TAIWAN Law and Practice Contributed by: Lihuei Mao, Dennis Yu and David Tien, Lee and Li Attorneys-at-Law
Act”) and will thus be subject to an administrative fine of between NTD120,000 and NTD25 million – plus the shareholders’ rights (including vot - ing rights and dividend rights) will be suspended by the DIR. The DIR may also order that such investment be ceased, transferred or withdrawn within a specific time. If the PRC investor fails to act accordingly, the DIR may impose successive administrative fines until the violation is rectified. The recognition or registration of the invested entity of the PRC investor may also be withdrawn or revoked if deemed necessary by the DIR. To ensure that PRC investors do not circumvent these investment control mechanisms through co-operating with local partners in Taiwan, the PRC Relations Act also provides that any person who offers or allows a PRC investor to use their name to make an investment in Taiwan in violation of the PRC Investment Rules under the PRC Relations Act will also be subject to the same administrative penalties. According to the Counter-Terrorism Financing Act (CTFA), upon the request of international treaties or protocols regarding counter-terrorism or as neces - sary for the implementation or enforcement of inter - national co-operation or resolutions made by the United Nations (UN), the Ministry of Justice may – at its discretion or upon a filing from the Bureau of Investigation – designate and announce the sanctions list. Such sanctions list will include the persons/enti - ties/associations designated in the resolutions of the UN Security Council regarding terrorism financing or weapons of mass destruction. Unless otherwise approved by the Ministry of Justice, pursuant to the CTFA no one is permitted to engage in the following activities with the persons/entities/ associations named on the sanctions list: 8. Other Review/Approvals 8.1 Other Regimes Application of Sanctions • withdraw from, remit to, wire transfer to, pay to, deliver or transfer the bank accounts or other
payment instruments belonging to the sanctioned persons/entities/associations; • transfer, change, dispose of or use the properties (or interest regarding the properties) of the sanc - tioned persons/entities/associations or otherwise change the quantity, quality or location thereof; and • collect or provide properties (or interest regarding the properties) for the benefit of the sanctioned persons/entities/associations. The above-mentioned restrictions also apply to cas - es where a third party keeps or manages property or property interests of the sanctioned persons/entities/ associations by authorisation, appointment or trust (or due to other causes). Therefore, if international treaties or protocols in con - nection with counter-terrorism require a person/entity/ association to be sanctioned, or if it is necessary to sanction a person/entity/association for the implemen - tation of UN Security Council resolutions on counter- terrorism, such person/entity/association would very likely be sanctioned by the Taiwanese government as well, pursuant to the CTFA. The current sanctions list of the Ministry of Justice can be found on the Ministry of Justice Investigation Bureau’s website . Although the SIFN does not explicitly prohibit per - sons/entities/associations that are on the sanctions list from making FDIs in Taiwan, all FDIs are subject to approval by the DIR. It is very likely that the DIR will deny an application from such person/entity/associa - tion owing to security concerns. Real Estate Transactions The administration of real estate is governed by the Land Act, Building Act and Housing Act, whereas real estate transactions are mainly governed by the Land Act and the Civil Code. Under Taiwanese law, a foreign investor (except for PRC nationals and companies, which are subject to a stricter set of laws and regula - tions) is permitted to own real estate on a reciprocal basis – ie, depending on whether its country permits Taiwanese investors to acquire real estate there as well. Such countries are known as “reciprocal coun - tries”. Certain sensitive lands are not allowed to be transferred or leased to foreigners, however. The list
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