TAIWAN Trends and Developments Contributed by: Lihuei Mao (Grace), Dennis Yu and Christina Chiang, Lee and Li, Attorneys-at-Law
Punishments for Theft of Taiwanese Core Technologies The National Security Act (NSA) was amended on 8 June 2022, to raise criminal liabilities for the theft of Taiwanese core technologies, in response to several incidents where the trade secrets of Taiwan’s hi-tech companies were sto - len by PRC competitors. The amendment states that any individual who engages in any act that infringes upon the trade secrets of any national core critical technology (such as stealing Taiwan’s critical technologies) with a certain motive as defined under the NSA will be deemed to have committed an Economic Espionage Crime and face a maximum of 12 years in prison and a fine of between TWD5 million and TWD100 million. The definition of “national core critical technologies” will be reviewed regularly by the National Science and Technology Council (NSTC) and be submitted to the Legislative Yuan for recordation. On 5 December 2023, the first tranche of national core critical technologies, totalling 22 items, and the competent authority in charge thereof, were announced. These items cover technical fields with leading advantages and requiring urgent protection; for example, defence technology, space, agriculture, semicon - ductors and information security. Increased Protection Over High-Tech Industries The PRC Relations Act was also amended to impose additional restrictions on professionals who have access to trade secrets. For example, if an individual or member has engaged (or had engaged within the past three years) in critical technologies-related research projects funded by government agencies (authorities), they must submit a prior application and obtain an approv - al before entering Mainland China.
the enforcement and prohibition on illegal PRC investment into Taiwan, including the following. Penalties for investing in Taiwan via Taiwanese nominees To prevent PRC investors from using nomi - nees to invest in Taiwan and thereby bypass - ing the PRC investment approval process, the Act Governing Relations between the People of the Taiwan Area and the Mainland Area (the “PRC Relations Act” ) was amended to prohibit Taiwanese individuals from offering their names to, or allowing the use thereof by, PRC investors for the purpose of investing in Taiwan. In case of violation of the above requirements, both the PRC investor and the Taiwanese nominee would incur a fine ranging from TWD120,000 to TWD25 million, which can be imposed consecutively until rectification. In addition, the Department of Investment Review (the competent authority in charge of reviewing PRC investment applica - tions) may order the violator to cease or with - draw such investment or to rectify it within a specified time, and may suspend the violator’s shareholder rights, and even instruct the com - pany registration authority to revoke or nullify the violator’s company registration. Increased penalties for engaging in business activities in Taiwan The PRC Relations Act was further amended to increase the criminal liabilities for PRC profit- seeking enterprises that engage in business activities in Taiwan by using non-PRC inter - mediates or Taiwanese nominees. Under the amended Article 93-2, a violator will be subject to imprisonment for up to three years (compared to one year before amendment), detention and/ or a fine of up to TWD15 million (which was TWD150,000 before amendment).
582 CHAMBERS.COM
Powered by FlippingBook