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Free Economic Pilot Zones
1. Phase I Action Plan for Free Economic Pilot Zones
A National Development Council (NDC) press release on the Executive Yuan-approved Phase I Action Plan for Free Economic Pilot Zones (FEPZs) is summarized below.
(1) Legal restrictions are to be relaxed and management upgraded to foster a more favorable environment for doing business.
(2) Six major actions are to be taken, namely (1) lifting legal restrictions to facilitate the free movement of goods, people and money, (2) rendering smart logistic service, enabled by innovative customs administration and information clouds, (3) establishing medical institutions and biotechnology research and development institutions in FEPZs to provide international healthcare services, (4) promoting value-added agricultural processing, (5) providing comprehensive financial services to non-residents and domestic sophisticated investors to boost wealth and asset management business and (6) restructuring college education to recruit more international students.
(3) FEPZs will include six harbors, one international airport, and Pingtung Agricultural and Biotech Park.
(4) FEPZs will upgrade technology levels and management. FEPZs will also boost Taiwan's participation in regional economic integration. The NDC expects that FEPZs will, among other things, create 13,000 jobs and increase investment by NT$21 billion in 2014.
To facilitate Phase I, 28 administrative regulations require revision, 23 of which had been actioned as of the end of February 2014.
Reported by: Kang-Shen Liu
Securities
2. Permission for Securities Firms to Invest in Emerging Stocks and Privately Placed SITE Funds Using Their Own Funds
On March 5, 2014, the Financial Supervisory Commission ("FSC") issued a ruling (Ref. No.: Jin-Guan-Zheng-Quan-Zi-1030001846) to permit securities firms to invest in emerging stocks and privately placed securities investment trust funds using their proprietary funds. However, for investment in emerging stocks, securities firms must open accounts with other securities firms and consign such firms for trading. The securities traded shall also be under the custody of Taiwan Depository & Clearing Corporation. In addition, securities firms must not use information obtained in the course of business to conduct trade which would be harmful to their clients.
Reported by: Jeffrey Liu / Judy Tai
3. Conditions and Process for Securities Firms to Apply for Custody
On March 11, 2014, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Quan-Zi-1030005251) to enact the conditions and process for securities firms to apply as custodians under Article 17 of Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals. The ruling took immediate effect. Qualifying securities firms may, after gaining FSC approval, conduct business such as the custody of funds and securities, trading confirmation, settlement of trading and reporting of information, provided that client's funds in the custody of securities firms are deposited in banks approved by the FSC.
Reported by: Jeffrey Liu / Judy Tai
SITE&SICE
4. Promotion of Voting by Electronic Transmission
On March 5, 2014, the Securities Investment Trust & Consulting Association ("SITCA") issued a ruling (Ref. No.:Zhong-Xin-Gu-Zi-1030050403) following an instruction from the FSC. Members of SITCA and owners of funds managed by such members are encouraged to use electronic voting for the companies invested by them to strengthen the supervisor's function of corporate shareholders.
Reported by: Jeffrey Liu / Judy Tai
Public companies
5. Items to Be Disclosed by Public Companies before Adopting International Financial Reporting Standards (IFRS)
On March 4, 2014, the FSC announced a ruling (Ref. No.: Jin-Guan-Zheng-Shen-Zi-1030005615) on items to be disclosed by public companies before adopting IFRSs. We summarize the key points below:
1. The financial report of 2013 and semi-annual and annual financial reports of 2014 shall disclose the material content and implementation status for adopting IFRSs and the major differences in accounting policies before and after adopting IFRSs.
2. The semi-annual and annual financial reports of 2014 shall disclose the accounting policies which public companies must adopt in accordance with IFRSs.
3. In principle, the above disclosure information for IFRSs shall be based on the Traditional Chinese Version of 2013.
Reported by: Stacy Lo / Mark Chen
6. Sample Template for Rules Governing Financial and Business Matters between Affiliated Enterprises
On March 4, 2014, the GreTai Securities Market (GTSM) published the amended "Sample Template for XXX Co., Ltd. Rules Governing Financial and Business Matters Between this Corporation and its Affiliated Enterprises" (the Amendment), which took effect from the publication date. It complements the amendment to the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, adding that certain transactions for the acquisition or disposal of assets with affiliated enterprises shall be approved by the board with supermajority resolution and further approved by a shareholders meeting.
Reported by: Stacy Lo / Angela Lin
Insurance
7. Draft Amendments to "Regulations Governing Foreign Investments by Insurance Companies"
On March 4, 2014, the FSC published draft amendments to the Regulations Governing Foreign Investments by Insurance Companies ("Amendments"). We summarize the main Amendments below:
(1) Foreign securities an insurer may invest include "an investment in listed securities or bonds, denominated in foreign currencies".
(2) Insurers may provide needed funds with a real estate investment business for the special purpose of investment through loans, or acquire real estate in a foreign country or Mainland China via trust.
Reported by: David Tsai / Angela Chang
8. Amendments to Article 4 of "Regulations Governing Insurance Enterprises and Related Persons Conducting Transactions Other Than Loans"
On March 10, 2014, the FSC published amendments to Article 4 of the Regulations Governing Insurance Enterprises and Related Persons Conducting Transactions Other Than Loans ("Amendments"). We summarize the main Amendments below:
(2) The Amendments state that where the related person is a securities investment trust company, transactions via the operation of the fund asset in accordance with the Regulations Governing Futures Trust Funds may be conducted with the general authorization of a board meeting.
(3) The Amendments state that transactions of less than NT$10 million with a subsidiary whose 100% shareholdings are indirectly held by the parent financial holding company may be conducted with the general authorization of a board meeting.
Reported by: David Tsai / Angela Chang
Intellectual Property
9. Draft of Implementation Regulations for Customs to Detain Articles Infringing Patent Rights
In view of the promulgation of amendments to the Patent Act to add broader detention measures for patent-infringing articles on January 22, 2013, the Taiwan Intellectual Property Office ("TIPO") released the Draft of Implementation Regulations for Customs to Detain Articles Infringing Patent Rights (the “Draft”) on March 10, 2014 after a public hearing. The main points of the Draft are as follows:
(1) To request the detaining of articles that are suspected of infringing patent rights, the patentee shall make such requests in writing to the Customs authority, accompanied by relevant documents and information, including proof of the patent right where in case the patent in question is a utility model patent, a “Technical Report” issued by the TIPO is required; an infringement report and descriptions sufficiently identifying the suspected articles together with materials such as samples, photos, catalogs or pictures of suspect articles and electronic files thereof; and relevant importing information sufficient to allow Customs to confirm the articles, such as the name and business registration number of the importer, declaration number, name, model number and specification of the goods and possible ports and dates of importation or transportation.
(2) In addition to the patentee, the exclusive licensee (if any) is also allowed to file a detention request.
(3) The detention requester shall provide a security in an amount equivalent to the duty-paid price of the imported articles, assessed by Customs, or equivalent assurance, upon receiving a notification from Customs authorities. Before the security or equivalent assurance is provided, Customs shall follow procedures in accordance with applicable Customs Regulations on imported articles clearance.
(4) Before a detention is made, Customs may inform the detention requester to assist the confirmation of the suspected articles. If the detention requester refuses to provide such assistance, thus preventing Customs from performing the detention, Customs shall follow procedures in accordance with applicable Customs Regulations on imported articles clearance.
(5) Once a detention request is approved, Customs shall immediately detain suspect articles and inform the requester and the importer in writing.
(6) Both the requester and the importer may examine the detained articles upon request; such examinations shall be made in accordance with the time, place and manner specified by Customs, with the condition that confidential information protection of the detained articles is not compromised.
(7) The detention requester shall file a suit for patent infringement for the detained article within twelve (12) days following the date of Customs’ acceptance of the request and inform Customs of this.
(8) The importer may request in writing the revocation of a detention by providing a security amounting to two times the security referred to in aforementioned item (3) or equivalent assurance.
(9) In the case of the detention being revoked, Customs shall follow procedures in accordance with applicable Customs Regulations on imported articles clearance after retaining a representative sample.
(10)The effective date of the Draft is proposed to be March 24, 2014.
Reported by: Jolene Wang / Linda Cheng
Multi-level Sales
10. Enforcement Rules for Act Governing Multi-level Sales
On March 7, 2014, the Fair Trade Commission (FTC) announced a draft of "Enforcement Rules for the Act Governing Multi-level Sales" (Enforcement Rules). We summarize the key points below:
(1) The Enforcement Rules stipulate judgment standards for reasonable market price in Article 18 of the Act Governing Multi-level Sales (AGMS). (Article 6 of the Enforcement Rules)
(2) In accordance with Article 21 of the AGMS, after termination of an agreement a distributor may request the return of goods before six months have elapsed from the date that the goods are available for collection. The Enforcement Rules provide the definition of the date that the goods are available for collection. (Article 8 of the Enforcement Rules)
(3) The FTC may publish the list of multi-level sale enterprises and other dynamic information on its website. (Articles 11 and 12 of the Enforcement Rules)
(4) The Enforcement Rules provide the situation and matters to be considered in determining any penalty. (Article 19 of the Enforcement Rules)
Reported by: Stacy Lo / Mark Chen
Food and Drugs Administration
11. Amended/new regulations regarding food product labeling will take effect on July 1, 2014
The amended “Regulations Governing the Labeling of Packaged Beverages Claimed to Contain Fruit and Vegetable Juice”, and the newly enacted “Regulations Governing the Labeling of Milk, Preserved Milk, Flavored Milk or Milk Powder Products” will take effect on July 1, 2014. For the key points of the amendments to the former, please refer to our Newsletter No. 186 (Issue date: October 22, 2013).
Reported by: Jolene Wang / Crick Liang
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2014-03-24
