G/SCM/Q2/TPKM/27  
6 August 2021 
(21-6126) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
QUESTIONS POSED BY THE UNITED STATES REGARDING  
THE NEW AND FULL NOTIFICATION OF THE SEPARATE  
CUSTOMS TERRITORY OF TAIWAN, PENGHU,  
KINMEN AND MATSU 1 
The following communication, dated and received on 26 July 2021, is being circulated at the request 
of the delegation of the United States . 
 
_______________  
 
 
The United States appreciates Chinese Taipei 's 2021 subsidy notification, which was submitted in a 
timely manner , and further appreciates that Chinese Taipei  has consistently met its notification 
requirement  with comprehensive and detailed information . The United States notes that there are 
several program s that were not included in Chinese Taipei 's notification that may be subject to 
notification.  
Question 1  
We understand that, based on the State Department 's 2020 investment climate statement, in 
January  2019, the government of Chinese Taipei launched a re -shoring initiative aimed to lure 
domestic companies to shift production back to Chinese Taipei.  
a. Would Chinese Taipei please explain why this program was not included as part of its 
notification?  
b. Are any of these incentives tied to utilizing local content or to the export of any products 
produced by the re -shored manufacturing?  
c. We would appreciate if Chinese Taipei would notify the program to the Committee.  
Question 2 
Based on the State Department 2020 investment climate statement , we understand that 
Chinese  Taipei offers subsidies for research and development expenses for foreign partnership 
projects . Please explain why this program was not included in your notification to the 
SCM Committee . 
Question 3  
Based on the State Department 202 0 investment climate statement , we also understand that the 
Statute for Industrial Innovation provides the legal basis for offering tax credits for companies ' R&D 
expenditures . We also understand that MOEA operates several R&D subsidy programs and that 
MOEA's target industries for investment are IoT (including Asia Silicon Valley -related investments), 
smart machinery, biotechnology and biopharmaceuticals, green energy, national defense, and the 
circular  economy . Please explain why this program was not inclu ded in your notification to the 
SCM Committee . 
 
1 G/SCM/N/372/TPKM . G/SCM/Q2/TPKM/27  
- 2 - 
  Question 4  
Based on the State Department 2020 investment climate statement , we understand that investors 
may receive low -interest loans or subsidies for participating in industrial R&D and industry 
revitalization programs . Please provide additional information on this program and explain why this 
program was not included in your notification to the SCM Committee . 
Question 5  
In its most recent Trade Policy Review, the WTO notes that "Chinese Taipei co ntinued to provide tax 
incentives to support specific industries (Table A3.7) including : the biotech and pharmaceutical 
industry (under the Act for the Development of Biotech and new Pharmaceutical Industry) 
(Sections  2.4.1, 3.3.1.2.3, 3.3.2.2, 4.1.1 and 4 .3.1); the automotive industry . Preferential loans 
through a NT$  10 billion  fund remain available for the promotion of the aerospace industry . To boost 
local investment in high -tech industries, the authorities provide funding for medium - and long -term 
concessional credit facilities ." Please explain why th ese program s were not included in your 
notification to the SCM Committee . 
Question 6  
In its most recent Trade Policy Review, the WTO notes that Chinese Taipei maintains a program for 
the "Encouragement of Newly Emerging, Important, and Strategic Enterprises  by providing up to a 
20% tax credit. " 
a. What constitutes a newly emerging, important, or strategic enterprise?  
b. Please explain why this program was not included in your notification to the 
SCM Committee . 
Question 7 (fisheries , including aquaculture ) 
Please explain why the following fish -related programs were not included in your notification to 
the SCM Committee : 
• Subsidy O perations for the Installation  of Automatic Ship Identification Systems on 
Fishing  Vessels  (Support for fishing vessels to install one automatic ship identification 
system ship platform) ; 
• Project for Establishing a High -Efficiency Modern and Friendly Aquaculture Fisheries 
Production Model Plan and Subsidizing Equipment  (Support for building indoor 
demonstration aquaculture production facilities as well as varied small fishing equipment) ; 
• Incentives for the Production of Canned Fisheries Products and Preserved Food Production  
(Rewards for certain types of canned food or preserved seafood products caught in 
Chinese  Taipei 's waters . The largest reward is for black tuna , NT$ 15 per kg. While we 
understand this was part of Chinese Ta ipei's special COVID -19 relief measures, the 
connection to the pandemic is not clear) ; 
• Smart Breeding Equipment Subsidy  (Assistance for the installation of water monitoring 
systems, remote control feeding systems, cloud storage systems and other "smart " 
facilities) ; 
• Regulations for Promoting Export Sales of Fishery Products  Regulations (Multiple support 
measures encouraging the export of various aquatic products . While we understand this 
was part of Chinese Taipei 's special COVID -19 relief measures, the con nection to the 
pandemic is not clear) ; 
• Incentives for the Trading of Chilled Tuna in Coastal Waters  (Rewards ‒ NT$ 30 per kg 
before 21 July 2020, and NT$  20 per kg from 15 April to 31 July 2021 ‒ for the trading of 
chilled tuna caught along Chinese Taipei 's coast . While we understand this was part of G/SCM/Q2/TPKM/27  
- 3 - 
  Chinese Taipei 's special COVID -19 relief measures, the connection to the pandemic is not 
clear) ; 
• Preferential Oil Price Standards for Fisheries Power Oil  (Support for the purchase of "power 
oil," which include s, diesel, mixed fuel oil and diesel oil, "marine fuel oil, " and gasoline) ; 
• Promotional Incentive Subsidies for Fishing Vessel Insurance  Incentive for fishing vessels 
to participate in fishing vessel insurance programs. (Support for small fishing vessels : 
NT$ 4,000, NT$  6,000, or NT$  8,000 depending on vessel tonnage) ; 
• Relevant Equipment Installed by Fishers in Response to International Fisheries 
Organizations or Management Needs  (Support for required equipment installations ; 
maximum amount of NT$ 54,000, a nd may not exceed 70 % of each vessel 's installation 
costs) . 
__________