Draft amendment to Foreign Trade Act clear legislative floor to crack down on false labeling

　The draft amendment to Taiwan’s Foreign Trade Act has undergone its three readings on December 3, 2019, aiming to safeguard the reputation of MIT products in the world and Taiwan’s overall economic interests.  As a result of the US-China trade dispute that has caused additional tariffs, the Ministry of Economic Affairs proposed the draft amendment to increase the fines to be imposed on acts of tagging imported China-made products with MIT label, applying or using fraudulent certificate of origin and also on the act of illegally exporting strategic high-tech goods without authorization to fulfill management requirements.  The draft amendment also includes provisions regarding reward to people who report use of fraudulent certificate.  

The highlights of the draft amendment are summarized as follows.

1.  Importers/exporters shall not falsely apply or use relevant trade permission and certificate (Article 17).  

2.  “Whistle-blower” clause is introduced and included to reward people who report contravention, which is expected to prevent and avoid foreign investigation on Taiwanese businesses due to importers’ or exporters’ use of fraudulent labels of origin that would eventually affect the overall interests and reputation of domestic industries (Article 17-1). 

3.  Monetary penalties are raised to effectively administer and impede illegal export of strategic high-tech commodities to restricted regions (Article 27).  

4.  Administrative fines are increased to (1) effectively administer and hamper illegal export of strategic high-tech goods to non-restricted regions, (2) to impede businesses’ application and use of false certificates of origin and false labeling of origin, or (3) to prevent acts of disturbing trade through improper means (Article 27-2 and Article 28).  (December 2019) 

/CCS