Dear Friends,

On November 18, 2014, the Legislative Yuan passed the third reading to draft amendments to 20 articles of the Act Governing Food Safety and Sanitation (Act) in response to recent disqualified lard event.  This is the 4th amendment of this Act since 2012.  We summarize the key features of this amendment below:

1.Significant increase of fine: The maximum administrative fine against disqualified food or food additives is increased from NT$50,000,000 to NT$200 million. (Article 44)

2.Heavier penalty:  The maximum imprisonment years for criminal penalty in connection with food with toxins or hazardous substances, adulteration or counterfeiting of food, or addition of any food additives not approved by the central competent authority is increased from 5 to 7 years with a maximum criminal fine increased to NT$80,000,000.  If such violation has detriment of human health, an imprisonment of 1 to 7 years with a maximum criminal fine increased to NT$100,000,000.  If causing severe detriment of human body, maximum criminal fine is increased to NT$150,000,000.  If resulting in death, maximum criminal fine is increased to NT$200,000,000.  All maximum criminal fine in scenarios above is increased to up to 10 times of original amount.  The maximum imprisonment years for negligent commitments is increased from 1 to 2 years. (Article 49)

3.Introduction of crimes of danger: If relevant violation against this Act is material and significant enough to create a danger to human health, an imprisonment of not more than 7 years with a maximum criminal fine of NT$80,000,000 may be imposed.  An actual injury is not necessary for establishment of crimes. (Article 49)

4.The pursuit for payment of improper gains and seizure of the same:  The provision about criminal fine against juristic person is maintained.  However, except criminal fine and administrative fine, it is added that competent authority may pursue for payment of or seize the improper gains of violators to prevent them from huge amount of fine due to the Principle of Double Jeopardy. (Articles 49 and 49-2)

5.New measures for food safety:  It is added that listed companies, OTC companies and food enterprises under certain category or with certain scale should establish laboratories for self-testing.  Food enterprises should prescribe food-safety monitoring program.  Food enterprises subject to establishment of traceability system should follow the requirements of competent authorities to use electronic invoices on stages for accuracy of tracing.  Any failure to correct after notification of violation is subject to an administrative fine between NT$30,000 to NT$3 million. (Articles 7, 9 and 48)  If issuing voices with wrongful contents to impact the checking on traceability, an administrative fine between NT$30,000 to NT$3 million should be imposed. (Articles 7 and 47)

6.Independent factory: The factories for food or food additives (Food Factory) should be established independently and the production, processing and preparation of non-food commodities is prohibited in Food Factory.  The old Food Factory conducting non-food operations should be publicly announced by competent authorities within 6 months of the enforcement of this Act and improvements should be completed within 1 year.  Any failure to correct after notification of violation is subject to an administrative fine between NT$30,000 to NT$3 million. (Articles 10 and 48)

7.Anti-Fraudulent transfer: To prevent violators from transferring properties fraudulently, the properties or benefits obtained from crimes against this Act, no matter their owners are violators or any third party, should be confiscated.  Such third party includes natural person, juristic person, and unincorporated body.  Besides, competent authorities may issue a punishment to seize such properties or benefits or pursue for payment of the same.  If anyone who is punished transfers properties or benefits to any third party for evading payment, competent authorities may seize properties of such third party or pursue for payment of the same. (Articles 49-1 and 49-2)

8.Reversing the burden of proof: It is added that if any behavior by food enterprises in connection with food with toxins or hazardous substances, adulteration or counterfeiting of food, or addition of any food additives not approved by the central competent authority causes damage to the customers, relevant enterprises should be liable for damages.  Unless relevant enterprise could prove that such damage is not caused by its behavior or that it has exercised all due diligence to prevent such damages, it should be subject to such liability. (Article 56)

9.Protection to whistleblowers: Except whistleblower article, it is added that if any employee suffers an unfavorable measure such as discharge or transfer by its employer because he/she whistle blows irregularities thereof to the regulators, the food safety protection fund should pay all relevant fees and lawyer remuneration of incurring civil suit. (Article 56-1)

10.Food safety meeting: The Executive Yuan shall convene relevant departments/councils and invite experts/scholars and representatives of civil groups to have a food safety meeting once for every 3 months.  The Premier shall be the convener and the Executive Yuan shall report relevant matters to the Legislative Yuan. (Article 2-1)

Chenchi Wang