RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SPEC/TPKM/2/Rev.1
27 April 1999
(99-1707)
Working Party on the
Accession of Chinese Taipei
DRAFT REPORT OF THE WORKING PARTY ON THE
ACCESSION OF THE SEPARATE CUSTOMS TERRITORY
OF TAIWAN, PENGHU, KINMEN AND MATSU
Revision
I. INTRODUCTION
1. At its meeting on 29 September-1 October 1992, the GATT 1947 Council of Representatives
established a Working Party to examine the applica tion of the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu (hereinafter referred to as "Chinese Taipei") to accede to the General
Agreement  1947 under Article XXXIII, and to submit to the Council recommendations which may
include a Draft Protocol of Accession, [on the basi s of the terms set out in an understanding] [as
reflected in the respective Minutes (document C/M/ 259)].  Membership of the Working Party was open
to all contracting parties wishing to serve on it.  Fo llowing the request of Chinese Taipei, circulated in
document WT/ACC/TPKM/1, and pursuant to the decision of the General Council of 31 January 1995,the Working Party was transformed into a Wo rld Trade Organization (WTO) Working Party to
negotiate the terms of accession of Chinese Taipei to  the Marrakesh Agreement Establishing the World
Trade Organization (hereinafter referred to as  the "WTO Agreement") under Article XII of that
Agreement.
2. The Working Party met on 6 November 1992, 21 December 1992
 15 April 1993 , 28 June 1993,
12 October 1993, 17 May 1994, 26 July 1994, 21 December 1994, 28 February 1997, 8 May 1998 and[.................] under the Chairmanship of H.E. Mr. M.  Morland (United Kingdom).   The terms of
reference and the membership of the Working Party are set out in document WT/ACC/TPKM/6.WT/ACC/SPEC/TPKM/2/Rev.1
Page 2
II. INFORMATION PROVIDED
3. The Working Party had before it, to serve as a basis for its discussion, the Memorandum on
Chinese Taipei's Foreign Trade Regime (L/7097 and Addenda 1 - 11) and the questions submitted byMembers on the foreign trade regime of Chinese Taipei  together with the replies of the Chinese Taipei
authorities thereto (L/7089/Rev .1, L/7429 and Add.1), and documents Spec(94)28 (Newly Promulgated
or Revised Laws and Regulations ), Spec(94)30 (Description of Serv ice Sectors), Sp ec(94)31 and Add.1
(Special Exchange Agreement), Spec(94)41 (Status Report of the Bilateral Negotiations),  Spec(95)1
and Corr.1 (Checklist of Accession Issues - Prelim inary Responses Provided by Chinese Taipei),
Spec(95)8 (Laws and regulations regarding agricu ltural products), WT/ACC/TPKM/2 (Tariff reductions
for 758 tariff lines effected as from 12
 14 July 1995), WT/ACC/TPKM/3 (Newly Promulgated or
Revised Laws and Regulations), and WT/ACC/TPKM/4  (The Customs Import Tariff and Classification
of Import and Export Commodities: revised edition of  August 1995).  In addition, the representative of
Chinese Taipei made available to the Working Party the following material:WT/ACC/SPEC/TPKM/2/Rev.1
Page 3
1. Customs Regime:
- Customs Law;
- Rules Governing the Implementation of the Customs Law;
- Implementing Regulation on the Imposition of Countervailing Duty and Anti-Dumping Duty;
- Rules for the Collection of Customs Fees.
2. Trade Regime:
(a) General:
- Foreign Trade Act;
- Enforcement Rules of the Foreign Trade Act;
- Regulations Governing the Proce ss of Objections Against Punish ment on Violation of Foreign
Trade Act;
- Customs Import Tariff and Classification of Import & Export Commodities (Supplement,
August 1995);
- Consolidated List of Commodities Subject to Import Restriction and Commodities Entrusted to
Customs for Import Examination (June 1997 Edition);
- Regulations Governing Import of Commodities by Business Firms;
- Regulations Governing Regist ration and Administration of Exporters and Importers;
- Regulations Governing Revenue, Expenditure, Custody, and Use of Trade Promotion Fund;
- Rules for Handling Import Relief Cases;
- Import Regulations Codes.
(b) Industrial Goods:
- Regulations Governing Export and Import of High-Tech Commodities;
- Operating Rules for Screening Applications to Import Fishing Vessels Using New Fishing
Methods;
- Requirements for Imported Drug Registration;
- Veterinary Drugs Control Act;
- Agro-Pesticide Act;
- Guidelines Governing the Application for and I ssuance of Fertilizer Registration Certificate;
- Operating Regulations Governing the Control of Restricted Methyl Bromide;
- Regulations of the Industrial Development Bur eau of the Ministry of Economic Affairs for
Controlled Substances Pursuant to the Montreal Protocol.
(c) Agricultural Goods:
- Statute for Agricultural Development;
- Regulations Governing Relief and Aid for Major Agricultural Products Damages by
Importation;
- Guidelines for Screening Applications for Lette r of Approval for the Importation of Livestock
and Poultry;
- Guidelines for the Issuance of Written Approval  Regarding the Importation of Aquatic Animals;
- Guidelines Governing Food Companies Applying  to Import Raw Gluti nous Rice/Powder for
Processing for Export;
- Operating Procedures Governing Applicati ons to Import Wheat and Operation of the
Stabilization Fund;
- Operating Procedures Governing Applications to Import Wheat Flour and Operation of the
Stabilization Fund;
- Feeds Control Act;WT/ACC/SPEC/TPKM/2/Rev.1
Page 4
- Guidelines Governing Applications to Import Aduki Beans;
- Screening Procedures and Criteria Governing the Issuance of Written Approval for the
Importation of Dried Betel Nuts (Ta-Fu-Tzu).
3. Investment Regime:
- Statute for Investment by Foreign Nationals;
- Negative List for Investment by Overseas Chinese and Foreign Nationals;
- Statute for Upgrading Industries;
- Enforcement Rules of the Statute for Upgrading Industries;
- Statute for Technical Cooperation;
- Statute for Development of Medium and Small Businesses;
- Statute for Establishment and Management of Export Processing Zones;
- Aeronautics and Space Industries Development Programme;
- Automotive Industry Development Policy.WT/ACC/SPEC/TPKM/2/Rev.1
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4. Other Texts Affecting Trade:
(a) General:
- Income Tax Law;
- Business Tax Law;
- Statute for Commodity Tax;
- Statute for Foreign Exchange Regulation;
- Fair Trade Law.
5. Intellectual Property Rights:
(a) Copyright:
- Copyright Law;
- Implementation Rules of the Copyright Law;
- Illustrated Contents of 'Each Kinds of Works' in Paragraph One, Article 5 of Copyright Law;
- Certain amounts of Items 2 and 3 of Paragraph One of Article 87 bis of the Copyright Law;
- Regulations of Application fo r Approval of Compulsory Li cense of Translation Rights;
- Regulations of Application for Approval of Compulsory  License of Musical Works;
- Organic Charter of the Copyright Examinati on and Mediation Committee of the Ministry of
Interior;
- Agreement for the Protection of Copyright between the Coordination Council for North
American Affairs and the Amer ican Institute in Taiwan;
- Agreement Concerning the Protection and Enfo rcement of Rights in Audiovisual Works
between the Coordination Council for North American Affairs and the American Institute in
Taiwan;
- Publication Law.
(i) Trademark:
- Trademark Law.
(ii) Patent:
- Patent Law.
(b) Standards, Quarantine, Inspection:
(i) Standards:
- Provisional Standard for Hi-Fi and Stereo Equipment.
(ii) Quarantine:
- Quarantine Requirements for the Importa tion of Animal and Animal Products;
- Quarantine Regulations on Imported Fishery Products;
- Quarantine Restrictions on the Importa tion of Plants and Plant Products;
- Statute for Prevention and Control of Infectious Animals Diseases;
- Implementation Rules of the Statute for Preventi on and Control of Infectious Animals Diseases;
- Regulations Governing the Quarantine at International Ports.WT/ACC/SPEC/TPKM/2/Rev.1
Page 6
(iii) Inspection:
- Commodity Inspection Law;
- Enforcement Rules for the Commodity Inspection Law (Implementation Rules of the
Commodity Inspection Act).
(iv) Others:
- Commodity Labelling Law;
- Law Governing Food Sanitation;
- Enforcement Rules of the Law Governing Food Sanitation;
- Law for the Control of Cosmetic Hygiene.
(c) Government Procurement:
- Law of Audit;
- Rules Governing Procuring Goods of Foreign Origin;
- Ordinance Concerning Inspecti on Procedure Governing Construction Work, Procurement and
Disposal of Properties by  Government Agencies.
(d) Others:
- Guidelines for Screening Applications for Written Import/Export Approval Regarding Wild
Fauna and Flora Deserving Conservation;
- Wildlife Conservation Law;
- Implementing Regulations of the Wildlife Conservation Law;
- Rules of Royalty Rate for Public Interest Activities.
6. Trade in services:
(a) Schedule of Commitments:
- Draft Schedule of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
Concerning Initial Commitments on Trade in Services.
(b) Banking:
- Banking Law;
- Guidelines for the Screening and Approval of th e Establishment of Branches and Representative
Offices by Foreign Banks.
(c) Insurance:
- Insurance Law;
- Insurance Company Establishment Criteria;
- Criteria for Approving Foreign Insurance Enterprises and the Governing Regulation;
- Central Reinsurance Corporation Act.
(d) Securities:
- Securities and Exchange Law;
- Foreign Futures Trading Law;
- Regulations Governing the Standard for Incorporation of Securities Companies;WT/ACC/SPEC/TPKM/2/Rev.1
Page 7
- Rules for the Administration of Securities Investment Trust Enterprises.
(e) Others:
- Broadcasting and Television Law;
- Motion Picture Law;
- By-laws Governing the Execution of the Motion Picture Law;
- Employment Service Act;
- Rules Governing the Approval and Administra tion of Foreign Specialist and Technical
Personnel Employed by Public or Private En terprises and Ranking Executives Employed by
Overseas Chinese or Foreign National Invested Enterprises.
III. INTRODUCTORY STATEMENTS
4. In  his statements the representative of Chinese Taipei inter alia recalled that Chinese Taipei,
which encompasses the islands of Taiwan, Penghu, Kinmen and Matsu, was short of natural resources.
Its only substantial resource - labour - was the source of  its strong rate of growth.  The main economic
indicators were as follows:WT/ACC/SPEC/TPKM/2/Rev.1
Page 8Chinese Taipei’s Main Economic Indicators
Annual Changes in Prices Year GNP
(Billion US$)GNP per
Capita
(US$)*Annual Final Budget of
Central Government
(Billion US$)Consumer price
(%)Wholesale price
(%)Unemployment
Rate (%)Foreign
Exchange
(Billion US$)Export Statistics
(Billion US$)Import
Statistics
(Billion US$)
1993 226.2 10,852 37.5  42.7 2.9 2.5 1.5 92.5  83.6 85.1 77.1
1994 243.9 11,597 37.3  39.6 4.1 2.2 1.6 90.3  92.5 93.0 85.3
1995 263.0 12,396 36.3  42.9 3.7 7.4 1.8 90.3 111.7 103.6
1996 275.1  274.6 12,872 39.5  40.9 3.1 -1.0 2.6 88.0 116.0  115.9 101.3  102.4
1997 284.8 13.198 44.8 0.9 -0.5 2.7 83.5 122.1 114.4
- Since 1960, the "Fiscal Year" refers to the 12-month period beginning from 1 July 1 of the preceding year to 30 June of the des ignated year.  The item excludes repayment of
government debt.WT/ACC/SPEC/TPKM/2/Rev.1
Page 9Chinese Taipei’s Expenditure on Gross National Product
Unit: Billion US$
Year Gross National
ProductGross Domestic
Product- Private
Consumption-Government
Expenditure- Gross Fixed
Capital Formation- Increase in
Inventory-Export of Goods &
ServicesImports of Goods &
Services
1993 226.2 213.7  222.6 121.7  126.8 34.2 35.6 50.6 52.7 3.2 3.3 94.5 98.5 90.5 94.3
1994 243.9 232.0  241.0 137.2 142.6 35.0 36.3 53.1 55.2 2.2 2.3 102.3  106.3 97.9 101.7
1995 263.0 250.7  260.2 150.0  155.7 36.5 37.8 57.5 59.7 1.8 1.9 122.3  126.9 117.4  121.8
1996 275.1 272.7  272.3 164.2  164.6 39.6 39.4 57.3 57.0 1.1 0.8 131.8  132.2 121.3  121.7
1997 284.8 283.3 172.1 41.0 59.4 3.0 139.5 131.7WT/ACC/SPEC/TPKM/2/Rev.1
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Chinese Taipei’s Employment Population by Sectors
Unit: 1000 Persons
Year Agriculture Sector Indust rial Sector Se rvices Sector
1993 1,005 3,418 4,323
1994 976 3,506 4,456
1995 954 3,504 4,587
1996 918 3,399 4,751
1997 878 3,502 4,795
Chinese Taipei’s Balance of Payments
Unit: Million US$
Year Current Account Capital Account Long-term capital Short-term
capitalChange in Net Foreign
Asset
1993 6,714 -4,662 -2,660 -2,062 -1,541
1994 6,154 -1,397 -1,960 563 -4,622
1995 4,824 -8,190 -1,227 -6,963 3,931
1996 10,481 -8,875 -2,974 -5,901 -1,102
Year Current Account Capital Acco unt Financial Account Reserves
1993 6,714 -328 -4,629 -1,541
1994 6,154 -344 -1,397 -4,622
1995 4,824 -650 -8,190 3,931
1996 10,481 -653 -8,802 -1,102
1997 7,776 -314 -8,154 728
He added that government policies had restructured the economy from agriculture towards basic and
heavy industries.  As part of an import substitution and integration process, intermediate goodsindustries were established.  Transportation was streamlined and large investments were made in newports, airports and highways.  The Chinese Taipei authorities had also intensified rural development
and supported the moves to improve farm income.  More recently, industrial restructuring was further
promoted.  Educational institutions placed greater emphasis on science and technology in order toprovide a highly trained workforce.  In the 1990's, economic liberalization and the internationalizationWT/ACC/SPEC/TPKM/2/Rev.1
Page 11
of the economy had continued.  Infrastructure investments, the regulation of pollution and the
privatization of the economy had accelerated.  Employment had shifted from the agricultural sector tothe industrial and service sectors.  The representative of Chinese Taipei also stated that when ChineseTaipei initiated its import-substitution strategy, exports were mostly composed of sugar, rice, bananas,tea and processed agricultural products.  Few industrial products were sufficiently competitive forexport.  Gradually the import substitution industries became capable of producing competitive exportproducts.  As a result, the share of exports of trad itional products declined whilst industrial products
took an increasing share of exports.  At first, major export items were labour intensive products such
as textiles and plywood.  Recently, electronic goods had become major export items.  Recent totalexports value in US$000 was as follows:
YEAR 1993 1994 1995 1996 1997
TOTAL 85,061,411
85,091,45892,948,783
93,048,783111,598,800
111,658,800115,942,064 122,080,673
Recent total imports value in US$000 was as follows:
YEAR 1993 1994 1995 1996 1997
TOTAL 77,061,203 85,322,194
85,349,194103,549,956
103,550,044101,373,051
102,370,021114,424,665
5. Referring to the direction of the future economic policies, the representative of Chinese
Taipei said that overall global economy expanded steadily in 1996  1997 , in contrast, Chinese Taipei’s
economy reached its slowest growth rate that year at 5.9  6.8 per cent, the lowest  highest in six years.
This was a significant reduction since its peak in 1991 at 7.6 per cent.  Economic growth for 1994
1995 and 1995  1996 had been 6.5  6.0 per cent  and 6.0  5.7 per cent respectively. The downturn  upturn
in Chinese Taipei’s economy could be attributed to slackening  strong private investment and
shrinking public investment, especially in the real estate sector consumption . In 1996 ,1997 inflation
was moderate  low at the rate of 3.1  0.9 per cent, compared with 4.1  3.7 and 3.7  3.1 in 1994  1995 and
1995 1996 . Trade surplus in 1996  1997 rose to a nine-year high of US$14.7 billion  was
US$7.7 billion . However, the rise in trade surplus stemmed from a drop in imports rather than an
expansion of exports.   For 1997  1998 , the economy of Chinese Taipei was expected to grow 6.7
5.3 per cent, with per capita GNP expected to reach almost US$14,000  US$12,030 and consumer
prices to rise no more than  3 1.9 per cent. Nevertheless, these expectations would, to a large extent,WT/ACC/SPEC/TPKM/2/Rev.1
Page 12
depend on whether public investment projects proceed according to schedule. An additional source of
major impetus to growth would be the private sector as a result of regained  strength in private
consumption, steady improvement in the investment climate and greater private investment in publicprojects.  In his statements he also outlined the sectors where Chinese Taipei would need transitionperiods to bring specific measures into full conf ormity with WTO obligations and said that Chinese
Taipei was ready to assume obligations comparable to those undertaken by WTO Members with a
comparable level of economic development. The representative of Chinese Taipei stated that his
government would not claim any right granted under WTO Agreements to developing countryMembers or to a Member in the process of transforming its economy from a centrally plannedinto a market, free-enterprise economy .
6. Members of the Working Party warmly welcomed the application of Chinese Taipei for
accession to the WTO.  Notwithstanding limitations on its natural resources and the relative size ofthe economy, Chinese Taipei had transformed itself into one of the world's most dynamic tradecentres.  Chinese Taipei's membership of the WTO would strengthen the multilateral trading system.Members also congratulated Chinese Taipei on its willingness to make the required adjustmentspromptly and to only seek a minimum of transition periods in which to bring its economy fully intoconformity with the requirements of the WTO.  Members noted, however, that membership of theWTO required full observance of the MFN and national treatment principles , in particular, GATT
1994 required the grant of any advantage, favour, privilege or immunity granted by any
contracting party to any product originating in or destined for any other country, whether or
not a contracting party, to products originating in  or destined for the territories of all other
contracting parties.  Similar MFN requirements applied in respect of the General Agreement onTrade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual
Property (TRIPS).   It also required the taking of comprehensive market access commitments on
goods, including agricultural products, and services, which would be reflected in the respectiveschedules of concessions and commitments annexed to the Draft Protocol of Accession.  Severalmembers of the Working Party were of the view that Chinese Taipei should assume a level ofobligations commensurate to that of the developed economy original Members of the WTO, and that
Chinese Taipei should apply the WTO Agreement fully from the date of accession, without recourse
to any transition periods.
7. The representative of Chinese Taipei acknowledged the importance of observing the
principles of MFN and national treatment in the WTO and the broad scope of that obligation.He stated that upon accession Chinese Taipei would fully observe its MFN and nationaltreatment obligations in respect of any advantage, favour, privilege or immunity granted toWT/ACC/SPEC/TPKM/2/Rev.1
Page 13
WTO Members or other countries or separate customs territories, unless specifically exempted
from its GATS commitments.
IV. ECONOMIC POLICES  POLICIES
Foreign Exchange Policies
8. In response to requests from members of the Working Party for information on the foreign
exchange system prevailing in Chinese Taipei, the representative of Chinese Taipei stated that all
current account transactions were free from foreign exchange controls.  As for residents, any companyor individual could freely settle foreign exchange with authorized banks up to an amount ofUS$50 million and US$5 million respectively per year.  As for non-residents, any non-resident could
open a New Taiwan dollar account with local commercial banks.  However, foreign financial
institutions outside the territory of Chinese Taipei could only deposit local earned revenue of NewTaiwan dollars into their accounts.  There was no restriction when the remittance was related to an
outward/inward investment project approved by the competent authority.  The foreign exchange ratewas determined by the market, and there were no discriminatory currency practices.   In response tofurther questions, he said that enterprises established under the Company Law of Chinese Taipeicould freely purchase the foreign exchange required  for imports or for invisible trade settlements
through the authorised foreign exchange banks without any restriction.  There was no restriction onthe use of foreign exchange for overseas investment provided that the investment had been approved
by the authorities.  Authorized foreign exchange banks and foreign banks were free to take part in the
Chinese Taipei foreign currency call loan market .  Since 1991, forward foreign exchange transactions
had been permitted.  The representative of Chinese Taipei said that these requirements would begradually phased out as market conditions permitted.  He expressed the view that Chinese Taipei'scurrency
 foreign exchange practices were fully consistent with Article XV of the GATT 1994.
9. Some members of the Working Party noted that Chinese Taipei was not a member of the
International Monetary Fund (IMF) and thus would have to enter into a Special Exchange Agreementas provided for in Article XV:6 of the GATT 1994 incorporating obligations consistent with FundArticle VIII.  Some members also expressed concern that elements of Chinese Taipei's foreign
exchange system provided scope for practices that distorted trade flows.  The representative of
Chinese Taipei said that in the context of acces sion to the WTO, Chinese Taipei was prepared to
comply with the provisions of Article XV of the GATT 1994 regarding its foreign exchangerestrictions.  He added that in order to comply with GATT 1994 Article XV, Chinese Taipei hadnegotiated a Special Exchange Agreement with the WT O.  Chinese Taipei expected that the Special
Exchange Agreement would cease to be effective if Chinese Taipei became a member of the IMF.WT/ACC/SPEC/TPKM/2/Rev.1
Page 14
10. [The Special Exchange Agreement between the WTO and Chinese Taipei,  within the
meaning of Article XV:6 of the GATT 1994, which is part of the obligations of Chinese Taipei underthe WTO Agreement, including GATT 1994 is reproduced  in Annex II of the Appendix to this Draft
Report. ]
Pricing Policies
11. Some members of the Working Party noted that Chinese Taipei had price controls for the
domestic prices of certain commodities and that there were no price controls applied exclusively to
imports, they requested a full list of the products subject to price controls, and the plans to eliminate
such price controls.  In response the representative of Chinese Taipei  stated that price controlsapplied primarily in the area of public utilities under control of the Public Utility Rate Commission.The products specified in the list reproduced in Attachment A to this Draft Report were the only onessubject to price controls.  In relation to the sale of tobacco and alcoholic beverages, the representativeof Chinese Taipei stated that minimum profit or  pricing of tobacco and alcohol products had been
abolished.  The regulation on the maximum retail margin would cease to be effective when themonopoly system is formally abolished.  He further added that petroleum, natural gas and liquefiedgas were subject to price controls in order to maintain stability in energy prices.  Salt, sugar and
fertilizer were subject to price controls to stabilize farmers' income and production costs.  Chinese
Taipei intended to phase out price controls as soon as possible, keeping in view the objectives notedabove.  Future liberalization of price controls would take into account the timetable for privatizingstate enterprises which had been involved in exercising price controls,  such as the Taiwan FertilizerCompany, and the Taiwan Salt Industrial Corporation.  Some members of the Working Party notedthat they could see no justification for price controls on sugar and salt.  In response, the representativeof Chinese Taipei stated that the price controls on salt were expected to be abolished by end of theyear 2001.   Domestic sugar prices were set by Taiwan Sugar Company,  which was the sole supplierof sugar.  The sugar price set by Taiwan Sugar Company took into account the price at which Taiwan
Sugar purchased sugar cane from local growers (which was set 10 years ago according to the farmers'
production cost at that time), and its own cost of production.   The domestic sugar price had beendecreasing, as the increase in import of sugar (the cost of which was  lower), helped to bring downTaiwan Sugar's cost.  Industrial users of sugar were consulted, in order to ensure that the price control
would not seriously affect their competitiveness.   There was no discrimination between cane and beet
sugar.  The price control system would be replaced by
 in conjunction with a tariff rate quota system.
The private sector would be free to import sugar at out-quota tariff rates.  Moreover, a certain
percentage of the tariff quota would be allocated to private sectors.  Therefore, importation of
sugar would not be subject to monopoly.   It was expected that the oil product market would beWT/ACC/SPEC/TPKM/2/Rev.1
Page 15
fully liberalized by the end of the year 2002  June 2000 .  It was not Chinese Taipei's policy to add to
the list of products subject to price control set out in Attachment A to this Draft Report, unless theeconomy or a specific sector thereof  was in serious difficulty or in a state of emergency.
12. [The representative of Chinese Taipei stated that, from the date of accession, Chinese Taipei
would ensure that price controls applied to the products covered in the list reproduced inAttachment A to this Draft Report, and to any other product, would be applied in a WTO-consistentfashion, taking account of the interests of exporting WTO Members as provided for in Article III:9 of
the GATT 1994.  The price levels of the goods subject to price controls would be published in
accordance with Article X of GATT 1994.  The Working Party took note of these commitments.]
V. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
Powers of Executive, Legislative and Judiciary, Administration of Policies on WTO-related 
Issues
13. In response to requests for information, the representative of Chinese Taipei stated that the
subject matter of international trade, including all matters covered by the WTO Agreements , fell
within the power of the central government.  In the event that measures taken by the sub-central
government had an impact upon international trade, those measures became subject to regulation bythe central government and the central government could overrule or invalidate measures of
sub-central governments .  By way of example, he noted that the procurement decisions of sub-
central government were subject to the disciplines of the Government Procurement Law made bythe central government. He further noted that all administrative decisions affecting trade could be
appealed to the Administrative Court, which conducted judicial review of administrative decisions
that affect the rights and interests of natural and legal persons.  The Administrative Court was an
independent judicial body.  a natural or juridical person whose rights and interests in a matter
relating to issues covered by the WTO Agreements are impaired by an administrative action inChinese Taipei is permitted to appeal such action.  In cases of administrative action allegedlycontrary to law, such appeal would be to the High Administrative Court with the possibility ofseeking a further appeal to the Supreme Administrative Court.  In cases of an administrativeaction that is allegedly improper, but not illegal, an appeal committee, organised by a higheradministrative level, drawn from government officials not involved in the enforcement of thematter at issue, experts from academia and other experts, will
 would review the matter and
recommend a correction to the administrative action .WT/ACC/SPEC/TPKM/2/Rev.1
Page 16
14. Some members of the Working Party enquired whether international treaties were
self-executing under the law of Chinese Taipei and sought a commitment that Chinese Taipei wouldbring its foreign trade laws and regulations into conformity with WTO provisions at the time ofaccession.  In response, the representative of Chinese Taipei said that, under its Constitution,international treaties enter into force after being duly ratified by the Legislative Yuan andpromulgated by the President.  An international treaty had the same force and effect as domestic laws.
15. [The representative of Chinese Taipei stated that the laws and regulations that would be
amended or newly made, within six months after accession, for the purpose of implementing the
accession commitments are reproduced in Attachment E to this Draft Report.  He further stated that
if, in the future, any law or regulation was found not to be WTO consistent, Chinese Taipei would
ensure that it was brought into conformity with the requirements of the WTO Agreement.]    [The
representative of Chinese Taipei confirmed that Chinese Taipei would fully implement itsobligations under the WTO Agreement and its Draft Protocol of Accession upon accession to the
WTO, unless specifically provided in this Draft Report and Protocol.   Further, central authorities
would eliminate or nullify measures taken by sub-central authorities in Chinese Taipei that areinconsistent with WTO provisions from the date of accession. A list of some of the laws that
would be amended as part of Chinese Taipei's implementation of its obligations is reproduced inAttachment E to this Draft Report.]
  The Working Party took note of this commitment.]
VI. POLICIES AFFECTING TRADE IN GOODS
16. Chinese Taipei undertook negotiations on market access in goods.  The Schedule of
Concessions reflecting the results of those negotiations  is reproduced in Part I of Annex I of the Draft
Protocol  of Accession reproduced in  the Appendix to this Draft Report.
Import Regulations
Registration of Importers and Exporters
17. Some members of the Working Party noted that Chinese Taipei required a registered
importer/exporter to clear all imports and exports through its customs.  Further, Chinese Taipei
conditioned registration as an importer or exporter on being an enterprise in Chinese Taipei andmeeting a NT$5 million minimum capital requirement.  These members of the Working Party statedthat they considered that the minimum capital requirement was excessive and could act as a restrainton trade.  They requested that the minimum capital requirement be eliminated and that registrationWT/ACC/SPEC/TPKM/2/Rev.1
Page 17
should be automatic, open to all individuals and enterprises interested in engaging in import/export
without regard to investment or establishment in Chinese Taipei and conform to WTO rules.
18. In response, the representative of Chinese Taipei stated that the purpose of the registration
requirement was not to restrain trade, but to ensure that importers/exporters had sufficient financialresources to support their import/export operations.  The precondition of NT$5 million minimumcapital requirement had been abolished in September 1997.  With the elimination of that capitalrequirement, the only condition for importer/exporter  registration was that the enterprise list import
and/or export activities in its business licence
 profit-seeking enterprise registration certificate .  No
fee was charged for the registration.  Chinese Taipei however would like to retain the registrationsystem, which operated as an automatic licensing procedure pursuant to the Agreement on ImportLicensing
19. The representative of Chinese Taipei stated that any enterprise or individual interested in
importing/exporting (whether or not invested or established in Chinese Taipei) would be permitted
to register, and that  including sole proprietorships,  interested in importing and/or exporting
and having included in its profit-seeking enterprise registration certificate export/import orbuying/selling as a business item, would be permitted to register as an importer/exporter.Registration as a profit-seeking enterprise required maintenance of an address in ChineseTaipei, but did not impose minimum investment or similar requirements.   the 
The registration
system to become an importer/exporter would conform to WTO rules, including the automatic
licensing provisions of the Agreement on Import Licensing, and would not restrain trade.  TheWorking Party took note of these commitments.
Advertising and Trade in Alcohol and Tobacco Products
20. Some members of the Working Party considered that the rules applying to the advertising of
tobacco and alcohol products, which had a stronger effect on imports, should not be used to
discriminate either de facto  or de jure  against imported products.  The representative of Chinese
Taipei stated that under current law, alcohol products could be advertised in newspapers and  on
television and radio during specified times.  While beer and wine could be advertised in magazinesand newspapers , spirits could not be advertised in these publications.  New spirits products could be
advertised in magazines for a period of one year following their release onto the market.  Therepresentative of Chinese Taipei also said that advertising of tobacco products was governed by theTobacco Hazard Prevention Act, which came into force on 19 September 1997.WT/ACC/SPEC/TPKM/2/Rev.1
Page 18
21. The representative of Chinese Taipei confirmed that from the date of accession Chinese
Taipei would not use advertising rules to discriminate against imported tobacco and alcohol products.The one-year limitation on advertising of alcoholic beverages would be eliminated upon accession.He also stated that, upon accession, Chinese Taipei would permit advertising for alcoholic beveragesin all media, subject to regulation in relation to the content and timing of advertising. He furtherconfirmed that the advertising rules for tobacco and alcohol products and implementation of thoserules would be consistent with WTO requirements from the date of accession. The Working Party
took note of these commitments.
22. Concerning the right to sell and trade in tobacco and alcoholic beverages, the representative
of Chinese Taipei stated that, upon accession, enterprises engaged in the distribution and/or trade ofimported alcohol and tobacco produ cts would not be required to provide information beyond that
requested of firms engaged in the distribution and/or trade of like domestic products in Chinese Taipeiconcerning their business plans or corporate structures and that such information will be requested onthe same timetable as applied to the latter firms.  He also stated that taxes and other charges ofwhatever character, including licensing and other administrative fees, related to trade and distributionof imported alcohol and tobacco products would not be applied in excess of those applied to firms
dealing with like domestic products.  The Working Party took note of these commitments.
Customs Tariff
23. Several members of the Working Party requested information on the tariff structure of
Chinese Taipei, the existence of bilateral rates of duty, in particular the products covered by bilateraltrade concessions, the existence of mixed duties, whether trade measures were being adopted on aMFN basis, the level of average effective rates of duty and the actual levels of protection in force.Some members noted that in 1992 some 413 agricultural and 21 non-agricultural products accountingfor 5.4 per cent of total tariff lines were subject to duty rates ranging from 30 per cent to 50 per cent.In response, the representative of Chinese Taipei said that since 1 September 1980, Chinese Taipei's
tariff had two columns of duty rates.  The differential duty rates in Column II were applied to imports
from countries or areas that granted reciprocal tariff treatment to Chinese Taipei's exports.  At present,Column II duty rates applied to products from 153 countries or areas which amounted for almost98 per cent of the total value of imports. Products from the following WTO Members did not fallwithin Column II: Angola, Cuba, Djibouti, Gambia, Mauritania, Mozambique, Myanmar, Romania,Uganda and Zimbabwe. The representative of Chinese Taipei undertook that upon accession to theWTO, MFN treatment would be extended to all WTO Members applying the WTO rules to Chinese
Taipei. He added that between 1984 and 1992, the tariff had been revised across-the-board and dutyWT/ACC/SPEC/TPKM/2/Rev.1
Page 19
rates have been lowered by some 50 per cent.  During that same period, 668 items had become duty
free, and 13165 items had their duty rates reduced. An additional tariff reduction in 1995 had furtherreduced duty rates on 758 items, with an average duty reduction  of 2.8 per cent.  Besides, the duty
rates of 1,358 items had been further reduced in 1998 including 289 items in accordance with
the WTO Ministerial Declaration on Trade in Information Technology products on December
1996.  Further reductions for 1,130
 750 tariff lines were pending in the Legislature.  At present, the
highest nominal duty rate was 50  per cent, but this was levied only in a few agricultural product
areas.  The simple average of nominal duty rates had declined from 30.81 per cent in 1984 to 8.72
8.25 per cent in 1996  1998 .
24. In response to further questions, the representative of Chinese Taipei indicated that in 1996
1997 out of a total of 8,070  8,274  dutiable items, 40 items were subject to specific duties and 114
items were subject to mixed duties.  The remaining 7916  8,119 dutiable items were subject to ad
valorem  duties.  Some members of the Working Party stated that, in their view, Chinese Taipei should
preferably adopt an ad valorem  approach throughout the tariff in order to increase the predictability
and transparency of the tariff régime.  The representative of Chinese Taipei said that more than 98 percent of the tariff lines were already subject to ad valorem  duties.  In future reviews of its tariff system,
Chinese Taipei would take into account the views of members in this respect.
[Tariff Rate Quotas
25. The representative of Chinese Taipei stated that following revision of its system of area
restrictions  import restriction  on certain imported products, Chinese Taipei would introduce a
system of now maintained the  tariff rate quotas, described in paragraphs [50, 54, 58 and 61 and 126 ]
below and recorded in the relevant part of the Schedule of Concessions.  The representative of
Chinese Taipei noted that products subject to import restriction would be completely liberalised
upon Chinese Taipei's accession to the WTO, with young coconuts and motor vehicles subject totariff rate quotas.]
Other Fees and Charges (Article II:1(b))
26. The representative of Chinese Taipei stated that except as provided in the Schedule of
Concessions on Goods (Part I of Annex I to the Draf t Protocol  of Accession of Chinese Taipei) all
other fees and charges covered by Article II:1(b) of the GATT 1994 would be bound at the level ofzero.WT/ACC/SPEC/TPKM/2/Rev.1
Page 20
Fees and Charges for Services Rendered
27. The representative of Chinese Taipei said that there were no taxes, charges or fees levied on
imports only.  The trade promotion fee authorized by the Foreign Trade Act had a ceiling of0.05 per cent, and was levied on all imports and exports exclusively to promote import and exporttrade. He stated that the Trade Promotion Fee was a very small charge, no more than 0.05 per cent ofcustoms value (currently only 0.0425 per cent), applied to both imports and exports to fund tradepromotion activities.  He added that in addition to import tariffs and taxes applied equally to imported
and domestic products (e.g., the Commodity Tax, the VAT, and the Alcohol and Tobacco Tax),  the
Harbour Construction Dues and the Trade Promotion Fee were the only charges applied to imports.In response, some members of the Working Party stated that the Trade Promotion Fee did not appearto be consistent with Article VIII of the GATT 1994.
28. In response to questions concerning the Harbour Construction Due, the representative of
Chinese Taipei explained that the customs authorities collected a Harbour Construction Due for goodsentering Chinese Taipei through ports.  The levy,  introduced in 1948 to fund harbour expansion and
maintenance, was imposed at the fixed rate of 0.5
 0.4 per cent and did not apply to inter-island trade.
29. Some members of the Working Party stated that they considered that this levy and fee were
inconsistent with Article VIII(1)(a) of the GATT 1994.  These members of the Working Party
considered that the levy and fee discriminated against imports because they were only applied toimported goods and not to like domestic products and they were not in conformity with Article III ofthe GATT 1994.  Some members of the Working Party pointed out that the ad valorem  nature of the
Harbour Construction Dues and the Trade Promotion Fee made it impossible for them to reflect theapproximate cost of the services rendered.  The representative of Chinese Taipei said that both theHarbour Construction Dues and the trade promotion fee applied to imports as well as exports.  In hisview, the Harbour Construction Dues  could be treated as an internal tax or a service fee to improveport facilities and services.  Chinese Taipei considered both the Harbour Construction Dues and the
trade promotion fee to be service fees as cont emplated under Article VIII of the GATT 1994.  He
acknowledged that 25 per cent of  the Harbour Construction Dues proceeds were used to providefinancial assistance to the cities where the harbours are located.  Upon accession to the WTO, therevised Commercial Port Law would require that any revenue generated through the HarbourConstruction dues be used exclusively for the development of commercial harbours.
30. Some members of the Working Party stated that the levy of 0.5
 0.4 per cent was a revenue
charge to fund harbour up-keep and expansion based on import taxation, and was not a charge forspecific services rendered.  This levy  and the trade promotion fee should be brought into conformityWT/ACC/SPEC/TPKM/2/Rev.1
Page 21
with GATT 1994 in advance of Chinese Taipei's accession.  The representative of Chinese Taipei
responded that a transitional period would be required  to bring the levy into conformity with Article
VIII of the GATT 1994.  The representative of Chinese Taipei stated that after reviewing thecomments made by Working Party members, and subject to agreement on a transitional period,Chinese Taipei had decided to bring the Harbour Construction Dues into conformity with Article VIIIof the GATT 1994.  He added that the Trade Prom otion Fee would not be revised because it was
considered in conformity with GATT 1994 Articles III, and VIII.  In addition, neither charge would
be increased in its level of application, or included in the taxable base of imports for the purposes of
applying domestic taxes such as the Commodity Tax.  If requested, Chinese Taipei would consultwith the Members concerning the effect of these measures on their trade.
31. [In response to the statement of the representative of Chinese Taipei regarding maintenance of
the Trade Promotion Fee, some members continued to express concern that the fee was inconsistentwith Articles II and VIII of GATT 1994 and requested that Chinese Taipei bring it into conformitywith the WTO upon accession.]
32. The representative of Chinese Taipei confirmed that the Trade Promotion Fee would be
applied in conformity with WTO obligations and would not exceed 0.05 per cent of the customs value
of the good.  The Working Party took note of these commitments.  Some members expressly reserved
the right to pursue this issue pursuant to the WTO Understanding on Rules and Procedures Governingthe Settlement of Disputes.
33. The representative of Chinese Taipei stated that Chinese Taipei would require a transitional
period of 15 months to bring its Harbour Construction Dues levy into conformity with therequirements of the WTO Agreement, particularly to make it a specific charge because of the need tomodify the budget plans to compensate for the anticipated revenue losses resulting from themodification of the levy.
34. The representative of Chinese Taipei stated that Chinese Taipei would bring the Harbour
Construction Dues into conformity with Articles III and VIII of the GATT 1994 within a period of
15 months from the date of accession to the WTO, and in any case by 31 December 2000
(whichever occurred first) by 1 January 2001. The Harbor Tax would be based on the cost of
the services provided and not applied on an ad valorem basis.   Within the same time-frame
Chinese Taipei would exclude these charges from the valuation base for the application to importsof domestic taxes, such as the Commodity Tax and the Tobacco and Alcohol Tax.  During thisWT/ACC/SPEC/TPKM/2/Rev.1
Page 22
transitional period, the Harbour Construction Dues would not exceed 0.5  0.4 per cent of the taxable
base.  The Working Party took note of these commitments.]
[The representative of Chinese Taipei stated that Chinese Taipei would bring the application of the
Harbour Construction Dues into conformity with Articles II and VIII of the GATT 1994 uponaccession and would exclude those charges from the valuation base for the application to imports ofdomestic taxes, such as the Tobacco and Alcohol Tax.  Specifically, the Harbour Tax would be aspecific charge based on the cost of the services provided and not applied on an ad valorem basis.The Working Party took note of these commitments.]  [The representative of Chinese Taipei statedthat Chinese Taipei would bring the Harbour Construction Due into conformity with Articles III and
VIII of the GATT 1994 by the date of its accession to the WTO.  The Working Party took note of this
commitment.]
Internal Taxes Applied to Imports
35. In response to questions, the representative of Chinese Taipei stated that VAT, Commodity
Tax, tobacco and alcohol monopoly tax were applied equally to imported and domestic products.
Commodity tax
36. Some Working Party members sought information from Chinese Taipei on the application of
the special commodity tax.  In response, the representative of Chinese Taipei said that the tax wasimposed on imported goods at the time of importation, and on like domestic goods upon their release
from the factory.  For imported goods, the amount of the commodity tax was the taxable value
established in accordance with the Customs Import Tariff, plus customs duties, plus harbourconstruction dues multiplied by the tax rate.  For domestic goods, the amount of the tax wascalculated on the basis of one of two methods.  The first method applied when the manufacturer soldproducts through wholesalers or if the manufacturer was paid to manufacture the products for others.
The second method considered a 12 per cent promotional expense.  The goods subject to thecommodity tax were:  rubber tires, cement, machine-ma de cool drinks, flat glass, oil and gas, certain
electric appliances and motor vehicles.  Chinese Taipei believed that many Working Party membershad similar practices.  He noted that the 12 per cent promotional expense represented a manufacturer's
typical promotion expense.  The tax allowed a deduction of 12 per cent for promotional expenses
when goods were circulated not through an exclusive wholesaler or distributor.  Chinese Taipeiconsidered that it treated imported goods the same as the goods sold through distributors, and did notdiscriminate against imports.  The commodity tax was a special excise tax.  The determination of thetax base had taken into account common practices.  The 12 per cent deduction only applied if theWT/ACC/SPEC/TPKM/2/Rev.1
Page 23
domestic sales were not through a sole distributor.  In response, some Working Party members noted
that a critical consideration in the application of this internal tax was consistency with nationaltreatment and other WTO obligations and the avoidance of subsidization.
37. Some members of the Working Party were of the view that the basis for the application of the
commodity tax to imports was artificially inflated because the tax base of domestic and imported
goods were different.  Domestic goods were assessed on an ex factory basis, excluding the cost ofdelivery and transfer of the goods to the wholesale level whereas the base for imported goods was theimport value plus transportation, insurance and other customs charges and customs  duty.  They alsonoted that domestic goods profited by having an additional 12 per cent deduction for promotionalexpenses prior to the calculation of the tax.  These members of the Working Party considered thatChinese Taipei should address the central issue of equal application of the tax.  The bases forcalculation of the tax were inequitable, and the incorporation of a 12 per cent differential in the
valuation of imports and domestic products based on the concept of promotional expenses could not
be justified, and should be eliminated prior to accession.  Those members considered that due to thedifferent tax bases, the tax was applied in a manner th at were not in conformity with Article III of the
GATT 1994.  They stated that Chinese Taipei should eliminate by the date of its accession anydomestic tax measures or methods of applying domestic taxes  whose applications vary according towhether the items are locally manufactured or imported.
38. The representative of Chinese Taipei stated that from the time of Chinese Taipei's
accession, changes to the Commodity Tax would modify the base for the tax.  From that date, thetax would be calculated on the basis of the sale price.  The sale price was the manufacturer'swholesale price for the current month; if the manufacturer sold directly to retailers, wholesale profitcould be deducted from the selling price.  Deductible wholesale profit rate was determined on anindustry-by-industry basis.  Imported goods were taxed on the basis of their CIF value and thereforewere not eligible for the tax adjustment.  He further added that in order to equalise the treatment ofdomestic and imported products, prices of domestic manufactured goods sold directly to retailerscontained elements of wholesale profits which were not included in the tax base.  He further statedthat the current practice of assessing the commodity tax based upon engine displacement ofautomobiles and the licence plate tax was fully consistent with Article III of the GATT 1994 .  Some
members of the Working Party were of the view , however, that application of a tax based on
characteristics such as engine displacement could de facto discriminate against imports.
39. The representative of Chinese Taipei stated that Chinese Taipei would amend its laws to
remove the allowance of 
12 per cent for promotional expenses,  allowance provided  when goods wereWT/ACC/SPEC/TPKM/2/Rev.1
Page 24
circulated not through an exclusive distributor, and to  would use selling prices as the base for levying
the commodity tax.  He further stated that Chinese Taipei would eliminate by the date of its accessionany domestic taxes , or
 tax assessment methods that resulted in the discriminatory taxation of domestic
and imported products  or application thereof which was inconsistent with Article III of the GATT
1994.  [He further stated that Chinese Taipei would eliminate by the date of its accession any
domestic tax measures or method of applying domestic taxes, whose application varied according to
whether the articles are locally produced or imported.  In particular, he stated that Chinese Taipei
would change the method of assessing the commodity tax on automobiles and the license plate tax
from one based on engine displacement to... .]   The Working Party took note of these commitments.
Gross Business Receipt Tax, General Sales Tax and VAT
Business Tax:  Gross Business Receipt Tax and VAT
40. Some members of the Working Party asked Chinese Taipei to describe the application of the
business tax, its scope and level of application, the portion of the tax revenue accounted for byimports, etc.  In response, the representative of Chinese Taipei said that the Gross Business Receipt
Tax (GBRT)  Business Tax applied to the sale of goods and the rendering of services.  The tax was
levied in two forms.  The first form was a general sales tax which applied to the business of insurance,
banking, investment trusts, securities, agricultural wholesale, pawn shops and small business
operators.  The second form, a VAT business tax, applied to all other businesses.  The VAT wasapplied at the rate of 5 per cent, to both domestic and imported products.   All goods, bothdomestically manufactured and imported, were generally taxed at the point of sale.  Revenue fromboth kinds of tax imposed on imported goods had represented 2.34
 1.98 per cent of total tax revenue
in 1996  1997 (1 July 1995  1996 to 30 June 1996 1997 ).  Chinese Taipei considered that the imposition
of the tax at the point of sale simplified the procedure by levying the tax on the taxable goods'imported value and the importers' added value jointl y, rather than separately.  However, in some
cases, to minimise tax avoidance imported goods were subjected to business VAT at the time of
importation.  The reason for this was that if  business VAT was levied at the time of sale, it was
possible that certain imported goods with particular end uses could avoid payment of the tax, i.e.motor vehicles imported for personal use, or goods imported by a financial institution.  He furthernoted that because the tax paid on inputs could be deducted from the tax paid on outputs collectedfrom purchases, goods imported for use and goods imported for resale were not differentiated at thetime of importation.  In relation to the tax base for calculation of the amount of business VATpayable, the representative of Chinese Taipei noted that imported goods were taxed on the basis of thecustoms duty paid value plus the commodity tax, if applicable.  The harbour construction dues wouldWT/ACC/SPEC/TPKM/2/Rev.1
Page 25
be removed from the tax base.  If the commodity tax was payable, the commodity tax formed part of
the value added, and was counted as the tax base for the business, whether the goods were imported ormanufactured domestically.  In addition, the busines s importer could deduct the input tax from the
output tax and was only taxed for the value added to the goods.  Therefore, there was no doublecounting or "tax-on-tax".  He added that Chinese Taipei, after examining whether all goods could betaxed at the time of importation, had found that it was common practice in those economies whichimposed VAT to levy the tax at the time of importation.
Monopoly tax on tobacco and wine
41. Some members of the Working Party sought information on the monopoly tax for tobacco,
wine, spirits and beer.  In their view, there was a serious transparency problem in this sector.  Inresponse, the representative of Chinese Taipei confirmed that imported tobacco and wine were subjectto a Monopoly Tax, in lieu of customs duty, harbour construction fees, commodity tax andvalue-added business tax.  The Monopoly Tax imposed on domestic tobacco and wine products wasassessed on an ad valorem  basis, equivalent to the operating revenue minus all relevant cost and
expenses of the Taiwan Tobacco and Wine Monopoly Bureau (TTWMB) and was considered a salestax.   On average, imported tobacco and wines were subject to the Monopoly Tax at the rate of
approximately 120 per cent of the import price.  Some members of the Working Party requested that
Chinese Taipei provide information on cost of production, and indicate how the TTWMB'smethodology to determine the tax rate complied with the GATT 1994, in particular Articles I, III, X,XI, XVI, and XVII, a list of the taxes applied to imports, their negative rates, the value basis as wellas the methodology used to determine that domestic tobacco, spirits and wine were subject to a taxrate of approximately 185 per cent of cost.  These members also requested information concerning
differences in the amount of tax payable on certain whiskies.  The representative of Chinese Taipei
stated that foreign spirits had only been permitted to be imported for a short period, and that due to
recent exchange rate fluctuations these were approximate figures.  He also noted that Scotch and Irish
whiskies were higher quality and price products, were classified as one category and subject to a
higher tax rate than other whiskies.  Some members of the Working Party recalled that this issue had
been raised in a WTO panel.  In their view, these measures appeared to be inconsistent wit h Article III
of the GATT 1994.
42. Some members of the Working Party reiterated their concerns in relation to the operation of
the Monopoly Tax scheme, particularly in relation to the lack of sufficient transparency in itsoperation.  Without the availability of data to calculate domestic costs, it was not possible toaccurately determine whether the Monopoly Tax was equally applied to domestic and importedWT/ACC/SPEC/TPKM/2/Rev.1
Page 26
products.  In their view the Monopoly Tax appeared to have a greater impact upon imported products.
They did not consider Chinese Taipei's explanations of the methodology used to determine theMonopoly Tax adequate, substantiated and verifiable.  It was not possible to conclude that domesticand imported products were taxed in an equivalent manner.  As there were large discrepanciesbetween the rates quoted by Chinese Taipei and the information available to national authorities, italso appeared that the tax system was discriminatory.  These members stated that no transition periodwould be appropriate.  Chinese Taipei should either eliminate the Monopoly Tax on imports of wine
and distilled spirits immediately upon accession or replace the Monopoly Taxes with reasonable ad
valorem  import duties, and ensure that internal taxes applied equally to domestic and imported wine
and spirits.  These members of the Working Party disagreed with the view that a system for the ad
valorem  taxation of domestic goods based on net profits of the TTWMB could be considered as
equivalent to a specific tax on imported goods.  It appeared to these members that due to the lack oftransparency mentioned above, there were problems in assessing the consistency of the MonopolyTax system with the GATT 1994.  Nevertheless the Monopoly Tax for imported wine, cigarettes anddistilled spirits was significantly higher than the effective tax rate for similar domestic products inbreach of Article III of the GATT 1994.  These members requested, therefore, that the operation of
the TTWMB be altered prior to Chinese Taipei's accession, to enhance transparency and to operate in
a manner consistent with the provisions of the GATT 1994.  The official monopoly plan ought to beliberalised and the trade impact of the plan fully  reviewed prior to accession.  The representative of
Chinese Taipei said that due to the alteration of the scheme over recent years, the Monopoly Tax onimported products tended to be lower than the tax applied to domestic products.  In any event, theLegislative Yuan was determined to repeal the tobacco and wine monopoly system.  Alcohol andtobacco products were classified according to production methods and other features, with differenttariff rates and taxes applying to different products.  Classification and tariff and tax rates werecarefully monitored in order to ensure that no discrimination occurred between domestic and imported
goods.
43. Some members of the Working Party asked that details be provided of the  scheme which
would replace the Monopoly Tax and reiterated that no transitional period was appropriate for asituation which was in clear breach  of Article III of the GATT 1994.  The representative of Chinese
Taipei responded that public hearings had been completed, and a plan had been developed.  Heprovided the Working Party with a summary of the re form plan and said that he considered that the
future regime would improve trade in alcohol and tobacco products.  The new scheme would beimplemented six months after Chinese Taipei's accession or, if the Legislature gave its approvalbefore accession, the new system would become effective six months after the implementation of the
new laws.WT/ACC/SPEC/TPKM/2/Rev.1
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44. [The representative of Chinese Taipei stated that, [prior to accession,] [within six months after
enactment of the Tobacco and Alcohol Administration Law and the Tobacco and Alcohol Tax Lawand in any event no later than six months after Chinese Taipei's accession] the Monopoly Tax wouldbe abolished and that tobacco and alcohol products would be subject to (i) import duties as reflectedin Chinese Taipei's Schedule of Concessions (Part I of Annex I to the Draft Protocol of Accession) inthe same manner as other imported products and (ii) the tobacco and alcohol tax.  The representativeof Chinese Taipei also stated that [from the date of accession,]  [within six months after enactment of
the Tobacco and Alcohol Administration Law and the Tobacco and Alcohol Tax Law and in any
event no later than six months after Chinese Taipei's accession] internal taxes and charges of whatevercharacter related to trade and distribution of alcohol and tobacco products would be applied equally todomestic and imported products, including with respect to domestic distribution and sales of theseproducts without regard to the ownership of the en terprise.  The Working Party took note of these
commitments.]
Quantitative Restrictions
Area restrictions
45. In the early stages of the Working Party, some members noted that discriminatory area
restrictions were imposed on many products:  (i) peaches:  limited to imports from Europe and the
United States;  (ii) lemons and limes, grapes, plums,  whole ducks, turkey cuts:  issuance of import
licenses was suspended except for imports from the United States;  (iii) oranges and other mandarins,including tangerines and satsumas, and grapefruits:  imports from the United States were free, importsfrom South Africa were limited in quantity;  (iv) apples:  imports from the United States and Canada
were free;  imports from other areas were subject to quantitative restrictions.  There were also
restrictions on cigarettes and bilateral agreements on the importation of beer, wine and cigarettes.  Intheir view, the area restrictions were discriminatory trade measures inconsistent with the GATT 1994and, in particular, the  MFN principle.  Those members emphasized that there was no justification topermit the continuation of such discrimination.  Chinese Taipei should eliminate those measures fromthe date of its accession to the WTO.
46. In response the representative of Chinese Taipei said that the area restrictions operated to
maintain the diversity in the origin of imports and to maintain trade balances with certain areas, orto facilitate agriculture restructure. Only a small percentage of industrial and agricultural productswere subject to the discriminatory restrictions. Area restrictions for alcoholic beverages andcigarettes had been eliminated on 1 September 1994.  Area restrictions in place on the agriculturalWT/ACC/SPEC/TPKM/2/Rev.1
Page 28
products listed in Attachment C to this Draft Report would be liberalized.   The tariff rate quotas
offered as a liberalization measure to be implemented after accession for certain agriculturalproducts would be distributed, through a bidding 
procedure  as indicated in Chinese Taipei's
market access schedule, through procedures  consistent with GATT 1994 and the Agreements on
Agriculture and Import Licensing Procedures.
47. With regard to automobiles, some members noted that Chinese Taipei's Import
Regulation 209, provided that only motor vehicles from "Europe and the American Continent" may beimported into Chinese Taipei.  The representative of Chinese Taipei agreed that this restriction wasdiscriminatory.  It was imposed pursuant to the Automobile Industry Strategic Development Plan.Chinese Taipei's car industry was currently not a competitive one, as the size of the market was notsubstantial enough to allow for economies of scale.  The total production value in 1992 was US$8.2
billion, representing 5 per cent of the total production value of the whole manufacturing sector.
Workers directly employed in the car industry were in the number of 120,000. A sudden opening ofthe market would result in serious economic and social problems.
48. Some members of the Working Party stated that a transitional period was not appropriate, and
that the area restrictions on automobiles should be eliminated prior to accession.  In response, therepresentative of Chinese Taipei undertook to eliminate the  area restrictions on automobiles.  Up tonow the liberalisation of car imports had proceeded as follows:  (i) heavy trucks could be importedfreely from February 1994;  (ii) passenger cars could be imported without quantitative restrictionsfrom North America and Europe (excepting Eastern Europe).  Passenger cars from other areas were
currently under either quantitative or area restrictions;  (iii) light trucks and station wagons could be
imported freely from North America and Europe.  Im ports of light trucks and station wagons from
other areas were currently under either quantitative or area restrictions.  He assured the Working Partythat it was not the intention of Chinese Taipei to employ measures not permitted by the WTOAgreement, such as voluntary export restraints or other grey area measures to liberalise automobileimports.
49. At the request of some members of the Working Party, the representative of Chinese Taipei
provided a comprehensive listing, covering both tariff and non-tariff measures, of all trade preferencesin force.  He added that once area restrictions were eliminated, there would remain no trade
preferences extended on a bilateral basis.  The representative of Chinese Taipei assured the Working
Party that area restrictions would be brought into conformity with the requirements of the WTOAgreement.WT/ACC/SPEC/TPKM/2/Rev.1
Page 29
50. The representative of Chinese Taipei undertook that area restrictions applying to imports of
certain passenger cars and certain small commercial vehicles, certain automobile chassis andmotorcycles would be eliminated upon Chinese Taipei's accession to the WTO.  Passenger cars andlight commercial vehicles were the only industrial products that would be subject to tariff-rate quotasafter WTO accession.  Tariff rate quotas would be allocated in a manner consistent with Article XIIIof the GATT 1994.  The tariff-rate quotas would be increased at the annual rate of 20 per cent.  Thetariff rate quota system would be eliminated no later than [31 December 2006].  He confirmed that
area restrictions for alcoholic beverages and cigarettes had been eliminated from 1 September 1994.
Chinese Taipei also undertook that upon its accession, area restrictions on agricultural products wouldbe eliminated.  The tariff rate quotas would be administered in a manner consistent with therequirements of the WTO Agreement, [in particular the Agreement on Agriculture, the Agreement onImport Licensing Procedures and GATT 1994].  The Working Party took note of these commitments.
Import Licensing
51. Several members of the Working Party noted that historically Chinese Taipei had maintained
a complex network of non-tariff measures consisting of quantitative restrictions affecting some 27items,  non-automatic import licensing affecting some 246 items, including 27 items which were
subject to quantitative restrictions and standards inspections, quarantine, labelling requirements, etc.
These members requested detailed information on the schemes.  Some members added that the banson liquid milk, rice , passenger cars equipped with diesel engines and motorcycles of 150cc or more,
applied by Chinese Taipei were inconsistent with WTO obligations and would have to be eliminated.These members requested that Chinese Taipei eliminate, prior to accession to the WTO, all importrestrictions inconsistent with the GATT 1994 and the WTO Agreements, in particular the Agreementson Agriculture, Sanitary and Phytosanitary Measures and Technical Barriers to Trade.
52. In response, the representative of Chinese Taipei said that a system of licensing had been
operating in relation to the importation of certain products that consisted of area restrictions,
discretionary licensing and import controls.  Automatic licensing operated to grant an import license
without requiring the Customs to screen the goods.  Discretionary licensing required that the Board of
Foreign Trade issued import licenses for certain products, following approval by consent letter of therelevant agencies.  In the case of such products, the Council of Agriculture, Industrial DevelopmentBureau, Department of Health, Department of Environmental Protection and other agencies were
required to consent to the issue of licenses for both import controls and discretionary licensing inrespect of products falling within their respective jurisdictions.  Once the importation was approved,the Board of Foreign Trade issued an import license.WT/ACC/SPEC/TPKM/2/Rev.1
Page 30
53. The representative of Chinese Taipei stated that as a result of the concerns expressed by
members of the Working Party, Chinese Taipei had decided to establish a "Negative List" system.The Negative List system would streamline the importation process and replace all pre-existinglicensing requirements, except in cases where the product had national security, public order,cultural, educational,
 public health, or environmental protection implications.  The Negative List
would result in the issuing of licenses by the relevant agencies according to an objective standard,and in a transparent manner.  He noted, however, that some items on the automatic license listwould become subject to quantitative restriction or import ban under the Negative List system, dueto the re-categorisation of those items.  For products subject to import monopolies, consent letterswould only be granted to importers enjoying an import monopoly.  The procurement practices ofthe government agencies enjoying the import monopoly would be made consistent with Article XVIIof the GATT 1994.
54. The representative of Chinese Taipei outlined the operation of its Negative List system under
the June 1997 version as follows.  Items were listed in either Table I (Table of Commodities Subject
to Import Control) or in Table II (Table of Commodities Subject to Conditional Import).  Items listed
in Table I could not be imported unless specially approved by the Board of Foreign Trade or otherrelevant authorities, which were listed in Import Regulations 111/112.  Items listed in Table IIrequired that an import license be issued prior to importation, by the Board of Foreign Trade or itsdesignated licensing banks i.e. Import Regulations 121/122.  Tables I and II constituted the NegativeList.  In respect of items that had previously required a license issued by the Board of Foreign Tradebut were not retained in the Negative List, if they  were subject to administration requirement, which
had no trade restriction effect, the Customs were required to carry out an inspection to determine thatall requirements for importation were fulfilled.  The items subject to that requirement were listed in
the "List of Commodities Entrusted to Customs for Import Examination" ("the Entrusted List").  The
Entrusted List was published together with the Negative List in a consolidated volume arranged byHS Code number.  The Negative List and the Entrusted List each accounted for 8 per cent of tarifflines, the remaining tariff items were free of this requirement.  Items contained in Table I were subjectto general import bans, which in respect of most products were justified under Articles XX and XXIof the GATT 1994,  whilst others were required to protect domestic sectors.  In the case of bansnecessary to protect domestic sectors, an entitlement to import the necessary quantity could beauctioned when domestic production fell short of demand.  He stated that upon accession, the itemsWT/ACC/SPEC/TPKM/2/Rev.1
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listed in Table I could  be moved to Table II if quotas or tariff quotas are used as transitional
measures.
55. In response to further questions from members of the Working Party, the representative of
Chinese Taipei explained that the decision whether a product should be included in the Negative Listwas taken by government agencies.  The legal basis for including items in the negative list wasArticle 11 of the Foreign Trade Act, which permitted the imposition of a restriction if the restrictionwas necessary to fulfil obligations under international treaties or trade agreements, or for national
defence, social security, culture, human health, environmental protection  reasons or to implement
specific policies.  After accession the inclusion of new items would be subject to a review procedureto ensure WTO consistency.  Although the legislation did not specifically provide for interestedparties to make representations concerning the inclusion of an item in the negative list, existingpractice permitted such representations to be made to decision makers.  The practice of invitinginterested parties to express their view when considering changes to the Negative List would becontinued.  Following accession to the WTO, the number of items included in the negative list wouldbe substantially reduced; inclusion of new items w ould be subject to a review procedure to ensure
WTO consistency.  He also noted that the effect of the recent Foreign Trade Act was to limit the types
of considerations required to be taken into account by administrators when deciding whether items
were to be included in the Negative List as subject to new import licensing requirements.
56. Several members of the Working Party indicated that all bans and restrictions set out in the
Negative List, and the requirements for import lice nsing being issued by more than one regulatory
agency should, be brought into full conformity with the WTO Agreement, especially the Agreementon Import Licensing Procedures.  In particular, a member of the Working Party noted that some of
Chinese Taipei's stated reasons for restrictions did not appear consistent with WTO requirements, e.g.,restrictions required to protect domestic sectors.  This member requested specific justifications for anyimport restrictions maintained or imposed in the future.  A general statement that  import bans, which
in respect of most products were justified under Articles XX and XXI was insufficient to evaluate any
commitment.  In response, the representative of Chinese Taipei noted that although the Agreement onImport Licensing Procedures allowed Members to have more than one import licensing entity,Chinese Taipei would work towards a system that required import licenses to be obtained from oneregulatory entity only.  Some members of the Working Party said that all import bans, quantitativerestrictions  import licensing restrictions, and other non-tariff measures inconsistent with therequirements of the WTO Agreement would have to be eliminated prior to Chinese Taipei's accession.Some members of the Working Party said that if Ch inese Taipei believed that certain of its import
bans, quantitative restrictions and administrative requirements were not inconsistent with theWT/ACC/SPEC/TPKM/2/Rev.1
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provisions of the WTO, the onus was on Chinese Taipei to demonstrate this.  They requested Chinese
Taipei to modify this list to show: the precise de scription of the product affected by HS number, the
measure or measures applied to each, the specific WTO provisions which justified the maintenance ofthe measure or measures and the responsible agency.  If border measures were to be justified toenforce Technical Regulations or Sanitary and Phytosanitary Measures, the table should also show therelevant national standard(s) and any international standard(s).  The Working Party would then be in aposition to examine the matter further.  The repres entative of Chinese Taipei stated that a table
containing the justifications for placing items on the Negative List would be submitted to the Working
Party.
57. [The Consolidated List of Commodities Subject to Import Regulations and Commodities
Entrusted to Customs Import Examination is referred to in Attachment D to this Draft Report.  Therepresentative of Chinese Taipei undertook to notify any changes introduced to the Consolidated Listin accordance with the Agreement on Import Licensing Procedures.  The Working Party took note ofthese commitments.]
58. [
In response to a request that Chinese Taipei produce a plan for the elimination of
quantitative or other non-tariff measures on fish, the representative of Chinese Taipei stated thatChinese Taipei would eliminate all quantitative restrictions on these products from the date ofaccession, with the sole exception of import bans on mackerel, carangid and sardines.  As indicated
in Attachment C of the Draft Report, upon accession to the WTO Agreement, the  The existing
import controls for mackerel, carangid and sardines would be replaced by tariff quotas which
would be distributed, as indicated in Chinese Taipei's market access schedule, throughprocedures consistent with GATT 1994 and the Agreements on Agriculture and ImportLicensing Procedures.  The Working Party took note of these commitments.]
59. Some members of the Working Party noted the continued application of non-tariff measures
to imports of certain yachts and vessels for pleasure or sports and a ban on the importation of
motorcycles, including those with reciprocating internal combustion piston engines of a cylinder
capacity exceeding 850 CC  150cc. These members of the Working Party stated that the restrictions
were not justified under the WTO Agreement.  In addition, some members noted that Chinese
Taipei had not developed appropriate emission standards for motorcycles over 150cc which initself could preclude effective market access even if the formal ban was eliminated.  Finally,those members noted that Chinese Taipei restricted motorcycle access on certain majorWT/ACC/SPEC/TPKM/2/Rev.1
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highways in Chinese Taipei.  These issues would need to be addressed at the time the ban was
eliminated to ensure effective market access for these products.
60. The representative of Chinese Taipei stated that Chinese Taipei would eliminate the import
ban on motorcycles over 150cc [two years after] [upon] accession to the WTO.  [At that time, ChineseTaipei would implement a licensing system for yachts and vessels for pleasure or sports that [wouldrequire importers to have an approved abandonmen t/replacement right as applicable to domestically
built fishing boats.  These measures conformed to Article XX(g) of GATT 1994.] [conformed to the
automatic licensing provisions of the WTO Agreement on Import Licensing Procedures.]   TheWorking Party took note of these commitments.
61. The representative of Chinese Taipei said that from the date of accession, Chinese Taipei
would apply its import licensing and quantitative restrictions regime in strict conformity with WTO
Agreements, in particular with the Agreements on Agriculture and Import Licensing Procedures.Chinese Taipei would also ensure that the distribution of import licenses, quotas, tariff-rate quotas,permits or any other means of approval for importation or the right of importation by central andsub-central authorities would not be conditioned on  whether competing domestic suppliers of such
products exist or on performance requirements of any kind, including but not limited to localcontent or mixing requirements, the transfer of technology, the conduct of research anddevelopment, minimum export requirements, or on the origin or nature of the enterprise, except as
provided in the relevant commitments in paragraph [85] of this Draft Report.  [The representative
of Chinese Taipei also confirmed that in accordance with  would ensure that price increases, if
any, in respect of imports by state trading enterprises would be imposed in a mannerconsistent with the requirements of Article II:4 of GATT 1994 and Article 4.2 of the Agreement
on Agriculture. , Chinese Taipei will ensure that no price increase in respect to imports, particularly
by State trading enterprises, will result in prot ection beyond that provided by the tariff in its
schedule.]  The Working Party took note of these commitments. ]
62. The representative of Chinese Taipei said that Chinese Taipei also undertook to eliminate
and not reintroduce or apply import bans, quantitative restrictions, licensing restrictions, or othernon-tariff measures having similar effect which were not justified under specific provisions of theWTO Agreement , with the exception of those measures listed in Attachment C of the Draft Report.
Area restrictions for agricultural and industrial products would be liberalized from the time of
accession as shown therein  . He also noted that Chinese Taipei would not use measures related to
customs procedures and technical product or safety standards as disguised barriers to trade and thatWT/ACC/SPEC/TPKM/2/Rev.1
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any measures applied will be no more restrictive than necessary to accomplish their legitimate
goals.  The Working Party took note of these commitments.
Customs Valuation
63. Some members of the Working Party requested information on the system of customs
valuation in Chinese Taipei.  In response, the representative of Chinese Taipei stated that paragraph 1of Article 12-1 of the Customs Law reflected the situations in which the transaction price would notbe used as the basis of customs value.  The transaction value would not be used when the invoiceprice did not include the cost adjustments provided under Article 12 of the Customs Law and theimporter failed to provide objective and quantifiable information to support the price calculation.  In
addition, if the Customs had any doubts concerning the adequacy or accuracy of an invoice, it
normally requested the importer to provide an explanation or other evidence to substantiate thevalidity of the invoice.  If the importer refuse d to give explanations or the evidence provided
contradicted the facts, and further investigation proved that the invoice price was not the priceactually paid or payable, the Customs could determine that the invoice price would not be accepted asthe customs value.  In such a circumstance, Article 12-2 to 12-6 of the Customs Law provided that thevalue was assessed in the following sequence:  firstly, the transaction value of identical goods;secondly, the transaction value of similar goods;  thirdly, the deductive value;  fourthly, the computedvalue;  and, fifthly, any other reasonable value.
64. Some members of the Working Party asked whether any minimum import values were used
in Chinese Taipei.   The representative of Chinese Taipei replied that although Article 12 of its
Customs Law provided for use of a duty paying value list which provided a pre-determined value forimported products, the Executive Yuan, by administrative order, had eliminated the pre-determined
values.  The discretionary power had been eliminated as the result of the April 1997 amendment to the
Customs Law.
65. Some members of the Working Party said that some aspects of the customs valuation regime
of Chinese Taipei appeared to be inconsistent with the requirements of the Agreement on the
Implementation of Article VII (Customs Valuati on Agreement) in the following respects:  the
authority to use the duty paying value list or any reference price mechanisms or other arbitrary lists of
prices used for customs valuation purposes on agricultural and other imports should be eliminated;and  the selection of valuation methods outside the hierarchy provided in the Customs ValuationAgreement, particularly in the case of valuation of leased and rented goods, should be addressed.They also noted that  precise WTO consistent rules on the determination of whether parties wererelated when dealing with the customs valuation of transactions between related parties were required;WT/ACC/SPEC/TPKM/2/Rev.1
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and  provisions giving effect to the WTO Ministerial Decision on Customs Valuation should be
enacted.
66. Some members of the Working Party also expressed concern regarding the practice of
requiring importers to post bonds for prompt clearance of goods, in particular horticultural goods,based on pre-determined reference prices.  These reference prices were not established in atransparent manner, were often changed without prior notice and no opportunity was provided forcomment on the rate established.  In the view of these members, this practice had the same effect asuse of reference prices to calculate duties.  In response, the representative of Chinese Taipei statedthat its use of reference prices in determining the amount of the bond to  be posted to facilitate
prompt clearance of goods was not inconsistent with the WTO obligations, in particular, theobligation under the Agreement on Customs Valuation. However, Chinese Taipei would continue toimprove the current practice to make the bond amount a closer reflection of the actual value of thegoods.  He noted in this connection that any bond paid would be refunded, if a post-clearanceassessment of the customs value of the goods was less than the bond amount.  In particular,
Chinese Taipei will immediately adopt an equitable, transparent Customs bonding system forany perishable fruits and vegetables subject to such requirements that allows for potentiallyfrequent adjustment to the bond value to take account of prevailing market forces.  Such asystem will include the following characteristics:
• The fixing of specific bond values for each supplier country.  Upon request, Chinese
Taipei Customs authorities will make available to any domestic or foreign interestedparty the data, the data source, and the methodology used in formulating thereference price upon which the value of the bond is based.
• Timely adjustments to the bond value, as frequently as is necessary, to take account
of prevailing international market prices, and seasonal quality consideration.
• Consideration of alternative data sources, should representatives of an exporting
country believe that more appropriate and accurate data exist beyond that beingemployed by Chinese Taipei in setting the bond values.
• The establishment of a mechanism that would provide, at the request of either an
exporting country or Chinese Taipei authorities, for prompt consultations should aquestion or concern arise relative to an established bond value.WT/ACC/SPEC/TPKM/2/Rev.1
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The Working Party took note of this commitment.
67. Responding to comments from some members of the Working Party detailing other areas
where the customs valuation regime of Chinese Taipei did not concord with the provisions of theAgreement, the representative of Chinese Taipei indi cated that these issues had been addressed in the
implementing legislation for WTO accession to be approved by the Legislative Yuan.
68. The representative of Chinese Taipei confirmed that amendments to bring the Customs Law
into conformity with the Customs Valuation Agreement would be made prior to accession, either byeliminating the inconsistent practices or amending current laws and regulations to bring proceduresinto line with the Customs Valuation Agreement.  [
 He confirmed that Chinese Taipei would
implement the Customs Valuation Agreement fully upon accession , without recourse to any
transition period . The representative of Chinese Taipei also committed that Chinese Taipei would,
upon accession, cease using pre-established or reference prices to establish the amount of any bond
that might be posted in connection with customs clearance of horticultural products. ]   He further
committed that Chinese Taipei would, with a vi ew to resolving specific problems, upon request,
provide information to WTO Members on the methods for determination of customs valuation ofspecific products and consult concerning the effect of Chinese Taipei's customs valuationprocedures on their trade.  The Working Party took note of these commitments.
Rules of Origin
69. Some members of the Working Party requested information about the elaboration of rules of
origin in Chinese Taipei whether in the context of free trade agreements or otherwise, and alsorequested Chinese Taipei to confirm that its rules of origin for both preferential  and non-preferential
trade complied fully with the WTO Agreement on Rules of Origin.
70. The representative of Chinese Taipei said that the Customs Law had been amended in
April 1997 to provide a legal basis for the establishmen t of rules of origin fully consistent with the
WTO Agreement.  The Rules of Origin on Imported Goods set out the criteria for determining origin.
Preshipment Inspection
71. Some members of the Working Party requested information on whether the services of a
preshipment inspection firm were employed by Chinese Taipei.  The representative of Chinese Taipeisaid that Chinese Taipei did not use pre-shipment inspection.  The representative of Chinese TaipeiWT/ACC/SPEC/TPKM/2/Rev.1
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noted however  that Chinese Taipei had amended the Foreign Trade Act in April 1997 to provide the
legal basis for the authority to regulate preshipment inspection activities of firms mandated by foreigngovernments.
72. The representative of Chinese Taipei stated that  Chinese Taipei would ensure that its laws and
regulations relating to preshipment inspection would be consistent with the relevant WTOAgreements, in particular, the Agreements on Preshipment Inspection and Customs Valuation.  TheWorking Party took note of this commitment.
Anti-Dumping and Countervailing Duties
73. In response to questions from members of the Working Party the representative of Chinese
Taipei said that in 1984 Chinese Taipei had enacted "The Implementing Regulation on the Impositionof Countervailing Duties and Anti-Dumping Duties".  That Regulation provided that countervailing oranti-dumping duties could be levied on goods found to have received subsidies or to have beendumped and which threatened domestic industries.   In the view of Chinese Taipei the implementingregulations had been in compliance with the requirements of the Tokyo Round Codes onAnti-Dumping and Subsidies and Countervailing Measures. In pursuance to the 1994
 1997
amendment to the Customs Law, Chinese Taipei undertook to revise the Regulations to make them
consistent with the Uruguay Round Agreements prior to accession to the WTO and to submit them to
the WTO.
74. The representative of Chinese Taipei stated that, Chinese Taipei would ensure that its
legislation on anti-dumping and countervailing duties was in full conformity with the requirements ofthe WTO Agreement, in particular Article VI of GATT 1994 and the Agreements On theImplementation of Article VI and Subsidies and Countervailing Measures from the date of accession.Chinese Taipei would also ensure that any anti -dumping or countervailing duties imposed on any
product after its accession were in accordance with the requirements of Article VI of GATT 1994 andthe Agreements On the Implementation of Article VI and Subsidies and Countervailing Measures.
The Working Party took note of these commitments.
Safeguards Regime
75. Some members of the Working Party noted that a provision in the Foreign Trade Act, referred
to as the "trade imbalance clause" permitted Chines e Taipei to suspend trade from specific countries
because of persistent trade deficits and did not specifically authorise the type of actions foreseen in
the Understanding on Balance of Payments Provisions of GATT 1994.  In response to requests forWT/ACC/SPEC/TPKM/2/Rev.1
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justification of this provision and measures taken pursuant to it, the representative of Chinese Taipei
said that, in his view, Articles XI, XII, and XI X of the GATT 1994 authorized the maintenance of this
particular provision of the Foreign Trade Act.  Some members of the Working Party disagreed withthis opinion and stated that the provision in question was not in conformity with the requirements ofWTO Agreement, in particular GATT 1994 Articles I, II, XI, XII, XIII, XIV and XIX.  Followingfurther discussions in the Working Party, the representative of Chinese Taipei agreed that certainprovisions of the Foreign Trade Act were inconsistent with the provisions of the WTO.
76. The representative of Chinese Taipei stated that in April 1997, the Foreign Trade Act had
been revised to address members' concerns about the trade imbalance clause.  This clause had beenreplaced with one that was consistent with Article XII of the GATT 1994.  The representative of
Chinese Taipei further confirmed that the provisions of the Foreign Trade Act would be
implemented from the time of accession in a manner conforming to the provisions of the WTOAgreement. Moreover, the representative of Chinese Taipei stated that should a critical balance ofpayment situation develop, [Chinese Taipei would use price-based measures] [
Chinese Taipei would
give preference to those measures referred to in the Understanding on the Balance of PaymentsProvisions of GATT 1994 as price-based measures]
 to address the situation and would maintain any
measures only so long as necessary to restore balance of payment equilibrium .  In the
circumstance that Chinese Taipei must resort to measures that are not price-based, ChineseTaipei will transform these measures into price-based measures within 6 months afterimplementing the initial measures.  Moreover, such 
any measures taken for balance-of-payment
reasons would  would not be used to  provide import protection for specific sectors, industries or
products.
77. In response to further questions the representative of Chinese Taipei informed members of the
Working Party that Chinese Taipei operated a sy stem to compensate farmers for damage caused by
competition from imports of agricultural products.  Relief was accorded if producers of majoragricultural products suffered serious injury as a result of the liberalisation of imports due to tradenegotiations or policy changes.  If the quantity of such products imported during the injury period hadincreased by 20 per cent or more compared with a reference period of the previous three years; or theimported products had been subsidised or had otherwise benefited from unfair trade practices.Serious injury was deemed to occur when the market price fell below the cost of production.  Thesixteen products eligible for relief under the Regulations were as follows: citrus, apples, plums,peaches, guavas, pears, wax apples, grapes, tea leaves, beef, pork, duck meat, bred shrimps,
pineapples, chicken meat and clams .  In 1995, the legislation was amended to the “Rules forWT/ACC/SPEC/TPKM/2/Rev.1
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Redressing Damage to Farmers Caused by Agri cultural Imports.”  It broadened the eligible
products to all agricultural products.   Chinese Taipei submitted to the Working Party information
concerning the draft Plan on Safeguards for Agricultural Products implementation of this program .
78. The representative of Chinese Taipei stated that, from the time of accession, the safeguards
regime would be fully consistent with the WTO Agreement on Safeguards.  [ The representative of
Chinese Taipei confirmed that safeguards on agricultural products would be included in the
calculation of Chinese Taipei's AMS calculations and AMS reduction commitments  measures
taken to redress damages to farmers caused by agricultural imports would be included in the
calculation of Chinese Taipei's AMS calculations and AMS reduction commitments according to
the Agreement on Agriculture. ]  The Working Party took note of these commitments.
Export Regulations
79. In response  to requests for information on any restrictions maintained on exports, the
representative of Chinese Taipei stated that no products were prohibited from export from Chinese
Taipei.  Ammunition, narcotics, protected wildlife, and strategic high-tech products were subject to
strict export controls, and could only be exported under special export permits.  As a result ofmeasures adopted by importing countries, certain other items such as textiles were subject to anexport licensing system.  He provided the Working Party with a list of all products subject to exportlicensing maintained to ensure:
(i) the implementation of quantitative restriction arrangements and voluntary restraint
arrangements;
(ii) national security, the security of supply of certain daily necessities and important
industrial materials, including rice and salt;
(iii) social and financial policies, including narcotics control;(iv) protection of endangered species of wild fauna and flora, including Formosan land-
locked salmon, and white-skin sugar cane;
(v) hygiene and health, including puffer fish, turtles, prawns and pork;(vi) agricultural development, including bananas, seedless water-melons, onions, eels,
and raw sugar.
80. In order to streamline the granting of an export licence, a system to permit the grant of an
automatic electronic export licence was under development. .
Export Processing Zones/Export subsidiesWT/ACC/SPEC/TPKM/2/Rev.1
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81. Some members of the Working Party requested information on the Export Processing Zones
(EPZ s), in particular, information on the total  value of trade as well as the percentage of EPZ s
production.  In response, the representative of Chinese Taipei said that the EPZ s were established
pursuant to the Statute for the Establishment and Management of Export Processing Zones.  Investorsin the EPZ s were entitled to the following incentives:
(a) exemption from the following duties and taxes:
(i) customs duties on imported machinery and equipment, raw materials, fuels,
commodities, components, and samples;
(ii) commodity tax on the exported or imported products, machinery and equipment,
raw materials, components, and samples;  and
(iii) deed tax on the newly built standard buildings acquired from the EPZ s
Administration or the buildings legally acquired from the EPZ s Administration;
(b) no business tax on exported goods and their related labour services as well as on the goods
purchased by the export enterprises;
(c) due to the exemption from taxes or duties, there was an exemption from the requirement to
keep certain documents and to pay tax deposits etc.  In addition, transfers of property to differententerprises within an EPZ were not subject to the business tax.  The representative of Chinese Taipeifurther added that the EPZ s were managed by the Export Processing Zones Administration, Ministry
of Economic Affairs.  Various products and services were produced in the EPZ s.  The representative
of Chinese Taipei noted that there were three
 four EPZs in Chinese Taipei.  In 1994, 96 per cent of
production in the EPZ s was exported.  Under Article 5 of the Statute for the Establishment and
Management of Export Processing Zones,  most of the production of the EPZ s was required to be
exported.  A certain percentage of the production could be sold on the local market, provided that it
was accorded the same treatment as imported products, and was subject to customs duties.  Theproduction from the EPZ s sold in the domestic market was subject to customs duty on the final
product, not on inputs into the product.  If goods produced in the EPZ s for local sale were less than 50
per cent of the annual production, the EPZ s Administration would automatically approve the domestic
sale of the goods.  If the goods produced for local sale were in excess of 50 per cent of annualproduction, the approval by the EPZ s Administration was discretionary.  However, no such
application for approval had ever been refused.  The representative of Chinese Taipei added that therewas no local content requirement for ente rprises wishing to operate in the EPZ s.  In the past the
subsidiaries or branches of enterprises could not be located in the EPZ s.  In April 1997 Chinese TaipeiWT/ACC/SPEC/TPKM/2/Rev.1
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had amended the Implementing Regulation in order to permit subsidiaries or branches of enterprises
to be located in the EPZ s.  EPZ s products which entered the domestic market accounted for only 3-4
per cent of the value of EPZ s total production in 1994 and 6-7 per cent in 1997.  In April 1997
Chinese Taipei had lifted the 50 per cent limit on local sales through amendments to the Statute.
Domestic sales had exceeded 50 per cent of the production of crystal oscillators, electronics testers,voice synthesizers, capacitor parts, sensors, etc.  Around 41.6 per cent of EPZ s production had
benefited from the tax exemption granted by the Statute for Upgrading Industries.
82. Some members of the Working Party noted that some of the arrangements providing for fiscal
incentives for businesses located or operating in the EPZ s appeared to be in conflict with the
provisions of the SCM Agreement and the Agreement on TRIMS.  They requested further informationon the fiscal incentives offered.  In response, the representative of Chinese Taipei indicated thatinvestments in the Export Processing Zones were exempted from customs duties and the commoditytax on imported machinery, raw materials, fuels, commodities, components and samples, and the deedtax on the new buildings purchased from or otherwise acquired from the EPZ s Administration.  No
business tax was charged on the exported goods and their related services, nor was the business taxlevied on purchases by those enterprises.  These enterprises were also exempted from applying for tax
exemption, guarantee, relevant bookkeeping, and paying provisional tax.  He further stated that in
Chinese Taipei's view those practices complied with the requirements of the WTO Agreement and didnot constitute export subsidies.  Their trade effect, if any, was minimal:  0.185 per cent of the totalexports.
83. Some members of the Working Party noted that import duty and tax exemptions on goods
imported into the EPZ s were provided for goods not directly incorporated into the exported product.
Direct taxes on the profits from the exports of those enterprises were also exempted.  In their viewthese practices appeared to be in conflict with the SCM Agreement.  Those subsidies could also becountervailable. The representative of Chinese Taipei replied that the purpose of the EPZ s was to
create duty-free zones for the production of exports, in order to create an environment where exports
manufactured from imported inputs need not obtain a refund of duties.  This was consistent with theobligations contained in the WTO Agreement.  The limitation on duty refunds/exemptions on inputsdirectly incorporated into exported products was applied by many developed economies, for thepurpose of administrative expediency, rather than being based on the theory that refunds/exemptionsof duties on imported inputs not directly incorporated into the exported products would undulyincrease the exporters' competitiveness and should not be allowed.  Because the products wereprimarily for export, it was therefore not necessary to limit exemptions or refunds to the extent ofproducts directly incorporated into the products exported from the EPZ s.  In fact, in Annex II of theWT/ACC/SPEC/TPKM/2/Rev.1
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same Agreement, inputs consumed in the production process, for which drawback of import charges
was allowed, are defined to cover energy, fuel and oil in the production process and catalysts whichare consumed in the course of their use to obtain the exported product as well as the inputs physicallyincorporated.  Because the exports from the EPZ s did not receive "undue" amounts of refund or
exemption the relevant practices did not constitute a subsidy.  The representative of Chinese Taipeiadded that the SCM Agreement Annex I "Illustrative List of Export Subsidies" did not contain therequirement that the input be physically incorporated into the exported product.  He stated that the
exemption from corporate income tax for EPZ s enterprises had been abolished together with the
Statute for Encouragement of Investment at the end of 1990.  The current tax exemption granted toEPZs enterprises also applied to enterprises located outside the EPZ s, whether or not they exported
their products, provided that they met the requ irements set forth in the Statute for Upgrading
Industries.  Consequently, the practice was neither a specific subsidy nor conditional upon exportperformance.
84. Some members of the Working Party reiterated that the incentives provided in the EPZ
appeared to be incompatible with the SCM Agreement.  They expected that Chinese Taipei wouldensure that sales into the market of Chinese Taipei from the EPZ would be subject to normal taxes,tariffs, and other border measures.  In addition, these members considered that Chinese Taipeishould satisfy the Working Party that the regime of the EPZ was consistent with all therequirements of the WTO concerning the treatment of goods, services and intellectual property.The representative of Chinese Taipei replied that Chinese Taipei had decided to levy duties on EPZproducts entering the domestic market on the basis of ex-factory prices minus value added resultingfrom manufacturing or processing activities in the EPZ, and would undertake to do so in the future.The formula to be used in calculating the value added by the EPZ would take into account therelevant practices of other economies.  Chinese Taipei hoped that the changes to the system wouldalleviate concerns that the current system operated as a disincentive for EPZ products entering thedomestic market.  He considered that all aspects of the EPZ were consistent with the WTO,particularly when the April 1997 amendments to the Statute Governing the Administration of ExportProcessing Zones takes effect after accession.  In connection with the exemption of import duties
for imported machinery used by EPZ he noted that this exemption was not conditional upon export
performance and the trade effects of this practice, in his view, were far below the threshold of 5 per
cent for actionable subsidies set out in that Agreement.   In the interim, elimination of the limits
on sale of products into the domestic economy had removed the requirement to exportproducts from an EPZ and the proportion of goods exported from the zones had declined overthe first six months of 1998.  While the fiscal incentives previously provided under the EPZWT/ACC/SPEC/TPKM/2/Rev.1
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statute could be considered by some members to constitute subsidies, elimination of the export
requirement, in Chinese Taipei’s view, resolved this issue.
85. The representative of Chinese Taipei confirmed that, from the date of its accession, all
taxes, charges, and measures affecting imports, including import restrictions and customs and tariffcharges, applied to imports from abroad into other parts of Chinese Taipei would be applied to EPZproducts entering the domestic market.  These taxes, charges, and measures 
While customs duties
would be applied on the basis of ex-factory prices [ minus value added resulting from manufacturing
or processing activities in the EPZs].  ,other taxes, charges and measures would be based on the
ex-factory price.   He further added that preferential arrangements provided to enterprises located
within the EPZs would be extended [ to all enterprises whether domestic or foreign and maintained
in a WTO consistent manner, in particular with regard to the principles of non-discrimination andnational treatment.] [in a WTO consistent manner].
  Furthermore, export requirements or
incentives would not be reintroduced.   The Working Party took note of these commitments.
Internal Policies Affecting Trade in Goods
Industrial Policies Including Subsidies
86. Some members of the Working Party stated that  in Chinese Taipei there were currently in
place a number of official industrial assistance prog rams that could be considered prohibited industrial
subsidies under the WTO Agreement on Subsidies and Countervailing Measures (the SCM
Agreement) were currently in place.    These practices  included all export subsidies that were of thetype contained in the illustrative list set out in Annex I to the SCM Agreement (including preferentialtax rates and other subsidies contingent upon export performance) and other subsidies contingentupon the use of domestic over imported goods, as provided for in Article 3 of the SCM Agreement.
87. Some members of the Working Party said that they considered that many of the industrial
promotion plans currently being implemented by Chinese Taipei acted as disguised subsidies.  Thesemembers requested that Chinese Taipei review these measures in light of the WTO Agreement onSubsidies and Countervailing Measures.  The representative of Chinese Taipei recalled that Chinese
Taipei had, as an observer, participated in the meetings of the GATT 1947 Committee on Subsidies
and Countervailing Measures.  He said that Chinese Taipei undertook to notify all relevant laws andregulations in order to facilitate the Committee's discussion of the industrial promotion plans.Moreover, Chinese Taipei undertook to notify its subsidy practices according to Articles 25 and 28 ofthe WTO Agreement on Subsidies and Countervailing Measures.WT/ACC/SPEC/TPKM/2/Rev.1
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88. In response to questions about industrial subsidies maintained by Chinese Taipei, the
representative of Chinese Taipei explained that the Statute for Upgrading Industries providedfinancial assistance to industry, tax exemptions or accelerated depreciation, assistance to "ImportantTechnology-Based Enterprises Engaged in Manufacturing Business", and "Important InvestedEnterprises Engaged in Manufacturing Business".  The representative of Chinese Taipei
explained that to qualify as an “important technology-based enterprise,” the following threecriteria must be met: (1) products to be produced under the investment plan should belong tothe ten emerging industries: (2) the paid-in or increased paid-in capital for the investment planshould be over NT$200 million; and (3) th e amount of the fund available for the purchase of
brand-new machinery/equipment in the inve stment plan should  be over NT$10 million.
“Important invested enterprises” include enterprises in the manufacturing as well as servicesindustries.  In other words, the products to be produced under the investment plan are notlimited to those of the ten emerging industries.  The criteria for paid-in or increased paid-incapital and the amount of funds for purchasing brand-new equipment/machinery are differentfrom industry to industry.   He further explained that the benefits specified in Article 5 of the
Statute (conferring accelerated depreciation of assets) applied to all enterprises, organized in theform of a company pursuant to the Company Law of Chinese Taipei, including companiesincorporated by foreign investors or entities.  He added that all industrial sectors could be entitled toreceive accelerated depreciation for investment in structural adjustment and energy saving devicesdeemed eligible pursuant to subparagraph 2 of Article 5 (by order of the Executive Yuan.)  So farthere had been no applications filed under subparagraph 2 of Article 5.  The representative ofChinese Taipei said that in the fiscal 1996 the total value of the tax exemptions or tax reductionsgranted, pursuant to the Statute, was approximately US$0.44 billion.  Details of the Statute for
Establishment and Administration of a Science-Based Industrial Park would be provided in the
notifications required by the SCM Agreement.
89. Some members of the Working Party expressed concern that Article 18 of the Statute
for the Establishment and Administration of a Science-Based Industrial Park (“SSP”)constituted a prohibited subsidy because the business tax was exempted from sales ofdomestically produced machinery and equipment sold to enterprises inside such an industrialpark, but was imposed on imported machinery and equipment sold to enterprises inside apark.  In their view, this constituted an import substitution subsidy.  Some members of theWorking Party pointed out that a similar provision could be found in Article 17 of the Statute
for the Establishment and Management of Export Processing Zones (Amended Edition) (“EPZWT/ACC/SPEC/TPKM/2/Rev.1
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law”).  The representative of Chinese Taipei explained that the business tax was not included
in the scope of either Article 18 of the SSP or Article 17 of the EPZ law, that business tax was,in fact, exempted on machinery and equipment that was imported for resale.  Such importswere covered by the very broad exemption from business tax under Article 41 of the BusinessTax law for goods imported by businesses for “business operations purposes.”  Some membersasked the Chinese Taipei representative why, if this was the case, was there a need for thepreceding article of the SSP, Article 17, which refers specifically to the business tax andexempts from such tax imports of machinery and equipment into a park.  The representativeof Chinese Taipei explained that the provisions of Article 18 of the SSP and Article 17 of theEPZ Law were redundant to Article 41 paragraph 2 of the Business Tax Law in respect of thebusiness tax.  The representative of Chinese Taipei stated that the details of the Statute forEstablishment and Administration of a Science-Based Industrial Park would be provided inthe notification required by the SCM Agreement.
90. Some members of the Working Party noted that Article 7 of the Statute for Upgrading
Industries (SUI)  gave tax credits to industries investing in particular regions filling criteria to be
determined by the Executive Yuan, and requested more information on those criteria.  Therepresentative of Chinese Taipei noted that the criteria set by the Executive Yuan were whether aparticular region was poor or the economic development was stagnated relative to population, levelsof employment, transportation capacity, tax revenues, the average regular income per family, andthe availability of public facilities.  For this purpose, each year the counties were ranked in apublished list which determined levels of regional assistance.  He confirmed that no industrial
commodities currently benefitted from domestic income and price supports, nor were domestic
subsidies granted which might affect trade.   Chinese Taipei would notify the investment tax credit
provided under Article 7 of the SUI.
91. Some members of the Working Party expressed concern about the transparency of the criteria
used to determine which enterprises would receive assistance under the Statute for Upgrading
Industries and requested information on the scope of application for tax benefits, whether they applied
to domestic and foreign investors, to all industrial sectors and to specific areas, as well as abreakdown of expenditures.  In response, the representative of Chinese Taipei said that under the taxincentive programme, any company established in the form of a company
 for establishing a renowned
brand and image exceeding NT$3 million expenditure in a tax year was entitled to a tax credit of 5
10 per cent of the tax payable in 1993 ;  if the expenditure exceeded NT$5 million and the company
was authorized by the Ministry of Economic Affairs to use the symbol of "excellence", the tax creditWT/ACC/SPEC/TPKM/2/Rev.1
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was 10  15 per cent of the tax payable.  Other tax benefits were allocated to all industrial sectors or to
particular industrial sectors.  In a recent period the incentives under the Statute for UpgradingIndustries related to the Business Income tax had included accelerated depreciation, corporateinvestment tax credit, institutional shareholders tax credit, foreign investment loss reserves,exemptions from the mandatory distribution of profits, deferral of income tax for stock dividends, etc;benefits had also concerned the Individuals' Investment Income Tax, Deferral of Land ValueIncrement Tax, Stamp Tax, Deeds Tax, etc.
92. Some members of the Working Party enquired whether all of the criteria listed in Article 21
of the Statute for Upgrading Industries were required to be established before a business could beeligible for assistance from the Development Fund.  Those members also requested examples of howthe Executive Yuan determined when assistance should be paid for "other purposes approved by theExecutive Yuan" as prescribed by sub-paragraph 6 of that Article.  The representative of ChineseTaipei said that only one criteria needed to be satisfied, and that sub-paragraph 6 only applied whennone of the other criteria applied.  He also explained that the value of the revolving Fund wasapproximately NT$66 billion at the end of July 1997.
93. Noting that the Statute for the Development of Medium and Small Businesses and the Statute
for Upgrading Industries provided for industrial incentives, some members of the Working Party
requested an estimate of their value
 set-up amount in a recent period.   In response to another
question, the representative of Chinese Taipei noted that Chinese Taipei had established the Fund  forDevelopment of Small and Medium Businesses in 1992, with a total value of NT$12 billion.  Until
March 1998, the allocated amount of the Fund is NT$9.1 billion.  Furthermore, almost all
enterprises could qualify as small or medium sized enterprises.
94. Some members expressed concerns that the tax credit provided in connection with the
creation of internationally recognized brands constitutes an export subsidy and thus prohibitedunder the SCM Agreement.  Article 4 of the implementing regulations for the relevant law listscovered expenses, which include, in part, “expenses for international market investigation forthe development of new products.”  The representative of Chinese Taipei stated that theRegulation on Creation of International Brands will be amended to be consistent with WTOrequirements, upon accession, without any recourse to a transition period. Any futureprogramme in this area would be consistent with WTO requirements and would notreintroduce prohibited subsidies.  The Working Party took note of these commitments.WT/ACC/SPEC/TPKM/2/Rev.1
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95. Some members of the Working Party also noted that among the measures to support new and
promising industries were tax concessions and that industrial cooperation programmes could be
applied in certain areas.  Reference was also made to the existence of two separate steel prices and theneed to ensure that the lower domestic price was not used to indirectly subsidize the export of steel.
With regard to steel, the representative of Chinese Taipei said that besides direct export price at theworld market level, Chinese
 China Steel Corporation (CSC) maintained a two-tier pricing in the
domestic market.  The higher domestic price offered to customers whose products were sold and
consumed in the domestic market was based on the landed, duty-paid price of imported steel products.
The lower one (i.e. indirect export price), applied to customers who manufactured steel into finalproducts for exports, was based on the landed, duty-free price of imported steel products.  The indirectexport price was aimed to ensure that CSC's pricing remained competitive with that of imported steel.The two-tier pricing system had been abolished in 1994 and China Steel Corporation had beenprivatized in April of the same year.  Prices of China Steel Corporation's products since then had beendetermined according to the market condition.  There had been no State intervention in the
determination of prices whatsoever   Since then the domestic steel market had been free andcompetitive.
96. Some members of the Working Party asked how Chinese Taipei proposed to stimulate
development of desirable industries, particularly high-technology and high value-added industries.The representative of Chinese Taipei said that in addition to the Statute for Upgrading Industries,Chinese Taipei had eased the requirements rela ting to the acquisition of land used for factory
construction and had taken steps to satisfy long term demand for industrial sites.  Chinese Taipei hadalso provided medium and long-ter m training programmes to highly qualified personnel in order to
upgrade skill levels, and had developed the necessary infrastructure pursuant to the DevelopmentPlan.
97. In response to additional questions concerning the specific measures taken by Chinese Taipei
to support new and promising industries, the representative of Chinese Taipei indicated that Chinese
Taipei supported research and technological development in the areas and technologies identified aspromising and major focuses of attention.  The Mi nistry of Economic Affairs (MOEA) gave priority
to funding scientific research and development.  Such investment had increased yearly.  The MOEAalso contracted with non-profit seeking research institutes to develop "Generic Technology" requiredby promising industries.  Promising industries could also enjoy tax incentives, pursuant to Article 8 ofthe Statute for Upgrading Industries.  Promising industries were "Important Technology-BasedEnterprises".  Pursuant to the Statute, the scope of the words "Important Technology-BasedEnterprises" was defined by order of the Executive Yu an.  In order to support industries deemed to beWT/ACC/SPEC/TPKM/2/Rev.1
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"Important Technology-Based Enterprises", the following steps were taken.  First, the relevant
authority of Chinese Taipei determined the generi c technologies to be developed for the relevant
industries.  Second, the Executive Yuan and the Legislative Yuan would review and approve therequired budget.  Third, the MOEA would enter contracts with non-profit research institutions toexecute the required research.  Fourth, private comp anies might be invited to participate in the joint
development of the required technologies, or alternatively, following development of the technology,might be offered the technology at a market price.  Fifth, the non-profit research institutions might
sub-contract specific research tasks to private companies.  Sixth, if the private companies had the
capacity to develop the required technology by themselves, the authorities could assist them inobtaining the necessary finance, or could provide other assistance.  The ten promising industriesspecified in the six year Development Plan were as follows:  telecommunications industry,information industry, consumer electronics industry, semi-conductors industry, precision machineryand automation industry, aerospace industry, advanced materials industry, specialty chemicals andpharmaceuticals industry, medical and health care industry and pollution control industry.  The eightkey technologies to support the development of the above-mentioned new and promising industries
are:  optoelectronics, information software, industrial automation, applied materials technology,
advanced sensing technology, bio-technology,  resource development and energy conservation.
98. In response to questions from members of the Working Party concerning the incentives
allocated to the use of advanced technology and their consistency with WTO obligations, therepresentative of Chinese Taipei said that in addi tion to the funding of research and development by
the MOEA, funds were also allocated for tec hnology import or "Inward Technology Transfer".
Subsidies applied to the purchase of automation equipment and pollution prevention equipment.  Thesubsidy took the form of a tax credit to purchasers.  Depending on whether the equipment wasimported or of domestic manufacture, different tax credits applied.
99. Some members of the Working Party expressed continued concern regarding the
assistance granted for the purpose of developing the “Top-Ten Emerging Industries.” In theirview, such assistance included practices that constituted import substitution and exportsubsidies and a wide range of R&D funding.  These members sought assurances that ChineseTaipei had included all such assistance in its subsidy notifications, emphasizing that suchnotifications would be without prejudice to the legal status of such assistance.  Therepresentative of Chinese Taipei assured the concerned members and the Working Party that
(1) the top-ten emerging industries did not now, and would not in the future, benefit from any
measure meeting the definition of an “export subsidy” under Article 3 of the SCM Agreement,WT/ACC/SPEC/TPKM/2/Rev.1
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and (2) all government assistance to those industries is strictly limited to (i) R&D funding, all
of which Chinese Taipei had notified, and which represented the totality of “Measures forAssistance in the Development of New Leading Products”; (ii) low-interest loans granted underArticle 21 of the SUI; and (iii) SUI Article 6 tax credits.
100. The representative of Chinese Taipei confirmed that the “Program for the
Development of Critical Components and Parts” was nothing more than an exhaustive list ofthe goods/products covered by Top Ten Emerging Industries and that the Program involvessupport or assistance measures only under the “Measures for Assistance in the Development ofNew Leading Products.”  With respect to low interest loans under Article 21 of the SUI, therepresentative of Chinese Taipei confirmed that the loans that Chinese Taipei maintained werenot given to a specific enterprise, industry or group of enterprises or industries within themeaning of Article 2 of the SCM Agreement, did not require the purchase of domesticallyproduced goods or services, and did not constitute an incentive or inducement to purchasedomestically produced goods or services over imported goods or services. With respect toArticle 6 tax credits, the representative of Chinese Taipei explained that under Article 6 of theSUI, enterprises that purchased domestically produced automation machinery and equipment,including “automatic machine equipment,” received a larger tax credit than if they purchasedimported automation machinery and equipment.  The representative of Chinese Taipeiconfirmed that Chinese Taipei would eliminate the Article 6 tax credit differential uponaccession and would not in the future reintroduce it or any other tax credit differential thatfavours domestically produced automation machinery and equipment, including “automaticmachine equipment.” The Working Party took note of this commitment.
101. The representative of Chinese Taipei said that the Export/Import Bank (Ex-Imbank) was a
government owned bank which provided financing a nd insurance schemes.  It provided secured loans
to export firms if the terms of sale provided payment terms of 181-360 days, in order to provide
working capital prior to payment.  Interest accrued on such loans at the rate of 6.375 per cent for NT$
loans, and  0.75 per cent above LIBOR for US$ loans  in August 1997 .  The bank also provided
deferred payment "export credits" with a duration of more than one year to exporters or importers inrelation to shipments of machinery and equipment, and products including turnkey capital goods.  Theamount of the down payment was not less than 15 per cent of f.o.b. contract value.  Interest wascharged at the rate of 6.25 - 6.75 per cent for NT$ loans, and
 6.5 - 7.75 per cent for US$ loans.
Meanwhile t The Bank also provided a fixed rate re-lending facility to overseas banks to enable the
purchase of manufactured goods of Chinese Taipei origin, at the rate of 5.5  8 per cent, and 5.75  8.25WT/ACC/SPEC/TPKM/2/Rev.1
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per cent depending on maturity date.  He added that the Ex-Imbank provided an overseas investment
financing system which financed domestic firms seek ing overseas investments.  That system did not
provide a more favourable interest rate than commercial loans from other banks.  Financing by theEx-Imbank was not linked to or conditional upon export performance.  The representative of ChineseTaipei reiterated that no export subsidies were paid to export enterprises.
102. Some members of the Working Party referred in detail to the aeronautics and space industry.
These members requested information concerning the Aeronautics and Space Industries Development
Programme, asked whether private or government owned enterprises had received assistance from the
Ministry of Defence and enquired about the use of industrial cooperation programmes in this sector.In this connection, a member of the Working Party noted that Chinese Taipei had indicated that theMinistry of Defence would use its operating f unds, technical personnel, technology and equipment
facilities to assist government-owned and private enterprises in the development of research and thedevelopment and the manufacturing of aeronautics and space products and their associated equipment.These members indicated that there could be no exemption, transitional or otherwise from subsidiesdisciplines for any sector or product such as the aeronautics and space industry.  The representative ofChinese Taipei said that the Aeronautics and Space Development Centre of the Chung Shan Science
Research Institute, Ministry of Defense had entered into an agreement with the Taiwan Aerospace
Corporation and the Industrial Technology Research Institute for technology transfer.  If agovernment entity purchased imported aeronautics and space products, the Committee for Aviationand Space Industry Development could enter into a technology transfer agreement, known as an"Industrial Co-operation Agreement".  If the foreign supplier entered such an agreement, the supplierwas required to provide a credit line in an amount equal to a percentage of the purchase price as acommitment to technology transfer and the purchase of domestic aeronautics and space products.Private companies that purchased foreign aeronautics and space products were encouraged to enterinto such "Industrial Co-operation Agreements", and if they did so were recommended to commercial
banks by the government of Chinese Taipei.  If they did not enter such agreements, no such
recommendation was made, and decisions by the banks whether to accord loans to those companieswere taken by the banks.
103. [The representative of Chinese Taipei stated that, as provided for in Article 28, any such
measure falling within the scope of Article 3 of the SCM Agreement granted or maintained within itsterritory would be notified by Chinese Taipei.  Such notification would provide a three year period forthe elimination or modification, as appropriate, of these subsidies, during which time they would notbe subject to challenge as prohibited subsidies under Part II of the SCM Agreement, but would remainWT/ACC/SPEC/TPKM/2/Rev.1
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actionable under Part III of the SCM Agreemen t.  The Working Party took note of these
commitments.]
104. [The representative of Chinese Taipei stated that, at the time of  upon accession, Chinese
Taipei would provide a complete notification of all of its subsidies which were specific to anenterprise, industry or group thereof (within the meaning of Articles 1 and 2 of the SCMAgreement) in conformity with Article 25 of the SCM Agreement.  This notification would include,
but not necessarily be limited to, the subsidies notified under Article 28.]  [The representative of
Chinese Taipei stated that, upon accession, Chinese Taipei would provide a complete notification of
all of its subsidies which were specific to an enterprise, industry or group thereof (within the
meaning of Articles 1 and 2 of the SCM Agreement) in confor mity with Article 25 of the SCM
Agreement.  This notification would include, but not be limited to, the subsidies notified under
Article 28 as well as the Development Fund and Article 8 tax benefits of the Statute for Upgrading
Industries; tax and interest benefits under part IV, section 9 of the Aeronautics and Space Industries
Development Program; and benefits under the Statute for the Establishment and Administration of a
Science-Based Industrial Park.]   [The Working Party took note of this commitment.]
105. [The representative of Chinese Taipei stated that, at the time of accession, Chinese Taipei
would provide a complete notification of all of its subsidies which were specific to an enterprise,
industry or group thereof (within the meaning of  Articles 1 and 2 of the SCM Agreement), in
conformity with the requirements of Article 25 of the SCM Agreement.  This notification wouldinclude, but not necessarily be limited to, the subsidies notified under Article 28.]  [The representativeof Chinese Taipei stated that, upon  accession,  Chinese Taipei would provide a complete notificationof all of its subsidies which were specific to an enterprise, industry or group thereof (within themeaning of Articles 1 and 2 of the SCM Agreement) in conformity with Article 25 of the SCMAgreement.  This notification would include, but not be limited to, the subsidies notified under Article28 as well as the Development Fund and Article 8 tax benefits of the Statute for Upgrading Industries;tax and interest benefits under part IV, section 9 of the Aeronautics and Space Industries
Development Program; and benefits under the Statute for the Establishment and Administration of a
Science-Based Industrial Park.]   [The Working Party took note of these commitments.]
Technical Barriers to Trade
106. In response to requests for information, with respect to the publication of the laws,
regulations, administrative orders and technical rules and standards, invitation of comments by thepublic, inquiry points, consultation agencies and other agencies required under the Agreement, theWT/ACC/SPEC/TPKM/2/Rev.1
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representative of Chinese Taipei said that, currently, only the Regulation for the Establishment of
National Standards promulgated in September 1996 contained a provision  that set forth the length oftime for soliciting comments.  There were nine laws, regulations and administrative orders relevant tothe implementation of the Agreement on TBT in Chinese Taipei.  The respective notifications shouldbe submitted to the WTO in due course.
107. The representative of Chinese Taipei added that Chinese Taipei had formed a national
committee to deal with and to coordinate all matters  relating to the Agreement. To ensure that the
Agreement was applied by all domestic relevant bodies, Chinese Taipei had promulgated the "Points
of Operation Concerning Enquiries under the Wo rld Trade Organization's Agreement on Technical
Barriers to Trade".  With respect to the publication of the technical regulations, standards andprocedures for assessment of conformity, and to the invitation of comments by the public, detailsconcerning the enquiry point and consultation agency that are required to be involved under theAgreement are as follows:
(i) notices of proposed or adopted technical regulations, standards and procedures for
assessment of conformity shall be published in the monthly Official Gazette of
Standards, distributed by the National Bureau of Standards under the Ministry of
Economic Affairs;
(ii) currently, only the Regulation for the Establishment of National Standards
promulgated in September 1996 contained a provision  that set forth the length oftime for soliciting comments.  Apart from this there were no explicit rules, either atthe central level or at the local level, that  set forth the length of time required for
soliciting comments. In principle, all government bodies shall provide a reasonabletime period (generally 60 days) for presentation comments.
108. In response to questions concerning the registration and certification requirements for
imported pharmaceuticals, cosmetics and medical devices, the representative of Chinese Taipei saidthat the requirements and approval standards for the importation of pharmaceuticals, cosmetics andmedical devices did not exceed the requirements applied in some advanced WTO members, and werethe same for imported and domestic goods.  The sanitary requirements for food stuffs were the samefor imported and domestic goods.  Domestic goods were also subject to inspection in order tomaintain effective quarantine in certain instances.  Goods found to be contaminated with toxigenic
vibrio cholerae  were destroyed.  The regulation on pesticide residue tolerances had been developed on
a "positive listing principle".  The same tests applied equally to domestic and imported goods.  TheWT/ACC/SPEC/TPKM/2/Rev.1
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CODEX standards set by FAO/WHO were one of the references used in determining the pesticide
maximum residue limits.  There were no procedures for the recognition of foreign quarantine or otherstandards in Chinese Taipei.  Chinese Taipei was endeavouring to modify standards so that theycomplied with international standards, except where national security, animal and plant healthconsiderations, or differences in environment, climate, geography or important technologyconsiderations necessitated deviations from international standards.
109. The representative of Chinese Taipei stated that recognition of foreign quarantine or other
standards would be dealt with in a manner consistent with Article 2.7 of the Agreement on Technical
Barriers to Trade.  The Working Party took note of this commitment.
110. Some members of the Working Party reaffirmed that Chinese Taipei would need to reform its
standards regime to bring it into conformity with the WTO Agreement on Technical Barriers to Trade,particularly in the area of notification procedures.  The representative of Chinese Taipei replied thatChinese Taipei was reviewing its standards with a vi ew to bringing them into conformity with the
TBT Agreement and had decided to incorporate notification procedures into the draft amendments toits relevant laws.
111. The representative of Chinese Taipei also provided examples of particular differences
between its standards and ISO and IEC standards, such as domestic electrical standards, Chinese
Taipei television broadcasting systems, the designation of industrial products, and the requirement of"weight" certificates for all imports of automobile s.  He said that Chinese Taipei was prepared to
comply with the Agreement on TBT but might need  a transitional period for the rectification of lawsor practices which did not comply with the Agreement.  In response, some members of the WorkingParty stated that they considered that a transitional period of general application was not appropriate.
112. Following examination of Chinese Taipei's technical barriers to trade regime, some members
of the Working Party stated that in addition to  taking a commitment to apply the Agreement on
Technical Barriers to Trade from the date of accession, without recourse to a transitional period,
Chinese Taipei should commit itself to eliminate the specific  problems members of the Working
Party had identified and which are listed below.  In this regard,  some members of the Working Partystated that, as a condition of its accession,  Chinese Taipei would be required to eliminate themandatory conformity assessment procedures and standards for imports that were not applied tosimilar domestic goods and were not based on relevant internationally recognized criteria.  ChineseTaipei would be required to accept equivalent third country standards and regulations in particular, inthe case of automobiles and heavy-duty vehicles, concerning the safety requirements (lightening,specification of brakes, horns), emission standard s and test procedures, fuel consumption, on boardWT/ACC/SPEC/TPKM/2/Rev.1
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diagnostic systems, evaporative requirements, vehicle noise).  Whenever new standards were imposed
by Chinese Taipei, enough time would have to be made available for manufacturers to adapt theirproducts.  Chinese Taipei would be required to abandon carry-over testing for vehicles whose modeltypes are unchanged from one year to the next and which were identical in emission-related aspectswith the previous model-year vehicles as well as additional quality control testing whenmanufacturers in-house test data are made available Ch inese Taipei would be required to provide for a
simplified homologation for vehicles supplied in small volumes and to extend to CKD vehicles the
same acceptance of self certification for emissions as applied to BU imports.  The representative of
Chinese Taipei said that because of the high density of cars, Chinese Taipei has serious concerns overpollution resulting from emissions but would nevertheless accept cars meeting the standards adoptedby the United States.  Furthermore, Chinese Taipei's  current practice was to accept the results of tests
carried out by the original car manufacturers according to the emission standards set by ChineseTaipei.  New emission and noise standards were implemented with prior notice of three to four years.
113. Some members of the Working Party also stat ed that Chinese Taipei should also ensure
compliance with requirements for publication of mandatory conformity  assessment procedures andstandards and ensure the establishment of a recommended comment period of 60 days prior to
finalization of such measures.   Chinese Taipei should also eliminate from the date of its accession its
requirements for performance testing of imported livestock.  Chinese Taipei should also replace theweight certificate system for automobiles with an automobile safety certification system of generalapplication, which would take effect  prior to Chinese Taipei's accession.  It was also noted that thecurrent requirements for performance testing of impor ts of livestock were inconsistent with Article 2,
paragraph 2.2 of the Agreement on Technical Barriers to Trade.  These members requested that allsuch inconsistencies with the Agreement on T echnical Barriers to Trade be eliminated upon
accession.  They also stated that Chinese Taipei should submit its statement on implementation andadministration of the Agreement on Technical Ba rriers to Trade to the Committee on Technical
Barriers to Trade at the time of accession.
114. Some members of the Working Party further stated that Chinese Taipei should confirm that
all relevant laws relating to its technical regulati ons, standards, conformity assessment procedures,
and labelling, including product coverage, would be administered by Chinese Taipei in conformitywith relevant international standards and guidelines .  Chinese Taipei should also undertake that the
controls applied in connection with technical regulations, standards, conformity assessmentprocedures, and labelling would be applied in no less favourable a manner for imported products thanfor like domestic products.  Such requirements should be administered in a manner which did notunnecessarily impede trade or create barriers to imported products, and should not be applied toWT/ACC/SPEC/TPKM/2/Rev.1
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imported products in an arbitrary manner, in a way which discriminated between supplier countries
where the same conditions prevail, or as a disguised restriction on international trade.
115. The representative of Chinese Taipei stated that Chinese Taipei would  fully apply the
provisions of the Agreement on Technical Barriers to Trade from the date of its accession to theWTO, without recourse to any transitional period.  The Working Party took note of this commitment.
Sanitary and Phytosanitary Measures
116. Some members of the Working Party asked whether the regulations regarding sanitary and
phytosanitary measures including quarantine and inspection provisions were published and readily
available to importers and exporters and whether these measures were based on sound scientificevidence.  They also asked whether Chinese Taipei would accept the sanitary and phytosanitarymeasures of other economies which offered equivalent levels of health protection.  In this connection,information was requested on certain provisions of the Commodity Inspection Law and itsImplementation Rules concerning the inspection of imports, bilateral arrangements, inspection fees,the inspection quantities and sample quantities, the sanitary requirements obtaining products such ascoconut and palm oil, milk, fresh fruits, poultry, bovine meat, pork.  In response, the representative ofChinese Taipei said that the most commonly used SPS measures in the agricultural sector were set out
in the Commodities Inspection Law, the Statute for Prevention and Control of Infectious Animal
Diseases, the Plant Protection and Quarantine Act, the Quarantine Restrictions
 Requirements on
the Importation of Animal and Animal Products, th e Quarantine Restrictions on the Importation of
Plants and Plant Products, the Law Governing Food Sanitation, the Regulations Governing theQuarantine at International Port, and the Quarantine Regulation for Cholera on Imported FisheryProducts.
117. In response to questions whether Chinese Taipei was prepared to apply phytosanitary
standards in a transparent manner based on scientific evidence, the representative of Chinese Taipeistated that in developing its standards Chinese Taipei  referred to relevant international biological and
entomological publications.  It also evaluated the probability of harm resulting from the introduction
of the pests or diseases.  In addition, comments  on the proposed measures were often sought from
relevant organisations.  In order to ensure transparency in the future, when a regulation waspromulgated by the authority, it would be notified to the relevant associations and trading partners.The representative of Chinese Taipei also provid ed the Working Party with detailed information on
various quarantine rules and import bans concerning the following products:  rice and rice products,sugar, wheat flour, meat and offal, fish, dairy products, and fruits.  He stated that even though allsafety inspection requirements and standards applied equally to domestic goods, some phytosanitaryWT/ACC/SPEC/TPKM/2/Rev.1
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requirements only applied to imported goods, when only imported goods risked contamination by
particular diseases and pests.
118. The representative of Chinese Taipei added that the sanitary requirements for food were set
by the Law Governing Food Sanitation.  The standards set out in that law were developed withreference to the CODEX standards set by the FAO/WHO.  In setting sanitary standards, ChineseTaipei used Codex standards with modifications as necessary, to a
 allow a higher level of protection,
if there was a scientific justification, or otherwise as set out in the relevant provisions of paragraphs 1
through 8 of Article 5 of the Agreement on SPS.    He further added that imported products were
subject to mandatory inspection by the Bureau of Commodity Inspection and Quarantine (BCIQ).The BCIQ's statutory duties were to protect product safety,  protect consumers' interests and preventthe dissemination of plant and animal diseases and insect pests.  The BCIQ applied scientific methodsin its inspection and quarantine practices.  Quarantine  regulations were established in accordancewith disease and insect pest variations, and international trends. The BCIQ had entered intoarrangements to recognise the standards of
 the certification,  issued by inspection and veterinary
authorities of certain of its trading partners.  The determination and publication of infectious animaldiseases had been transferred from the BCIQ to the Council of Agriculture.  Chinese Taipei had
determined that the following were among the infectious animal diseases:  rinderpest;  foot-and-mouth
disease;  bovine ephemeral fever (bovine influenza);  contagious bovine pleuropneumonia;
tuberculosis (bovine tuberculosis);  brucellosis;  blackleg (gas gangrene);  anthrax;  equine infectious
anaemia;  glanders;  epizootic lymphangitis;  trypanosomiasis;  sheep pox and goat pox;  scabies of
sheep; rabies;  viral haemorrhagic septicemia;  newcastle disease;  fowl cholera;  pullorum disease;
bovine malignant catarrh;  blue tongue;  pseudorabies (aujeszky's disease);  african swine fever;
swine vesicular disease;  trichinellosis;  bovine mastitis caused by streptococcus agalactiae;  avain
infectious laryngotracheitis;  vesicular stomatitis;  vesicular exanthemas;  duck viral enteritis;  bovine
spongiform encephalopathy (BSE);  porcine reproductive and respiratory syndrome (PRRS) in
addition to the List A and List B animal diseases of the Office International des Epizooties, the
following were also among the infectious animal  diseases:  Vesicular exanthema, Erysipelas,
Scabies, Bovine ephemeral fever (Bovine influenza), Gas gangrene, Streptococcal mastitis,
Infectious pancreatic necrosis, Wirling disease and Bacterial Kidney disease .  The plant pests or
diseases referred to in the Enforcement Rules concerned harmful organisms which are fungi, slimemould, bacteria, viroids, phytoplasma, parasitic plants, nematodes, insects, mites, molluscs, andinvertebrates or vertebrates directly or indirectly causing harmful effects to plants and plant
products .WT/ACC/SPEC/TPKM/2/Rev.1
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119. The representative of Chinese Taipei added that the importation of fresh fruit was prohibited
from areas where infestations of  mango seed weevil, mango weevil,  Chinese citrus fly, peach fruit
fly, cucurbit fly or guava fruit fly had occurred.  Fresh fruit could only be imported from areas whichhad been infested with Mediterranean fruit fly if the BCIQ gave approval following
 prior to any
phase of quarantine treatment at the place of origin.  Fresh fruit could only be imported from areas
subject to codling moth, apple maggot, plum curulio, peach twig borer, Mexican fruit fly, West India n
fruit fly, South American fruit fly or Queensland fruit fly and lethal yellowing, kaincope r disease,
cadang-cadang disease, bronze leaf wilt, root (wilt) disease, Guam coconut disease, leaf scorch
disease of coconuts, and arrowhead scale of Citrus and red and black citrus leaf mixer  leafminer , if
imported with a certificate stating that the fruit had been thoroughly inspected and found free ofinfestation or has been treated with an appr opriate treatment prior to shipment .  The
representative of Chinese Taipei added that there were 449 standards applying to agricultural andprocessed agricultural products administered by the Bureau of Standards.
120. In response to the information presented by the representative of Chinese Taipei on the
sanitary and phytosanitary regime, some members of the Working Party requested that Chinese Taipeienter a commitment that in implem enting the terms of the Agreement on Sanitary and Phytosanitary
Measures as follows:  Chinese Taipei would enforce its sanitary or phytosanitary measures based on
accepted scientific principles and an assessment of the risks involved;  follow the notificationprocedures of the SPS Agreement;  not maintain a measure unless based on sufficient scientificevidence;  ensure that existing international st andards were applied when they exist;  accept the
sanitary and phytosanitary measures of other WTO Members as equivalent, even if these measuresdiffered from Chinese Taipei's measures or from those used by other countries trading in the sameproduct, upon demonstration that such measures achieved the appropriate level of sanitary orphytosanitary protection; and,  ensure that sanitary and phytosanitary measures were adapted to thesanitary or phytosanitary characteristics of the area, including areas within a country or other political
boundary, from which the product originated and to which the product was destined.  Some members
also requested that Chinese Taipei recognize exports as being from pest or disease free areas and areasof low pest or disease prevalence.
121. Some members of the Working Party stated that new quarantine regulations applying to
air-freighted fresh fruit, whereby inspectors were being sent to the exporting countries to inspect thefruit prior to shipment imposed excessive burdens on importers and acted as a barrier to trade.  The
representative of Chinese Taipei replied that this measure was typically applied by developedeconomies.  Chinese Taipei had held intensive discussions with the trading partners that had indicatedWT/ACC/SPEC/TPKM/2/Rev.1
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they had problems with Chinese Taipei's SPS provisions.  Some of the problems had been resolved,
and technical experts had discussed existing problems.
122. Some members of the Working Party requested that Chinese Taipei eliminate the following
practices from the date of its accession to the WTO without recourse to any transitional period:
quarantine controls applied to imported agricultural commodities without adequate notification,consultation, or a clear scientific basis for their application;  certificates nominally granted for healthsanitation or quarantine reasons which were in fact never granted, and therefore acted as de facto  bans
on importation;  and the arbitrary denial of certification with no criteria being made available totraders to indicate under what conditions certificates can be obtained, and no explanation being givenfor non-approval of certification.
123. The representative of Chinese Taipei stated that the ban on imports of live swine due to the
infestation of Porcine Reproductive and Respiratory Syndrome (PRRS) had been removed, and that
live swine which met the quarantine requirements would be allowed entry into Chinese Taipei fromthe date of accession.  The Working Party took note of this commitment.
124. Some members of the Working Party raised various concerns regarding Chinese
Taipei’s practices with respect to application of SPS measures.  In their view, Chinese Taipeihad, in the past, adopted SPS measures without providing notice of the action and the criteriafor its application to traders and often bases quarantine areas on political geographicalregions, rather than scientifically justified areas.  In addition, Chinese Taipei had at timesfailed to base its SPS measures on international guidelines or recommendations and had insome cases adopted and maintained measures without sufficient scientific evidence.  Inparticular, scientific risk assessments that take into account assessment techniques developedby international organizations had not been provided in some cases.   The representative of
Chinese Taipei stated that Chinese Taipei would fully apply the provisions of the Agreement on
Sanitary and Phytosanitary Measures from the date of its accession, without recourse to any
transitional period and would address the concerns raised by members.
[The representative of Chinese Taipei confirmed that in implementing the terms of the SPS
Agreement, Chinese Taipei would:
(a)        only enforce SPS measures which were based on accepted scientific principles and an
assessment of the risks involved, and after adequate notification of the measure and the
criteria for its application;
(b)        not maintain a measure without sufficient scientific evidence;WT/ACC/SPEC/TPKM/2/Rev.1
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(c)        apply international standards where they exist, except as otherwise provided for in the SPS
Agreement; and
(d)        accept the SPS measures of other WTO Members as equivalent, even if these
measures differ from Chinese Taipei's own or from those used by other countries trading in
the same product, upon demonstration that such measures achieve the appropriate level of
sanitary or Phytosanitary protection.
(e)        ensure that SPS measures are adapted to the sanitary or Phytosanitary characteristics
of the area, including areas within a country or other political boundary, from which the
product originated and to which the product  was destined.  Chinese Taipei shall recognize
pest- or disease-free areas and areas of low pest or disease prevalence.]
[He also stated that Chinese Taipei would, by the date of entry into force of its Protocol, notify to
the WTO all relevant laws, decrees, regulations, and administrative rulings of general applicationrelating to its sanitary and phytosanitary measures, including product coverage and relevantinternational standards, guidelines and recommendations.  The Working Party took note of thesecommitments.]
Trade Related Investment Measures
125. Some members of the Working Party requested information on the investment regime of
Chinese Taipei, in particular the local content re quirements prevailing in the automotive sector.  Some
members of the Working Party said that Chinese Taipei needed to notify its TRIMs such as the local
content requirements for motor vehicles and the mi xing requirements in force for coal and cement
production, and specify a schedule for their elimination.   In response the representative of ChineseTaipei said that Chinese Taipei only maintained  local content requirements on automobiles and
motorcycles.  In the case of small automobiles, at least 50 per cent of the motor vehicle plus at leastfour items from a list of fifteen designated major items were required to be of local manufacture.  Forlarge automobiles (3.5 to 10 tons), at least 37 per cent of the motor vehicle plus at least three itemsfrom a list of fifteen designated major items were required to be of local manufacture.  For largeautomobiles over ten tons, at least 31 per cent of the motor vehicle plus at least two items from a list
of fifteen designated major items were required to be of local manufacture.  For motorcycles, at least
90 per cent was required to be of local manufactu re.  These local content rules applied equally to
domestic and foreign enterprises.  He added that a local content requirement on governmentprocurement of incinerators had been eliminated, but that a local content requirement on electricWT/ACC/SPEC/TPKM/2/Rev.1
Page 60
locomotives remained.  He noted that this was an exception to national treatment permitted under
Article III of the GATT 1994, as these products were not intended for commercial resale.
126. Some members of the Working Party said that Chinese Taipei needed to notify its TRIMs
such as the mixing requirements in force for coal and cement production, and specify a schedule fortheir elimination.  The representative of Chinese Taipei said that Chinese Taipei had no mixing
requirements for cement production.  The mixing requirements for coal were imposed upon importersof coal.  Importers of coal were required to purchase local coal which was at least 1.41 per cent of the
amount of coal that they wished to import.  Chinese Taipei planned to lower this requirement to 0.72
per cent by the end of 1998.  However, the ratio had actually been lowered to 0.55 per cent as of theend of 1996.  Chinese Taipei was of the view that the requirement was an Article III mixingrequirement and not a TRIMs issue, and therefore this measure did not require notification under theTRIMs Agreement.  Nevertheless, Chinese Taipei would eliminate the mixing requirements for coalwithin thirty-six months  following accession.  Some members of the Working Party indicated that the
requirement should be eliminated more rapidly.  127
 The representative of Chinese Taipei stated that
Chinese Taipei would eliminate the mixing requirement relating to the use of coal within 36 months
of its accession to the WTO  undertook to eliminate the existing local content and sourcing
requirements applied to the production of automobiles and motorcycles and the mixingrequirement relating to the use of coal upon accession to the WTO .  The WTO
 Working Party
took note of this commitment. ]
[The representative of Chinese Taipei stated that Chinese Taipei undertook to eliminate the existing
local content requirements applied to the production of automobiles and motorcycles [and the mixing
requirement relating to the use of coal] upon accession to the WTO.  The Working Party took note of
this commitment.]
127. [The representative of Chinese Taipei confirmed that Chinese Taipei did not apply measures
inconsistent with the TRIMS Agreement and would not do so in the future.  The Working Party took
note of this commitment.]
State-Trading
128. Some members of the Working Party requested that Chinese Taipei provide information on
the State owned enterprises covered by Article XVII of the GATT, and the WTO Understanding onthe Interpretation of Article XVII operating in Chinese Taipei.  At the request of members of the
Working Party, the representative of Chinese Taipei supplied details of the State enterprises operating
in the energy industry, the agriculture-fertiliser industry, the metals-mining industry, heavy industry,WT/ACC/SPEC/TPKM/2/Rev.1
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the petrochemical industry, the paper manufacturing industry, and the tobacco products and alcoholic
beverages industry.  He noted that the provin cial government of Taiwan Province owned the Taiwan
Chung Hsin Paper Corporation, the Tang Eng  Zong Iron Works Corporation  Co. Ltd , the Taiwan
Agricultural and Industrial Development Corporation Enterprise Co. Ltd , the Kaohsiung Sulphate
Corporation  Kao-Hsiung Ammonium Sulphate Co. Ltd , and the Taiwan Tobacco and Wine
Monopoly Board (TTWMB).  He indicated that the Chinese Petroleum Corporation had enjoyed amonopoly to import crude oil and refined products and to export refined products which had been
abolished on 26 June 1996.  The Taiwan Sugar Corporation enjoyed a monopoly to import and export
sugar.  All liquid ammonia imports were monopolised by the Taiwan Fertiliser Company, which alsocentrally administered purchase and sales, except for imports of waste acid gas.  The Taiwan SaltWorks (Taiwan Salt Industrial Corporation) held a monopoly to import salt, except for imports ofindustrial salt used in the production of alkali-chloro.  The TTWMB held a monopoly in theproduction and trading of tobacco and alcohol products.  Taiwan Sugar Corporation supplied all thealcohol requirements of the TTWMB.  The representative of Chinese Taipei asserted that neitherTaiwan Power Company, China Steel Corporation (b efore it was privatized) nor Aerospace Industrial
Development Corporation enjoyed import or export monopoly.  These enterprises did not enjoy any
special treatment in their trade or production activities.
129. In response to further questions from some members of the Working Party, the representative
of Chinese Taipei said that the above-mentioned State-owned and the provincial enterprises wereprofit oriented and operated on the basis of commercial considerations.  Purchases by State enterprisesin principle were made by public tender and the purchase decisions were based upon such factors asqualities, specifications, deliveries and prices.  Non-commercial factors did not come into play.  Arearestrictions applied to two neighbouring economies that were the only instances where purchasedecisions could deviate from commercial consid erations when the amount of the procurement
involved exceeded US$600,000 had been abolished on 1 June 1997.  These State enterprises imported
raw materials for products where production could meet the demand of the domestic market.  The
reselling price of the imported products was determined in the same way as for domestically producedproducts.  There was no discrimination against imports.  The purchasing decisions of Taiwan PowerCompany and China Steel Corporation (before it was privatized) were also generally based uponcriteria such as quality, specification, delivery and price.  However, since the government of ChineseTaipei was the largest shareholder in these enterprises, the purchasing decisions were affected by the
government's economic and trade policies.   Some members noted that the State-enterprises were notsubject to the Fair Trade Law and asked how this could be justified in light of Articles XVII and III ofthe GATT 1994.  The representative of Chinese Taipei replied that some of the practices of these
enterprises had been exempted from the provisions of the Fair Trade Law for an interim period of fiveWT/ACC/SPEC/TPKM/2/Rev.1
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years to permit the commercial adjustment and their eventual privatization.  This temporary
exemption from the application of the Fair Trade Law had expired in February 1996.  Theprocurement by these companies would be governed by the Agreement on Government Procurementonce Chinese Taipei became a signatory.
130. Some members of the Working Party referred to the status and operations of the publicly
owned retail stores which offered buyers between 20 per cent and 30 per cent discounts on identicalmerchandise purchased in the free market.  In their view the pricing policies of these stores were
highly irregular.  Prices were fixed in a manner which could undermine sales in the free market as
suppliers were required not to sell at a lower price to open market stores.  There were no limits onpurchases or resale of goods purchased in the publicly-owned retail stores and access was notrestricted to members only.  In response, the representative of Chinese Taipei said that there were 55publicly owned retail stores in operation.  These stores do not discriminate against imported productsand do not create obstacles to importation and distribution of imported products.  The UnitedCooperative Association (UCA) was a private entity commissioned by the government to supply daily
necessities to employees of the government and educational institutions.  The rules governing thenegotiation practices contemplated the determination of a base price which was 15 per cent to
30 per cent lower than the market price.  Access to  these stores was restricted to members and the
resale of merchandise was prohibited.  In the Ministry of Defense PX stores, the selling price was 2per cent above the sourcing price to cover the operating expenses.  Some members of the WorkingParty said that many privately owned stores used  the public stores as sources of supply, which
resulted in market distortions.  Some members of the Working Party also said that the UCArequirement that suppliers not sell at lower prices to any store in the free market appeared to be in
conflict with the Fair Trade Law.  In addition, the operating practices of the UCA and the Military PXstores harmed both manufacturers who were forced to sell at unrealistically low prices, and privateretailers who were forced to compete with subsidised publicly-owned stores.  Prices in the
publicly-owned retail stores were 15-30 per cent below retail levels, and in many cases manufacturers
were forced to supply these stores at below cost prices.  The publicly-owned retail stores appeared tohave up to 40 per cent of market volume.  This factor, combined with their prices, made it difficult forprivate retailers to compete in the market place.  These members considered that the publicly-ownedretail stores should be subject to the Fair Trade Law.  The representative of Chinese Taipei respondedthat the UCA and the Military PXs were not entirely exempted from the operation of the Fair TradeLaw, and that the exemption was limited to the organisation of the UCA because it fell within thedefinition of horizontal collaboration among the stores participating in the organisation of the UCA.Otherwise, all other business practices of the UCA were subject to the Fair Trade Law.  He further
added that publicly owned businesses did not de jure or de facto discriminate against importedWT/ACC/SPEC/TPKM/2/Rev.1
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products and did not create obstacles to the importation and distribution of imported products in terms
either of price or of quantity.  Some members of the Working Party asked that Chinese Taipei takesteps to control the persons allowed to gain access to the UCA and Military PX stores, the quantity ofproducts allowed to be purchased by the public employees, establish and publish new procurementand product listing guidelines which reflected market dynamics, and establish a fairer price settingprocedure.  These members also asked whether the UCA and Military PX stores received anysubsidisation in their operations.  The representative of Chinese Taipei said that shopping centres,
supermarkets and discount stores in many cases offered merchandise at the same or lower prices than
those of the Military PX stores.  Because of the prices of private stores, the incidence of resale ofproducts purchased at Military PX stores was almost non-existent.  In addition the Military PXHeadquarters had made rules to prohibit the resale of products purchased in the Military PX stores.
Concerning the purchasing decisions of the Military PX stores, the representative of Chinese Taipeinoted that needs of military personnel and the condition of the market were examined.  The decisionto purchase was advertised in newspapers.  All suppliers, whether importers of foreign goods or localmanufacturers who could meet the limited purchase volume requirements of the Military PXs storeswere eligible to enter into negotiations to supply the stores.  The Fair Trade Commission, i.e. the
administrative agency responsible for enforcing the Fair Trade Law, had been monitoring very closely
the business practices of UCA. It had fined different UCA stores for their failure to prevent the entryby individuals who did not have legal access to these stores. It had also fined several private storeswho held themselves out as UCA stores in order to deceive consumers. The Commission was looking
into the pricing practices of suppliers of the UCA stores to see whether there was any abuse of marketpower by the UCA stores.
131. Some members of the Working Party stated that Chinese Taipei must agree to additional
transparency in the operation of all of its State- trading enterprises, particularly in the area of
agricultural products, e.g. by demonstrating that mark-ups on State-traded imports do not discriminate
against imported goods vis-à-vis  domestically-produced goods, and in the area of export subsidies.
The representative of Chinese Taipei said that the operations of the State-owned enterprises werebased on commercial considerations such as quantity, price, quality, supply stability and risk and thatthere was no discrimination against imports.
132. The representative of Chinese Taipei said that the following State or Provincial enterprises
would be notified as State-trading enterprises under Article XVII for the purposes of theUnderstanding on the Interpretation of Article XVII of the GATT 1994: Taiwan Power Company;
Chinese Petroleum Corporation; Taiwan Sugar Corporation; Taiwan Fertilizer Company; TaiwanSalt Works (Taiwan Salt Industrial Corporation); China Shipbuilding Corporation; and
 TaiwanWT/ACC/SPEC/TPKM/2/Rev.1
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Machinery Manufacturing Corporation; Taiwan Tobacco and Wine Monopoly Bureau; China
Engraving and Printing Works; Taiwan Provincial Food Bureau; and Taiwan Provincial FruitMarketing Cooperative.   He stated that the TTWMB, which was owned and managed by
provincial authorities, upon the Working Party's decision, would also be notified under Article
XVII as long as it maintains its current nominal import/distribution monopoly and other specialprivileges under law and regulation in the distribution, or trade of tobacco and alcohol products.Private traders could import alcohol and tobacco products using TTWMB as the nominal importer.The statutory monopoly would be abolished with the implementation of new laws establishing atobacco and alcohol tax and administration system.  The representative of Chinese Taipei also statedthat some private trade in rice and sugar, as reflected in Chinese Taipei's agricultural market accessschedule, would be permitted under the [tariff quota for that product] [appropriate arrangements].
He further stated that for some time after the date of accession, importation of fertilizer would belimited to the Taiwan Provincial Food Bureau or the Taiwan Fertilizer Company, firms owned andmanaged by the provincial authorities, and that during this period, both entities would be notifiedunder Article XVII as long as they maintain this monopoly or any other special privileges under lawand regulation in the distribution, or trade of fertilizers.  The Working Party took note of thesecommitments.
133. [The representative of Chinese Taipei said that Chinese Taipei would eliminate the import
monopoly on fertilizers within four years after accession to the WTO.  The Working Party took noteof these commitments.]
134. [The representative of Chinese Taipei stated that, upon request of any WTO Member, full
information on the pricing mechanisms of its state trading enterprises would be provided for bothdomestic and traded goods, including, but not limited to, domestic procurement prices, contract termsfor delivery of exported and imported goods, and financing terms and conditions.  The representativeof Chinese Taipei confirmed that for all "state trading enterprises,"  Chinese Taipei would ensure thatany fees or charges assessed to importers or end-users by these state trading enterprises would notafford protection in excess of the tariff rate prov ided for imports listed in the Schedules annexed to
Chinese Taipei's Draft Protocol of Accession, plus f ees and charges consistent with Article VIII of the
GATT.  Imports in excess of the level of the tariff quotas specified in the Schedules will not be
reserved for state-owned or state-operated enterprises, and may be imported and distributed by private
firms and other non-state-trading enterprises.   State trading enterprises would not be used as a conduitfor subsidized exports, nor would notification of these enterprises under Article XVII exempt themfrom other notification requirements under WTO Agreem ents, e.g., Article 4(2) of the Agreement onWT/ACC/SPEC/TPKM/2/Rev.1
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Agriculture.  He further indicated that Chinese Taipei would not take any measure to influence or
direct these enterprises as to the quantity, value, or country of origin of goods purchased.Furthermore, Chinese Taipei would not resort to ei ther price pooling for the procurement of goods for
export or targeted discriminatory export pricing and, in particular, Chinese Taipei would not exportrice imported under its minimum access commitment.  The Working Party took note of thesecommitments.]
135. [The representative of Chinese Taipei also undertook that all State-trading enterprises within
the definition of Article XVII of the GATT 1994 would operate in a transparent manner and in
compliance with that Article and with the other re levant Articles of GATT 1994, in particular with
Articles I, II, III, XI and XIII.  The Working Party took note of these commitments.]
State Ownership and Privatization
136. Some members of the Working Party enquired whether State owned enterprises would be
privatized.  The representative of Chinese Taip ei said that the policy was to privatize all  most State
owned enterprises, except those which involved security and defence, and certain public utilities . The
statutory framework required to implement this policy was in place.  In 1994 - 1995 China Steel
Corporation (CSC), China Petrochemical De velopment Corporation, and BES Engineering
Corporation had been privatized.  Further share issues were planned, but in order to minimise
economic dislocation and internal resistance the privatisation programme would progress cautiously.
137. In response to further requests for information, the representative of Chinese Taipei stated
that information on the privatization of State owned enterprises could be obtained through the websiteof the Council for Economic Planning and Development.  Since 1989, more than 30
 40 offerings
(including CSC's two DR issues in 1992 and early 1997, representing 360 million shares and 203million shares respectively), and several sales of assets had been conducted. Sales of governmentowned companies had yielded total proceeds of nearly NT$ 247.2
 349 billion, corresponding to US$ 8
10.2 billion (based on January  July 1998 data).  Seven  Fourteen of the targeted SOEs had been
successfully privatized, including China  Chung Kuo Insurance Co. Ltd. (CIC), China Petrochemical
Development Co.  Corporation  (CPDC), BES Engineering Co.  Corporation,  CSC, YangMing
Marine Transport Co.  Corporation (YMTC), LP - Liquefied Petroleum Gas Supply Administration ,
Veterans Gas Manufactory,  and Chang Hwa Commercial Bank , First Commercial Bank, Hua
Nan Commercial Bank, Taiwan Business Bank, Taiwan Fire and Marine Insurance Co. Ltd,,
Taiwan Navigation Co. Ltd. and Taiwan Life Insurance Co. Ltd.  In addition, 3 plants of the
Taiwan Machinery Manufacturing Corp.  Corporation (TMMC) have been privatized by private
placement. The details of the 7  14 privatized enterprises were as follows:WT/ACC/SPEC/TPKM/2/Rev.1
Page 66
Privatized State-Owned Enterprises in Chinese Taipei
Company Date of
Privatization% Government
Shareholding
(January  1998 data)
China  Chung  Kuo Insurance Co. Ltd., MOF 5 May1994 36.36  30.66
China Petrochemicals  Petrochemical
Development Co., MOEA20 June 1994 18.87  16.23
BES Engineering Co.  Corporation , MOEA 22 June 1994 0.0
China Steel Co.  Corporation , MOEA 12 April 1995 40.0  40.69
YangMing Marine Transport Co.  Corporation ,
MOTC15 February 1996 45.04  43.53
LP Liquefied Petroleum  Gas Supply
Administration, VAC16 March 1996 0.0
Veterans Gas Manufactory, VAC 1 January 1998 40.00
Chang Hwa Commercial Bank, TPG 1 January 1998 40.0  30.72
First Commercial Bank, TPG 22 January 1998 40.85
Hua Nan Commercial Bank, TPG 22 January 1998 41.36
Taiwan Business Bank, TPG 22 January 1998 40.96
Taiwan Fire and Marine Insurance Co. Ltd.,
TPG22 January 1998 30.05
Taiwan Navigation Co. Ltd., TPG 20 June 1998 39.08
Taiwan Life Insurance Co. Ltd., TPG 30 June 1998 31.89
- Note: MOEA = Ministry of Economic Affairs
- MOF = Ministry of Finance
- MOTC = Ministry of Transportation and Communications
- VAC = Veteran Affairs Council
- TPG = Taiwan Provincial Government
Recent changes had made it easier for the shares of SOEs to be listed on the Taiwan Stock Exchange
and the OTC market. In addition, the priority shares issued to employees of SOEs had been raised,with each employee now entitled to purchase shares equal in value up to 48 months' pay, instead ofWT/ACC/SPEC/TPKM/2/Rev.1
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just 24 months as before.  The timetable for the next 5 years involved the privatization of 42  39 SOEs,
together with the modification of legislation needed to pave the way for the privatization process.
Privatization Timetable for 42 SOEs
Date Authority Company
December 1997 VAC Veterans Gas Manufactory,
Pharmaceutical Plant
June 1998 MOF The Farmers Bank of China
MOEA Taiwan Fertilizer Co. Corporation ,
Taiwan Machinery Manufacturing Co. Corporation
VAC Veterans  Food Products Factory,
Veterans  Nan-tzu Abrasives Factory,
Kang-shan  Rope  Ropery  Factory,
Tai-chung Lumber Processing Factory
TPG Kao-Hsiung Ammonium Sulfate  Sulphate
Co.Corporation ,
Taiwan Chung Hsing Paper Co. Corporation ,
Agriculture & Development Co.,
Taiwan Navigation Co.,
Taiwan Film Culture Co.,
Taiwan Shin Sheng Daily News
December 1998 TPG Hua Nan Commercial Bank
First Commercial Bank,
Agricultural and Industrial Enterprise Co. Ltd.Taiwan Film Culture Co. Ltd.,
Taiwan Business Bank,
Taiwan Fire & Marine Insurance Co.,
Taiwan Development & Trust Co. Corporation ,
Taiwan Life Insurance
Taiwan Bookstore
June 1999 MOF Chiao Tung BankWT/ACC/SPEC/TPKM/2/Rev.1
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Date Authority Company
VAC Veterans Printing Works,
Veterans  Plastics Works,
Taipei Iron Works,Taipei Paper Manufactory,Lung-chi
 Chemical Works  Plant ,
Tao-yuan  Furniture Factory
TPG Taiwan Provincial Gove rnment Printing Factory
TCG Taipei City Government Printing House
December 1999 MOEA Aero Industry  Industrial  Development Co. Corporation
MOF Central Reinsurance Co. Corporation
TPG Tang Zong Iron Works Co. Ltd.
June 2000 TPG Fertilizer Sales & Transportation Department of Food
Bureau
Taipei Bank
December 2000 TPG Taiwan Tobacco & Wine Monopoly Bureau
June 2001 MOEA Taiwan  Salt Industrial Co. Corporation
China Shipbuilding Co. Corporation ,
Chinese Petroleum Co. Corporation ,
Taiwan Power Co. Corporation .
MOTC Chunghwa Telecom Co. Ltd.
VAC RET-SER Engineering Agency
TPG Taiwan Motor Transport Co. Ltd.
Hsin Sheng Press Co. Ltd.
KCG Bank of Kao-Hsiung
June 2002 TPG Taiwan Railway Administration
Taiwan Railway Freight Co. Ltd.
- Note: TPG = Taiwan Provincial Government
- TCG = Taipei City Government
- KCG = Kao-Hsiung City Government
138. [The representative of Chinese Taipei confirmed the readiness of Chinese Taipei to ensure the
transparency of its ongoing privatization program and to keep WTO Members informed of its progress.WT/ACC/SPEC/TPKM/2/Rev.1
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He stated that [if it becomes an established WTO practice,]  his authorities would provide annual reports
to WTO Members on developments in its programme of  privatization as long as it was in existence.
The Working Party took note of this commitment.]
Taiwan Tobacco and Wine Monopoly Bureau (TTWMB)
139. The representative of Chinese Taipei said that the privatisation of the TTWMB was under
review independently of the tax reform plan.  He  provided information concerning the calculation
methodology, and stated that the units used by Chinese Taipei were 1000 sticks for cigarettes, and litres
for alcohol.  He explained that the prices of domes tic wine and tobacco products were equal to the sum
of operating costs plus the Monopoly Tax.
140. With regard to tobacco products, some member s of the Working Party said that the future
operations of the TTWMB should provide equal opportunities to all tobacco product exporters.  Therepresentative of Chinese Taipei replied that following the reforms the TTWMB would have noregulatory function, nor a monopoly on the distribu tion of tobacco and alcohol products.  The TTWMB
would, pursuant to the draft Tobacco and Alcohol Admini stration Law, be restructured so that it would
only operate as a business venture.  Within the cen tral government, the regulatory functions would be
carried out by the Ministry of Finance.  Mo reover, the TTWMB would have no influence upon the
market access of tobacco exporters.  He submitted to the Working Party the summary of the Tobacco
and Alcohol Reform Plan reproduced in Attachment B.
141. [The representative of Chinese Taipei stated  that from the date of accession, TTWMB would be
reformed to bring its operations in the area of international trade and domestic distribution into
conformity with GATT 1994 and the other obligations of the WTO.  He added that Chinese Taipeiwould establish an open and equitable trade and dist ribution system in these products and would ensure
national treatment and non-discriminatory treatment for these products.]  [From the date ofaccession][Within six months of the date of accessi on], TTWMB would not have a regulatory function
concerning tobacco and alcoholic beverages and w ould operate on a commercial basis subject to the
same laws, regulations, rules, decrees, directiv es, administrative guidance, policies and measures
applicable to other firms in Chinese Taipei.  Any special or monopoly privileges granted to TTWMB inthe domestic distribution and international trade of  alcohol and tobacco products would be eliminated
from that date.  Both domestic and foreign firms would be eligible to participate in the distribution and
trade of these products on an equal basis, as noted in the Schedules annexed to the Draft Protocol of
Accession.]  The Working Party took note of these commitments.WT/ACC/SPEC/TPKM/2/Rev.1
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142. [The representative of Chinese Taipei confirmed that from the date of accession, TTWMB
would  be a business operation without any regulato ry function.  Within the central government, the
regulatory functions will be carried out by the Mini stry of Finance.  All special or monopoly privileges
granted to TTWMB in the domestic distribution and international trade of alcohol and tobacco products
will be eliminated, and both domestic and foreign firms will be eligible to partic ipate in the distribution
and trade of these products on an equal basis, as note d below and in the Schedules attached to the Draft
Protocol.   The representative of Chinese Taipei fu rther stated that the reform of TTWMB would also
include the gradual elimination of its monopoly on  the production of alcohol and tobacco products.
Production of tobacco and alcohol products will be  opened to other domestic and foreign firms
according to the following schedule: [Tobacco]...[date];  [wine]...[date]...[Beer]...[date];[Spirits]...[date].
Any subsidies provided for the domestic produc tion of tobacco and grapes would be bound and
gradually reduced as provided for in the Schedule at tached to the Draft Protocol of Accession.  All firms
producing tobacco or alcohol products in Chines e Taipei would have access on an equal basis to
imported and domestic inputs, including any rema ining benefits from such  subsidies, for their
production and processing activities consistent with th e provisions of the WTO.  He added that Chinese
Taipei would begin processing applications for fi rms seeking authorization to produce alcohol products
six months in advance of the date when such activiti es are liberalized, in order to provide new entrants
with the possibility of operating under the reform program from its inception.    He further stated that all
enterprises in Chinese Taipei that produce these products would be subject to the same protection,
formalities, fees, and penalties under law, without regard to their ownership or length of establishment.He stated that fees charged would not be ex cessive or unduly burdensome and that penalties for
violation of the Tobacco and Alcohol Tax and Admi nistration Laws will not exceed in severity the
penalties applied for similar violations in other sector s.  To ensure adequate transparency after reform,
Chinese Taipei would provide WTO Members with annual reports on the volumes of tobacco andalcoholic products manufactured in Chinese Taipei  and on taxes paid by TTWMB and other domestic
production enterprises by taxable category.  This would be accompanied by an annual independent
accounting review of the operations of TTWMB a nd other domestic production enterprises based on
standard and customary accounting procedures, includi ng a fiscal balance sheet that reports on costs,
expenditures, and revenues of TTWMB, and on its profits and losses.    Recognizing that sales into the
domestic market of large quantities of smuggled or counterfeit imports of alcohol and tobacco products
undermined Chinese Taipei's market for legally marketed products, and wishing to discourage suchactivities in the future, the representative of Chines e Taipei confirmed that all such contraband seized
would be destroyed, and that Chinese Taipei intends to make additional efforts to prevent such illegal
imports.  In this regard, Chinese Taipei would  ensu re that certain alcoholic beverage imports would beWT/ACC/SPEC/TPKM/2/Rev.1
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accompanied by a certificate of origin similar to that issued by the regulatory authorities in the country
of origin.  The Working Party took note of these commitments.]
Government Procurement
143. In response to questions concerning the Chinese Taipei's procurement policies, the
representative of Chinese Taipei stated that the Proc urement Department of the Central Trust of Chinese
Taipei was a non-exclusive procurement agent for government entities and State enterprises whichsolicited offers and products from foreign sources.  It did not exercise nor operate as an import
monopoly.  The Trading Department of the Central Trust of Chinese Taipei acted as a non-exclusive
import/export agent for government organisations, public  and private enterprises.  The Taiwan Supply
Bureau functioned as a non-exclusive tender and purchase agent for local and provincial governmentorganisations.
144. In response to a series of questions from memb ers of the Working Party concerning tendering
requirements for government procurement contracts,  the representative of Chinese Taipei said that
tender requirements set by the procurement agencies were based on factors such as performance, design,international standards, domestic standards, or refere nce brands (or equivalents to the reference brands).
Any special tender requirements were clearly described in the tender documents.  The threshold above
which open tenders were required was NT$50 million, except in circumstances that allow for
non-competitive tenders.  The division of contracts in order to avoid the tender threshold was subject toan administrative penalty. Chinese Taipei's tender no tices were required to contain similar types of
information as that required by the WTO Govern ment Procurement Agreement.   All unsuccessful
bidders were, at their request, informed of the reas ons why they did not win a contract.  There was no
provision for an unsuccessful bidder to appeal  against a decision not to award a tender.
145. In response to questions the representative of Chinese Taipei said that a bidder could be
required to submit a commitment to implement an industry
 industrial co-operation plan (ICP) to the
amount of a certain percentage of the contract price.   Some members of the Working Party said that the
increased use of the requirement that tenderers agr ee to technology transfers was inconsistent with the
Agreement on Government Procurement.
146. Some members of the Working Party said that Chinese Taipei should apply for and commence
negotiations on accession to the Agreement on Government Procurement (AGP).    The representative ofChinese Taipei said that Chinese Taipei had careful ly examined the request and had decided to accede to
the Government Procurement Agreement.  He adde d that Chinese Taipei undertook, prior to acceding to
the Government Procurement Agreement, to take step s to improve the procedural aspects of the currentWT/ACC/SPEC/TPKM/2/Rev.1
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practices.  The representative of Chinese Taipei said that Chinese Taipei had prepared a draft
Government Procurement Law which will replace the existing procurement requirements set by thevarious audit laws and regulations.  The draft Law takes full account of the AGP requirements,including the establishment of a bid challenge procedure.  The draft Law was currently being reviewedby the legislature.  A Government  Procurem ent Gazette was being officially published from
1 November 1996 after a ten-month long trial publicat ion. The ceiling limitation of 49 per cent for the
acquisition of interests in existing constructi on firms had been abolished from 3 November 1995.
Foreign experiences can be counted in the determination of qualification for Class A construction
company licenses. From 1 June 1997 the area restri ction in the procurement practices had also been
lifted. The issues of the industrial cooperation program (ICP), and the limitation on foreign suppliers'market access/lowering of the threshold were being dealt with in the accession negotiations for the AGP.
Some members of the Working Party noted that nego tiations were continuing regarding Chinese Taipei's
commitments regarding product coverage and implem entation of procedures associated with the
procurement process.  In particular, additional cl arity was required regarding procedures to address
disputes arising in the context of the procurement a nd contract performance process.  The representative
of Chinese Taipei noted that the contract performan ce process did not fall within the coverage of any
WTO rules.
147. The representative of Chinese Taipei stated that Chinese Taipei had notified the Committee on
Government Procurement of its intention to accede to the Agreement on Government Procurement and
had initiated negotiations to that end by the submission of an offer.   The representative of ChineseTaipei confirmed that Chinese Taipei would accede to the Agreement on Government Procurement(GPA) within one year of its accession to the WTO.   If, however, new government procurement lawsnecessary to comply with the GPA were enacted  prior to Chinese Taipei's accession to the WTO,
Chinese Taipei would accede to the GPA within one year of enactment of those laws or at the time
Chinese Taipei accedes to the WTO, whichever wa s later.  The Working Party took note of these
commitments.
[
Agreement on Trade in  Textiles and Clothing
148. The representative of Chinese Taipei stated that Chinese Taipei recognized that the quantitative
restrictions on imports of textiles and clothing products originating in Chinese Taipei underarrangements between Chinese Taipei and WTO Members that were
 are in force on the date prior to the
date of accession of Chinese Taipei to the WTO would be notified to the Textiles Monitoring Body(TMB) as being the base levels for the purpose of application of Articles 2 of the Agreement on Textilesand Clothing. Thus, for the purpose of Chinese Taip ei's accession to the WTO, the phrase "day prior toWT/ACC/SPEC/TPKM/2/Rev.1
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the date of entry into force of the WTO Agreem ent" contained in Article 2.1 of the Agreement on
Textiles and Clothing would be deemed to refer to the day prior to the date of accession of ChineseTaipei to the WTO.  To these base levels the incr ease in growth rates provided for in articles 2.13 and
2.14 and no quantitative limits of flexibility use provided for in article 2.16
 of the Agreement on
Textiles and Clothing would be applied, as appropriate, from the date of accession of Chinese Taipei tothe WTO.
Barter Trade
149. Some members of the Working Party requested information on the treatment of imports under
barter arrangements.  The representative of Chinese Taipei said that Chinese Taipei had only hadagricultural barter trade with Korea.  Since 1992 th e barter of Korean apples and pears for Chinese
Taipei bananas had been stopped.  In 1997, a new agreement had been made between Korea andChinese Taipei, which provided for barter of Korean apples and pears for Chinese Taipei bananas,lychees, mangoes, garlic, onions and oranges.  Unde r the existing bilateral arrangement, Korea was
provided with access to the local market in respect of apples (which were currently subject to area
restriction) and nashi pears (which were currently under import ban) up to a specified volume.  He noted
that following the elimination of the area restricti ons on apples and quantity restrictions on nashi pears,
there would be no need to maintain this arrangem ent after Chinese Taipei's accession to the WTO.  The
barter trade arrangement had been  terminated from 1 October 1997.
150. in response to further questions concerning purchase requirements, the representative of
Chinese Taipei said that no mandatory counter purchase requirements were imposed.  The currentpractice of encouraging the purchase of locally manufactured components was granted to foreign
investors who had exported substantial quantities of  components or parts back to their home countries
but had no monetary implications or value.  Th e purpose of the scheme was to encourage export of
locally made automotive parts by giving a public announcement of the Government's appreciation forincreased export volume by particular suppliers.  The scheme was not a subsidy program nor did it
impose any mandatory requirement to make local purchases.
Agricultural Policies
151. Some members of the Working Party noted that Chinese Taipei had indicated that it did not
apply subsidies to exports of agricultural products, and accordingly these members stated that Chinese
Taipei should agree to bind its export subsidies at ze ro in its Schedule of Concessions.  These members
noted however, that Chinese Taipei exported the surplu ses of rice generated by artificially high internal
price supports sustained by an import ban on competitive products.  Recently  On average from 1990 toWT/ACC/SPEC/TPKM/2/Rev.1
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1992 , exports had represented some 12  10 per cent of production and some 145,000  160,000 tons.
These members asked that Chinese Taipei explain how the difference between the price paid toproducers and the export price was funded as well as the meaning of the expression "a comfortable rate
of self sufficiency in rice".  Information was also requested on total price support expenditures of
Chinese Taipei and the use of government assisted loans as provided in the Statute for Agricultural
Development.  Some members also enquired wh ether the import ban on rice was of a general
application and requested its elimination.
152. The representative of Chinese Taipei stated that  Chinese Taipei's policy was to liberalise the
agricultural sector.  All domestic price supports woul d be scaled down consistent with the outcome of
the Agriculture Agreement of the Uruguay Round.   In response to questions, the representative of
Chinese Taipei indicated that the price support m echanisms operated to purchase agricultural products
from farmers at guaranteed prices, which were se t above the production cost of the product.[He noted
that all [AMS] domestic price supports would be scal ed down consistent with the requirements of the
WTO Agreement on Agriculture, i.e., phase-downs would be completed [within six years after
accession to WTO] [by the year 2000.]   The purpose of the rice price support was to maintain a stable
food supply and to maintain farmers' income.  The rice price support mechanism consisted of two
elements:  planned purchase and supplementary pur chase.  The purchase was made twice in a year
divided into two crops.  Aged ri ce was exported at prices lower than the production costs due to the
lower quality when compared to new rice.  The Food Bureau mandated the Central Trust to auction offthe rice with the base price taking into account the in ternational rice price.  The feed plants, livestock
farming business and aquaculture business could ap ply to the Food Bureau through the Feedstuff
Association for the purchase of feed rice.  The pri ce was set at 90 per cent of the wholesale price for
imported maize at the time of purchase price paymen t.  The difference between the guaranteed price
paid to producers and the export price was funded by  the government budget.  The guaranteed purchase
price was the only price support measure employed by  Chinese Taipei.  Rice imports needed a Consent
Letter of the Food Supply Bureau.  Because of over production consent letters were not given and rice
could not be imported.  He added that soybeans, corn  and sorghum were eligible for crop purchase under
the Rice Crop Substitution Programme
 Production and Ricefields Diversification Programme .  In
addition, the importation of soybeans, corn and sorg hum had been liberalised, and the duties for those
products were 1.5 per cent, 1 per cent and 1 per cent, respectively.  He said that price supports would
gradually be phased out after  accession in accordance with the Schedule annexed to the Draft Protocol
of Accession.   He also stated that Chinese Taipei would gradually reduce excess rice production.  A
proposal on rice imports would be submitted to the Working Party after completion of bilateralnegotiations.  The standards for paddy, milled and brown rice were provided.  Some members of the
Working Party expressed continued concern about Chin ese Taipei's practice of auctioning central riceWT/ACC/SPEC/TPKM/2/Rev.1
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stocks for export only.  These members  noted that only livestock feed businesses had access to these
stocks for domestic use, and only at fixed prices.  In the view of these members, this practice was an
export subsidy.  In response, the representative of Chin ese Taipei stated that in addition to livestock feed
businesses, livestock and fish farmers also had access to the rice stocks.  Chinese Taipei did not consider
that the practice amounted to an export subsidy.  However, in order to alleviate members from the
concern, Chinese Taipei assured that purchasers of rice from the central stock would not berequired to export the purchased rice.  Chinese Taipei also stated that upon accession, anyonehaving the right to trade in rice on Taiwan would have access to aged rice from central stockson the same terms offered to exporters, and that no further trade-based restrictions would beimposed.  The Working Party took note of these commitments.
153. In response to questions concerning exports of sugar, tobacco leaves and bananas, the
representative of Chinese Taipei stated that Chines e Taipei's sugar exports fl uctuated with changes in
the United States import quota allocated to Chinese Ta ipei.  All exports of sugar were to the United
States.  The sugar supply was the monopoly of Taiw an Sugar Corporation, which was an enterprise
under the supervision of the Ministry of Economic Affa irs with shares partly held by private parties.
Taiwan Sugar Corporation had its own sugar cane farm s;  it also contracts with farmers for processing
the sugar cane and sharing the sugar made from suga r cane sourced from such farmers.  The sugar cane
growers could share 55 per cent of the sugar, whic h in turn could be purchased by Taiwan Sugar
Corporation for export or sale in the domestic market .  The purchase price was calculated on the basis of
domestic price if the sugar was sold to the domestic market;  and on the basis of export guaranteed price
or the settlement price after payment to the Suga r Stabilization Fund, if the sugar was to be exported.
The Sugar Stabilization Fund had been in existe nce since 1966 for the purpose of stabilizing sugar
export and farmers' income.  The Fund operated as fo llows:  when the export price was higher than a
threshold payment was made to the Fund;  the pa yment amount was calculated according to the scale of
the price difference and at a cumulative rate.  When the export price was lower than the exportguaranteed price, payment to th e farmers for the price difference was made out of the Fund.  Taiwan
Sugar Corporation, however, had to b ear the price difference all by itself.  The export price had been
lower than the export guaranteed price in recent year s.  The price difference had been paid out of the
Fund contributed by the price difference resulting from the export price exceeding the export guaranteed
price in the past.   Sugar prices were of two types:   one was for sugar of general use, and the other was
for sugar used for processing exported food products.  The domestic price for sugar of general use was
set by the Ministry of Economic Affairs;  while the prices for sugar of export processing use was
determined on the basis of London spot market price (F.O.B.) for sugar plus importation cost.  The foodWT/ACC/SPEC/TPKM/2/Rev.1
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processing companies applied to Taiwan Sugar Cor poration for purchase of the needed sugar and paid
the domestic price in the first instance.  When the products were exported, the differences were settled
154. The representative of Chinese Taipei stated that all tobacco exports were of tobacco purchased
by the Taiwan Tobacco and Wine Monopoly Board  Bureau (TTWMB).  Banana exports were dealt
with by the Fruit Transportation and Marketing C ooperative.  When the export price of bananas was
lower than the export guaranteed price, the diffe rence was covered by a fund administered by the
Cooperative;  when the export price was higher than  the export guaranteed price, contributions were
made to the fund according to the scale of the difference and at a cumulative rate.  Farmers could choose
whether to sell their products to the domestic market  or to the Cooperative for export.  The prices for
domestic sales and for export are determined according to the demand and supply.  Generally, exportprices were higher than the domestic price.  The representative of Chinese Taipei also stated that
soybeans, maize and sorghum were purchased by th e Provincial Food Burea u, and summer vegetables
were all
 mostly purchased by the Department of Agriculture and Forestry of  the Taipei Agricultural
Produce Marketing Company on the basis of guarant eed minimum prices.  Guaranteed purchases of
wine grapes and wheat had been terminated in the first part of 1997 and 1995, respectively.
155. Some members of the Working Party requested an assessment of the effect of the price support
programmes operated by Chinese Taipei on the exportation of Chinese Taipei's agricultural products.  In
response, the representative of Chinese Taipei rep lied that he did not consider that the price support
programme constituted a subsidy on exports.  Consistent with the requirements of the WTO Agreement,Chinese Taipei would submit the draft schedule  of AMS commitments to the Working Party.
[Chinese Taipei undertook negotiations on market  access concessions and domestic support and export
subsidy commitments relating to agricultural goods. As noted in paragraph  [15] above, the Schedule of
Concessions which includes the results of those negotia tions, is reproduced in Part I of Annex I of the
Draft Protocol of Accession.  The representative of Chinese Taipei also provided the Working Party the
liberalization plan reproduced in Attachment C to th is Draft Report.  [The representative of Chinese
Taipei and the members of the Working Party agreed that in the event of any inconsistency between the
Schedule of Concessions and Commitments annexe d to the Draft Protocol  of Accession and
Attachment C to this Draft Report, the Schedule of  Concessions and Commitments annexed to the Draft
Protocol  of Accession shall prevail.]  The Working Party took note of this commitment.]
156. [The representative of Chinese Taipei indi cated that upon accession, in accordance with the
provisions of the Agreement on Agriculture, Chinese Taipei would eliminate all quantitative restrictions
and bind all tariffs applied on imports of agricultu ral products listed in Annex I of the Agreement.
Further, in accordance with Article 3, Part II of the Agreement on Agriculture, Chinese Taipei would notWT/ACC/SPEC/TPKM/2/Rev.1
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provide export subsidies, nor support in favour of  domestic producers, in excess of the commitment
levels specified in the Schedule annexed to this pr otocol, and confirmed that from the date of accession,
support previously granted for the production of tobacco  and grapes would be eliminated.  The Working
Party took note of these commitments.]
VII. TRADE RELATED INTELLECTUAL PROPERTY REGIME157. Some members of the Working Party noted that in recent years, Chinese Taipei had introduced
a number of improvements to the protection of intell ectual property rights and that Chinese Taipei was
apparently ready to assume in full the obligations set out in the WTO Agreement on TRIPS.  In their
view the problems faced by Chinese Taipei in this area related to enforcement rather than to the
intellectual property rights legislation itself.  Info rmation was requested with regard to the entry into
force of the Patent Law, the Trademark Law, the Integrated Circuit Protection Law and the Industrial
Design Law.  Information was also requested on the existence of bilateral agreements, the bordermeasures to combat counterfeiting, the procedures a pplicable to the infringement of intellectual property
rights, the protection accorded to pharmaceutical in ventions, the protection accorded to geographical
indications and to appellations of origin for wines and spirits.
158. In response, the representative of Chinese Taipei  said that the Action Plan to Comprehensively
Protect Intellectual Property Righ ts approved by the Executive Yuan on 29 June 1993 had set out the
following eight directions for efforts to strength en the protection of intellectual property rights:
(i)  improving the relevant legal framework;  (ii)  strengthening the relevant administrative organization;
(iii)  enhancing the enforcement of the relevant la ws and regulations;  (iv)  increasing education and
promotion;  (v)  increasing the capability to nego tiate with other economies;  (vi)  strengthening
investigation and research capabilities;  (vii)  providing adjustment assistance to the industries
concerned;  and (viii)  monitoring the implementati on of the plan.  Some members of the Working Party
responded that they had noted continued high levels of piracy of computer software in Chinese Taipei
and export of pirated software embodied in semic onductors.  Members of the Working Party expressed
concern regarding the failure to impose penalties, in  particular administrative penalties and seizure of
infringing product and machinery predominately used  to produce such products, sufficient to deter
piracy.  In addition, Chinese Taipei had decided to  establish the Intellectual Property Bureau whose
responsibility was exclusively for d ealing with intellectual property ma tters.  According to Article 4 of
the Copyright Law, copyrights of economies or territories which have established reciprocity withChinese Taipei were protected by Chinese Taipei.  Protection also extended to foreign works publishedfor the first time in the territory of Chinese Taipei , or foreign works which were published in Chinese
Taipei within thirty days of thei r first publication in territories outside of Chinese Taipei.  ChineseWT/ACC/SPEC/TPKM/2/Rev.1
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Taipei had been making efforts to revise  had revised the Copyright Law to meet the requirements of
TRIPS.  The proposed  main revision includes:  (a)  amending the definitions for public broadcast and
public performance;  (b)  giving explicit protection for performers' performance;  (c)  deleting provisionsconcerning compulsory licenses for translation; and (d)  affording a life-plus-50-years or 50 years term
of retroactive protection in consistency with th e obligation under Article 18 of the Berne Convention.
The draft Amendment was pending in the Legislative Yuan for approval, and was expected to complete
the legislative process before  The Amendment had been promulgated since 21 January 1998, and
effective since 23 January 1998, except the retroacti ve protection provisions which will not take
effect until Chinese Taipei's accession to the WTO.  Under paragraph 1 of Article 42 of the 1986 Patent
Law, a patent holder had the exclusive right to make , sell, or use his invention.  Therefore, a product
patent gave protection to the product no matter whic h process was used in the manufacturing of the
product.  Paragraph 2 of the same Article provided that if the patented invention was a process, thepatent protection extended to the product using the process in the manufacturing.  However, if the
product was subject to another party's patent, the use of the process invention required the consent ofthat other party.  The above rules applied to all inventions, including pharmaceutical inventions.  The
Patent Law, after its amendment in 1994, provides in its  Article 21 statutory bars to an invention patent.
Article 56 of the amended Patent Law confers on the patentee of a patented article and patented
manufacturing process the exclusive rights to manufactur e, sell, use or import. Article 80 stipulates that
where the product manufactured in accordance with  a patented manufacturing process was under a
product patent granted to others, the owner of such  process patent shall not put his process invention
into practice without the consent of the product pate ntee.  Currently, the Trade Mark Law did not have
specific provisions for the protection of geographic i ndications and appellations of origin for wines and
spirits.  However, as a general rule, if a manufact urer's use of geographic indications as trademarks
caused confusion to the general consumers as to th e geographical origin of the product concerned, the
Bureau of Standards could on its initiative or upon petition by interested parties turn down the
application of trademark registration or cancel the existing registration, as the case may be, according to
Article 37, paragraph 1, sub-paragraph 6 of  the Tradem ark Law.  If appellations of origin were used as
trademarks, there would be a vi olation of Article 37, paragraph 1, sub-paragraph 10 regarding
indications of origin.  The relevant trademark a pplication would be turned  down or the registration
would be cancelled.  Chinese Taipei believed that th e above protection should m eet the requirement for
the protection of geographical indica tions and appellations of origin contemplated in the WTO TRIPS
Agreement.  In addition to the administrative measures  to be taken by the National Bureau of Standards,
the Fair Trade Law and the Commodity Labelling Law also provide rules that can be effected, when
seeking protection. Article 21(1) of the Fair Trad e Law provides that enterprises (i.e. firms or
individuals engaging in trade) may not make any false or misleading marking of place of origin orWT/ACC/SPEC/TPKM/2/Rev.1
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manufacturing  or distribute, export  or import goods bearing such marking. Violators may be fined up to
one million New Taiwan Dollars. Under the Commodity Labelling Law, distributors  importers and
manufacturers are required to include info rmation relating to the place of origin  name and address of
the manufacturer on product labels. Failure to do so was punis hable by fines, suspension or business
closure.  Whoever is found guilty of violating this law and failing to rectify the impropriety within a
prescribed time-limit shall be punished by a fine of 5,000 to 50,000 yuan (equivalent to NT$15,000
to NT$150,000).  In the case of grievous offence, wi th the prior approval of  the central competent
authority, the violator may also be  subject to such disciplinary acti on as suspension or cessation of
business operations.  In addition, persons using false designations may be liable under Article 339 of
the Criminal Code for committing forgery.  He a dded that the bilateral agreement on protection of
intellectual property rights  copyright with the United States had taken effect on 16 July 1993 and had
been reinforced by a bilateral agr eement regarding reciprocal treatment on the priority rights of
trademarks and patents of 10 April 1996.  The representative of Chinese Taipei welcomed anyopportunity of entering into bilateral agreements w ith trading partners other than the United States.
According to Article 4 of the Copyright Law, the r eciprocity required for granting protection to foreign
copyrights could be established by way of (i) a tr eaty or agreement, (ii) unilateral action by other
economies through their laws, regulations, or othe r legal instruments which provide protection to
Chinese Taipei's copyrights, or (iii) customary practices.  Chinese Taipei was willing to discuss with
interested parties to find a mutually accepted way to establish such reciprocity.  Except the bilateral
agreement with the United States, Chinese Taipei had decided to protect works originating in the United
Kingdom, Hong Kong and Switzerland through unilateral administrative action in response to thosethree economies actions protecting works of Chinese Taipei origin.  The amendments to the Patent Lawand the Trademark Law passed in April 1997 w ould enter into force upon accession.  The draft
frameworks for the Integrated Circuits Layout Pr otection Law had been pr omulgated on 11 August 1995
and entered into force on 11 February 1996.  He added that during July 1992 to January 1993, the
following products were set out to be subject to export licensing requirements in the area of intellectual
property prot ection:  8473.30.10.9.0
 8473.30.10.00  Computer PC board (only PC boards with
semiconductor chips and computer software within the chip);  8473.30.10.90  8473.30.10.00  Printer PC
board (only PC boards with semiconductor ch ips containing comput er software);  9504.10.00.10
Television video game PC boards with semic onductor chips containing computer software;
9504.10.00.10 Video games of a kind used with a television receiver;  95 04.90.90.00 Other articles for
funfairs, table or parlour games (palmtop elect ronic games containing  computer software);
9504.90.90.00 Other articles fo r funfairs, table or parlour games (cassettes for palmtop electronic
games);  9504.10.00.20 Cassettes for television video games;  8471.20.00.00 Digital automatic data
processing machines (containing in the same hosin g at least a CPU and output unit, whether combinedWT/ACC/SPEC/TPKM/2/Rev.1
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or not);  8471.92.20.10 Dot matrix printer;  8471.92.20.20 Laser printer;  8471.92.20.30 Daisy printer;
8471.92.20.90 Other printer;  8524.90.30.00 Recorded data pr ocessing system magnetic disks (only
disks containing computer so ftware);  8524.11.90.00 Other digital integrated circuits (used in
computers, printers or TV video games and c ontaining chips with co mputer software);  8542.19.90.00
Other monolithic integrated circuits (used in com puters, printers or TV video games and containing
chips with computer software);  8542.20.00.00 Mixed integr ated circuits (used in computers, printers or
TV video games and containing chips with com puter software);  8542.80.90.90 Ot her integrated circuits
and micro assemblies (used in computers, printers or TV video games containing chips with computer
software).  Export licensing requirements on the above computer-related products were lifted on
15 July 1998, however, they were subject to rando m checks at the port by Customs in order to
ensure that infringing goods would not be exported.  CD and VCD manufacturers in Chinese Taipei
were required to inscribe the source identification code (SID) on all CD's and VCD's manufactured.
This measure aimed to deter the circulation of pirated CD's  and VCD's .
159. In reply to further questions concerning the laws for the protection of industrial designs,
semiconductor chips or trade secrets, the representati ve of Chinese Taipei stated that these laws were
along the lines of the provisions of the WTO TRIP S Agreement.  In response to a question concerning
Chinese Taipei's current protection for computer programs and foreign well-known marks he said that
since 1980 computer programs had b een protectable as "literary work s", and protectable as computer
programmes since 1985 under the Copyright Law.  Th e protection term was 50 years.  Article 37(1)(6  7)
of the Trademark Law was applied to provide pr otection for well known foreign marks in accordance
with Article 6 bis of the Paris Convention, i.e. even when the goods were not similar to the goods in
respect of which a trademark was registered.  In re sponse to a question concerning the consistency of its
laws with the TRIPS Agreement, the representative of  Chinese Taipei indicated that the Patent Law and
the Trademark Law had adopted the relevant provisi ons of the TRIPS Agreement.  He provided details
of the Patent Law, and its provisions for compulso ry licensing, in particular how it complied with the
TRIPS Agreement.  In his opinion, the Copyright La w was in conformity with the Berne Convention
and the TRIPS Agreement.  He provided details of the Copyright Law provisions to the Working Party.
He said that Chinese Taipei had promulgated seven  one Act and eight implementing regulations:  the
implementing rules of the Copyright Law;  the regu lations for Approval of Application for Compulsory
License of Translations;  the regulations for A pproval of Application fo r Compulsory License of
Musical Works; the standards of Royalty Rates for Us e in Public Interest Activities; the regulations for
Illustration of the Contents of Various Works in Pa ragraph 1 of Article 5 of the Copyright Law; the
Organisational Charter of the Copyright Examina tion and Mediation Committee; the regulations for
Mediation of Copyright Disputes;  and the "Cer tain Amount" of Items 2 and 3 of Paragraph 1 of
Article 87 bis of the Copyright Law.  In addition a Statut e for the Copyright Intermediary OrganisationsWT/ACC/SPEC/TPKM/2/Rev.1
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was being prepared  Copyright Intermediary Organization Act; The Illustrated Contents of Each
Kind of Works in Paragraph 1 of Article 5 of the Copyright Law; The Certain Amount in
Item 2 and 3 of  Paragraph 1 of Article 87bis of the Copyright Law; Regulations GoverningApplication for  Approval of Compulsory License of Musical Works and Royalties for UseThereof; Standards for Compensation for Fair Use of Works in Paragraph 4, Article 47 ofCopyright Law; Regulations Governing Regi stration of Plate Rights; Implementation
Regulations for Suspension of Release of Good s Infringing on Copyright or Plate Right by
Customs Authorities; Regulations of Copyrigh t Dispute Mediation; Organic Charter of the
Copyright Examination and Mediation Committee of the Ministry of Interior .
160. In response to further questions concerning th e Trademark Law and the statement by a member
of the Working Party that Chinese Taipei's Bureau  of Standards applied the standards for trademark
registration inconsistently with the TRIPS Agreemen t, the representative of Chinese Taipei provided
details of the system of protection and the resp ective time limits which, in his opinion, were basically
consistent with the TRIPS Agreement.  He stated  that the Bureau of Standards had recently adopted
several measures to facilitate the examination proce ss and to maintain consistency.  Statistics revealed
that in Chinese Taipei applications for trademar k registration filed by foreign applicants had a
consistently high approval rate.  Concerning the question of geographic denominations of origins, he
confirmed that the Trademark Law did not deal with  geographic denominations of origin.  However, if
an application for a trademark was made and the tr ademark could cause confusion as to the geographic
origin of the marked goods, the application could be rejected.  If appellations of origin were used astrademarks their use would infringe
 violate Article 37 of the Law.  He considered that these provisions
would meet the protection required by the TRIPS Agr eement.  In additional to the Trademark Law, the
Fair Trade Law, the Commodity Labelling Law and th e Criminal Code also contain provisions that
provide protection to ge ographical indications.
161. In response to questions concerning whether Chinese Taipei protected trade secrets, the
representative of Chinese Taipei said that the Trade Secrets Law was promulgated on 17 January 1996.
He assured the Working Party that the protection of  trade secrets would conform with the requirements
of the TRIPS Agreement.
162. In response to questions concerning whether pharm aceutical inventions could be the subject of a
product patent giving protection to the product inde pendently of the process with which it had been
manufactured, the representative of Chinese Taipei said that a patent was granted on the invention,regardless of which process was used in the manufacture of the goods.  He said that the examiningWT/ACC/SPEC/TPKM/2/Rev.1
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authority could grant extensions of the time limits  for the submission of supplementary information
supporting a patent application.
163. The representative of Chinese Taipei said that, in 1989  1993 , Chinese Taipei had initialled
formally executed a bilateral copyright agreement with the United States.  In his view, the agreement in
some cases gave a higher standard of protection than  the Berne Convention.  The text of this agreement
was made available to the Working Party as well as the Agreement Concerning the Protection and
Enforcement of Rights in Audiovisual Works be tween the Coordination C ouncil for North American
Affairs and the American Institute in Taiwan.
164. Concerning the enforcement of intellectual propert y rights, the representative of Chinese Taipei
said that Chinese Taipei provided training concerni ng intellectual property rights (intellectual property
rights) to judges, prosecutors and other law enfo rcement officials.  Newly appointed judges and
prosecutors could not practice until they had comple ted an eighteen month training programme which
included an introduction to intellectual property rights.  In addition  Additional training was provided to
incumbent public prosecutors.  Chinese Taipei had also  taken steps to co-ordinate the relevant agencies
in the enforcement of intellectual property rights.  Th e Public Prosecutors' Office attached to the Chinese
Taipei High Court had conducted five seminars since 1 July 1992 for representatives from government
agencies including Customs, the Government Info rmation Office (GIO), the Board of Foreign Trade
(BOFT), and the Police Administration.  The Ministry of Justice (MOJ) had also issued administrative
directives to establish a special public  appoint specific public prosecutors in the prosecutor's office to
deal with intellectual property rights infringement  cases.  The MOJ had also issued administrative
directives to public prosecutors to handle intellect ual property rights complaints expeditiously and to
press for harsh sentences whenever the circumstan ces warranted.  Judgements which appeared not to
have a deterrent effect would be appealed to the Appellate  High Court.  The Ministry of Justice had
directed to all prosecutors that the discretion of commuting prison terms to fines should be exercised
very carefully in intellectual property rights cases.  To facilitate the investigation of intellectual property
rights infringement cases, on 31 March 1993, the P ublic Prosecutor's Office had integrated all
intellectual property rights agencies to form a task  force.  In a letter of 20 August 1996, the MOJ had
requested all prosecutors to investigate cases wher e Chinese Taipei residents infringe copyrights in
mainland China.  If the result of the investiga tion meets the requirements under Article 251 of the
Criminal Procedure Code, prosecutors should prosecute the case. Article 94  100 of the Copyright Law
provided that a prosecutor could initiate an investig ation and issue an indictment in the absence of a
complaint.  If a complaint had initiated the investigation, Article 94  100 also provided that the
prosecutor could continue with the investigation or prosecution even if the in jured party withdrew the
complaint.  When a search warrant and the seizure of goods was considered appropriate, prosecutorsWT/ACC/SPEC/TPKM/2/Rev.1
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were required to proceed promptly.  In addition to the Copyright Law, the MOJ had directed that the
discretion to not prosecute a case under the Crimin al Code should be exercised very carefully in
intellectual property rights criminal cases.  The Judicial Yuan had also encouraged judges to impose theheaviest penalties possible on intellectual property rights infringers, and had established intellectualproperty rights divisions in  District Courts.  Special
 Specific prosecutors had been designated to deal
with intellectual property rights cases.  The Public  Prosecutors' Office attached to the Chinese Taipei
High Court had conducted several on-the-job seminars since 1 July 1992 for new and current
prosecutors. The MOJ together with the Judicial Yuan  will continue to hold educational seminars and
courses for new and current prosecutors and judges on a regular basis to keep them informed of the newdevelopments relating to intelle ctual property rights issues.
165. The representative of Chinese Taipei also explai ned that border measures had been strengthened
in relation to trade in products protected by intellect ual property rights.  Con cerning computer software,
Chinese Taipei had established a system for the cont rol of exports of computer software pursuant to a
memorandum of understanding signed with the Unite d States.  The Customs had been delegated to
examine packages of software consigned for export, to determine whether they conformed to the export
permit, invoice and packaging list or other export documents.  The examinations were carried out at
random with 30-50 per cent of such exports being ex amined.  All exports of an exporter who had been
previously found to have exported intellectual pr operty rights infringing products were subject to
inspection, whether or not these exports were describe d as computer software.  All exports suspected of
being counterfeit were seized, unless the exporter could provide evidence to offset such suspicion.  Theseized products would be confiscated when the intelle ctual property rights right-holder obtained a final
judgment from the Courts confirming that the produc ts were infringing intellectual property rights.
Public Prosecutors were required to prosecute forgers of documents including documents which wereused to support the exportation of intellectual property  rights infringing products.  To further deter the
export of counterfeit computer software, the Boar d of Foreign Trade of the Ministry of Economic
Affairs promulgated the Guidelines for Handlin g Cases Where the Export of Products related to
Computer Programs was Suspected of Copyright Infringement in 1996.
166. Concerning patents and trademark infringements , the representative of Chinese Taipei stated
that the Anti-Counterfeiting Committee (ACC) under the Ministry of Economic Affairs worked closelywith the Customs and the Prosecutors Office.  The ACC had been designated as the coordination agency
to assist the effective operation of the export monitoring system.  The ACC was responsible for theenforcement of anti-counterfeiting e fforts involving trademark and pate nts.  The ACC directed the work
of the intellectual property rights Enforcement S upervisory Task Force since July 1989.  The ACC was
empowered to refer suspected counterfeiting cases directly to the Courts for prosecution.  FollowingWT/ACC/SPEC/TPKM/2/Rev.1
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conviction, the ACC could request the BOFT to impose punitive measures according to the degree of
seriousness of the offence.  The BOFT could refuse to issue export permits for a period of one year to
the companies concerned.  He added that the insp ection by the Customs emphasized the examination of
the product name, brand names, qualities, specifica tions, product serial numbers, model numbers,
countries of manufacture, net weights etc.  Tradem ark infringement was not within the scope of the
inspection.   Trademark holders with sufficient informati on could file a petition to the Court for the
provisional attachment of the counterfeit goods or in form the prosecutor.  The Customs could only seize
the goods when informed by the Court or the tradem ark authority.  If Customs suspicions were aroused
concerning the export of certain goods, it would refer the matter to the ACC.  There was no such
mechanism to deal with imported goods.  He also stat ed that consultations with the United States on the
protection for pharmaceuticals had been concluded.  On 7 July 1993, the Department of Health had
issued revised public notices regarding safety monitoring which applied to all pharmaceuticals
regardless of their origin.
167. In reply to questions concerning the procedures  for the seizure by the Customs of infringing
products, the representative of Chinese Taipei indicated that in relation to patented goods, it wasnecessary for the right holders to obtain a Court orde r before any seizure could be made by the Customs.
All infringements of intellectual property rights had to be dealt with in the same manner as patent rights.
The only exception was Article 104
 90bis of the Copyright Law, which provided that right-holders upon
the posting of an appropriate bond could petition the Customs to seize imports reasonably suspected to
be infringing copies.  The goods would be c onfiscated upon a Court judgment confirming the
infringement.  In response to questions concerning th e seizure of parts imported into Chinese Taipei for
the purpose of being assembled into infringing goods  which would be exported to a third country, the
representative of Chinese Taipei replied that Chinese Taipei had never encountered such a situation, butthe goods could be seized if a Court order was obtained.
168. Some members of the Working Party asked whether any additional measures were planned in
order to combat the infringement of intellectual property rights, taking into account that existing
measures did not appear to be having a suffici ent deterrent effect on certain commercial scale
counterfeiting operations, such as watches.  [
Some members also noted the continued high levels of
piracy of computer software embodied in se mi-conductors.  These members expressed concern
regarding the failure to impose penalties, in particul ar administrative penalties and seizure of infringing
products and machinery used to produce such products, sufficient to deter piracy] .  The representative of
Chinese Taipei replied that Chinese Taipei had issu ed an Action Plan for Enforcement and Protection of
Intellectual Property Rights.  The Action Plan laid down a framework for the improvement of
intellectual property protection, includi ng the upgrading of the standards of protection, the application ofWT/ACC/SPEC/TPKM/2/Rev.1
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stiff administrative measures, the strengthening of j udicial enforcement and the education of the general
public to respect intellectual property rights.  An inter-agency Task Force had been established to
co-ordinate and supervise the enforcement of in tellectual property rights.  Chinese Taipei was
determined to enjoy a reputation as a territory  that respected intellectual property rights.
169. In response to the assertion by some members of the Working Party that Chinese Taipei did not
appear to protect against the transmission of infr inging copyright material on its cable television
network, the representative of Chinese Taipei indi cated that the Government Information Office (GIO)
had determined that a priority target was a crackdown on illegal cable television networks that
transmitted illegal copyrighted television programmes without authorization.  In the event of such a
transmission being made, the GIO severed the cable connection of the broadcaster and referred thematter to the prosecuting authorities.  After the Cable TV Law had been promulgated in 1993, the GIOhad the authority to impose fines on those cable TV networks which transmitted copyrighted televisionsprogrammes without authorization, and refe r cases to the prosecuting authorities.
170. [Recognizing that sales into the domestic market  of smuggled or counterfeit imports of alcohol
and tobacco products undermine Chinese Taipei's market for legally marketed products, and wishing todiscourage such activities in the future, the repres entative of Chinese Taipei confirmed that all such
contraband seized would be destroyed, or otherwise disposed of, taking into account the practices of
WTO Members in a similar situation, and that Chin ese Taipei intends to make additional efforts to
prevent such illegal imports.  In addition, Chinese Ta ipei would ensure that certain alcoholic beverage
imports be accompanied by a certificate of origin in order to combat counterfeiting.  The Working Party
took note of these commitments.]
171. The representative of Chinese Taipei said that the Trademark Law, Articles 4, 5, 23, 25, 34, 37
and 61 would be amended to achieve the following objectives:
(i) to broaden the scope of reciprocal granting of  the right of priority to cover the situation
where there was no formal agreement but the right of priority was granted to Chinese
Taipei's owner of trademark through practice;
(ii) to include a combination of colours in the group of items that are capable of constituting
a trademark so as to be consistent with Article 15 of the TRIPS Agreement;
(iii) to extend administrative protection to well known marks by providing that no
applications may be filed for registration of a trademark design which was identicalWT/ACC/SPEC/TPKM/2/Rev.1
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with or similar to another person's well- known trademark or mark and likely to cause
the public to form a mistaken belief.
He added that the Patent Law, Artic les 21, 51, 56, 57, 78, 79, 80, 82, 88, 91, 105, 109, 117 and 122
would also be amended to achieve the following objectives:
(i) to delete the requirement of reciprocity in respect of the granting of patents for
micro-organisms, extension of patent prot ection terms and the granting of exclusive
import rights so as to be consistent with  Articles 3 and 4 of the TRIPS Agreement;
(ii) to limit compulsory licensing in re spect of semi-conductor technology to public
non-commercial use or to remedying anti-comp etitive practice, so as to be consistent
with Article 31(c) of the TRIPS Agreement;
(iii) to provide patent owners and his/her exclus ive licensees the right to request destruction
or other necessary disposition of the infr inging goods, raw materials or instruments
used, in connection with the infringement, so as to meet the requirement of Article 46 of
the TRIPS Agreement which calls for giving th e judicial authority to order disposition
outside the channels of commerce;
(iv) to provide for shifting the burden of proof in respect of process patents as required by
Article 34 of the TRIPS Agreement;
(v) to provide for longer term of protection for industrial design, so as to meet the minimum
requirement of 10 years of the TRIPS Agreement.
These amendments had been passed in April 1997 and would enter into force at the time of accession.
[Some members of the Working Party expressed their appreciation to the representative of ChineseTaipei for the information on efforts to impl ement the TRIPS Agreement.  These members
re-emphasized the need for effective enforcement of Chinese Taipei s intellectual property laws as part
of its obligations under the TRIPS Agreement].  [The representative of Chinese Taipei said that effectiveenforcement was already carried out on a continuing basis].
172. The representative of Chinese Taipei stated that Chinese Taipei would  fully apply the
provisions of the Agreement on TRIPS by the date  of accession, without recourse to any transitional
period.  [Chinese Taipei would furtherm ore ensure by the date of accession:WT/ACC/SPEC/TPKM/2/Rev.1
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(a) full protection of geographical indications (including against trademarks which contain
or consist of such an indication), as well as of well-known marks (including theenhanced protection pursuant to Article 16.2 and 3 of  the TRIPS Agreement);
(b) the establishment of a registration system for trademarks which incorporates all
conditions as set out in the TRIPS Agreement;
(c) the amendment of Chinese Taipei Copyrigh t Law to comply with Article 14(1) of the
TRIPS Agreement;
(d) the extension to all WTO members of advantages currently given on the basis of
reciprocity, the elimination of any reciproc ity requirements;   and in particular,
(e) effective enforcement (including implemen tation of the special requirements related to
border measures).
The Working Party took note of these commitments.]VII. POLICIES AFFECTING TRADE IN SERVICES173. Several members of the Working Party stressed that Chinese Taipei must undertake a
substantial package of initial commitments in its  Services Schedule with minimum exceptions from
MFN treatment.  Chinese Taipei engaged in market access negotiations on services with members of the
WTO.  The results of those negotiations are reproduced  in Part II of Annex I to the Draft Protocol of
Accession.
174. The representative of Chinese Taipei confirmed that MOTC would license additional
facilities-based operators effective from July 2001; and, consistent with Chinese Taipei’scommitments under the GATS, there would be no limitations on the numbers of licenses afterChinese Taipei becomes a member of the WTO. In addition, MOTC will deregulate internationalvoice simple resale service from July 2001. From that time, market access to services-basedcompetition will be fully open. The Worki ng Party took note of these commitments.
175. Some members of the Working Party welcomed Chinese Taipei’s commitment to permit
attorneys of foreign legal affairs (AFLA) to establish a partnership with or employ a lawyer licensedin Chinese Taipei three years after Chinese Taipei’s accession to the WTO. They also noted that, asfrom the date of its accession, Chinese Taipei has agreed to permit an AFLA to form a cooperativerelationship with licensed lawyers of Chinese Taipei, except that such relationship must not be inWT/ACC/SPEC/TPKM/2/Rev.1
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the form of a joint liability and profit sharing arrangement. The representative of Chinese Taipei
confirmed that the prohibition of a “profit sharing” arrangement did not preclude payment forservices rendered, but was intended to encompass general agreements between these serviceproviders on division of any profits. He also confirmed that cooperative arrangements betweenAFLAs and licensed lawyers of Chinese Taipei that were not in the form of a joint liability andprofit sharing arrangement would not be considered to be a partnership under Chinese Taipei’sLawyers Law.
IX. [TRANSPARENCY][PUBLICATION]
176. Some members of the Working Party noted that Article X of the GATT 1994 required that all
laws, regulations, judicial decisions and administrative  rulings relating to trade be published promptly so
that governments and traders could become  acquainted with them.  [
Similarly, Article III of the GATS
required prompt publication (at the latest by the time of entry into force - except in emergency
situations) of all relevant measures of general applic ation which pertain to or affect the operation of the
GATS Agreement.  These members also noted that tr ansparency obligations arose from Article 63 of the
TRIPS Agreement.]   They also requested that such la ws, regulations, judicial decisions and
administrative rulings relating to tr ade be systematically and immediately translated into a WTO official
language.  The representative of Chinese Taipei sa id that Chinese Taipei would comply with the
publication provisions of GATT 1994 and other re levant WTO Agreements but would not accept an
additional general obligation to translate legal instruments into an official WTO language.
[Some Working Party members emphasized the importa nce of prior notice of laws, regulations and
other measures affecting trade in goods, services and intellectual property rights, in particular the right toprovide comments on proposed measures prior to th eir enactment and implementation.  These members
of the Working Party also noted that some of the WTO Agreements expressly provided for such a notice
and prior comment process and urged Chinese Taipei to extend the coverage of this process to all
measures related to the WTO.]  [The representative of Chinese Taipei said that Chinese Taipei would
not accept such extension because it exceeded th e obligations set out in the WTO Agreements] .  The
representative of Chinese Taipei noted the existence of requirements in some WTOAgreements for prior notice and a reasonable time to present comments on proposedmeasures.  He stated that Chinese Taipei had an open and transparent system for adoptinglaws, regulations and other measures.  Upon accession, Chinese Taipei, would provide aperiod for appropriate authorities, including those of other WTO members, to comment onlaws and regulations and other measures of general application affecting trade in goods,WT/ACC/SPEC/TPKM/2/Rev.1
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services, or TRIPS before such measures are enacted and implemented except in emergency
situations.  The Working Party took note of this commitment.
177. [The representative of Chinese Taipei stated that the following Laws and Regulations  shall be
amended or newly made [within six months from]  [by] the date of accession to the WTO for the purpose
of putting into effect Chinese Taipei's accession commitments:
- Foreign Trade Act
- The Commodity Inspection Law
- The Trademark Law
- The Patent Law
- Company Law
- Customs Law Articles
- Statute for Commodity Tax
- Business Tax Law
- The Securities and Exchange Law
- The Certified Public Accountants' Law
- Commercial Port Law
- Highway Law
- Lawyers' Law
- Architects' Law
- Statute Governing Privileges and Immunities of the Foreign Missions and their Personnel in 
Chinese Taipei
- Law of Pharmaceutical Affairs
- Law Governing Food Sanitation
- The Publication Law
- Central Bank Act
- Banking Law
- Copyright Law
- Copyright Intermediary Organization Act
- Tobacco and Alcohol Administration Law
- Tobacco and Alcohol Tax Law
- Statute Governing the Organizati on of Department of National Tr easury, Ministry of Finance
- Provincial Statute for Monopoly of T obacco and Wine in Taiwan Province
- Customs Import Tariff and Classifi cation of Import Export CommodityWT/ACC/SPEC/TPKM/2/Rev.1
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- Statute for Establishment and Management of Export Processing Zones
- Statute for Agriculture Development
- Food Management Law
- Government Procurement Law
- Statute Governing the Organization for the Public Construction Commission, Executive Yuan
- Statute for Inspection Procedure Governing Cons truction Works and Procurement and Disposal 
of Properties by Government Agencies
- Statute for Vocational Assistance for Retired Servicemen
- Law for the Administration of National Enterprises
A summary of the amendments that will be introdu ced to some of the above-mentioned laws was
reproduced in Attachment E.  The representative of  Chinese Taipei further stated that Chinese Taipei
would ensure that from the date of accession, all laws , regulations, judicial decisions and administrative
rulings relating to trade would be published promp tly so that governments and traders could become
acquainted with them. The Working Party took note of these commitments].
178. The representative of Chinese Taipei further stat ed that Chinese Taipei would ensure that from
the date of accession, all laws, regulations, judicial decisions and administrative rulings of general
application relating to trade in goods, as well as measures subject to the transparency provisions of the
GATS and TRIPS Agreement would be translated and published in an official WTO language no later
than [30 calendar days]  90 days after enactment or issuance and, except in situations of extreme
emergency, prior to the date such measures are implemented or enforced .  Such measures would,
however, be published in the official language of Chinese Taipei prior to the date such measures
are to be implemented or enforced ex cept in cases of extreme emergency.  In respect of enquiry
points required to be established under the WTO Agreement or the Protocol, the representative of
Chinese Taipei stated that Chinese Taipei would establish or designate an enquiry point where, upon
request of any individual or enterprise, all information relating to the measures required to be published
may be obtained.  Replies to enquiries for inform ation would generally be  provided within [15  30
working days]  after receipt of a request.  In exceptional cases, replies may be provided within [20  45
working days] after receipt of a request.  Rep lies would be complete and would represent the
authoritative view of  Chinese Taipei.]
179. [The representative of Chinese Taipei noted the existence of requirements in some WTO
Agreements for prior notice and a reasonable time  to present comments on proposed measures.  He
stated that Chinese Taipei had an open and transpar ent system for adopting laws, regulations and other
measures.  Upon accession, Chinese Taipei, would pr ovide a period for appropriate authorities toWT/ACC/SPEC/TPKM/2/Rev.1
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comment on all laws, regulations and other measures pe rtaining to or affecting trade in goods, services,
or TRIPS of at least [60 calendar days] before su ch measures are implemented.   The Working Party
took note of these commitments.]
Notifications
180. The representative of Chinese Taipei said that the latest upon entry to force of the Protocol of
Accession, Chinese Taipei would submit all notifications  (other than those required to be made on an ad
hoc basis) required by any Agreement constituting part of the WTO Agreement.  Any regulations
subsequently enacted by Chinese Taipei which gave  effect to the laws enacted to implement any
Agreement constituting part of the WTO Agreement would also conform to the requirements of that
Agreement.  The Working Party took note of these commitments.
X. OTHER TRADE AGREEMENTS181. In response to questions from some members of the Working Party, the representative of
Chinese Taipei stated that Chinese Taipei was not a party any trade agreement which provided for the
granting of preferences to trade in goods and/or services.
Agreement on Trade in Civil Aircraft
182. In response to questions concerning the aerospace sector, the representative of Chinese Taipei
said that its aerospace industry did not presently have the capability to assemble civil aircraft or compete
internationally.  Chinese Taipei did not provide any subsidies specifically for the aerospace industry.
Some members of the Working Party said that a modern and sophisticated economy such as ChineseTaipei, which was also a major participant in the globalization of the world's aeronautics and spaceindustry, should accept the Agreement on Trade in Civil Aircraft upon accession to the WTO.  Theyfurther added that due to the advanced state of th e industrial development of Chinese Taipei and the
plans to expand the aircraft and components industry, the acceptance by Chinese Taipei of theAgreement on Trade in Civil Aircraft was a prerequisite to accession to the WTO.
183. The representative of Chinese Taipei stated that Chinese Taipei would become a signatory to
the Agreement on Trade in Civil Aircraft at  the same time that it acceded to the WTO.
XI. CONCLUSIONS184. The Working Party took note of the explanations  and statements of Chinese Taipei concerning
its foreign trade regime, as reflected in this repor t.  The Working Party took note of the commitmentsWT/ACC/SPEC/TPKM/2/Rev.1
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given by Chinese Taipei in relation to certain spec ific matters which are reproduced in paragraphs [ 12,
15, 19, 21, 22, 32, 34, 39, [44], 50, [57], 58, 60, 61, 62, 66, 68, 72, 74, 78, 85, 94, 100, [103], 104, [105],
109, 115, 123, 124, 126, [127], 132, [133], [ 134], [135], 138, [141], [142],  147, 152, [156], [170], [172],
174, 176, [177], [179] and [180] ] of this Draft Report and noted that these commitments had been
incorporated in the Draft Protocol of Accession.
185. [Having carried out the examination of the foreig n trade regime of Chinese Taipei and in the
light of the explanations, assurances and commitment s given by the Chinese Taipei representatives, the
Working Party reached the conclusion that Chinese Taipei be invited to accede to the Marrakesh
Agreement Establishing the World Trade Organizati on on the terms set out in the draft Protocol of
Accession reproduced in the Appendix to this  Report, including the Annexes thereof].
[TO BE COMPLETED]WT/ACC/SPEC/TPKM/2/Rev.1
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APPENDIX
ACCESSION OF THE SEPARATE CUSTOMS TERRITORY
OF TAIWAN, PENGHU, KINMEN AND MATSU
Draft Decision
[The General Council,
Having regard to the results of the negotiations directed towards the establishment of the terms
of accession of the Separate Customs Territory of  Taiwan, Penghu, Kinmen and Matsu (hereinafter
referred to as "Chinese Taipei") to the Marrakesh  Agreement Establishing the World Trade Organisation
and having prepared a Draft Protocol for the Accession of Chinese Taipei,
Decides, in accordance with Article XII of th e Marrakesh Agreement Establishing the World
Trade Organization, that Chinese Taipei may accede to the Marrakesh Agreement Establishing the
World Trade Organization on the terms set out in the Draft Protocol for the Accession of Chinese
Taipei.]WT/ACC/SPEC/TPKM/2/Rev.1
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[DRAFT PROTOCOL  OF ACCESSION OF THE SEPARATE CUSTOMS TERRITORY OF
TAIWAN, PENGHU, KINMEN AND MATSU TO THE MARRAKESH AGREEMENT
ESTABLISHING THE WORLD TRADE ORGANIZATION
The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the approval
of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement
Establishing the World Trade Organization (hereinafter  referred to as the "WTO Agreement"), and the
Separate Customs Territory of Taiwan, Penghu, Kinmen  and Matsu (hereinafter referred to as "Chinese
Taipei"),
Taking note of the Report of the Working Party on the Accession of Chinese Taipei to the WTO
Agreement reproduced in document WT/ACC/...., dated ........ (hereinafter referred to as the "Working
Party Report"),
Having regard to the results of the negotiatio ns on the accession of Chinese Taipei to the WTO
Agreement,
Agree as follows:
PART I -  GENERAL
1. Upon entry into force of this Draft Protocol pursuant to paragraph 10, Chinese Taipei accedes to
the WTO Agreement pursuant to Article XII of that  Agreement and thereby becomes a Member of the
WTO.
2. The WTO Agreement to which Chinese Taipei accedes shall be the WTO Agreement as
rectified, amended or otherwise modified by such legal instruments as may have entered into force
before the date of entry into force of this Protocol.  This Protocol, which shall comprise  include  the
commitments referred to in [paragraph 184]  of the Working Party Report, shall be an integral part of
the WTO Agreement.
3. Except as otherwise provided for in the paragraphs referred to in [paragraph 184]  of the
Working Party Report, those obligations in the Mu ltilateral Trade Agreements annexed to the WTO
Agreement that are to be implemented over a period of time starting with the entry into force of thatWT/ACC/SPEC/TPKM/2/Rev.1
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Agreement shall be implemented by Chinese Taipei as if it had accepted that Agreement on the date of
its entry into force.
4. The Special Exchange Agreement between the WTO and Chinese Taipei reproduced in Annex
II to this Draft Protocol forms an integral part of this Protocol.
5. Chinese Taipei shall at the time of accession to the WTO  accept the Plurilateral Trade
Agreement on Government Procurement listed in  Annex 4 of the Agreement Establishing the WTO
according to [paragraph 147] of the Report of the Working Party .
6. Chinese Taipei may maintain a measure inconsistent with paragraph 1 of Article II of the GATS
provided that such a measure was recorded in the li st of Article II Exemptions  annexed to this Draft
Protocol and meets the conditi ons of the Annex to the GATS on Article II Exemptions.
PART II - SCHEDULES
7. The Schedules reproduced in Annex I to this  Draft Protocol shall become the Schedule of
Concessions and Commitments annexed to th e General Agreement on Tariffs and Trade 1994
(hereinafter referred to as the "GATT 1994") and the Schedule of Specific Commitments annexed to the
General Agreement on Trade in Services (hereinafter referred to as "GATS") relating to Chinese Taipei.
The staging of the concessions and commitments listed in the Schedules shall be implemented asspecified in the relevant parts of the respective Schedules.
8. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of
that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments
annexed to this Draft Protocol shall be the date  of entry into force of this Draft Protocol.
PART III - FINAL PROVISIONS
9. This Draft Protocol shall be open for acceptance,  by signature or otherwise, by Chinese Taipei
until .....
10. This Draft Protocol shall enter into force on the thirtieth day following the day upon which it
shall have been accepted by Chinese Taipei.WT/ACC/SPEC/TPKM/2/Rev.1
Page 96
11. This Draft Protocol shall be deposited with  the Director-General of the WTO.  The
Director-General of the WTO shall promptly furnis h a certified copy of this Draft Protocol and a
notification of acceptance by Chinese Taipei thereto pursuant to paragraph 9 to each Member of theWTO and to Chinese Taipei.
This Draft Protocol shall be registered in accordance with the provisions of Article 102 of the
Charter of the United Nations.
Done at Geneva, this [date] day of [month]  one thousand nine hundred and ninety ....., in a
single copy in the English, French and Spanish languages, each text being authentic.]WT/ACC/SPEC/TPKM/2/Rev.1
Page 97
ANNEX I
SCHEDULE .... - SEPARATE CUSTOMS TERRITORY
OF TAIWAN, PENGHU, KINMEN AND MATSU
Part I - Goods
[The Schedule will be circulated in document .... ]
Part II Services
[The Schedule will be circulated in document .... ]
[TO BE COMPLETED]WT/ACC/SPEC/TPKM/2/Rev.1
Page 98
[ANNEX II
SPECIAL EXCHANGE AGREEMENT BETWEEN THE
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND
MATSU (HEREINAFTER REFERRED TO AS "CHINESE TAIPEI") AND THE
WORLD TRADE ORGANIZATION (HEREINAFTER REFERRED TO AS THE "WTO")
Whereas paragraph 6 of Article XV of the General Agreement on Tariffs and Trade 1994
(hereinafter referred to as the General Agreement 1994), [as indicated in the Explanatory Notes thereof]
provides that any WTO Member which is not a memb er of the International Monetary Fund (hereinafter
referred to as the "Fund") shall, within a time to be determined by the WTO after consultation with the
Fund, become a member of the Fund, or, failing that, en ter into a special exchan ge agreement with the
WTO;
Whereas paragraph 7 of the said Article provides  that such special exchange agreement shall
provide to the satisfaction of the WTO  that the objective of the General Agreement 1994 will not be
frustrated as a result of action in exchange matters by the Member in question, and taking into account
that the terms of such an agreement shall not impose obligations inconsistent with those imposed by the
Fund;
Whereas the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (hereinafter
referred to as "Chinese Taipei") desires to accede to the Marrakesh Agreement Establishing the World
Trade Organization (hereinafter referred to as the "WTO Agreement") in pursuance of Article XII
thereof;
The World Trade Organization
and
Chinese Taipei, acting through its representative duly authorized for this purpose,Hereby agree as follows:
ARTICLE IWT/ACC/SPEC/TPKM/2/Rev.1
Page 99
Orderly Exchange Arrangements
1. Chinese Taipei shall collaborate with the WTO to promote exchange rates which reflect
underlying economic fundamentals, to maintain orde rly exchange arrangements with other Members of
the WTO, to avoid competitive exchange alterations, a nd to assist, in accordance with Articles II and III
of this Special Exchange Agreement,  in the elimination of restrictions on the making of international
payments and transfers within the multilateral sy stem, and to promote international trade and
investment.
2. Recognizing that the essential purpose of the in ternational monetary system is to provide a
framework that facilitates the exchange of goods, services, and capital among countries, and that helpssustain non-inflationary economic growth, Chinese Taipei undertakes to assure orderly exchange
arrangements and to promote a stable system of exch ange rates.  In particular, Chinese Taipei shall:
(i) Endeavour to direct its economic and financial policies toward the objective of
fostering sustained, non-inflationary economic growth with macroeconomic stability;
(ii) Permit exchange rates to reflect underlying economic and financial conditions;
(iii) Avoid manipulating exchange rates or th e international monetary system in order to
prevent effective balance-of-payments adju stment or to gain an unfair competitive
advantage over other members; and
(iv) Follow exchange policies compatible with the undertakings under this Article.
ARTICLE II
Avoidance of Restrictions on Current Payments and Multiple Currency Practices
1. Chinese Taipei shall not, without the approval  of the WTO, impose restrictions on the making
of payments and transfers related to current account transactions.
2. Chinese Taipei shall not engage in, nor pe rmit its Ministry of Finance, Central Bank,
Stabilization Fund, or other agency, to engage in an y discriminatory currency arrangements or multiple
currency practices except as approved by the WTO.WT/ACC/SPEC/TPKM/2/Rev.1
Page 100
3. Exchange contracts which involve the currency of any Member or Chinese Taipei and which
are contrary to the exchange control regulations of that Member or Chinese Taipei maintained or
imposed consistently with the Articles of Agreemen t of the Fund or with the provisions of a special
exchange agreement entered into pursuant to paragr aph 6 of Article XV of the General Agreement 1994
or this Special Exchange Agreement, shall be unenforceab le in the territories of Chinese Taipei or in the
territories of any Member.
ARTICLE III
Controls of Capital Transfers
1. Chinese Taipei undertakes that it shall seek to avoid the imposition of capital controls to address
balance-of-payments and macroeconomic objectives.  However, Chinese Taipei may exercise suchcontrols as are necessary to regulate internat ional capital movements, if these movements are
destabilizing to the balance of payments or jeopa rdize macroeconomic stability, so long as Chinese
Taipei does not exercise these controls in a manner which will restrict payments for current transactions
or which will unduly delay transfers of funds in settlement of commitments.
2. Chinese Taipei undertakes that measures affec ting capital flows will be in accordance with this
Special Exchange Agreement, the General Agreement 1994, and the WTO Agreement.
3. If  Chinese Taipei institutes new capital cont rols or tightens existing capital controls, it shall
immediately after instituting or tightenin g such controls consult with the WTO.
ARTICLE IV
Restrictions on Payments - General
1. In the event that Chinese Taipei, with the approval of the WTO, as provided in Article II, or
consistent with consultations with the WTO, as provided in Article III, as the case may be, imposes ameasure to restrict payments and transfers fo r balance-of-payments and macroeconomic stability
purposes, it shall:WT/ACC/SPEC/TPKM/2/Rev.1
Page 101
(a) initiate good faith consultations with the WTO on economic adjustment measures to address the
fundamental underlying economic problems giving rise to the measures; and
(b) adopt or maintain economic policies consistent with such consultations.
2. A measure adopted or maintained under Article II of this Special Exchange Agreement shall:
(a) avoid unnecessary damage to the commercial, economic or financial interests of another
Member;
(b) be temporary and be phased out within a clearly-specified time-frame;(c) be the least burdensome type of action available;(d) be consistent with this Special Exchange Agreement and the economic policies adopted
pursuant to paragraph 1(b) of this Article; and
(e) be applied on a most-favoured-nation treatment basis.
3. A measure adopted or maintained under Article III of this Special Exchange Agreement shall to
the extent practicable conform to the provisions set forth in sub-paragraphs (a) through (e) of paragraph2 of this Article.
ARTICLE V
Furnishing of Information
1. Chinese Taipei shall furnish th e WTO with such information with in the general scope of section
5 of Article VIII of the Articles of Agreement of the International Monetary Fund as the WTO mayrequire in order to carry out its functions under the WTO Agreement.
2. Chinese Taipei shall be under no obligation to furn ish information in such detail that the affairs
of individuals or corporations ar e disclosed.  Chinese Taipei undertakes, however, to furnish the desired
information in as detailed and accurate a manner as is practicable.WT/ACC/SPEC/TPKM/2/Rev.1
Page 102
ARTICLE VIMiscellaneous Provisions
1. For purposes of this Special Exchange Agreemen t, the term "Payments for current transactions"
means payments which are not for the purpose of tran sferring capital, as defined by the International
Monetary Fund.
2. The WTO shall at all times have the right to  communicate its views informally to  Chinese
Taipei on any matter arising under this Agreement.
3. Whenever the WTO consults with the Fund on exchange matters or in other appropriate cases
particularly affecting Chinese Taipei, the WTO sha ll take measures, as are satisfactory to the Fund, to
ensure effective presentation of Chinese Taipei's  case to the Fund, including, without limitation, the
transmission to the Fund of any views comm unicated by Chinese Taipei to the WTO.
4. The Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO
shall apply to disputes arising under this Agreement.
5. This Agreement shall enter into force on the date of entry into force of the Protocol of
Accession of Chinese Taipei to the WTO.6.           The provisions of this Agreement,  entered into pursuant to Article XV of the General
Agreement 1994, shall be deem ed to be included within that Article  and shall constitute an integral part
of the Draft Protocol of Accessi on of Chinese Taipei to the WTO.
7.           This Agreement shall terminate upon the mutual agreement of Chinese Taipei and the WTO.  ]WT/ACC/SPEC/TPKM/2/Rev.1
Page 103
ATTACHMENT A
Price Controls List
The tariff items subject to price controls and their justification and legal basis are as follows:
1. Price Controls Mandated by Law:  Electricity and Salt;
2. Price Controls to Implement Specific Policies:  Oil:  energy policy to stabilize oil prices as well
as prices of general commodity prices (as oil is th e basis input for almost all productions);  Sugar and
fertilizer:  agricultural policy to stabilize farmers' income and production cost;
3. Price controls on other necessities:  Natural gas and liquefied petroleum gas:  mandated by the
"Law Governing Surveillance over Privately Owned Utility Companies"  "Statute for Monitoring
Private Enterprises Operating Public Utilities" ; price to be determined by the Public Utility Rate
Commission of the Executive Yuan.
[(i) Electricity:  The legal basis for price controls was the Electricity Law;]
(ii) Salt:  The HS number is 2501.  The legal basis for price control was the Statute for Salt
Administration;
(iii) Petroleum:  The HS numbers are 2710.00.11, 2710.00.12, 2710.00.23, 2710.00.31 and
2710.00.33;
(iv) Sugar and fertilizers:  The HS numbers are 1701.11, 3102.10.10, 3102.21.10,
3102.30.10, 3102.70.10, 3103.10.00.  The legal basis for price control of thesecommodities was the Table of Division of Work between the Ministry of EconomicAffairs and the Executive Yuan;
(v) Natural gas and liquefied gas:  The HS numbers are 2711.21.00 and 2711.19.10.  The
legal basis for price control was the Stat ute for Monitoring Private Enterprises
Operating Public Utilities.WT/ACC/SPEC/TPKM/2/Rev.1
Page 104
ATTACHMENT B
Revised Summary of the Tobacco and Alcohol Reform Plan (January, 1998)
The following outlines Chinese Taipei's intentio ns for the tobacco and alcohol reform plan:
Tobacco and Alcohol Taxes
The TTWMB reform plan includes a classificati on of tobacco products and alcoholic beverages
for the purposes of internal taxes (tobacco and alcohol taxes). Tobacco products are classified intocigarettes, pipe tobacco, cigars, and others. Cigarette s are subject to specific tax of  x dollars per 1,000
sticks;  pipe tobacco, cigars, and others are subject to specific tax of x dollars per kilogram.
Alcohol products are classified into brewed al coholic beverages (including beer and other
brewed alcoholic beverages), distilled alcohol be verages (including whisky, brandy, rum, gin, and
vodka), reprocessed alcohol beverages, rice wine (" Mi Chiu"), cooking wine, other alcoholic beverages,
and alcohol. The alcohol products are to be taxed as follows:
A. Brewed Alcoholic BeveragesI. Beer: specific tax of x dollars per litre.(a) Other Brewed Alcoholic Beverages:
specific tax of x dollars per litre per degree of alcohol content.
B. Distilled Alcoholic Beverages (including, among others, whis ky, brandy, rum, gin, vodka):
specific tax of x dollars per litre.
C. Reprocessed Alcoholic Beverages
specific tax of x dollars per litre of alcohol contents exceeding specific 20 per cent by volume,
specific tax of x dollars per litre per degree of alcohol contents less than 20 per cent by volumeWT/ACC/SPEC/TPKM/2/Rev.1
Page 105
D. Rice Wine ("Mi Chiu")
specific tax of x dollars per litre.
E. Cooking Wine:
specific tax of  x dollars per litre.
F. Other Alcoholic Beverages:
specific tax of x dollars per litre per degree of alcohol content.
G. Alcohol:
specific tax of x dollars per litre.
The reform of the TTWMB will ensure the levy of tobacco and alcohol tax in a transparent and
non-discriminatory manner with equal treatment accorded to imported and domestic products. Thesetting of the rates of tariffs and taxes has taken into account the current monopoly tax level, UruguayRound "zero for zero" offers, and the practices of comparable economies of the WTO members. Thetariff rates will be incorporated into Chinese Taipei's market access schedules.
Administration of Tobacco and Alcohol Products
This section covers the various aspects of th e administration of tob acco and alcohol products
with the implementation of the reform plan.
The planting and purchase of tobacco leaves are to be arranged between the manufacturers and
tobacco farmers by contracts. Production of cigarettes wi ll not be open to the private sector within three
years after the reform.
In terms of the production of alcohol products, the manufacturing of machinery and equipment
for alcohol and tobacco production, printing of tradem arks, and packaging paper are not regulated in theWT/ACC/SPEC/TPKM/2/Rev.1
Page 106
Tobacco and Alcohol Administration Law. Production of alcohol products will be open to the private
sector in stages within three years after the implementation of the new system.
Chinese Taipei plans to liberalize production/ma nufacture of wine within one year after the
implementation of the new system; liberalization of spirits and beer production will be effected twoyears after the implementation of the new system. It is the intention of Chines e Taipei to attain full
liberalization within three years.
Any person wishing to engage in the production of alcohol and tobacco products will be require
to meet certain qualifications. First of all, perm its from the authority will be required. To do so, the
applicant must fulfil requirements including, mini mum capital, organization form (companies limited by
shares only), acquiring a factor y license, and no record of criminal offence or tax default.
After the implementation of the new system , tobacco and alcohol manufacturers legally
established will be permitted to import alcohol and t obacco products in bulk for repackaging, provided,
however, such manufacturers shall have authorizati on from the original manufacturers of the imported
products and shall be able to produce the relevant certificates of origin.
In addition, tobacco and alcohol manufactur ers may contract out or accept contract
manufacturing, subject to the appr oval of the competent authority.
In the importation and wholesale of alcohol a nd tobacco products, a license is required for an
importer and a wholesaler of the products; the license bearer can not have prior record of tax default or
criminal offence within a prescrib ed time. Chinese Taipei has incor porated services related to the
distribution of tobacco and alcohol  products in its draft schedule of specific commitments on trade in
services.
The legal and regulatory framework for produc tion and distribution of  alcohol and tobacco
products will not impose particular restriction on foreign firms engaging in related commercial
activities. The time table and rules for liberalizing the production/manufacture of particular tobacco and
alcohol products will apply equally to foreign as well as domestic private firms.
Labelling requirement with respect to tobacco and alcohol products is stipulated under the
Tobacco and Alcohol Administration Law. All alcohol products will be required to be labelled with the
warning "excessive drinking endangers health."WT/ACC/SPEC/TPKM/2/Rev.1
Page 107
Product inspection will be governed by the sta ndards established by the health authority and
administered by that authority accordingly.
Advertising and promotion for tobacco products are subject to the Tobacco Hazards Prevention
Act (promulgated 19 March 1997). Chinese Taipei has to  a large extent lifted restrictions and allowed
advertising of beer, wine and other alcohol beverage s on radio and TV in specified time period of the
day. After implementation of the Tobacco and Al cohol Administration Law,  advertising of alcohol
products in all media will be permitted, subject howev er to regulation in relation to the content and
timing of the advertising. All advertising regulation will be consistent with the principle of national
treatment. The advertisement shall not contain cont ents which run counter to public order and good
moral, and public interest; encourage and promote drinking; cause harm to adolescents, pregnantwomen's mental or physical well-beings; include fo rged, exaggerated, or false facts or misleading
contents; and any other situations prohibited by the central competent authority through public notice.
Trading order will be maintained according to th e Fair Trade Law and other relevant laws and
regulations.
Contraband
Chinese Taipei has incorporated penal provisions into the draft Tobacco and Alcohol
Administration Law to serve the legal basis for enhanced efforts to protect against smuggled andcounterfeit products. The alcohol and tobacco administ ration agency will be given the authority to carry
out inspection on the business operations of manufact urers and traders. Inspection and interception of
contraband will be subject to the Alcohol and Tobacco Administration Law (draft), Alcohol and
Tobacco Tax  Law (draft),  Statute for Anti-smuggling Law and Statute for Interception by the Customs,
and other relevant laws and regulation. Under the new administration system, contraband and counterfeit
products will be destroyed or otherwise disposed of, taking into account the international practices.
Any violation of the Tobacco and Alcohol Admini stration Law will be subject to administrative
or criminal penalties, depending on th e type or seriousness of the violation.WT/ACC/SPEC/TPKM/2/Rev.1
Page 108
ATTACHMENT C
Agriculture Liberalization Plan
1. ANNEX 5 to the Agreement on Agriculture:
Serial
NumbersProduct Current
Import
RegulationCurrent
RateMinimum Access
(Percentage of Domestic
Consumption)Out-of-Quota Tariff Rate
lst. Year
Year 18th. Year
2000lst. Year
Year 18th. Year
2000
1 Rice and
Rice Products111
import
controlled0%
17%
20%
30%40%
45%
50%Annex 5
FormulaAnnex 5
FormulaAnnex 5
FormulaAnnex 5
Formula
2. TARIFF RATE QUOTA (TRQ):
Serial
NumbersProduct Current
Import
RegulationCurrent
RateQuota
(Percentage of
Domestic
Consumption)Out-of-Quota Tariff
Rate
(Percentage of Tariff
Equivalent)
Year 1 Year 6
2006Year 1 Year 6
2006
1 Peanuts import ban or
consent letter50%
40%
35%30%15%
10%
5%4% 8% 100% 85%WT/ACC/SPEC/TPKM/2/Rev.1
Page 109
Serial
NumbersProduct Current
Import
RegulationCurrent
RateQuota
(Percentage of
Domestic
Consumption)Out-of-Quota Tariff
Rate
(Percentage of Tariff
Equivalent)
Year 1 Year 6
2006Year 1 Year 6
2006
2 Fresh Pears (excl.
European Pears)import ban 50% 4% 8% 100% 85%
3 Sugar consent letter 25%
35%26% 41% 90% 76%
4 Dry Garlic Bulbs import ban 40%
45%4.2% 8% 80% 68%
5 Betel Nuts import ban 35% 4% 8% 100% 85%
6 Meat of Fowls import ban 40%
20%4% 8% 100% 85%
7 Liquid Milk* import ban 20%
32.5%
35%40%4.5% 9% 80% 68%
8 Animal Offal import ban 35%
50%4% 8% 100% 85%
9 Mackerel import ban 50%
NT$14/KG
or 45%
42.5%
40%
37.5%
NT$11/KG
or 37.5%
37.5%15% 25% 100% 85%
10 Red Beans import ban 20%
40%45%13% 21% 80% 68%
11 Dry Shiitake
(Forest Mushroom)import ban 50% or
NT$221/KG4% 10% 80% 68%WT/ACC/SPEC/TPKM/2/Rev.1
Page 110
Serial
NumbersProduct Current
Import
RegulationCurrent
RateQuota
(Percentage of
Domestic
Consumption)Out-of-Quota Tariff
Rate
(Percentage of Tariff
Equivalent)
Year 1 Year 6
2006Year 1 Year 6
2006
12 Shaddocks import ban 50% 4% 10% 70% 60%
13 Dry Longans and
Longan Pulpimport ban 30% 10% 30% 80% 68%
14 Young Coconuts quota to 3
countries
only50% or
NT$3/KG17.6% 22% 50% 43%
15 Bananas import ban 25% 4% 10% 70% 60%
16 Pineapples import ban 30% 4% 10% 50% 43%
17 Mangoes import ban 50% 4% 10% 80% 68%
18 Persimmons** import ban 50% 4% 10% 80% 68%
19 Carangid import ban 40%
42.5%
50%4% 10% 80% 68%
20 Sardines import ban 37.5%
42.5%
40%
42.5% or
NT$81/KG
50%15% 30% 100% 85%
21 Dry Day Lilies import ban 45% 4% 10% 80% 68%
* Importation of sweetened condensed milk will be liberalized upon accession.
** After 6 years of implementation period, a tariff-only regime will be in place with the rate reduced to
35 per cent.WT/ACC/SPEC/TPKM/2/Rev.1
Page 111
3. TO BE LIBERALIZED AFTER RAISING TARIFF RATES UPON ACCESSION:
Serial Numbers Product Current Import
RegulationCurrent Rate Accession Rate
Year 1 Year 6
2002
1 Pork Bellies import ban 15% NT$18/KG
(60%)NT$15/KG
(50%)
2 1 Fresh Longans import ban 10% 20% 17%
3 2 Lychees import ban 10% 20% 17%
4. TO BE LIBERALIZED UPON ACCESSION:
Serial Number Product Current Import Regulation
1 Wheat Flour Already liberalized
2 Meslin Flour Already liberalized
3 Potatoes Import ban
4 Oranges Area restriction
5 Limes and Lemons Area restriction
6 Grapefruits Area restriction
7 Grapes Area restriction
8 Peaches Area restriction
9 Plums Area restriction
10 Apples Area restriction
11 Papayas Import ban
12 Other Mandarins Area restriction
13 Other Citrus Fruits Import ban
14 Ducks, cut into pieces Import ban
15 Whole Ducks Area restriction
16 Turkeys, cut into pieces Area restriction
17 Guavas Import ban
18 Squid Import banWT/ACC/SPEC/TPKM/2/Rev.1
Page 112
ATTACHMENT D
The Consolidated List of Commodities Subject to Import Restrictions and Commodities
Entrusted to Customs for Import Examination, J une 1997 Edition, has been deposited with the WTO
Secretariat (Accessions Division, Room 1126)WT/ACC/SPEC/TPKM/2/Rev.1
Page 113
ATTACHMENT E
Summary of Law Amendments
Title of Law and Articles
AmendedBackground of Amendment
Foreign Trade Act
Articles 6, 18, 20-1Article 6:
The amendment is to remove previous authorization to take trade
restrictive measures when encountering bilateral imbalances of
trade.  The new version changes the condition for taking such
action to imbalance in international payments.
Article 18:
The amendment deletes the words "d rastic or large" in describing
the amount of increase in imports as a condition to initiate
domestic safeguard action.  This is to follow the use of languagein the Safeguard Agreement.The amendment also provides a legal basis for the authority toset rules to initiate safeguard action as contemplated in theAgreement on Textiles and Clothing.
Article 20.1:
This is a new addition to the Law which is intended to providethe legal basis for the authority to regulate the pre-shipmentinspection activities of firms mandated by foreign governments.It also gives binding effects of the decisions of dispute resolution
panel of the WTO Preshipment Inspection Agreement on the
private parties concerned, namely, the preshipment inspection
company and the exporter.WT/ACC/SPEC/TPKM/2/Rev.1
Page 114
Title of Law and Articles
AmendedBackground of Amendment
The Commodity Inspection Law
Articles 1, 4, 7, 8, 10, 11, 27, 28,
38The amendment exercise is to achieve the following three
objectives:(i) to incorporate international standards in the domestic
standard-setting process, so as to ensure that domesticinspection standards follow international trends, the
inspection regime meets the requirements of the TBT
Agreement,
(ii) to accord national treatment to foreign products in terms
of application of simplified procedures and exemption
which were previously available only to domesticproducts,
(iii) to accept and recognize foreign inspection certificates in
order to be in line with th e spirit of the TBT Agreement,
particularly that calling for mutual recognition.
The Trademark Law
Articles 4, 5, 23, 25, 34, 37, 61The amendments to this Law are to achieve the following
objectives:
(i) to broaden the scope of reciprocal granting of the right
of priority to cover the situation where the there is noformal agreement but the right of priority is granted toChinese Taipei's owner of trademark through practice,
(ii) to include combination of colours in the group of items
that are capable of constituting a trademark so as to beconsistent with Article 15 of the TRIPS Agreement,
(iii) to extend administrative protection to well known marks
by providing that no applications may be filed forregistration of a trademark design which is identical withor similar to another person's well-known trademark ormark and likely to cause the public to form a mistakenbelief.WT/ACC/SPEC/TPKM/2/Rev.1
Page 115
Title of Law and Articles
AmendedBackground of Amendment
The Patent Law
Articles 21, 51, 56, 57, 78, 79, 80,
82, 88, 91, 105, 109, 117, 122The amendments to this Law are to achieve the following
objectives:(i) to delete the requirement of reciprocity in respect of the
granting of patents for micro-organisms, extension ofpatent protection terms and the granting of exclusive
import rights so as to be consistent with Articles 3 and 4
of the TRIPS Agreement,
(ii) to limit compulsory licensing in respect of semi-
conductor technology to public non-commercial use or
to remedying anti-competitive practice, so as to beconsistent with Article 31(c) of the TRIPS Agreement,
(iii) to provide patent owners and his/her exclusive licensees
the right to request destruction or other necessary
disposition of the infringing goods, raw materials orinstruments used, in connect ion with the infringement,
so as to meet the requirement of Article 46 of the TRIPSAgreement which calls for giving the judicial authorityto order disposition outside the channels of commerce,
(iv) to provide for shifting the burden of proof in respect of
process patents as required by Article 34 of the TRIPSAgreement,
(v) to provide for longer term of protection for industrial
design, so as to meet the minimum requirement of10 years of the TRIPS Agreement.
Company LawArticles 373, 383The amendment is to delete the reciprocity requirement for
recognition of foreign companies and public placement offoreign companies' shares, so as to fulfil Chinese Taipei'scommitments under the GATS.WT/ACC/SPEC/TPKM/2/Rev.1
Page 116
Title of Law and Articles
AmendedBackground of Amendment
Customs Law
Articles 3-1, 4-3, 4-4, 11-1, 12,12-4, 12-5, 12-6, 27, 27-1, 46-1,
46-2, 47-2, 51This set of amendments is to achieve the following objectives:
(i) to provide a legal basis for application of tariff-quotas
negotiated by Chinese Taipei as substitution measures
for existing restrictions,
(ii) to provide for a duty of secrecy on customs personnel in
respect of information submitted for assessment ofimport duties, so as to meet the requirement of Article
10 of the Agreement on Customs Valuation,
(iii) to provide a legal basis for the establishment of the rules
of origin and the authority to require the submission of
the certificates of origin,
(iv) to revise the customs valu ation rules according to the
Agreement on Customs Valuation,
(v) to delete the provisions that limit the drawback of import
duties to imports of machinery by certain high-tech orimportant companies whose products are solely for
export,
(vi) to revise the provision relating to determination of
normal value for purposes of anti-dumpingadministration so as to make it consistent with Article 2
of the Anti-dumping Agreement.
Statute for Commodity Tax
Articles 3, 5, 13, 14, 15, 17, 18, 32The amendments are to achieve the following objectives:
(i) to delete rules relating to tobacco and alcohol products
as this part of the Law will be replaced by the new
Tobacco and Alcohol Tax Law, a separate body of law,
(ii) to delete allowance for deduction of 12 per cent
promotion expenses in the calculation of tax base, whengoods are not circulated th rough exclusive distributors,
as a reflection of Chinese Taipei's accession
commitment,WT/ACC/SPEC/TPKM/2/Rev.1
Page 117
Title of Law and Articles
AmendedBackground of Amendment
(iii) to exclude harbour construction dues from the tax base
for commodity tax.
Business Tax LawArticles 16, 20The amendments are to exclude harbour construction dues from
the tax base of the business tax and to require that the businesstax base shall include tobacco and alcohol tax as provided in the
new Tobacco and Alcohol Tax Law.
The Securities and Exchange Law
Articles 54, 95, 128Article 54: This amendment is to delete the requirement that the
certain business personnel of securities firms be Chinese Taipeiresidents.
Article 95: This amendment is to  delete the limitation that only
one stock exchange can be established in one geographical area,
Article 63: This amendment is to  delete the limitation that only
Chinese Taipei residents can be shareholders of a stock exchangein company form.
The Certified Public AccountantsLawArticle 47The amendment is to delete the reciprocity requirement for
foreigners to take the examination and be qualified as certifiedpublic accountants in Chinese Taipei.
Commercial Port Law
Article 7The amendment is to subject goods, circulated internally through
international commercial ports, to the levy of the harbour
construction dues in order to be consistent with the principle ofnational treatment.  The amendment also makes clear that therevenue of harbour construction dues shall be used exclusivelyfor the development of commercial harbours so as to ensure thelevy to be consistent with Article VIII of the GATT 1994 which
regulates the levy of service fees.
Highway Law
Article 35The amendment is to provide legislative mandate to the
administrative authority for the opening of the markets for rental
services of passenger cars, freight trucking and container
trucking as a reflection of Chinese Taipei's commitment under
the GATS.WT/ACC/SPEC/TPKM/2/Rev.1
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Title of Law and Articles
AmendedBackground of Amendment
Lawyers' Law
Articles 20.1, 42, 45, 46, 47.1 to
47.14, 48, 49, 50, 50.1This set of amendments is directed:
(i) to provide a statutory basis for allowing Chinese Taipei
lawyers to hire foreigners to work as consultants or legal
assistants,
(ii) to delete the reciprocity requirement for foreigners to
take the bar examination and become qualified to
practice Chinese Taipei law,
(iii) to provide the statutory basis and qualification standards
for allowing foreign lawyers to practice the laws of their
home countries and international law in Chinese Taipei.
Architects' Law
Article 54The amendment is to delete the reciprocity requirement for
foreigners to take the architects' examination and becomequalified to practice in Chinese Taipei.
Statute Governing Privileges andImmunities of the ForeignMissions and their Personnel inChinese Taipei
Article 7-1This addition to the Law is to extend privileges and immunities
to WTO related personnel for purposes of Article 8 of theMarrakesh Agreement Establishing the World Trade
Organization.
Law of Pharmaceutical Affairs
Article 53This amendment is to lift the restriction on and provide rules for
regulating repackaging of imported pharmaceutical products.
Law Governing Food SanitationArticle 17The amendment is to provide the labelling of food products with
an option to use the date of manufacture or the expiry date as acode for product identification.
The Publication LawArticle 8This amendment is to delete reciprocity requirements in the
granting of publishing rights to foreign nationals.
Central Bank ActArticle 23The amendment is to replace current limitation on foreign
liabilities of banks operating in Chinese Taipei with reserverequirements.
Banking Law
Article 42This amendment is to complimen t the amendment of Article 23
of the Central Bank Act in respect of the authority in the setting
of the deposit reserve ratio and reserves for other liabilitiesWT/ACC/SPEC/TPKM/2/Rev.1
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Title of Law and Articles
AmendedBackground of Amendment
Copyright Law
- Amended 104 articlesThe amendments to this Law are to achieve the following
objectives:
1)           To strengthen protection of public performances,
broadcasts and communications by extending coverage of the
Law to be consistent with Article 11(1)(ii) of the Berne
Convention and Article 14(1) of TRIPS;
2)           To extend protection of public display to include re-
productions of previously unreleased artistic pieces and/or
photographic works;
3)           To restore market mechanism by abolishing
compulsory floor price-setting;
4)           To eliminate practices inconsistent with international
treaties, such as preferential treatment on local copyrights;
5)           To extend protection to include compulsory licensing
on translated texts, to be cons istent with the Berne Convention.WT/ACC/SPEC/TPKM/2/Rev.1
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Title of Law and Articles
AmendedBackground of Amendment
1) To amend the definitions for public broadcast and
public performance;2) To include explicit protection for performances;3) To revise the provisions regarding the ownership ofworks created in the course of employment or under
commission. These revisions are aimed at reducing tension
which have existed between the employers and employeesunder the old law;4) To revise the provisions regarding the moral right ofintegrity in order to accommodate the use and circulation ofworks;5) To expand the subject matter of works protected bythe public display rights;6) To delete provisions mandating the competent
authority to set the minimum prices for the transfer of
economic rights of works and the royalties for the use of suchworks. This change is made because that market mechanismshould be allowed to determine these prices;7) The delete provisions concerning compulsory licensesfor translations in accordance with TRIPS and the BerneConvention;8) To amend provisions regarding compulsory
mechanical licensing for musical works. This is based on the
ideal of promoting the circulation of musical works;9) To abolish the copyright registration system;10) To afford a life plus 50 years or 50 years term ofretroactive protection for works not protected prior to ChineseTaipei's   accession to the WTO.WT/ACC/SPEC/TPKM/2/Rev.1
Page 121
Title of Law and Articles
AmendedBackground of Amendment
Copyright Intermediary
Organization Act
- New legislation of 46 articlesThe amendments to this Law are  new legislation is to promote
and to facilitate the use of copyrighted works by the generalpublic through well-established professional copyrightintermediary organizations, following examples from
international practices.
Statute for Establishment and
Management of ExportProcessing Zone
- Amended 30 articlesThe amendments to this Statute are to promote international
trade by means of the following:6) To replace the original policy objective of export-
oriented by international trade promotion;
7) To expand the scope and depth of business within thezone, including trade informa tion services, R&D and technical
services;8) To encourage investments by the elimination ofrestrictions on establishing businesses within the zone;9) To increase administrative efficiency within the zoneby simplifying the customs clearance process, consistent withthe Negative List provided by Article 11 of the Foreign Trade
Act.WT/ACC/SPEC/TPKM/2/Rev.1
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Title of Law and Articles
AmendedBackground of Amendment
Tobacco and Alcohol
Administration Law
- New legislation of 60  63
articlesFollowing the tobacco and alcohol reform plan, the new Law is
to provide legislative mandate to the administrative authoritiesfor the opening-up of the tob acco and alcohol products. The
new Law aims to achieve the following:10) To provide a legal basis for the authorities to regulate
the manufacture and the distri bution of tobacco and alcohol
products;11) To provide definitions of tobacco and alcohol products;12) To forestall international trade disputes by preventingthe prevalence of counterfeit products and ensuring establishedstandards are implemented and enforced in the manufacture oftobacco and alcohol products;13) To protect national health interests by includingmeasures such as guidelines on labelling tobacco and alcohol
products and regulations on advertisements.
Statute Governing the
Organization of National
Treasury, Ministry of Finance
- Amended 13 articlesThe amendments of this Statute reflect the administrative
modifications made with the reform of the tobacco and alcohol
monopoly. A department will be added to the current
organizational structure to implement administrativerequirements established in the new Tobacco and AlcoholAdministration Law.
Tobacco and Alcohol Tax Law
- New legislation of 24  22
articlesThe amendments to this Law are  new legislation is to achieve
the following:14) To provide definitions of tobacco and alcoholicbeverages;15) To establish a new tax system in light of the reform ofthe tobacco and alcohol monopoly to facilitate tax collection;16) To establish tax collection procedures to facilitate the
enforcement of the new tax regime.WT/ACC/SPEC/TPKM/2/Rev.1
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Title of Law and Articles
AmendedBackground of Amendment
Food Management Law
- Amended 3 articlesThe amendments to this Law are to minimize the price
differential between domestic and imported goods. Japan s"mark-up" approach to imports of cereal, rice and processedrice products will be adopted, consistent with Article 4(2) of the
WTO Agreement on Agriculture.
Statute for Agriculture
Development
- Amended 25 articlesThe amendments to this Statute are to achieve the following:
17) To introduce competitive pricing system by deleting"uniform pricing" for exported agricultural products, to
complement the enforcement of the Fair Trade Law and
open-market mechanisms;18) To expand the Statute to include special safeguardprovisions consistent with the WTO Agreement on Agriculture;19) To introduce measures to prevent the monopolizationof the market.
Government Procurement Law
- Draft legislation has 8 cha pters
containing 98 articlesThis draft Law has 8 chapters containing 98 articles. The Law
aims to ensure a transparent,  free and fair environment in
government procurement projects, consistent with the GPA by
the following:
20)         To de signate a single agency - Public Construction
Commission to be responsible for matters relating to
government procurement;
21)         To promote transparency by publishing procurement
notices in the Government Procurement Gazette;
22)         To include participation of foreign bidders base on
international treaties or agreements;
23)         To extend procurement process to include open,
selected and limited tenders, consistent with the GPA;
24)         To establish a committee to accept tender disputes
raised by contractors or potential suppliers;
25)         To provide access to arbitration in settling contractual
disputes.WT/ACC/SPEC/TPKM/2/Rev.1
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Title of Law and Articles
AmendedBackground of Amendment
Statute Governing the
Organization of the PublicConstruction Commission,Executive Yuan
- Amended and added a total of
14 articlesThe amendments to this Statut e reflect the re-structured and
expanded responsibilities of the Public ConstructionCommission. The changes include:26) To establish a committee within the Commission tohandle complaints by suppliers on government procurement
projects;
27) To establish an information office within theCommission as a centralized information system on publicconstruction and government procurement projects;28) To provide technical assistance and support to othergovernment agencies in matters relating to government
procurement.
Statute for Inspection Procedure
Governing Properties byGovernment Agencies
- Amended 7 articles; added 4
articles; deleted 29 articles; and
maintained 1 articleThe amended Statute is formerly know as the "Statute for
Inspection Procedure Governing Construction Works andProcurement and Disposal of  Properties by Government
Agencies". The amendments to this Statute aim to simplifyinspection procedures and to im prove efficiency by clarifying
the sole responsible authority for government procurement i.e.
Public Construction Commi ssion. Therefore, procedures
inconsistent with the Statute are either deleted or combinedwith the Government Procurement Law.
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