TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
2.9 Market Share Jurisdictional Threshold
The statute of limitations for the TFTC to enforce merger control regulations is five years. 2.12 Requirement for Clearance Before Implementation The implementation of a transaction must be suspended until clearance is obtained. 2.13 Penalties for the Implementation of a Transaction Before Clearance The sanctions for implementing a transaction prior to receiving clearance are the same as those applicable for the failure to file a notifi - cation; please see 2.2 Failure to Notify . Public information reveals that no penalties have been imposed in the case of foreign-to-foreign trans - actions. 2.14 Exceptions to Suspensive Effect There are no general exceptions to or waivers from the suspensive effect. 2.15 Circumstances Where Implementation Before Clearance Is Permitted There is no exception under the TFTA that allows parties to close a transaction prior to receiving the TFTC’s clearance. Furthermore, whether the TFTC will accept the parties’ proposal to tem - porarily carve out transactions related to Taiwan is unclear, since no case precedent is available.
As the TFTA does not limit the filing threshold assessment to only overlapping products/ser - vices, it is possible for one party – either a tar - get or an acquirer – to meet the threshold in the absence of a substantive overlap. 2.10 Joint Ventures Joint ventures are likely to be covered by the merger control rules, as long as they meet the definition of combination under the TFTA and any filing threshold is triggered. The term “joint venture” is not defined under the TFTA. However, the TFTC ruled in 2002 that the establishment of a joint venture, whether it is a newly incorporated enterprise or an existing enterprise, will be subject to merger control if it constitutes a combination as defined under the TFTA. Note that the TFTA does not further cat - egorise joint ventures into different types based on their function or corporate structure. In addition, on 28 June 2023, the TFTC promul - gated amendments to the “Combination Types to Which Paragraph 1, Article 11 of the Fair Trade Act Does Not Apply” by adding an additional ”non-notifiable/exempted” type of combination of joint ventures; please see 1.1 Merger Control Legislation for details. 2.11 Power of Authorities to Investigate a Transaction The TFTC does not have the power to investigate or call in a transaction that does not meet the jurisdictional thresholds. However, if the TFTC has doubts, it does have the power to issue let - ters to the parties, requesting them to provide explanations and relevant documents to prove that the jurisdictional thresholds are not met, if deemed necessary.
3. Procedure: Notification to Clearance 3.1 Deadlines for Notification
The law does not stipulate a deadline for mak - ing a filing. However, since the TFTC requests a definitive agreement or relevant board reso - lution to be submitted with the notification to evidence the parties’ intention of conducting the
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