TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
5.7 Prohibitions and Remedies for Foreign-to-Foreign Transactions To date, the TFTC has never imposed “struc - tural” remedies (such as divestment of assets or disposal of shares) in foreign-to-foreign merg - ers. However, the TFTC has certainly attached behavioural remedies to a few foreign-to-foreign mergers, most of which involve sensitive indus - tries such as the semiconductor or technology licensing industries. 6. Ancillary Restraints and Related Transactions 6.1 Clearance Decisions and Separate Notifications As far as is known, no case precedent is avail - able in Taiwan, so it is unclear whether ancillary restraints (such as non-competition agreement) will be covered by a clearance decision. 7. Third-Party Rights, Confidentiality and Cross-Border Co-Operation 7.1 Third-Party Rights Third parties (eg, customers, competitors, com - plainants) may have opportunities to be involved in the review process. If the TFTC accepts a combination notification and decides to exercise its jurisdiction on the transaction, it will post a summary of the pro - posed transaction on its website for one week to seek public opinion. In some cases where the TFTC considers that the transaction will have a great impact on the local market, it will: • hold a symposium or a public hearing and invite competitors, upstream and downstream
its own motion. Although the TFTC may choose to consult the parties before imposing the rem - edies, it can nonetheless impose remedies that the parties have not agreed. Please see 5.2 Par- ties’ Ability to Negotiate Remedies regarding the procedural steps with respect to remedies. 5.5 Conditions and Timing for Divestitures Please see 5.2 Parties’ Ability to Negotiate Remedies regarding the standard approach for the conditions and timing for divestitures or other remedies. Depending on the nature of a remedy, it is acceptable for the parties to complete the merger before complying with the remedies. The TFTC will conduct periodic reviews of the par - ties’ behaviour or divestment status to ensure that the parties comply with the conditions imposed by the TFTC. Since the remedies will serve as conditions to the TFTC’s clearance, the parties must adhere to the conditions. If the TFTC discovers any violation, it may impose penalties on the parties, includ - ing the prohibition of the combination, divesti - ture, transfer of the business acquired, and/or removal of personnel designated by the enter - prises. The TFTC also has the power to impose an administrative fine of between TWD200,000 and TWD50 million. 5.6 Issuance of Decisions When the TFTC clears a transaction without any condition/remedy, it will only publish a news release summarising its decision on its website and does not issue a formal decision letter. For a decision with a condition/remedy or prohibiting a transaction, the TFTC will issue an official deci - sion to the parties, which will also be published on the TFTC’s website.
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