WT/TPR/S/232 Trade Policy Review 
Page 34 
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since its previous Trade Policy Review, in 2006 , Chinese Taipei has ma intained the openness 
of its trade regime and undertake n improvements in certain areas, including government procurement 
and protection of intellectual property rights. 
2. The tariff is Chinese Taipei's main trade policy instrument and a significant, albeit declining, 
source of tax revenue (4.5% of total taxes collected  in 2009).  Nonetheless, 52.7% of all tariff lines 
(including ad valorem  equivalents of non- ad valorem  rates) are subject to applied MFN tariffs no 
greater than 10%, and 30.1% are duty free.  As no tariff cuts occurred during the period under review, 
the simple average applied MFN tariff rate remain ed unchanged at 7.8%.  The tariff is relatively 
complex, involving a multiplicity of rates (86 ad valorem,  16 specific, 48 alternate duties).  All tariff 
lines are bound and most applied rates coincide with bound rates, thereby imparting a high degree of predictability to Chinese Taipei's tariff schedule.  The current and final average bound MFN rate is 
8.2%.  Non- ad valorem  duties remain an element of the tariff, particularly in agriculture, where they 
tend to conceal relatively high ad valorem  equivalents (AVEs);  75 of the top 100 applied MFN tariff 
rates involved non- ad valorem  rates.  The peak applied MFN ad valorem  rate remains at 500% (deer 
velvet) while the highest tariff rate consists of an AVE rate of 1,069.87% (rolled or flaked rice).  The 
product coverage of tariff-rate quotas, mainly fo r agricultural items, has dropped by about 22%.  
Higher seasonal tariffs may be levied on some fruit.  On the other hand, the authorities temporarily reduced customs duties on 30 basic items, mainly to stabilize commodity prices and to help ease 
inflation;  similar action was taken with respect to the business tax rate on imported wheat, corn, and 
soybeans;  domestic production of these items is pe rmanently exempt from business tax.  The scope of 
preferential tariff treatment for imports has been expanded considerably through the conclusion of 
more free-trade agreements;  these cover an average of 67% of total tariff lines on top of the 30% of 
lines that are already duty free, and re duce the simple average tariff rate applied to beneficiaries by up 
to 5 percentage points.   
3. Customs clearance procedures have remained e xpeditious and electronically operated;  since 
2007, "excellent" importing/exporting businesses (i .e. those whose trade performance attains a 
prescribed amount), have benefited from more exclus ive trade facilities.  Additional charges imposed 
on imports and exports, such as a trade promotion service fee, and harbour service dues, remain unchanged.  Harbour-service dues on domestic trad e remain 60% lower than those for overseas 
routes, which require costlier equipment and ser vices for large international cargo freighters. 
4. Since its previous Trade Policy Review, Chinese Ta ipei has expanded slightly the scope of its 
import bans to 63 ten-digit HS items (as of Octo ber 2008);  24 items have remained subject to 
non-automatic import licensing.  There are no quan titative import restrictions.  Prohibitions on the 
cross-strait movement of goods from China affect some 2,243  tariff lines at the HS ten-digit level.  
Chinese Taipei has never used countervailing or saf eguard measures except for special safeguards in 
agriculture.  It maintains five anti-dumping measures on three products. 
5. Chinese Taipei maintains prohibitions and licen sing requirements for its exports mainly on 
grounds of security and public safety;  the scope of  export prohibitions has dropped since its previous 
TPR.  Exports of eel fry (seasonally), whale shar k, and plants used for pharmaceutical purposes are 
prohibited;  since 2008, fertilizer exports have been subject to prior approval.  Exemptions and, on a 
case-by-case basis, drawbacks are used in order to redu ce, if not eliminate, the extent to which import 
tariffs levied on raw materials (and intermediate goods ) used in the production of exports feed through 
to become implicit taxes on exports;  such tariff re lief measures tend to increase the complexity of the Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 35 
 
 
border taxation.  Similarly, rebates of internal sales  taxes are used to facilita te trade by ensuring that 
exported goods are not subject to double taxation (in both Chinese Taipei and importing countries).  
6. A global market expansion plan in place since end 2008, includes discounted interest rates for 
loans;  it was intended to aid exporters facing declining orders from overs eas.  Various forms of 
assistance, including subsidies for production and con sequently trade, continue to be provided for 
agricultural, fisheries, and industrial products a nd activities.  Chinese Taipei has not notified any 
export subsidies to the WTO. 
7. The large majority of Chinese Taipei's standard s remain voluntary;  in 2009, 18% of applied 
standards were aligned to international standa rds, down from 25% in 2005.  Measures have been 
taken to address maximum residue limit requirements.  
8. A participant in the WTO Government Proc urement Agreement (GPA) since July 2009, 
Chinese Taipei has undertaken regulatory changes re lating mainly to dispute settlement cases in 
government procurement.  Regard ing procurement not covered by the GPA, local suppliers are 
granted a margin of preference of up to 3%, an d bidders may be requested to purchase locally 
produced goods.  The share of non-Chinese-Taipei s uppliers rose from 18.1% of the total value of 
government procurement in 2004 to 28.5% in 2008.   About 33% of all procurement is awarded 
through selective and limited tendering procedures, up from 25% at the time of the previous TPR.  
State trading in Chinese Taipei in volves rice, the most important crop, as well as tobacco, wine, sugar, 
and banknote paper;  not all of these ac tivities were notified to the WTO.   
9. As a result of a virtual standstill in the priva tization process, government involvement in the 
economy persists in several areas (e.g. shipbuildin g, petroleum, steel, sugar, tobacco and liquor, 
banking, insurance, rail transport) and statutory monopolies are retained (electricity, water supply, 
postal services).  Rice wine produced by the govern ment-owned TTLC has been sold at a fixed price 
since June 2009.  
10. Chinese Taipei amended certain laws and regul ations during the period to ensure better 
protection of intellectual property ri ghts, particularly in the area of  copyrights and patents, where 
two cases of compulsory licensing occurred;  it has in tensified efforts to enforce legislation in this 
regard.  However, a number of improvements remain to  be made, e.g. with respect to Internet piracy 
and college campus-related issues (e.g. te xtbooks, software) and infringements.   
11. Competition and consumer protection policy has, by and large, remained unchanged.  Certain 
activities, such as export and import cartels, may be exempted from the application of the Fair Trade 
Law, if approved by the Fair Trade Commission.   
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration, documentation, and procedures 
12. Importation is governed mainly by the 1967 Cu stoms Act (amended in June 2008) and the 
Foreign Trade Act (amended in 2007).1  Chinese Taipei maintains a single contact window, operated 
by the Bureau of Foreign Trade (BOFT) of the Mi nistry of Economic Affairs, to provide relevant 
import or export information to various traders.2  Companies must register with the BOFT in order to 
                                                      
1 The Foreign Trade Act was adopted in 1993.  Th e latest amendments dealt with the issue of 
certificates of origin as well as fines and penalties in case of violation of provisions in this area. 
2 APEC (2007b). WT/TPR/S/232 Trade Policy Review 
Page 36 
 
 
engage in import (or export) business.3  Registration is free of char ge.  No minimum investment 
requirements are imposed on either domestic or non-Chinese-Taipei importers (or exporters).   
13. As from 2007, an exporter or importer (including publicly-owned firms) whose trade 
performance in the preceding year  has reached a prescribed amount qualifies as an "excellent" 
importing/exporting business.4  Benefits include:  being listed in a BOFT directory;  awards;  reduced 
(or eliminated) service fees, and preferential treat ment for "special-case" services available from 
TAITRA (section (3)(vii));  a higher line of credit,  in conformance with relevant Ministry of 
Economic Affairs (MOEA) regulati ons on extension of credit;  and specific certification marks. 
14. Import declaration normally takes place within 15 days following the arrival of the means of 
transport by which the goods were carried.  Shipme nts must be cleared under one of three modes:  
"by-pass", "document review" or "document review  and physical examination", determined by 
computerized selectivity criteria based on various f actors, including reputation of importers/exporters, 
duty rates, and origin of imports (destination of exports).5  Currently, the average customs clearance 
times for air cargo are:  less than a s econd for by-pass cases, just over 30 minutes for 
document-review cases, and just over 1 hour fo r physical-examination cases.  For sea cargo, the 
respective clearance times are:  less than a second, 1 hour 21 minutes, and 7 hours 50 minutes.  
15. According to the Directorate General of Customs, 99% (same as in 2006) of customs 
declarations in Chinese Taipei are processed electronically, using the UN/EDIFACT model.  A 
web-based system, for filing declarations through th e Internet has been ava ilable since 2004.  Since 
2001, Chinese Taipei has also b een implementing various systems to simplify customs clearance 
including for express consignments and post-clearan ce audit.  Since 2005, consolidated payment of 
duties and charges has been in place, under which authorized importers may pay duties on a monthly 
basis and benefit from a lower rate of cargo examination.6 
16. Customs officers may inspect import (and export) ca rgoes if they believe that regulations are 
being breached.  Penalties include warnings, fin es, and suspension or repeal of privileges.7  
Importers/exporters may file a protest with the Customs and/or appeal.8  Between 2006 and 2009 
(October), a total of 17,519 seizure cases invol ved merchandise worth US$257.7 million, consisting 
mainly of electronics and electric goods, agricultu ral and fishery products, chemicals, and gold and 
silver coins, shipped mainly from:  China;  Hong  Kong, China;  Singapore;  Malaysia;  and Japan.  
The main reasons for smuggling are price differen ces (electronics, electric goods, agricultural and 
fishery items) and import controls or prohibitions (illicit drugs, endangered species, counterfeit items). 
                                                      
3 Venture capital firms, civil aviation firms, tour  agencies, and private ambulance operators are not 
allowed to engage in import/export operations due to the highly specialized nature of these businesses. 
4 BOFT document "Regulations Governing the Commendation of Excellent Exporters/Importers", 
4 July 2007.  Viewed at:  http://eweb.trade.gov.tw /kmi.asp?xdurl=kmif.asp&cat=CAT457 [29 March 2009]. 
5 In 2008, 82.1% (78% in 2006) of air cargo and 57 .2% (53% in 2006) of sea cargo declarations were 
processed through the "by-pass" mode, which requires no document review or physical examination;  about 
11.9% (14% in 2006) of air cargo and 29.1% (34% in 2006) of sea cargo declarations are cleared under the 
"document review" mode, and around 6.0% (7.6% in 2006) of air cargo and 13.7% (13% in 2006) of sea cargo 
declarations are processed thro ugh the "document review and physical examination" mode. 
6 Between January 2005 and October 2009, 7.5% of all import declarations for air cargo, and 5.1% for 
sea cargo were made through the Cust oms consolidated clearance system. 
7 The privileges include online electronic data transmission and import/export declaration, express 
consignment clearance, b onded goods storage, and monthly payment of duties and charges. 
8 There were 4,749 appeals in 2008 (2,939 in 2005), of which 1,542 were upheld (590 in 2005). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 37 
 
 
17. Chinese Taipei has implemented most of the provisions in the Revised Kyoto Convention;  
the provisions of the Customs Act were brought into line with those of the Convention on 5 May 2004.   
(ii) Customs valuation 
18. Customs valuation is based on the c.i.f. value denominated in NT dollars.  The customs value 
of imports is determined primarily on the basis of the transaction value (i.e. the actual price payable or 
paid for the goods when sold for export).
9  Since 2006, 98.4% of transaction values declared by 
importers have been accepted by  the Chinese Taipei Customs.  Si nce November 2004, field customs 
offices have been fully responsible for the verifi cation of the customs value of imported goods.  A 
valuation database, based on risk management techniqu es, has been used to as sess the accuracy of the 
value declared by importers, with a view to det ecting under-invoicing.  During the review period, 
most cases suspected of under-invoicing involved sh ipments of new and used vehicles (from Europe 
and America), fruit (from New Zealand, Australia, South and North America), fish products (from Europe and South America), and ag ricultural products (from Asia). 
19. To meet the practical needs for determining the customs value of imported used cars, the 
Operational Directions for Imported Used Cars Va luation were amended on 17  August 2007 and took 
effect immediately.
10  In line with relevant provisions of both the WTO Customs Valuation 
Agreement and Articles 29-35 of the Customs Act, the valuation methods for used cars were set out in  
sequential order of application.  The term "Model Year of Imported Cars" wa s redefined to facilitate 
customs valuation and the "Average Trade-In Price"  was replaced by the "Trade-in Price", a change 
similar to the one made to the U.S. National Au tomobile Dealers Association Used Car Guide. 
(iii) Tariffs 
20. Since 2009, Chinese Taipei's Customs Import Ta riff Schedule has been based on the 2007 
version of the Harmonized Commodity Description a nd Coding System (HS).  The current Schedule, 
which now consists of 8,730 eight-digit tariff lines, contains 109 lines less than its HS 2002 version.  
It has three sets of rates:  th e first (MFN rates) applies to goods from WTO Members or countries and 
areas that accord reciprocal  treatment to Chinese Taipei11;  the second set is preferential rates 
(section (2)(e) and Chapter II);  and the third set app lies to imports not covered by the first two sets.  
The third set of rates are either higher than or equa l to those contained in the other two sets.  Applied 
MFN rates covered 98.4% of total imports in 2004;  no recent data were available from the 
authorities.  The importance of customs tariffs as a source of revenue has declined during the period 
under review;  their share of total tax reve nue dropped from 5.3% (2005) to 4.5% (2009) 
(section (4)(i)).  
                                                      
9 Chinese Taipei has implemented the WTO Customs Valuation Agreement fully without recourse to 
transition periods (WTO document WT/ACC/TPKM/18, 5 Oc tober 2001).  In the event that transaction values 
(of the goods being valued, identical goods, or similar goods) cannot be used, the customs value is based either 
on a deductive value or computed value;  if neither of these methods can be used, the customs value is determined on the basis of available data. 
10 APEC (2007a). 
11 Chinese Taipei receives reciprocal treatment  in:  Afghanistan, Amer ican Samoa, Anguilla, 
Azerbaijan, Bahamas, Eritrea, Ethiopia, Holy See, Iran,  Iraq, Kazakhstan, Lao People's Democratic Republic, 
Lebanon, Liberia, Libya, Marshall Islands, Montserrat, Nauru, New Caledonia, Puerto Rico, Russian Federation,  
Somali DR, Sudan, Syria, Tahiti, Equa torial Guinea, Kiribati, Palau, Sao Tome and Principe, Tuvalu, Union of 
Comoros, Vanuatu, Western Samoa, and Yemen. WT/TPR/S/232 Trade Policy Review 
Page 38 
 
 
(a) Applied MFN rates  
21. During the period under review, Chinese Taipei's  simple average applied MFN tariff rate 
remained stable, at 7.8% (Table III.1).  Agriculture  continued to receive much higher tariff protection 
than non-agricultural products;  th e simple average applied MFN rate  for agricultural products (WTO 
definition) in 2009 was 22.1% compared with 5.0% for non-agricultural products (Table III.1);  the 
highest tariff rates apply to agricultural products. 
Table III.1 
Tariff structure, 2005 and 2009 
(%) 
    MFN 2005 MFN 2009 Final bounda 
1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 
2. Simple average applied rate 7.8 7.8 8.2 
 Agricultural products (HS01-24) 23.8 23.7 25.2 
 Industrial products (HS25-97) 4.4 4.3 4.5 
 WTO agricultural products 22.3 22.1 23.0 
 WTO non-agricultural products 5.0 5.0 5.4 
 Textiles and clot hing 8.9 8.8 8.9 
 ISIC 1 - Agriculture, hunting, fishing 17.9 17.9 18.6 
 ISIC 2 - Mining 0.6 0.6 1.0 
 ISIC 3 - Manufacturing 7.2 7.2 7.6 
 Manufacturing excluding food processing 4.4 4.4 4.5 
 First stage of processing 15.7 16.3 17.2 
 Semi-processed products 5.1 5.0 5.5 
 Fully processed products 7.5 7.4 7.7 
3. Tariff quotas (% of all tariff lines) 1.5 1.2 0.9 
4. Domestic tariff "peaks" (% of all tariff lines)b 5.0 5.2 4.9 
5. International tariff "peaks" (% of all tariff lines)c 9.3 9.3 9.6 
6. Overall standard deviati on of tariff rates 28.7 29.4 29.9 
7. Coefficient of variation of tariff rates 3.7 3.8 3.6 
8. Duty-free tariff lines (% of all tariff lines) 30.9 30.1 28.8 
9. Non- ad valorem  tariffs (% of all tariff lines) 1.8 1.8 1.8 
10. Nuisance applied rates (% of all tariff lines)d 4.8 4.4 3.6 
a Implementation of the WTO binding commitment was complete d in 2008, except on 27 products to be implemented in 2011 
(one item refers to Tequila (HS code 220890 40) the other 26 refer to motor vehicles).  Calculations on bound rates are based on  
the 2009 tariff schedule. 
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
c International tariff peaks are defined as those exceeding 15%. 
d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: Three-year (2002-04) average AVEs pr ovided by the authorities are included.  The 2005 tariff is based on HS02 nomenclatur e 
and consists of 8,839 lines;  the 2009 tariff is base d on HS07 nomenclature and consists of 8,730 lines. 
Source: WTO Secretariat calculations, based on data pr ovided by the Chinese Taipei authorities. 
22. In 2009, tariffs of 15% or below (excluding dut y-free items) applied to 35.3% (35% in 2005) 
of agricultural products and to 65.5% (64.4% in 2005) of industrial goods.  The range of tariffs 
remained much greater for agricultural products th an for non-agricultural products.  In 2009, 30.1% 
(30.9%  in 2005) of tariff lines were duty free and 52.7% (52.0% in 2005) (including ad valorem  
equivalents of non- ad valorem  rates) were at rates of 10% or lowe r.  Applied rates at 100% or higher, 
involving some 39 agricultural products (at HS eight di gits), accounted for 0.4% of tariff lines.  On 
non-agricultural products (WTO defin ition), tariffs higher than 50% were applied to 8 lines (fish).   Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 39 
 
 
23. Chinese Taipei's tariff schedule involves ad valorem  duties, specific duties, and alternate 
duties.  All three types are levied on both agricultu ral and non-agricultural prod ucts (WTO definition).  
In 2009, ad valorem  duties involved 98.2% of all tariff lines12;  this simplifies the tariff structure and 
improves transparency.  However, there are some 150 different rate bands (86 ad valorem , 
16 specific, and 48 alternate rates), 5 bands less than in 2005.  Non- ad valorem  duties are levied 
mainly on agricultural products, such as animal products, fruit, vegetables, and prepared food 
products, and 54 tariff lines in non-agricultural pro ducts (mainly fish and fish products, one line 
mixed metal scrap) (WTO definition).13  Ad valorem  equivalents (AVEs) were provided by the 
authorities (for 2009) for all non- ad valorem  rates.  The simple average rate for all AVEs supplied is 
102.2%;  of the top 100 tariffs, 75 were non- ad valorem  rates.  While the peak MFN ad valorem  rate 
was 500% (deer velvet) the highest tariff rate consis ted of an AVE of a specific out-of-quota rate at 
1,069.87% (rolled or flaked rice).  Hence, non- ad valorem  rates continued to conceal relatively high 
tariff rates. 
24. Since 2002 seasonal tariffs have applied to some  fruit, for example oranges, grapefruits, 
lemons, and limes.14  These seasonal rates appear to be in  line with WTO binding commitments.  
25. Changes to Chinese Taipei's tariff schedule are usually proposed by the relevant authorities 
(e.g. the industrial and agricultural authorities) to  the Customs Tariff Commission, whose decision is 
submitted to the Ministry of Finance and subsequently  the legislature for approval.  Past tariff changes 
relating to WTO accession commitments and the a doption of the HS 2002 nomenclature resulted in 
the unilateral lowering of tariffs on some 35 items (H S eight digits).  The authorities indicated that 
there have been no tariff rate increases or re ductions relating to the adoption of the HS 2007 
nomenclature.  As from 2010, a tariff rate of 5% or less is to apply to 5,700 tariff lines;  2,780 tariff 
lines are to be duty free.15  
(b) Tariff rate quotas (TRQs) 
26. The product coverage of TR Qs, which have been in pl ace since Chinese Taipei's WTO 
accession in 2002, fell from 129 tariff lines (1.5% of a ll tariff lines) in 2005 to 101 tariff lines (1.2% 
of all tariff lines) in 2009 (Table III.1);  they now  consist of 16 agricultura l products (75 tariff lines) 
and passenger cars and chassis (26 tariff lines).16  This drop was due to the phase-out of the TRQ 
system on mackerel, carangid, sardines, and persimmons as of 1 January 2008.17  TRQs on passenger 
cars and chassis are to be phased out in 2011.  Th e TRQs on agricultural products are based on global 
quotas, except for rice (65% of the quota allocat ed to specific countries since 2007);  those on 
passenger cars and chassis are country-specific quotas (Table AIII.1).18  
                                                      
12 In 2009, specific and alternat e rates involved 1.0% and 0.8% of all lines, respectively. 
13 Non- ad valorem  tariffs are less transparent, more distortin g, and less stable;  they are more frequent 
in agricultural than in manufacturing products. 
14 Higher rates are imposed on oranges between 1 October and end-February of the following year, and 
on grapefruits, lemons, and limes during the period 1 Oc tober to end-December of the same year.  Seasonal 
tariffs add 5, 10 or 15 percentage points to the norma l MFN rate depending on the item.  For more information 
on seasonal tariff levels, see Directorate of Customs onlin e information.  Viewed a t:  http://web.customs.gov.tw/ 
rate/rate/esearch.asp. 
15 APEC (2008a). 
16 Agricultural products subject to TRQs (Table AIII.1) are:  deer velvet, fresh pears, bananas, red 
beans, liquid milk, peanuts, garlic bulbs, dried shiita ke, dried day lilies, coconuts, betel nuts, pineapples, 
mangoes, shaddocks, dried longans, rice and rice products. 
17 APEC (2008a). 
18 The 2008 TRQ for imports of sedans, defined by capacity of under nine passengers and weight of 
under 3.5 tonnes, was:  38,555 units from Canada, 475,428 from the United States, 475,428 from the EU, and WT/TPR/S/232 Trade Policy Review 
Page 40 
 
 
27. Allocation of tariff quotas on agricultural products is based on the average of the amount 
actually imported by the applicant in the previous two years, on a "first-come, first-served" basis, or through open bidding.
19  Specific conditions regarding the allocation of a TRQ are published in the 
Government Bulletin .  Any enterprise registered with the Bureau of Foreign Trade as an 
importer/exporter is eligible to apply for TRQs.  If bidding for rice and rice products, a valid grain 
dealer registration certification is also required.  The government-owned bank, BOT, is entrusted by 
the Ministry of Finance (MOF) to administer the allocation of TRQs for agricultural products;  those for passenger cars are administered by the Bureau of Foreign Trade of the Ministry of Economic 
Affairs.
20  The authorities indicated that domestic and non-Chinese-Taipei applicants for TRQs are 
treated equally in the allocation procedures.  
28. In 2008, the fill ratio of in-quota imports remain ed at zero or less than 20% for virtually the 
same items as in 2004, i.e. bananas, liquid milk, dried shitake, betel nuts, pineapples, mangoes, and 
shaddocks (Table AIII.1).  The authorities indicated  that the in-quota imports of certain products 
remained low because of Chinese Ta ipei's SPS measures against fruit flies as well as over-supply, low 
market prices, or persisting low co nsumption levels.  During the review period, the fill ratio for 
in-quota imports of rice21, dried velvet, fresh pears, red beans, peanuts and dried longans was 100% or 
close to it. 
(c) Tariff escalation 
29. Tariff escalation remains present in certain subsect ors, most notably textiles, petroleum, coal, 
and non-metallic mineral products (while de-escal ation from semi-processed to fully processed is 
noticeable in food, beverages, and tobacc o, and wood and furniture) (Chart III.1).22  Tariff escalation 
results in a bias against imports of more processed goods and therefore provides an effective rate of protection that is higher than the nominal rate for the processed goods.
23  Consequently, in the absence 
of GSP or other preferences, tariff escalation can im pede the industrializati on of developing countries 
and LDCs seeking to export products with  higher value-added to Chinese Taipei. 
(d) Bound rates 
30. All tariff lines in Chinese Taipei's tariff schedule are bound and almost all binding 
commitments were implemented in  2008 (Table III.1).  In its 2009 tariff schedule, bound and applied 
tariff rates coincided (or their difference was very small) in about 90% of all tariff lines, suggesting 
wide predictability in the tariff.  The simple av erage bound rate is 23.0% for agricultural products 
(WTO definition), and 5.4% for non-agricultural pro ducts.  The final average bound rate is expected 
to be 8.2%  by 2011 (Table III.1).  
                                                                                                                                                                     
29,860 from each other WTO nation.  The 2009 TRQ stood at 46,266 (55,519 in 2010), 570,514 (684,617 in 
2010), 570,514 (684,617 in 2010), and 5,832 (42,998 in 2010), respectively. 
19 Under the first-come, first-served system, quotas  are allocated in accorda nce with the order of 
applications or by ballot, or based on historical imports.  The authorities may also auction quota rights or use 
other methods agreed by international treaties or approved by the Ministry of Finance upon consultation with 
the related authorities.  For further details on TRQ a llocation and transparency procedures, see WTO (2006). 
20 WTO document G/STR/N/12/TPKM,  5 June 2008. 
21 The authorities explained that delays in filling the 2008 TRQ for rice were due to higher international 
prices than those of domestic produce, therefore making rice imports unattractive for local traders. 
22 Tariff escalation means that the level of effective tariff protection increases as goods in these sectors 
undergo further processing;  it thus tends to deter imports of semi-finished and finished goods. 
23 The effective rate of protection (ERP) measures the protection provided by the entire structure of 
tariffs, taking into account those levied on inputs as well as those on final products.  For further details on ERP, see WTO (2006). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 41 
 
 
n.a.n.a.05101520253035404550
Food,
beverages and
tobaccoTextiles and
leather Wood and 
furniturePaper printing
and publishingChemicals Non-metallic
mineral
productsBasic metals Fabricated
metal products
and machineryOther
manufacturingPer centChart III.1
Tariff escalation by 2-digit ISIC industry, 2009
Average applied rate in manufacturing
(7.2%)First stage of processing Semi-processed Fully processed
Not applicable.
Calculations exclude in-quota rates.   Three-year (2002-04) average AVEs have been used where available;  
where they are not available the ad valorem  part of compound and alternate rates is used.
WTO Secretariat calculations, based on data provided by the Chinese Taipei authorities.n.a.
Note:
Source :
 
31. Pending incorporation of Harmonized System no menclature changes into its Schedule of 
Concessions CLIII, and completion of consultations  and/or possible Article XXVIII negotiations, 
Chinese Taipei has benefited from waivers suspending the application of the provisions of Article II 
of GATT 1994;  the last such waiver extended th e period for implementing changes relating to the 
third amendment to the HS2002 until 31 December 2009.24  Chinese Taipei   incorporated the HS2002 
changes into Schedule CLIII, and certif ied them to the WTO on 10 September 2009.25  By 
end-January 2010, the drafts of the transposition of  HS 2007 nomenclature and the concordance table 
(HS2002 to HS2007) were ready for inter-agency consultations;  Chinese Taipei authorities indicated 
that they would submit them to the WTO at an appropriate time. 
(e) Preferences 
32. Chinese Taipei has expanded considerably the sco pe of its preferential tariff treatment for 
imports by concluding more free-trade agreements (FTAs) since its previous TPR (Chapter II), when 
Panama was the sole beneficiary of such treatme nt.  Under its bilateral FTAs, Chinese Taipei now 
provides preferential access to imports originating in Panama (as of 2004) and Guatemala (as of 
July 2006) as well as Nicaragua, El Salvador, and Honduras (as of 2008) (Table III.2).26  These 
agreements cover an average of 67% of total tariff lines on top of the 30% of  lines that are already 
duty free at MFN level (section (a) above), and re duce the simple average tariff rate applied to 
beneficiaries by up to 5 percentage points compar ed with the average MFN applied rate of 7.8% 
(Tables III.1 and III.2).  Since December 2005, Chin ese Taipei has also granted duty-free access to 
items of least developed country (LDC) origin. 
                                                      
24 WTO documents WT/L/744, 22 December 2008  and G/MA/W/23/Rev.6, 19 March 2009. 
25 WTO document WT/Let/656, 29 September 2009. 
26 APEC (2008a). WT/TPR/S/232 Trade Policy Review 
Page 42 
 
 
Table III.2 
Preferential trade agreements, 2009 
Agreement Participants Overall 
average rate Coveragea Preferential margin 
Chinese Taipei-El Salvador FTA El Salvador 5.2% 5,877 0.5% to 100% of MFN rate 
Chinese Taipei-Guatemala FTA Guatemala 4.3% 5,882 0.5% to 100% of MFN rate 
Chinese Taipei-Honduras FTA Honduras 4.8% 5,877 0.5% to 100% of MFN rate 
Chinese Taipei-Nicaragua FTA Nicaragua 5.0% 5,826 0.5% to 100% of MFN rate 
Chinese Taipei-Panama FTA Panama 2.4% 5,925 1.3% to 100% of MFN rate 
Least developed countries (LDCs) 50 least de veloped countries 7.7% 135 100% of MFN rate 
a Based on eight-digit tariff lines.  Only rates that are lower than the corresponding MFN rate are taken into account.  Under the 
MFN applied rate, out of a total of 8,7 30 tariff lines, 2,625 are already duty free. 
Source :  WTO calculations, based on data provide d by the Chinese Taipei authorities. 
 
(f) Rules of origin 
33. Chinese Taipei uses both non-preferential and preferential rules of origin.  Its preferential 
rules of origin, which are applied to imports under free-trade agreements (Chapter II), are based on:  
the wholly produced criterion and the substantial tran sformation criterion.  If more than two countries 
or areas are involved in the production of goods, th e country or area in which the goods underwent 
last substantial transformation is deemed to be the country or area of origin of the goods.  Substantial 
transformation is considered to have taken place when  the first six digits of the Customs Import Tariff 
of the processed or manufactured goods is different from those of their parts or materials, or the ratio of value added is at least 35% of the transaction va lue of the non-originating parts or materials.  In 
order to make the process and period of determini ng the origin of imported goods more transparent, 
predictable, and specific, Chinese Taipei ame nded articles of the Regulations Governing the 
Determination of Country of Origin  of an Import Good on 17 January 2008.
27  
(g) Tariff exemptions and other concessions 
34. Certain items specified in the Customs Act ar e exempted from import tariffs.  These include:  
articles imported by certain government officials or for certain official use;  articles for educational, 
research, or experimental purposes imported by pub lic and private schools or other educational or 
research institutions;  and advertising material and samples of no commercial value or of a value 
below the prescribed ceiling.   
35. The Ministry of Finance has authority to adju st customs duties in order to deal with an 
"extraordinary" economic situation,  domestic or overseas, or a situation to accommodate the supply of 
goods, or to provide a "reasonable operational envi ronment" without seeking the approval of the 
legislature.  Adjustments are allowed within 50% of the statutory duty rate or quantity and may be 
applied for up to one year.  By this means, sin ce the previous TPR, the MOF decreased customs duties 
on 30 items (19 items more than in 2004) to cove r fuels and certain basic foodstuff, e.g. cereals, 
tomato products and dairy products (Table III.3).  Reportedly, since 2007 the additional food-related 
adjustments have been aimed at stabilizing commodity  prices and to help ease inflation;  according to 
                                                      
27 APEC (2008a) . Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 43 
 
 
MOF estimates, these seasonal tariff cuts could invo lve a decrease in governmental tax revenues of 
NT$816 million a year.28   
Table III.3 
Adjustment of customs duties in 2009 (for the period from 5 October 2004 to 31 December 2009)  
(%) 
Tariff number Description Temporarily 
adjusted rate Applied rate 
31021010 Urea, for fertilizers use 1 2 
31021020 Urea, coated 1 2 
31051000 Goods in this chapter in tablets or simi lar forms, or in packages of a gross weight 
not exceeding 10 kg 1 2 
31052000 Mineral or chemical fertilizers containi ng the three fertilizing elements:  nitrogen, 
phosphorus and potassium 1 2 
31053000 Diammonium hydrogenorthophos phate (diammonium phosphate) 1 2 
31054000 Ammonium dihydrogenorthophos phate (monoammonium phosphate) and 
mixtures thereof with diammonium  hydrogenorthophosphate (diammonium 
phosphate) 1 2 
31055100 Other mineral or chemical fertili zers containing nitrat es and phosphates 1 2 
31055900 Other mineral or chemical fertilizer s containing the two fertilizing elements, 
nitrogen and phosphorus 1 2 
31056000 Mineral or chemical fertilizers cont aining the two fertilizi ng elements, phosphorus 
and potassium 1 2 
31059000 Other fertilizers 1 2 
38249052 Chemical fertilizers, othe r than those in Chapter 31 1 2 
27101110 Gasoline 5 10 
27101939 Other diesel fuel 2.5 5 
10011000 Durum wheat, unmilled, for feeding 3.25 6.5 
11010010 Wheat flour 8.75 17.5 
11022000 Maize (corn) flour 3 6 
11031100 Groats and meal of wheat 10 20 
11031300 Groats and meal of corn 5 10 
12081000 Flours and meals of soya beans 1.5 3 
23033000 Brewing or distilli ng dregs and waste 1.5 3 
10019000 Other wheat and meslin 3.25 6.5 
04021090 Other milk and cream, in powder, granule or other solid form, of a fat content, by 
weight, not exceeding 1.5% 5 10 
04022190 Other milk and cream, in powder, granule or other solid form, of a fat content, by 
weight, exceeding 1.5%, not containing a dded sugar or other sweetening matter 5 10 
19011000 Other preparations for infant  use, put up for retail sale 2.5 5 
19019021 Prepared milk powder, milk food canne d or packaged, 5 lbs and under for retail 6 12 
19019022 Other milk powder, prepared 6 12 
12074000 Sesamum seeds 6 12 
Ex20029000 Other tomatoes prepared  or preserved otherwise than by vinegar or acetic acid 5 10 
04059010 Milk fat, anhydrous 4 8 
04051000 Butter 2.5 5 
84082091 Compression-ignition internal combusti on pistion engines,of a cylinder capacity 
exceeding 3,000 cc, for diesel vehicles  1.25 2.5 
Table III.3 (cont'd) 
                                                      
28 USTR (2009);  China Post,  17 July 2008.  Viewed at:  http://www.chinapost.com.tw/business/2008/ 
07/17/165890/Taiwan-to.htm [13 May 2009];  and China Post, 17 May 2008.  Viewed at:  
http://www.chinapost.com.tw/business/2008/05/17/1 56804/Commodity-tariffs.htm [13 May 2009]. WT/TPR/S/232 Trade Policy Review 
Page 44 
 
 
Tariff number Description Temporarily 
adjusted rate Applied rate 
Ex84099110 Connecting-rods 6.25 12.5 
Ex84099120 Cylinder body, valve conduit, valv e blocks for motor vehicles 5.75 11.5 
Ex84099190 Other parts suitable for use solely or  principally with spark-ignition internal 
combustion piston engines 7.5 15 
84831010 Transmission shafts and cranks  for motor vehicle engines 7.5 15 
85365040 Switches for motor vehicles, for a voltage not exceeding 1,000 V 6.25 12.5 
87082919 Other pressed elemen ts of vehicles 6.25 12.5 
87082990 Other parts and accessories of bodies (including cabs), of the motor vehicles of 
headings 87.01 to 87.05 7.5 15 
87083020 Other brakes or servo-brakes 2.5 5 
87083099 Parts of other brakes and servo-brakes 2.5 5 
87085019 Other drive axles with differential,  whether or not provided with other 
transmission components 6.25 12.5 
87085029 Other non-driving axles and parts thereof 7.5 15 
87088010 Suspension shock-absorbers 7.5 15 
87089210 Silencers and exhaust pipes 7.5 15 
87088020 Other suspension systems 7.5 15 
87088090 Parts and accessories for suspension systems 7.5 15 
87089190 Parts of radiators 6.25 12.5 
87089290 Parts of silencers and exhaust pipes 7.5 15 
87089499 Parts of other steering wheels, st eering columns and steering boxes 3.75 7.5 
87089510 Safety airbags with inflater system 7.5 15 
87089590 Parts of safety airbags with inflater system 7.5 15 
87089990 Parts and accessories fo r other motor vehicles 7.5 15 
90292010 Speed indicators and combined meters, for motor vehicles 5 10 
Source:  Information provided by the Chinese Taipei authorities.  
(iv) Other charges affecting imports29 
36. Indirect taxes, including the business tax, the commodity tax, and the tobacco and alcohol tax 
are levied at the same rates on imports as on domestically produced goods (and services) (section (4)(i)).   
37. As from 1 October 2006, the Trade Promotion Serv ice Fee has been charged at the rate of 
0.04% (previously 0.0425%) on the c.i.f value of im ports (and the f.o.b. price of exports) to support 
trade-promotion activities.  The Trade Promoti on Fund, which is managed by a Committee, is 
financed mainly by this fee.  About a quart er of the 21 members of the committee are the 
representatives of exporters and importers.  
38. Harbour dues remain unchanged a nd are based on the gross tonnage of ships entering the port 
(ship port dues), number of passengers departi ng (passenger port dues), and the "revenue tons"
30 of 
loaded or unloaded cargoes (cargo port dues).31  Non-Chinese-Taipei and domestic ships are subject 
to the same harbour dues for the same shipping routes, but harbour dues for overseas routes are 60% 
                                                      
29 For further details on these charges, see WTO (2006). 
30 Revenue tonnes (or charged tonnes) are the great er of measurement tonn es or weight tonnes. 
31 Other port-service charges include:  port charges (dockage, buoy, tugboat, mooring and unmooring, 
water supply, cleaning maintenance) and terminal operation charges (cargo handling, storage, wharf passage, equipment utilization). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 45 
 
 
higher than for domestic routes.  The authorities consid er that this difference reflects the costs related 
to the type of equipment and services provided fo r vessels operating these routes.  The dues collected 
are used mainly for construction and development of the commercial ports. 
39. Customs continues to collect fees for certain services, including a special supervision fee, 
cargo examination fee, customs sealing fee, escorting fee, certificate issuance fee and bonded 
warehouse stocktaking charge;  no duty drawback service charge (section (3)(v)) has been levied 
since 25 July 2006.  Fees have remained unchanged.  
(v) Import prohibitions, restrictions, and licensing 
40. Since its previous TPR, Chinese Taipei has expanded slightly the scope of its import bans, 
which rose from 56 ten-digit HS items (2006) to 63 (as of October 2008)32, involving mainly 
narcotics, toxic chemicals, hazardous wastes, a nd HCFC (hydrochlorofluorocarbon) compounds that 
are subject to trade restrictions under internati onal agreements.  Additiona l prohibitions apply to 
direct cross-strait imports of some 2, 243 tariff lines (as of 20 November 2009)33, an increase of 
45 lines since the previous TPR.34  Since 15 December 2008, direct  cross-strait trade has been 
conducted directly from China;  in the past goods had to be shipped through Hong Kong, China.  
Chinese Taipei maintains no quantitative import restric tions.  Twenty-four ten-digit HS items remain 
subject to non-automatic import licensing.35  
41. Import prohibitions, restrictions, and licensing apply, inter alia,  by reason of the requirements 
of various trade agreements, essential security, and for the protection of culture, hygiene, or the 
environment as well as for trade surveillance purposes (iron/steel products);  these measures are 
stipulated in the Regulations Governing Impor t of Commodities and the Regulations Governing 
Export and Import of Strategic High-Tech Commoditi es.  To facilitate the implementation of the 
regulations, the Consolidated List of Commoditi es Subject to Import Restriction (or the Negative 
List)36 and the List of Commodities Assisted by Cust oms for Import Examination have been in place 
since 1 July 1994.  
                                                      
32 This increase was due to the addition of 8 items of whale shark in 2009, the reduction of banned 
toxic chemicals from 25 items in 2006 to 19 in 2009, and the increase of hazardous waste from 2 items in 2006 
to 7 in 2009. 
33 As indicated earlier (Chapter II), these prohibitions cover a variety of items both industrial (61.5% of 
all lines) and agricultural (38.5%);  they include pharmaceuticals, iron and steel, electrical and electronic items, 
and textile-realted products.  The increase in the number of tariff lines is due to additions relating to the recent 
HS nomenclature change and the inclusion of 29 beef products.  Nevertheless, the authorities indicated that 
between 2006 and 2009 a total of 66 HS ten-digit items were liberalized consisting mainly of industrial products 
(e.g. washing and drying machines, construction material, chemicals). 
34 Cross-strait trade is subject to Chinese Taipei's speci fic laws and regulations dealing with such trade.  
These prohibitions are maintained pursuant to the provisio ns of Article 8.1 of the relevant regulations governing 
cross-strait trade and stipulating that the Ministry of Ec onomic Affairs will lift restrictions on goods originating 
in China as long as such deregulation fulfils the conditions set forth of "not endangering national security" and 
"not seriously impacting related domestic industries". 
35 Items that are currently restrict ed and subject to prior authorization include rough diamonds, iron or 
steel, lead, cadmium and chromium wa stes and scraps, methyl bromide,  and chemicals restricted under the 
Montreal Protocol (WTO document G/LIC/N/3/TPKM/2/Rev.1, 31 August 2009;  APEC, 2008a;  and USTR, 
2009). 
36 This includes the List of Commodities Subject to Import Control and the List of Commodities 
Subject to Conditional Import.  Imports of commodities on the former are prohib ited except under special 
circumstances, in which case, the BOFT grants special permits;  commodities on the latter list can be imported under certain conditions, with the consent of relevant authorities. WT/TPR/S/232 Trade Policy Review 
Page 46 
 
 
42. The Bureau of Foreign Trade (BOFT) of the Ministry of Economic Affairs remains the main 
authority in charge of issuing import permits fo r products on the List of Commodities Subject to 
Conditional Import.  Before the BOFT issues an import  permit, certain conditions as prescribed by the 
regulations must be fulfilled;  these include the appr oval by other agencies responsible for the relevant 
categories.  The criteria and procedures for appr oval by other agencies are publicly announced.   
43. The List of Commodities Assisted by Customs for Import Examination (i.e. compliance with 
existing requirements) covers products subject to re quirements imposed by other laws or decrees for 
regulatory purposes.37  These products can be imported only if  approved by relevant authorities in 
charge of various sector-specific laws;  secto r- or product-specific requirements include CITES 
permits, food additives/pesticides/medicine regist ration certificates, tobacco/alcohol business licences, 
medical device market licences, and supervisory a pproval for explosives, medicated cosmetics, or 
environmental agents.  Import permits issued by the BOFT are not required for these products.  According to the authorities, these requireme nts are not generally trade restrictive.   
44. Applications for import permits can be  submitted in writing or electronically.
38  No licensing 
fees and/or other administrative charges or deposit or advance payments are required in relation to 
obtaining import licences.  
45. Since 2004, Chinese Taipei has submitted only one WTO notification on import licensing 
procedures (in 2009);  according to the authoriti es, this was for internal "technical reasons".39 
(vi) Contingency measures 
(a) Anti-dumping and countervailing actions40 
46. Anti-dumping and countervailing measures are governed by the Customs Act and the 
Implementation Regulation on the Imposition of Co untervailing and Anti-Dumping Duties of 3 July 
1984.  The Regulation was last amended in February 2005.   
47. Anti-dumping or countervailing measures may be  initiated upon written application to the 
MOF by producers or related commercial, industrial, labour, or agricultural associations or other legal 
organizations;  the Ministry's Tariff Commission must  decide whether to initiate investigation.  The 
MOEA is responsible for investigating whether the subsidized or dumped product causes injury to the 
domestic industry;  investigations are conduc ted by its International Trade Commission.  
Anti-dumping and countervailing duties may be in force for five years.  The MOF may initiate ex officio  a review process regarding the continuation of  these duties;  such a review may also be 
introduced upon the request of the applicant or any other interested party. 
48. Between 2005 and 2009, Chinese Taipei initia ted six anti-dumping investigations;  
provisional and final measures were taken for two cases, involving imports of towelling products and 
footwear from China, and no action was taken fo r the remaining four cases, involving imports of 
uncoated printing and writing paper from China, In donesia, and Japan, and benzoyl peroxide from 
                                                     
 
37 These products include:  live breeding animals and their embryos;  tuna (yellow fin, blue fin, 
southern blue fin, swordfish, and big-eye);  tobacco and alcohol products;  oil and petroleum products;  fishing 
boats and vessels;  firearms and ammunition;  drugs, medicine (human, veterinary, raw, medicated cosmetics, 
etc.) and medical devices;  cinema films;  controlled ra dio frequency devices;  electronic amusement machines;  
and optical disk manufacturing equipment.   
38 For further details on import licensing procedures, see WTO (2006). 
39 WTO document G/LIC/N/3/TPKM/2/Rev.1, 31 August 2009. 
40 For further details about anti-dumping and countervailing procedures, see WTO (2006). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 47 
 
 
China.  Five anti-dumping measures are in force (December 2009) on three products:  art paper from 
Japan, subject to anti-dumping duties effective 20 July 2000 (reviewed in 3 March 2006);  and 
towelling products and certain footwear from China, subject to duties or undertakings, effective as of 
2006 and 2007, respectively.41  One anti-dumping case, concerning benzoyl peroxide from China, was 
under investigation at the time of completion of th is report in mid-March 2010.  Chinese Taipei has 
not imposed any countervailing measures since its accession to the WTO in January 2002.  
(b) Safeguards 
49. Chinese Taipei has not taken any safeguard  measures during the period under review.42  
Safeguard measures are governed by the Foreign Tr ade Act and the Rules for Handling Import Relief 
Cases, and dealt with by the MOEA Internationa l Trade Commission.  The Rules for Handling Import 
Relief Cases were amended on 19 January 2009, ma inly to abolish provisions governing safeguards 
against textiles and clothing from China, in accordan ce with the expiry of paragraph 242 of the Report 
of the WTO Working Party on the Accession of China.  
50. Chinese Taipei maintains Special Safeguards ( SSGs) on a number of agricultural products 
covered by TRQs (section (iii)(b) and Chapter IV ).  SSGs, permitted under Article 5 of the WTO 
Agreement on Agriculture, allow the imposition of  additional duties when import quantities exceed 
SSG trigger volumes or import prices fall below SSG trigger prices.  As Chinese Taipei did not import many of these products in the past, SSG tr igger volumes are relatively low.  During the period 
under review, Chinese Taipei has imposed safeguard provisions on poultry imports several times, and 
SSGs have been triggered on several ot her products, including types of offal. 
51. Chinese Taipei may retaliate against any discr iminatory treatment of goods exported from 
Chinese Taipei or carried by Chinese Taipei transport.   To date, no retaliatory measures have been 
imposed on imported goods.  
(vii) Government procurement
43 
52. During the period under review, the total value of government procurement in Chinese Taipei 
was NT$1.284 trillion, or 10.4% of GDP (Table III.4).  Procuring entities may accord domestic 
suppliers preference over non-Chinese-Taipei supplie rs in the award of contracts, except where 
prohibited by agreements to which Chinese Taipei is a party.  Chinese Taipei became a member of the 
plurilateral WTO Agreement on Government Pr ocurement (GPA) on 15 July 2009.  Upon 
implementation of the WTO GPA, a more competitive procurement climate is to be installed to:  
enhance project quality and innovation;  provide high er value for taxpayers' money;  and encourage 
more transfer of know-how and technology.44  This change coincides with the launch of a 
NT$500 billion stimulus plan, as part of its 12 major infrastructure projects relating to the transportation network, industria l development, urban and rural development, and environmental 
protection.  The GPA accession is also viewed as an opportunity for local firms to explore government procurement markets around the world.
45  The authorities indicated that as a result of 
                                                      
41 WTO document G/ADP/N/195/TPKM, 15 February 2010. 
42 Despite an affirmative injury determination of a "China safeguards investigation" regarding imports 
of certain towelling products under Chapter 4-1 of the Rules for Handling Import Relief Cases, no measure was 
taken. 
43 For further details about the procedural and institutional framework governing government 
procurement operations, see WTO (2006). 
44 European Chamber of Commerce, Chinese Taipei, Pr ess Release, 28 November  2008.  Viewed at:  
http://www.ecct.com.tw/inde x.php?option=com_content&task=view&id = 298&Itemid=162 [28 April 2009]. 
45 Central News Agency,  8 June 2009. WT/TPR/S/232 Trade Policy Review 
Page 48 
 
 
long-term preparatory work involving, inter alia,  an e-procurement system and training courses, no 
difficulties have been encountered so far in implementing the GPA.   
Table III.4 
Procurement by origin, 2004-08  
(NT$ billion and %)  
 2004 2005 2006 2007 2008 
Total value (NT$ billion) 1,011.5 999.9 971.5 1,277.5 1,284.7 
Share      
Domestic 81.86 86.55 75.56 70.41 71.51 
Non-Chinese-Taipei 18.14 13.45 24.44 29.59 28.49 
Number of contracts awarded 154,953 177,413 167,830 167,511 185,939 
Share      
Domestic 88.08 92.99 92.60 92.47 92.93 
Non-Chinese-Taipei 11.92 7.01 7.40 7.53 7.07 
Note: The statistics include procurement not covered by the WTO/GPA and with a value of more than NT$100,000. 
Source:  Information provided by the Chinese Taipei authorities. 
53. Government procurement is regulated by th e 1998 Government Procurement Act, which 
entered into force in May 1999, and related regulat ions;  the latest amendment of the Act, which 
entered into effect on 4 July 2007, relates to di spute settlement over construction work contracts.  
Other amendments during the review period involv ed regulations governing joint tendering (2007), 
evaluation of the most advantageous tender (2008), fees for review of procurement complaints (2007), 
mediation of procurement contract disputes ( 2007), organization of the Procurement Evaluation 
Committee (2008), and publication of tender notice and issuance of Government Procurement Gazette  
(2008).  The authorities consider that the current government procurement regime is in conformity 
with WTO/GPA, and that there is no need to pass new implementing legislation in this area.   The 
Public Construction Commission (PCC) formulates, c oordinates, and monitors the implementation of 
Chinese Taipei's policies on government procurement of all goods, services, and construction works.  
A Complaint Review Board for Government Procur ement (CRBGP) receives and reviews complaints 
by suppliers against procuring entities in procurem ents reaching the threshold for publication (i.e. 
NT$1 million). 
54. Procurement contracts of not less than NT$1 million for construction work, property, and 
services are awarded through open, selective, or li mited tendering procedures.  In principle, open 
tendering must be used for all procurement contract s of a value of NT$1 million or over:  a public 
notice is given and all interested suppliers are inv ited to submit tenders;  under certain circumstances, 
as specified in the Act, selective or limited tendering  can be used.  According to the authorities, the 
same requirements in tendering apply to both dome stic and non-Chinese-Taipei suppliers.  Between 
2004 and 2008, an annual average of about 67% of all procurement was awarded through open 
tendering procedures (Table III.5);  this is lower than  at the time of the previous TPR (average annual 
of 75% in 1999-04).  By contrast, greater use has been made of limited tendering procedures, now at 
about 20% of all procurement compared with about 13% in the past.  The au thorities indicated that 
this shift was due to three significant procur ement contracts awarded through limited tendering 
procedures in 2007;  they involved two contracts for natural gas (NT$57.9 billion and NT$62.3 billion) for the purpose of commercial resale  or production of goods for resale by Taiwan 
Power Company (Table AIII.4 and Chapter IV),  and one military contract (NT$42.9 billion). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 49 
 
 
Table III.5 
Procurement share by type of procedure, 2004-08  
(Percentage of contract value) 
Year Item Open tendering Selective tendering Limited tendering 
2004 % of total value 65.58 14.94 19.48 
 Construction 85.47 3.93 10.60 
 Properties 40.98 29.77 29.25 
 Services 78.34 5.11 16.55 
2005 % of total value 76.29 8.14 15.57 
 Construction 94.08 0.60 5.32 
 Properties 52.05 18.98 28.97 
 Services 81.64 4.78 13.58 
2006 % of total value 76.32 10.60 13.08 
 Construction 94.01 0.42 5.56 
 Properties 61.87 22.92 15.21 
 Services 73.40 4.11 22.49 
2007 % of total value 52.45 21.06 26.50 
 Construction 94.60 0.89 4.50 
 Properties 23.31 35.67 41.02 
 Services 71.81 9.61 18.58 
2008 % of total value 66.97 11.98 21.05 
 Construction 88.94 6.40 4.67 
 Properties 45.83 17.18 36.99 
 Services 74.54 10.56 14.91 
 TOTAL 66.65 13.69 19.66 
Note: The statistics include procurement not covered by the WTO/GPA and with a value of more than NT$1,000,000. 
Source:  Information provided by the Chinese Taipei authorities.  
55. Selective tendering involves pre-qualificati on selection among interested suppliers who 
submit their qualification documents upon public noti ce;  only suppliers selected though this process 
are invited to tender.  The selective procedures may be  used when:  there is a recurring demand;  if the 
review of tenders is lengthy;  if the suppliers' cost  of preparing a tender is high;  if the suppliers' 
qualification requirements are complicated;  or if the procurement concerns research and 
development.  The limited procedures do not involve  public notices;  only a few suppliers are invited 
to compete or only one supplier is invited to tender.  The limited procedures are used, inter alia,  
when:  there is no eligible tender in response to  open and selective procedures;  the subject of a 
procurement is an exclusive right;  there is extrem e urgency;  or the procurement involves follow-up 
maintenance by the current supplier.  
56. Procurement notices, invitations to tender and contract awards are published in the daily 
Government Procurement Gazette  (GPG).  The government procurem ent information system (GPIS) 
database provides information on legal framework, tendering information for all levels of the 
Government, awarding of bids, and procedures for handling disputes.  An electronic procurement 
system through the Internet is used.46 
57. By law, government procurement must be conducted on a non-discriminatory basis, unless 
there is "due proper cause".  With regard to participation of non-Chinese-Taipei suppliers, the 
principle of reciprocity is applied.47  The share of non-Chinese-Ta ipei suppliers rose from 18.14% 
                                                      
46 In November 2009, 8,327 procurement contracts were open for e-bidding through the Internet. 
47 Suppliers, products or services from a country that  imposes restriction on or bans suppliers, products, 
or services from Chinese Taipei ma y be banned or restricted (Article 17, Government Procurement Act). WT/TPR/S/232 Trade Policy Review 
Page 50 
 
 
(2004) to 28.49% (2008) of the value of government  procurement but dropped from 11.92% to 7% of 
contracts awarded (Table III.4).  The authorities cl arified that this shift was due to two major 
procurement contracts awarded to non-Chinese-Taipei suppliers in 2008, i.e. an Indonesian supplier  
of natural gas (NT$74.6 billion), and a U.S. s upplier of military equipment (NT$65.7 billion).  In 
2008, the main procurement items were:  ores, minera ls, and products thereof;  aircraft and airframe 
structural components;  chemicals;  and fuels, l ubricants, and waxes.  The main services procured 
were:  professional, administrative, and manageme nt;  transportation, travel, and relocation;  
maintenance, repair and rebuilding equipment, a nd construction.  The major construction contracts 
covered highway, rapid transit, electric power, and oil-refining-related works.  Between 15 July and 
31 December 2009, out of 997 (NT$181.76 billion) GPA- covered contracts in construction, goods and 
services procurement, 171 (NT$9.43 billion) were awar ded to suppliers origina ting in GPA parties;  
these contracts were largely related to procurement of goods. 
58. Under the GP Act, local supplier may be gi ven preference over non-Chinese-Taipei suppliers 
in the award of contracts not covered under the GP A commitments, if the local supplier contributes at 
least 50% value added, or supplies construction work or services;  the margin of preference may be up 
to 3%.  The margin of preference and the starti ng and expiry dates of the preference period for 
particular tenders should be published in the GPG.   No such preferences have been published and 
applied, as the scope of the preferences has not yet been prescribed.  The law allows procuring entities 
to request bidders to purchase locally produced goods, to transfer technology, to make an investment, 
to facilitate exports, or to take any other similar measures;  such requests are realized within the 
context of industrial c ooperation programmes (ICPs).48  ICPs are particularly common in government 
procurement relating to defence, transportation ve hicles, power generation, and high-tech.  Between 
2006 and 2008, 74 ICP projects were approved, mainly involving commitments to procurement of local goods, technology transfer and training.  
59. Complaints regarding tender documentation, evaluation, or the award of a contract may be 
filed with the procuring entity concerned.  In the ev ent that the supplier object s to a decision made by 
the procuring entity, a complaint may be filed with  the CRBGP.  A supplier may file an administrative 
suit with the High Administrative Court within two months of receipt of the CRBGP's decision.
49  A 
dispute arising from the performance of a contract ma y be taken to the CRBGP for mediation or to an 
arbitration institution.  Between 2004 and end-Oct ober 2009, 3,024 cases were taken to the CRBGP. 
60. Bid-rigging, which is being dealt with by the CRBGP, has rarely been investigated by the 
authorities;  they consider that the relevant provisi ons of the GP Act relating to the general principles 
of fairness, reasonableness and competition prev ent the occurrence of bid-rigging.  Between 
May 1999 and November 2009, about 17 cases relating to infringement of Article 88 of the GP Act 
(bid-rigging punishment) were investigated in courts. 
(viii) State-trading activities 
61. According to the Chinese Taipei legislation a nd authorities, a government-owned enterprise is 
a company that retains de jure  monopoly rights and at least 50% of its shares are owned by the 
government;  upon the loss of its statutory monopoly right s or other special rights, and/or reduction of 
the number of shares held by the public sector , a government-owned enterprise is considered 
privatized, and therefore not subject to WTO notification.  The latest WTO notification from 
                                                      
48 ICPs are designed to promote technology and industrial capability in Chinese Taipei.  According to 
the authorities, less than 0.0015% (0.01% in 2005)  of all procurement contracts require the ICP. 
49 Between November 2005 and November 2009, 399 cases were brought to High Administrative 
Court. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 51 
 
 
Chinese Taipei indicates that state-trading involves only rice and banknote paper.50  Nevertheless, 
government-owned companies (e.g. the Taiwan Tobacco and Liquor Corporation (TTLC) and Taiwan Sugar Corporation (TSC), Table AIII.4), whic h lost their monopoly or exclusive trading rights 
and whose operations were last notified in 2007
51, remain active in production and/or trade 
(section (3)(iv)).  From January to October 2009, T TLC's imports of tobacco and wine accounted for 
2.58% and 0.3% of total imports of these items, respectively.  No other data on imports of 
government-owned enterprises were available from the authorities.  
62. State-trading activities are underpinned by legislated import rights, such as the Food 
Management Law, Import Regula tions, and by specific monopoly rights over domestic production 
and import.  Regarding rice, the most important crop in Chinese Taipei, the stated aims of state 
trading include:  ensuring stable market cond itions by controlling domestic production and securing 
supply;  controlling imports;  and stabilizing the income of producers.  The Agriculture and Food 
Agency (AFA) of the Council of Agriculture has th e exclusive right to import a certain quantity of 
rice at low tariffs (i.e. 65% of the in-quota rice volum e (section (2)(iii)(b) and Chapter IV);  in 2006 it 
undertook about 84% of total rice imports.  
63. The Central Engraving and Printing Plant (CEPP) retains the exclusive right to print currency 
and to import banknote paper. 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration, documentation, and procedures 
64. Registration and documentation requirements for exports remain, by and large, similar to 
those for imports.  Like importers, exporters must be registered with the BOFT under the Regulations 
Governing Registration and Administration of Export ers and Importers and be fore engaging in export 
businesses (see section (2)(i)). 
65. Exportation from Chinese Taipei is governed by the Customs Act, Foreign Trade Act and 
pertaining regulations, including the Regulations G overning Export of Commodities, last amended in 
March 2007, to differentiate commodities made en tirely in Chinese Taipei from those re-exported 
after being processed locally.  An export declarati on form must be submitted along with loading lists, 
booking notes, packing list, and, if relevant, export permits and othe r required documents. 
(ii) Export taxes, charges, and levies 
66. Chinese Taipei does not levy export  taxes.  However, exports are subject to a trade promotion 
service fee and harbour service dues (section (2)(iv)).   
(iii) Export prohibitions, restrictions, and licensing52 
67. The framework and scope of export restrictions remain similar to those applied to imports.  
There is a Consolidated List of Commodities Subject  to Export Restriction (the negative list) and a 
Consolidated List of Commodities Assisted by Cu stoms for Export Examination.  The negative list 
consists of the List of Commodities Subject to Export Control (products that cannot be exported 
except under special circumstances, in which case the BOFT grants special permits), and the List of 
Commodities Subject to Conditional Export (products that can be exported under certain conditions, 
                                                      
50 WTO document G/STR/N/12/TPKM, 5 June 2008. 
51 WTO document G/STR/N/11/TPKM, 7 February 2007. 
52 For further details about these measures, see WTO (2006). WT/TPR/S/232 Trade Policy Review 
Page 52 
 
 
such as approval by relevant authorities).  Chinese Taipei does not maintain any quantitative 
restrictions on exports.  As from 15 December 2008, cross-strait movement of goods can be undertaken by direct shipment;  prior to this date goods had to be shipped through a third port, usually 
Hong Kong, China (section (2)(v)).  
68. Export prohibitions dropped during the review period, and now cover some 37 (48 in 2005) 
tariff lines (HS ten-digit level), mainly products th at are banned under interna tional conventions, such 
as toxic chemicals, arms and ammun ition, and narcotics (Table AIII.2).
53  In addition, exports of 
whale shark, plants used for pharmaceutical purposes, and antiques are prohibited;  exports of eel fry are prohibited seasonally, from 1 November to 31 Marc h.  To help meet local demand amid rising 
fertilizer prices on the world market in 2007 and 2008 , prior approval from the Council of Agriculture 
has been required for fertilizer exports since May 200 8;  the authorities indicated that at end 2009, all 
138 export authorization requests had been approved.  In addition,  domestic  fertilizer prices were 
frozen from 30 May 2008 to 31 October 2008
54, during which, government subsidies were provided to 
the agricultural producers to absorb pa rt of the price hike in ferilizers.  According to the authorities, 
the budgetary outlays for fertilizer  subsidies conform with the ' de minimis'  limit, and are being 
reduced in line with the downwar d trend of world prices for raw materials.  As a result of these 
measures, domestic prices of fertilizer were much  below those in other Asian countries.  Another 
41 items, including chemicals, paper, certain diamonds  and mechanical apparatus, remain subject to 
export licensing.55   
69. Products "assisted by the Customs for export ex amination" (i.e. those in compliance with 
existing requirements) include agricultural products56, methyl bromide, drugs and medical devices, 
chips, and IP products, including optical disks.  E xportation of these products requires approval from 
the relevant authorities. 
70. Exports bearing a trade mark, patent or copy right are subject to special monitoring by 
Customs under, inter alia,  the Trademark Export Monitoring System (TEMS), to prevent 
infringement of intellectual property rights.  Customs can take ex-officio  action. 
(iv) Export operations of government owned enterprises 
71. According to the authorities, similarly to the Tobacco and Liquor Corporation (TTLC) 
(sections (2)(viii) and (4)(i)(a)), the government -owned Taiwan Sugar Corporation (TSC) does not 
have any exclusive rights or privileges with r espect to sugar export operations (since 2005).  
Therefore, no information on their export activities has been notified to th e WTO recently.  Between 
January and October 2009, TTLC was responsible for all tobacco expor ts and 62.56% of total wine 
exports.  From 2006 to 2008, the TSC exported 39, 837 tonnes of raw sugar and 8,000 tonnes of 
refined white sugar.  No other data on exports undertaken by g overnment-owned enterprises were 
made available by the authorities. 
                                                      
53 Among the items removed from the export prohibitions list are trout and salmon products. 
54 The partly government-owned fertilizer company ab sorbs up to 85% of fertilizer price hikes.  In 
2008, Chinese Taipei's urea was priced at NT$11,250 per tonne, which was 30% of Japan's price, 50% of 
Korea's (Rep. of) price, an d 70% of China's price.  China Post,  "Export ban on fertilizer to remain: COA", 
27 August 2008.  Viewed at:  http://www.chinapost .com.tw/business/2008/08/27/172000/Export-ban.htm 
[13 May 2009]. 
55 For a detailed list of these items, see WTO (2006), Table AIII.5. 
56 Live breeding animals and their embryos, tuna (yellow-fin, blue fin, southern blue fin, swordfish, and 
big-eye), eel, and certain vegetables. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 53 
 
 
(v) Duty and tax concessions 
72. Customs duty and taxes paid on imported raw materi als used in exports are refundable.  Duty 
refunds (or offsetting or drawbacks) are governed by the Customs Act and the Regulations Governing 
the Offsetting or Refund of Duties and Taxes on Raw Materials for Export Products.  The criteria for 
refund of customs duties and commodity taxes on ra w materials are established by the Ministry of 
Economic Affairs on a case-by-case basis in the light of evidence of material to be used in the 
production process as reported by the exporter prio r to processing and verified by the Industrial 
Department Bureau.  During the review period, th e total annual drawback di sbursements peaked at 
NT$2 billion in 2008, before drop ping to NT$1.5 billion in 2009;  the main sectors benefiting from 
these outlays were base metals and articles thereof, electric and electronic appliances, agricultural and 
livestock products, and mineral products.  Over th e four-year period 2006-09, the f.o.b. value of 
exports under drawback averaged NT$63.7 billion pe r year, and duty and/or tax refunded averaged 
about NT$1.8 billion, resulting in an average a nnual coefficient of reimbursement of 2.79%. 
73. Exported goods are exempt from the commodity tax, tobacco and alcohol tax, and VAT 
(section (4)(i)(a)). 
(vi) Export finance, insurance, and guarantees 
74. The publicly owned Export-Import Bank is one of  the main institutions that promotes exports 
and provides export credit, insurance, re-lending, an d other kinds of export financing facilities.  The 
re-lending facility is provided by the bank to over seas banks in order to facilitate exports of goods 
from Chinese Taipei.  The bank also provides export cr edit, with a duration of more than one year, for 
shipments of machinery and equipment and othe r products.  The bank also provides an overseas 
investment financing facility to domestic firms seek ing to invest overseas.  Financing by the bank is 
not conditional on export performance.  The interest rate is set at Libor or OECD Commercial Interest 
Reference Rates (CIRR) plus interest margin, and a grace period may be granted upon request.  The 
authorities indicated that the export credit conditions  are in line with the provisions of the OECD 
Arrangement on Officially Supported Export Credit.  
(vii) Export promotion and assistance 
75. Chinese Taipei's export promotion schemes are ai med at helping exporters to explore and 
expand markets, improve product quality, and upgr ade product image.  A non-profit organization, 
TAITRA57, is responsible for implementing major trade promotion programmes and projects.  Besides 
contributing to the TAITRA, the Government pr ovides funding for various import/export associations 
to promote Chinese Taipei's exports;  group visits overseas, participation in trade shows and trade 
conferences, training and publication are funded un der the budget.  TAITRA's activities absorb the 
largest part of export promotion spending;  betw een 2004 and 2008, total export promotion support by 
the Government amounted to NT$10.4 billion of whic h 77.2% was directed to TAITRA.  Government 
support for export promotion continues to acc ount for 0.1% of its  annual budget.   
76. At end 2008, under a global market expansion plan called the New Cheng Ho Plan, the 
Ministry of Economic Affairs intended to spend so me NT$9 billion over the following four years to 
maintain export momentum by aiding exporters facing declining orders.58  The plan focuses on 
emerging markets including India, the Russian Fede ration, Brazil, and the Middle East, as well as 
                                                      
57 For further details about TAITRA, see WTO (2006);  and online information at:  http://www.taitra. 
com.tw/about_02.asp. 
58 China Post,  "Gov't to spend NT$9 bil. to aid exporters", 25 December 2008.  Viewed at:  
http://www.chinapost.com.tw/business/2008/12/25/189190/Gov't-to.htm [13 May 2009]. WT/TPR/S/232 Trade Policy Review 
Page 54 
 
 
those of ASEAN members.  Types of support under this plan include:  discounted rates for loans to 
exporters representing outlays up to NT $5.582 billion;  promotional activities59 for Chinese Taipei 
exports to China, up to NT$500 million per year;  encouraging non-Chinese-Taipei firms to procure in Chinese Taipei, up to NT$65 million;  and assisti ng domestic firms to attract bids from some 
40 countries under the GPA (section (2)(vii)).  The authorities hoped that these measures would 
transform export growth from negative to positive in 2009.  
(viii) Free zones (export processing zones, scien ce-based industrial parks, and free-trade 
zones)
60 
77. Free-zone activities encompass manufacturing, as well as trade, warehousing, distribution, 
marketing, and other services.  In Septembe r 2009, eight export processing zones (EPZs) were 
operational, hosting about 387 (340 in  2006) enterprises, with total investment of US$10.8 billion 
(US$7.9 billion in 2006)  and 55,792 employees.61  EPZs are administered by the Export Processing 
Zone Administration (EPZA).  There are also thr ee major science-based industrial parks (SIPs) and 
five free-trade zones.  
78. Imports into all the above zones are exempt from customs duty and other indirect taxes;  
income tax exemption applies only to oper ations undertaken within free-trade zones.62  Commodities 
shipped from the zones to non-bonded areas are subj ect to domestic import and export regulations.  
Businesses within free-trade zones may employ non -Chinese-Taipei persons up to 40% of the total 
number of employees.  All entities operating within th e zones enjoy equal treatment in terms of duties 
and taxes, including income taxes. 
79. In 2008, the total value of trade into and out of EPZs amounted to US$14.2 billion or 2.9% of 
total external trade.  Exports from EPZs accounted for 2.8% of total exports , and imports into EPZs 
comprised 2.9% of total imports.  In same year , 62.6% of production in EPZs was exported and the 
rest entered the local market.  The total value of  trade into and out of SIPs amounted to US$50.76 
billion, or 10.23% of total external trade.  Expor ts from SIPs accounted for 13.0% of total exports, 
and imports into SIPs 7.3% of total imports. 
                                                      
59 These activities include enhancing domestic food and consumer product exports to China, 
conducting market research, promoting internet sales,  providing brand consultatio n, or setting up TAITRA 
branch offices in China. 
60 For further details about these zones, see WTO (2006);  WTO document G/SCM/N/155/TPKM, 
5 September 2007;  and Department of Investment Services online information.  Viewed at:  
http://investintaiwan.nat.gov.tw/en/opp/incentives/locations/epz.html. 
61 Businesses that can be established in the EP Zs include:  machinery and equipment, medical 
equipment, electronics, chemicals and biochemicals, textiles and apparel, motor vehicles, food processing, and 
various other manufacturing.  Businesses providing consulting, logistics, shipping, insurance, trading, legal, and 
accounting services are also allowed.  Thresholds for businesses to start operations in EPZs are set at 
NT$80 million for warehousing industries and NT$1 million for others. 
62 According to Article 29 of the Free Trade Zone Law, where a branch  office of a foreign enterprise 
stores goods or conducts simple pr ocessing in the free trade zone by itself or through a free-trade zone 
enterprise, and then sells the goods to both domestic and foreign customers, the income so derived is exempt 
from income tax. However, where the sales value to domestic customers exceeds 10%  of the combined sales 
value to domestic and foreign custom ers, the excess is not exempt from in come tax.  The Law was passed on 
8 July 2009, but no action has been taken so far as its implementing legislation was to be promulgated in 
March 2010.  Online information viewed at:  http://investtaiwan.nat.gov.tw/matter/show_eng.jsp [8 January 2010]. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 55 
 
 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax-related assistance 
80. During the period under review, reliance on revenue  from direct taxes increased steadily as a 
result of the rising contribution of the profit-seek ing enterprise (or corporate) income tax and 
individual income taxes, the principal sources of ta x revenue in Chinese Taipei (Table III.6).  This 
seems to be the outcome of efforts to improve the tax structure and strengthen the collection of 
income tax.   The principal indirect taxes remain the busin ess tax, commodity tax, customs duties, and 
tobacco and alcohol tax.63   
Table III.6 
Direct and indirect tax revenues, 2004-09 
(NT$ billion and %) 
    2004 2005 2006 2007 2008 2009 
Total tax revenue (NT$ billion) 1,387. 3 1,567.4 1,600. 8 1,766.9  1, 760.4  1,530.3 
  (% of total) 
Direct taxes 55.8 59.3 60.4 61.9 65.1 62.4 
 Mining concession tax 0.0 0.0 0.0 0.0 0.0 0.0 
 Profit seeking enterprise income tax 17.4 21.0 19.5 21.7 25.3 21.8 
 Individual income tax 15.5 18.9 20.9 19.7 22.1 20.0 
 Estate and gift tax 2.1 1.9 1.8 1.6 1.6 1.5 
 Securities transactions ta x 6.1 4.4 5.6 7.3 5.1 6.9 
 Futures transactions tax 0.6 0.4 0.3 0.3 0.4 0.2 
 Land value tax 3.8 3.4 3.4 3.3 3.4 3.9 
 Land value increment tax 5.9 5.2 4.8 4.2 3.2 3.5 
 House tax 3.6 3.2 3.3 3.0 3.1 3.7 
 Deed tax 0.9 0.8 0.9 0.8 0.7 0.9 
 Education surtax 0.0 0.0 0.0 0.0 0.0 0.0 
Indirect taxes 44.2 40.7 39.6 36.2 34.9 37.6 
 Customs duties 5.7 5.3 5.0 4.6 4.6 4.5 
 Commodity tax 11.5 10.7 9.9 8.4 7.2 8.4 
 Tobacco and alcohol tax 3.5 3.2 3.2 2.9 2.8 3.0 
 Business tax 16.8 15.2 14.8 13.9 13.9 14.6 
 Vehicle licence tax 3.6 3.3 3.3 3.0 3.0 3.5 
 Stamp tax 0.6 0.5 0.5 0.5 0.5 0.6 
 Amusement tax 0.1 0.1 0.1 0.1 0.1 0.1 
 Financial enterprises busines tax 1.7 1.6 1.7 1.6 1.7 1.4 
 Health and welfare surcharge on tobacco 0.7 0.7 1.1 1.1 1.1 1.6 
Source : Online statistical information.  Vi ewed at:  http://eng.stat.gov.tw/public /data/dgbas03/bs7/bulletin_eng/PDF/eng-
month9902.pdf [10/03/2010]. 
(a) Indirect taxes64 
81. Business tax is applied to sales of goods and services in two forms:  non-value-added and 
value added.  The non-value-added co mponent is applied to gross receipts of:  enterprises engaging in 
banking, insurance, investment trust, securities, fu tures, commercial paper, and pawnshops, at a rate 
of 2% (except for reinsurance premiums of insuranc e business at 1%);  enterprises engaging in special 
                                                      
63 Other indirect taxes include:  stamp tax, vehicle licence tax, and amusement tax.  Other direct taxes 
include estate and gift tax, securities transactions tax, futures transactions tax, agricultural land tax, land value 
tax, land value increment tax, house tax, and deed tax. 
64 For further details about these taxes, see WTO (2006). WT/TPR/S/232 Trade Policy Review 
Page 56 
 
 
beverage and food services, at 15%  (night clubs or restaurants pr oviding entertainment) or 25% 
(saloons or tearooms, coffee shops or bars offe ring female companionship);  small businesses 
supplying agricultural products and traders (consignees) in the wholesale agricultural market, at 0.1%;  
and small business and other business entities excluded  by the MOF from reporting their transactions, 
at a rate of 1%.  The value-added tax component is applied to all other businesses at the rate of 5% on 
a value-added basis (with tax credits for inputs).  Exemptions from the business tax include:  sales of 
land;  medical and education services;  goods or services sold by cooperatives and associations to 
their members;  proceeds from goods sold in tende rs;  services by postal and telecommunication 
offices;  unprocessed raw agricultural products;  sales of rice and flour;  sales of fixed assets;  gold 
bars and bricks;  and the sales of financial deri vative products.  Following a 2008 amendment to the 
Business Taxation Act, and customs tariff adjustme nt action (section (2)(iii)(g)), the 5% business tax 
rate on imported wheat, corn and soybeans was set at  zero for one year starting in March 2008;  this 
reduction was extended until March 2010.65  The same items produced domestically are permanently 
exempt from the business tax.   The business tax is calculated on the basis of actual sales;  the 
valuation basis for imported goods is the c.i.f. value plus the amount of customs duty.   
82. The commodity tax, a special ex cise tax, applies equally to imported and dom estic products.  
Goods subject to commodity tax include rubber tyres,  cement, certain beverages, flat glass, oil and 
gas, certain electric appliances, and motor vehicles (Table AIII.3).  Depending on the product, the tax 
can be in the form of ad valorem  or specific duties (cement and fuels);  ad valorem  rates range from 
8% to 30% (sedans above 2,001 cc).  The base for the commodity tax is the manufacturers' net selling 
price for domestically produced goods, and the c.i.f. price plus the corresponding customs duty for 
imports.  Exemptions from commodity tax include ra w materials used for manufacturing other taxable 
commodities, exported goods66, and goods for exhibition but not for sale. 
83. Since the last TPR of Chinese Taipei, changes ha ve been made to some tobacco and alcohol 
tax rates, as a result of the 2008 and 2009 amendmen ts to the Tobacco and Alcohol Tax Act of 2000.  
The May 2008 changes reduced the rate on alc oholic beverages used for cooking (from NT$22 to 
NT$9 per litre) and increased the rate on ethyl alcohol (from NT$11 to NT$15 per litre).  As from 
June 2009, the new formula for duties on distilled li quor has been based on the alcohol content of the 
product, i.e. NT$2.5 per degree of alcohol cont ent per litre (instead of NT$185 per litre).  
Furthermore, since June 2009 rice-wine ( mijui ), a staple ingredient in local cuisine and production of 
medicinal tonics, as well as a major alcoholic drin k for many low-income people, which is produced 
by the government-owned TTLC has be en sold at a price no higher than NT$50 per 0.6 litre bottle or 
one third of the tax charged per litre on this item since 2003.67  Both changes lowered the market price 
of the mijui  rice wine;  the authorities indicated that th ese changes have not had any impact on the sale 
of domestic or imported distilled spirits and there is  no substitution effect between imported distilled 
spirits and mijui  wine.  In February 2010, 240 of the 448 companies authorized to produce wine were 
making rice wine.  No data on the market positi on of TTLC in domestic production or trade of 
mijui  wine were made available by the authorities. 
                                                      
65 China Post,  17 May 2008.  Viewed at:  http://www.chinapost.com.tw/business/2008/05/17/156804/ 
Commodity-tariffs.htm [13 May 2009].   
66 The commodity tax on tax-paid on export items is refundable (section (3)(v)). 
67 In line with Chinese Taipei's WTO accession co mmitments, alcohol products labelled "rice-wine" 
have been subject to a progressively increased tax set at NT$185 per litre as from 2003;  the purpose of this 
increase has been to unify the level of taxation for mijui rice wine with that applied to other distilled spirits and 
eliminate any discriminatory aspects of the tax.  As a result, annual sales of legally made rice wine have dropped to about 750,000 bottles, just 3.6% of  the pre-accession volume of 210 milli on bottles.  The market has instead 
been flooded with fake rice wine from bootlegging operations, posing a severe threat to people's health 
(China Post,  29 April 2009.  Viewed at:  http://www.ch inapost.com.tw/business/2009/04/29/206071/ 
Consumers-welcome.htm [13 May 2009]). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 57 
 
 
(b) Direct taxes  
84. Revenue from individual income tax and prof it-seeking enterprise income tax accounted for 
20% and 21.8%, respectively, of to tal tax revenue in 2009 (Table III.6).  At end 2009, the highest 
marginal rate of individual income tax was 40% ;  as from 2010, the highest rate of profit-seeking 
enterprise income tax is 20%, down from 25% (Chapter I).  According to the authorities, in 2006 the 
effective rate of profit-seeking enterprise income tax was 14.9% (17.5% in 2003).68  
(c) Tax incentives 
85. Until end 2009, the main vehicle for the gove rnment to promote industrial development 
remained the Statute for Upgrading Industries (SUI) (Chapters II and IV).  Domestic and 
non-Chinese-Taipei businesses are eligible for tax in centives directed at facilitating automation and 
"newly-emerging, important and strategic" i ndustries, new knowledge-economy industries (e.g. 
biotechnology and new pharmaceutical industry as  from 2007), R&D, pollution control, energy 
conservation, and personnel training.69  Recently, Chinese Taipei has designated industries such as 
semiconductors, image displays, digital content,  and biotechnology as new profit bases for its 
industrial development.  Chinese Taipei seeks to build a stronghold of R&D based on high quality 
manpower and a knowledge-based economy.70  Income tax incentives include:  accelerated 
depreciation on certain equipment and facilities;  a tax credit for investment in certain equipment, R&D, and personnel training, and for investment in resource-poor or lesser developed rural areas;  tax 
holidays for investment in "newly-emerging, importa nt and strategic" industries.  Tax relief includes 
exemptions/drawbacks in respect of import duties,  and business taxes for certain industries;  tax 
exemption in relation to merger and acquisition;  "g ranting of investment loss reserve";  investment 
tax credits for shareholders of emerging, importa nt, and strategic industries;  tax exemption for 
royalties for personal creations or innovations;  and exemption from income tax on royalty payments.   
86. Annual estimates of tax revenues forgone as a result of these and other tax measures aimed at 
promoting the upgrading of the industry and encouragi ng exports are publicly available;  for example, 
in 2008, the latest year for which such data are available, total tax reve nues forgone were about 
NT$154 billion (NT$57 billion in  2004) or 8.7% (4% in  2004) of tax revenue.
71  However, no data are 
available on the estimated tax revenue forgone as a result of individual tax incentives, or on the cost 
effectiveness of various tax incentives.  Publica tion of a breakdown of estimates of tax revenues 
forgone (so-called "tax expenditures") along the lines  of practices in many OECD countries, together 
with studies evaluating the cost-effectiveness of such  incentives, would enhance the transparency of 
such measures, and thus public accountability, thereb y contributing to a more effective tax policy in 
Chinese Taipei.   
87. Experience elsewhere suggests that tax incen tives are seldom cost effective;  most 
econometric studies show that forgone tax revenues ex ceed the increase in investment.  They run the 
risk of subsidizing good investments, which might ha ve been undertaken in any event, or turning bad 
investments into profitable ones.  Insofar as tax in centives have stimulated investment in the latter, 
                                                      
68 Effective rate = (tax payable – tax credit for investment)/taxable income. 
69 For further details on tax incentives, see WTO (2006);  and the MOEA Department of Investment 
Services Investment Guide.  Viewed at:  http://www .dois.moea.gov.tw/tig/english/page.asp?class_id=4&page=1 
[30 June 2009]. 
70 APEC (2007b). 
71 Ministry of Finance online information.  Viewed at:  http://www.mof.gov.tw/engweb/ct.asp? 
xItem=53144&CtNode=682&mp=2 [21 October 2009]. WT/TPR/S/232 Trade Policy Review 
Page 58 
 
 
they may well have unduly distorted the allocati on of resources at the expense of total factor 
productivity, a major determinant of competitiveness.72 
88. As an integrated part of the broader fiscal reform policy strategy and to create a more efficient 
industrial development environment to face new challenges in the 21st century, the SUI was to be 
phased out at the end of 2009, and be replaced by the Statute for Industrial Innovation (SII).  The SII 
was scheduled to be discussed at the legislative session of March 2010.  If passed, it will cancel all 
industry-specific tax incentives and provide four  types of functional and non-discriminatory tax 
incentives:  for R&D, manpower training, operations  headquarters, and international logistics and 
distribution centres. 
(ii) Subsidies 
89. Chinese Taipei provides subsidies to selected products and activities in agriculture, fisheries, 
and manufacturing.73  In agriculture, subsidies are provided in the form of guaranteed purchase prices 
and/or grants for the production of rice, sorghum a nd feed corn, sweet potatoes, beans, tobacco leaves, 
certain vegetables, and sugar (Chapter IV).  Fertili zer prices remain particularly low compared with 
prices in other countries in the region as a r esult of government subsidies and government 
involvement in urea production (section (3)(iii)).74  Subsidized interest loans are available for various 
purposes to all farmers and fishermen at different ceiling amounts.  In fisheries, the Government provides grants for implementing programmes for bu y-back of fishing vessels, reduction of fishing 
vessels, for closing fishery season, for water-reci rculation devices used in aquaculture, marine 
insurance for fishing vessels, a nd fishmarket (price) stabilization,  as well as aquaculture facilities 
subsidized by loan programmes.  In the industria l sector, the Government provides subsidized loans 
for small and medium-sized enterprises (SMEs), for product marketing, and for overseas investment and construction projects.  Chinese Taipei's cent ral bank offers special loans via the commercial 
banking system at preferential interest rates to fi nance imports of machinery and equipment for major 
industries.
75  The main beneficiaries of these loans are SMEs;  during 2006-08, the estimated 
budgetary cost for this type of support was NT$1.5 billion.  In addition, the authorities have provided 
tax incentives (section (4)(i)(c) and Chapters II and IV) and funds for development of 
"newly-emerging, important and strategic" indus tries, for regional development, and R&D in 
numerous areas including new leading-industries, a nd oil and natural gas exploration.  These support 
schemes have been contingent neither on expor t performance nor on the use of domestic over 
imported goods.  The authorities indicated that domestic and non-Chinese-Taipei enterprises have been eligible for these subs idies on an equal basis. 
90. Subsidies provided to the above-listed activ ities during 2005-08, were estimated at 
NT$502.62 billion, of which more than  81% was disbursed in 2008.   
91. The government-owned Taiwan Power Compa ny (Chapter IV) is required to provide 
electricity at preferential rates ranging from 5% to 50% to, inter alia,  agriculture (5%-50%) and 
electrified railways (15%), representing NT$2.7 million and NT$5.6 million, respectively.  Price 
                                                     
 
72 Total factor productivity (TFP) re flects the efficiency with which f actors of production are used and 
is thus a major determinant of an economy's performance.  TFP should be distinguished from labour 
productivity, which is the amount of output per employee or per hour.  T FP growth and capital accumulation are 
the main determinants of improvemen ts in labour productivity.  Capita l accumulation contributes to improved 
labour productivity by increasing the amount of  capital that employees have to work with. 
73 For further details about these subsidies, see WTO documents G/SCM/N/155/TPKM, 
5 September 2007, and G/SCM/N/186/TPKM, 7 July 2009. 
74 China Post,  "Export ban on fertilizer to remain:  COA", 27 August 2008.  Viewed at:  
http://www.chinapost.com.tw/business/2008/ 08/27/172000/Export-ban.htm [13 May 2009]. 
75 Economist Intelligence Unit (2008b). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 59 
 
 
control measures have been in place for mijui  rice-wine produced by the government-owned TTLC 
(section (4)(i)(a)) and fertilizers (section (3)(iii)). 
(iii) Trade-related investment measures 
92. Chinese Taipei does not maintain any local-c ontent or trade-balancing requirements.  
(iv) Standards and other technical requirements 
(a) Standards, technical requirements, and inspection 
93. During the period under review no changes were  made to Chinese Taipei's main legal 
instruments regulating standardization and inspectio n, e.g. the Standards Act and the Weights and 
Measures Act.  The Commodity Inspection Act was re vised in 2007 and its changes mainly involved:  
the use of risk management princi ples for pre-market inspection to facilitate trade;  the imposition of 
obligations on distributors not to display or sell pr oducts not complying with inspection requirements;  
the imposition of obligations on business operators to  notify incidents caused by their products;  and 
adjustment of penalties.  The Bureau of Sta ndards, Metrology and Inspection (BSMI), under the 
Ministry of Economic Affairs, remains in charge of, inter alia,  the development and promotion of 
standards;  commodity inspections in accordan ce with mandatory technical regulations;  and 
voluntary product and management systems certifi cation.  The BSMI ha s concluded cooperation 
arrangements with 34 organizations in 24 countries.76  It is also responsible for the full 
implementation of the Mutual Recognition Agreement on Electro-Magnetic Compatibility77, and is a 
signatory to the International Committee of Wei ghts and Measures Mutual Recognition Arrangement.  
The BSMI participates in APEC and the Organisati on Internationale de Métrologie Légale (OIML) 
and is the enquiry point under the WTO Ag reement on Technical Barrier to Trade. 
94. Chinese Taipei's standards policy is intended to  promote standardization;  pursue quality 
improvement for products, processes, and services;  in crease productivity;  and ensure adequacy of 
production, transportation, marketing, and c onsumption so as to promote public safety.  
95. Domestic standards are voluntary, except for t hose designated as techni cal regulations.  At 
end-March 2009, there were 14,329 domestic standa rds in Chinese Taipei (13,981 in October 2005), 
of which 221 (1.5%) were designated as technical re gulations.  At the same time, 18% (25% in 2005) 
of domestic standards were harmonized with  international ones in 2009 (Table III.7).78  The BSMI 
adopts relevant international standards when the sc ope, grade, condition, and level of application are 
appropriate for domestic circumstances.  All sta ndards newly introduced between 2005 and 2009 were 
harmonized with existing international ones;  th ese standards pertain to engineering (railway, 
nuclear), environmental management, domestic wares, and information and communication. 
                                                      
76 Cooperation agreements have been signed with certification organizations in Australia, Austria, 
Belgium, Canada, Czech Republic, France, Germany, H ungary, Israel, Italy, Ja pan, Republic of Korea, 
Malaysia, Mongolia, the Philippines, Poland, Saudi Arabia, Singapore, South Africa, Sweden, Switzerland, 
Thailand, the United States, and Viet Nam. 
77 Chinese Taipei has concluded mutual recogniti on agreements (MRAs) with Australia, Canada, 
New Zealand, Singapore, and the United States.  Under the MRAs, the parties mutually accept test reports for 
specified electrical and electronic goods issued by respective conformity assessment bodies.  Chinese Taipei is a 
party to the APEC TEL MRA (Mutual Recognition Arrangement for Conformity Assessment of 
Telecommunications Equipment) and EEMRA (Mutual Recognition Arrangement on Conformity Assessment for Electronic and El ectrical Equipment). 
78 At the end of March 2009, 3,499 (4,983 in 2005) domestic standards had corresponding international 
standards (Table III.7);  74.16% (71% in 2005) of th ese domestic standards were aligned to international 
standards. WT/TPR/S/232 Trade Policy Review 
Page 60 
 
 
96. Mandatory technical regulations are governed by  the relevant authorities under various laws 
and regulations;  these authorities issue conformity certificates.  Technical regulations are mainly applied to certain chemical products, electrical products, and electronic and mechanical products 
(Table III.7). 
Table III.7 
Domestic standards and thei r equivalence to internationa l standards, end-March 2009  
Domestic standards equivalent to 
international standardsb 
(B)=(C)+(D) 
Area Total 
domestic 
standards Existence of 
international 
standardsa 
(A) Number of 
domestic 
standards 
equivalent to 
international 
standards 
(B) Mandatory 
technical 
regulation 
(C) Voluntary 
standards 
(D) Rate of 
equivalence 
(E)=((B)/(A))x100 
Civil engineering and 
architecture 668 63 58 4  54  92.1 
Mechanical 
engineering 2,196 412 280 19  261  68.0 
Electrical engineering 1,103 668 253 71  182  37.9 
Electronic engineering 878 227 183 3  180  80.6 
Automotive and 
aerospace engineering 498 32 28 4  24  87.5 
Railway engineering 88 14 14 0  14  100.0 
Shipbuilding 
engineering 397 29 10 0  10  34.5 
Ferrous materials and 
metallurgy 390 161 151 2  149  93.8 
Non-ferrous materials 
and metallurgy 276 88 37 0  37  42.0 
Nuclear engineering 48 1 1 0  1  100.0 
Chemical industry 2,872 185 183 40 143 98.9 
Textile industry 353 85 82 0  82  96.5 
Mining 344 89 49 0  49  55.1 
Agriculture 454 81 61 32  29  75.3 
Food 529 191 161 20  141  84.3 
Wood industry 79 33 32 14  18  97.0 
Pulp and paper 
industry 209 63 55 0  55  87.3 
Environmental 
management 23 21 21 0  21  100.0 
Ceramic industry 419 101 59 0  59  58.4 
Domestic wares 341 9 9 0  9  100.0 
Medical equipments 
and appliances 388 139 122 4  118  87.8 
Information and 
communication 738 482 480 0  480  99.6 
Industrial safety 221 40 30 0  30  75.0 
Quality control 73 41 39 0  39  95.1 
Physical distribution 
and packaging 185 30 19 0  19  63.3 
General and 
miscellaneous 559 214 178 8  170  83.2 
Total 14,329 3,499 2,595 221  2,374  74.16 
a Number that have corresponding international standards. 
b A domestic standard that is identical with or modifies corre sponding international standards is considered as equivalent to 
international standards. 
Source: Information provided by the Chinese Taipei authorities. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 61 
 
 
97. Products subject to mandatory technical regulations are subject to commodity inspection in 
accordance with the Comm odity Inspection Act.79  Inspection is carried out by the BSMI for industrial 
and mining commodities, imported products (incl uding food products), and those destined for 
exportation.  Import inspections increased fro m 335,780 cases in 2004 to  386,457 in 2009 
(Table III.8) as a result of a rise in food inspections80;  there has been no inspection of exports since 
2004.  Commodity inspection is conducted under f our schemes:  batch-by-batch, monitoring, 
registration of product certification, and declaration of conformity.  The authorities are of the view 
that Chinese Taipei applies the same type of commodity inspection procedures to domestically 
produced goods and imports.81  The commodity inspection standards are determined and identified in 
accordance with the obligati ons in international conve ntions and in reference to domestic standards. 
Table III.8 
Commodity inspection, by type, 2004-09 
Import inspection 
Year Total 
Food productsa Others Total Inspection for 
domestic marketb 
2004 344,923 300,118 35,662 335,780 9,143 
2005 354,574 310,914 35,304 346,218 8,356 
2006 359,233 319,617 32,864 352,481 6,752 
2007 394,931 355,957 32,452 388,409 6,522 
2008 401,534 366,194 29,369 395,563 5,971 
2009 392,363 355,444 31,013 386,457 5,906 
a The BSMI conducted the inspection of imported food products  on behalf of the Department of Health (DOH) under an 
interagency commissioned arrangement. 
b The products do not include domestically produced food products as these are inspected by the DOH. 
Source:  BSMI online information.  Viewed at:  http://www.bsmi.gov.tw/ws ite/public/Data/fl225266657797.xls 
[2 July 2009]. 
98. Manufacturers may apply to the BSMI for the CN S Mark to demonstrate that their products 
comply with related domestic standards.  The CN S Mark is voluntary and is granted when:  the 
quality management system (QMS) of the factory complies with the criteria specified by the BSMI;  
and the products are tested in accordance with rele vant domestic standards.  The BSMI accepts QMS 
certificates issued by recognized QMS certificati on bodies.  Any QMS certification body may apply 
to the BSMI for recognition if it is accredited by the domestic accreditation foundation or by an 
accreditation body that is located in the same count ry as the QMS certification body and that is a 
member of the Multilateral Recognition Arrangeme nts (MLA) of the International Accreditation 
Forum, Inc. (IAF) or the Pacific Accreditation C ooperation (PAC).  The authorities indicated that 
Chinese Taipei's conformity assessment requirement s do not create unnecessary obstacles to trade.  At 
end 2008, 616 factories and 1,897 products  were registered under the CNS Mark.   
99. Proposals by any person, government agency or  organization for adopting new domestic 
standards are submitted to the BSMI and re viewed by the Standards Review Council.82  Notices of 
                                                      
79 According to the Act, the purpose of commodity inspection is to ensure compliance of commodities 
with safety, health, and environmental protection requir ements, as well as to protect consumers' rights and 
interests, and to promote sound development of economic activities. 
80 As the inspection of domestically manufactured food products is carried out by the Department of 
Health (DOH), data on these inspections are not contained in Table III.8. 
81 Chinese Taipei has applied a Supplier's Decl aration of Conformity (SDoC) since 2001 and 
self-verification for measuring instruments since 2003;  a total of 65 products have been covered by the SDoC 
since 2002, including chemical pro ducts, electric and electronic products , and personal protective equipment. 
82 For further details about standardization procedures  and other matters in this area, see WTO (2006). WT/TPR/S/232 Trade Policy Review 
Page 62 
 
 
proposed technical regulations, standards, and pro cedures for conformity assessment are published in 
the Government Gazette  (http://gazette.nat.gov.tw/egFront/eng/EngIndex.jsp) and are available on the 
BSMI website (http://www.bsmi.gov.tw).  The work programme on domestic standards, as required in 
Annex 3(j) of the WTO TBT Agreement, is published in the Standards Gazette .  Between 1 January 
2005 and mid-March 2010, Chinese Taipei submitted 77 notifications under Articles 2, 5, and 10 of 
the WTO TBT Agreement. 
(b) Sanitary and phytosanitary arrangements83 
100. During the period under review, most of the ma in laws and regulations governing sanitary and 
phytosanitary (SPS) measures, including the Statute for Prevention and Control of Infectious Animal 
Diseases, the Plant Protection and Quarantine Ac t, the Law Governing Food Sanitation, the 
Quarantine Requirements for the Importation of Animals or Animal Products, and the Quarantine Requirements for the Importation of Plants and Plant Products, have been amended at least once.
84  To 
strengthen the safety management of food products , the Act Governing Food Sanitation was amended 
and promulgated on 11 June 2008;  the main amen dment raised the amounts of fines for illegal foods 
with pesticide residue, veterinary drugs exceeding the permissible tolerance level, and misleading 
labels and advertisements .  In 2008, the penalty provisions in the Plant Protection and Quarantine Act 
and Statue for Prevention and Control of Infecti ous Animal Disease were revised for international 
passengers who fail to apply for animal and plant quarantine.  On 5 January 2010, Chinese Taipei 
amended its Food Sanitation Act to ba n the import of skulls, brains, eyes, spinal cord, offal, and all 
ground beef from any country that has had a Bovi ne Spongiform Encephalopathy case, for a period of 
ten years from the country's most recent case.85   
101. The Bureau of Animal and Plant Health Inspection and Quarantine (BAPHIQ), under the 
Council of Agriculture, is, inter alia,  responsible for establishing a nd executing SPS-related policies 
as well as for animal and plant disease control, hea lth inspection and pest control, quarantine, 
veterinary drug administration, and meat hygiene and inspection.  It also performs mandatory 
inspection of domestically produced food products, whic h are regulated by the Department of Health.  
Following the establishment of the Food and Drug Administration (FDA) on 1 January 2010, four bureaus under the DOH were streamlined into one;  as from 1 January 2011, it will enforce inspection of imported food items, an activity currently commissioned by the DOH to BSMI. 
102. Under the Plant Protection and Quarantine Act,  imports (or transhipments) of soil and 
restricted plants require Council of Agriculture approval.  Plants or plant products subject to 
quarantine requirements must be imported with a phytosanitary certificate issued by the exporting 
country.  An importer must apply for the plant quarant ine before the arrival of plants or plant products 
at the port of entry.  Exporters of plants or plan t products may apply for a phytosanitary certificate, if 
so requested by an importing country.   
103. No new cooperation agreements in this area have been signed since 2006.  Chinese Taipei 
maintains a bilateral arrangement with the New Zealand Commerce and Industry Office in Taipei on 
the promotion of mutual cooperation on plant quar antine issues. SPS measures ar e also covered in the 
free-trade agreement with Panama.
86  Bilateral technical consultations  and negotiations with trading 
partners and participation in multilateral organizations, such as the WTO SPS Committee and the 
                                                      
83 For further details about legislative and ot her matters in this area, see WTO (2006). 
84 BAPHIQ online information.  Viewed at:  http://www.baphiq.gov.tw/. 
85 Meat International online information.  Viewed at:  http://www.meatinternational.com/ 
news/food-safety/usmef-statement-disappointment-in-t aiwans-amendment-to-food-sanitation-law-id2218.html 
[22 February 2010]. 
86 In the FTA, Chinese Taipei and Panama agreed to set up a committee on SPS measures. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 63 
 
 
World Organisation for Animal Health (OIE) are under the responsibility of the BAPHIQ.  Chinese 
Taipei recognizes non-Chinese-Taipei quarantine st andards and SPS measures as equivalent as long 
as these achieve the appropriate level of sanitary  and phytosanitary protection.  Based on OIE 
standards, at present there are no quarantine requirements and measures for pork or pig imports 
against the H1N1 influenza pandemic.   
104. Since 1 January 2008, alcohol product manufact urers and importers must comply with the 
Hygiene Standards for Alcohol Products on antiseptics,  colorants, and additives, or face penalties of 
up to NT$90,900.87 
105. Foodstuffs designated by the authorities, such as special dietary food, imported food in tablet 
or capsule forms, food additives, and food containing  GMOs are subject to licences;  these are valid 
for up to five years, with the possibility of extens ion for another five years.  Chinese Taipei only 
regulates corn and soybeans and their products derived from recombinant-DNA.88  Prior registration 
and approval is required from the DOH Food Safety Bu reau for biotech soybean and corn imports for 
food, feed, or processing use as well as for exports .  In May 2008, Chinese Taipei implemented 
registration for "stacked events"89;  Chinese Taipei has approved 29 of the most widely 
commercialized bioengineered corn and soybean ev ents.  Newly registered "stacked events" are 
required to meet regulatory food safety assessment requirements in order to verify food safety and protect human health;  the authorities indicated that  the relavant approval procedure would not disrupt 
trade.   
106. Although Chinese Taipei is not a member of either Codex or the International Plant 
Protection Convention (IPPC), the authorities do take international standards, guidelines and 
recommendations of IPPC into consideration.  Chinese Taipei accepts Codex pesticide residue 
standards on a provisional basis for a limited nu mber of already recognized chemicals used on 
imported fruits and vegetables.
90  The authorities consider that bo th the establishment and process of 
evaluating pesticide maximum residue  limits (MRLs) should also be in line with the domestic dietary 
pattern and total dietary intake;  they would eventual ly be established on the basis of risk assessments.  
To speed up and improve the transparency of th e risk assessment procedure for establishing import 
tolerances, in July 2008, Chinese Taipei established a priority list of 218 MRLs, a small part of the 
MRLs approved for use by Codex91;  out of this list, 88 permanent MRLs had been established and 
33 draft MRLs had been notified to the WTO by the time of completion of this report 
(mid-March 2010).  The DOH is to review applica tions for these high-priority MRLs over the next 
two to three years in an effort to  reduce the backlog for establishing p esticide tolerance.  By end 2009, 
the DOH had published and enforced 392 pesticide MRLs.   
107. Chinese Taipei has delayed implementation of the draft Codex Maximum Residue Limit for 
ractopamine (a growth promotant), although it notif ied the WTO of its plans to adopt this draft.92  The 
                                                      
87 USTR (2009). 
88 USTR (2009). 
89 A genetically modified organism (GMO) and all subsequent identical clones resulting from a 
transformation process are called a transformation event.  If more than one gene from another organism has 
been transferred, the created GMO has stacked genes (o r stacked traits), and is called a gene stacked event 
(http://en.wikipedia.org/wiki/Gene_stacked_event).  In most contexts, the difference between a GMO with one 
new trait and a GMO with several is negligible.  However, when the GM content of a harvest or any GM 
product is being measured, stacked genes may have seve re consequences.  Many countries require the labelling 
of GM products if the GM share of a single ingredient ex ceeds certain limits. 
90 USTR (2009). 
91 USTR (2009). 
92 WTO document G/SPS/N/TPKM/114, 16 August 2007;  and USTR (2009). WT/TPR/S/232 Trade Policy Review 
Page 64 
 
 
ban on the use of β-agonist  group of chemicals (including ractopamine) in food-producing animals is 
still in effect.  Various stakeholders hold different  opinions and animal farmers particularly have 
strong objections against establishing the ractopamine MRL93;  therefore the DOH is continuing 
consultations with a view to formulating a ractopa mine management policy.  Concern over this issue 
was expressed in the October 2008 WTO SPS Comm ittee meeting where Chinese Taipei indicated 
that the use of ractopamine was forbidden by ma ny WTO Members and that the Codex Alimentarius 
Commission had also been unable to make a final decision on MRLs for ractopamine.94   
108. Chinese Taipei has adopted WTO/SPS principles for the implementation of food sanitation 
regulations.  Chinese Taipei established or revised  34 food sanitation standards in 2009 (16 in 2007) 
in addition to the 392 pesticide residue limits (di scussed above), and sanitation standards for infant 
foods, food ustensils, food containers a nd packages, fishery products, etc.  
109. Between 1 January 2005 and mi d-March 2010, some 201 notifi cations were submitted under 
the WTO Agreement on Sanitary and Phytosanitary  Measures (the SPS Agreement).  This includes 
141 regular notifications;  no emergency notifica tions were submitted during this period.   
(c) Labelling 
110. Labelling is governed by the Commodity Labelling Law last amended in 2003.  
Chinese Taipei has no ingredient-labelling requireme nts for alcoholic bevera ges, though beverages 
must include a warning label stating that ex cessive drinking is harmful to one's health.95  Chinese 
Taipei requires labels on foods cont aining biotechnology corn or soybeans.96  All food products 
containing 5% or more bioengineered soybean or co rn ingredients by weight must be labelled as 
"Genetically Modified (GM)" or "Containing Gene tically Modified".  Highly processed food items 
(items with no proteins or DNA) do not require GM labels. 
111. Under the new Imported Organic Agricultural Product and Organic Agricultural Processed 
Products regulations, which were  promulgated in 2007 and implemented as from 29 January 200997, 
the product packaging must be labelled with a non-duplicative "serial" number approved by the 
Council of Agriculture (COA) on a batch basis for ev ery organic product shipment to Chinese Taipei.  
With a view to avoiding repetitive certification a nd reducing certification costs for imported organic 
agricultural products and organic agricultura l processed products, the COA recognizes the 
accreditation and certification results of countries in which the management systems of organic 
agricultural products are equivalent to those of Chin ese Taipei.  However, to ensure the protection of 
consumers' rights, the COA verifies that each ba tch of imported organic agricultural products or 
organic agricultural processed products is certif ied by accredited certification bodies of countries 
recognized by the COA.  A certification documen t demonstrating that th e products have obtained 
organic certification must be provided by the impor ter along with the application.  Importers must 
apply to the COA for the organic labelling approval doc uments according to the re levant provisions of 
the Organic Import Regulations.  To ensure the timely  delivery of products that have a short shelf-life, 
the COA gives priority to applications relating to  imported fresh organic ag ricultural products, and 
shortens the review time so as to preser ve the quality of perishable products.  
                                                      
93 According to the authorities, the use of ractopamine in food-producing animals is forbidden by many 
WTO Members for food safety and animal welfare reasons. 
94 WTO document G/SPS/R/53, 22 December 2008. 
95 USTR (2009). 
96 USTR (2009). 
97 USTR (2009). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 65 
 
 
(v) Intellectual property rights 
112. The protection of intellectual property rights (IP Rs) is of crucial impor tance in developing 
Chinese Taipei into a knowledge-, innovation- a nd R&D-based economy and th us in attracting FDI.98  
Since its previous TPR, Chinese Taipei has strengthe ned IPR protection, particularly in the area of 
copyright, and its enforcement regime (see below).99  Work to amend patent, trade mark, and 
copyright legislation is ongoing.   
113. Chinese Taipei committed to fully apply the TR IPS Agreement by the date of its accession to 
the WTO;  the authorities consider that they have fully implemented the Agreement.  The legislation 
was reviewed at the WTO TRIPS Council's meeting of 17 to 20 September 2002;  Chinese Taipei 
replied to questions raised by Members.100  Since its previous TPR, Chinese Taipei has participated 
actively in the work of the Council on TRIPS and has not submitted any new notifi cations in this area.  
Apart from TRIPS, Chinese Taipei ensures coopera tion on, and protection of, IPRs within the 
framework of the APEC.  As it is not a Member of  WIPO, Chinese Taipei is not a signatory to any 
WIPO conventions.  Chinese Taipei has sought to implement cross-border IP protection requirements 
and obligations through 18 bilateral instruments,  particularly prior to its accession to the WTO.101  
These agreements remain in place,  except for the IPR MOU with Ni caragua, which was incorporated 
in the relevant FTA signed in J une 2006 (Chapter II);  new or re newed agreements or MOUs have 
been signed with the Philippines (2007), Spain (2008), and Australia (2008).   
114. The MOEA's intellectual property office (TIPO) is  responsible for:  formulating IPR-related 
policy;  administration of IPR registration and public IP awareness;  settling disputes, and 
enforcement of IPR-related laws;  inter-agency coordination;  and promoting cooperation with 
Chinese Taipei's trading partners.  IPR legislation is made available on TIPO's website (http://www.tipo.gov.tw/en/index.aspx) in bot h Chinese and English in most cases. 
115. In accordance with relevant laws and re gulations, both domestic and non-Chinese-Taipei 
applicants for IPR protection receive the same level of protection
102;  application procedures in terms 
of time and fees are also the same.  
116. In 2008, 38.6% of patent applications were  submitted by non-Chinese-Taipei applicants, 
slightly less than in 2006 (Table III.9);  the incr ease in applications by locals was the outcome of 
domestic policies encouraging inno vation and R&D.  The share of non-Chinese-Taipei applicants in 
the total trade marks applications was 23.7% in 20 08;  24.8% of all approved trade marks pertain to 
overseas applicants. 
                                                      
98 Chinese Taipei Representative Office in Belgium (2007). 
99 As a result, on 18 January 2005, the Office of  the United States Trade Representative removed 
Chinese Taipei from its Special 301 Priority Watch list and placed it on the less stringent Watch List;  moreover, 
as of 16 January 2009, Chinese Taipei was removed from the Special 301 Watch List, for the first time since 1998 (International Intellectual Property Alliance, 2009). 
100 WTO document IP/Q/TPKM/1-IP/Q2/TPKM/1-IP/Q3/TPKM/1-IP/Q4/TPKM/1, 8 June 2004.    
101 These are with Austria, Australia, Chile, Cost a Rica, El Salvador, th e EU, France, Germany, 
Guatemala, Japan, Liechtenstein, the Netherlands,  New Zealand, Paraguay, Spain, Switzerland, the 
United Kingdom, and the United States. 
102 According to the authorities, the granting of IPR pr otection is in conformity with Article 3 of the 
TRIPS Agreement.  Nonetheless, it is apparently subject to reciprocity if:  the country of a non-Chinese-Taipei 
applicant is not from a country signatory to a regional/mul tilateral agreement to which Chinese Taipei is also a 
signatory;  or that this country has not concluded an agreement with Chinese Taipei on reciprocal protection of 
IPRs (patents and trade marks);  or if the Acts of the country do not accept patent ap plications filed by Chinese 
Taipei persons (Article 4, Patent Act;  Article 3, Tr ademark Act;  Article 4, Copyright Act;  and Article 5, 
Integrated Circuit Layout Protection Act). WT/TPR/S/232 Trade Policy Review 
Page 66 
 
 
Table III.9  
IPR applications and approvals, 2004-09  
(Number and %) 
Patents Trade marks  
Application Approvala Published 
Certificate Application Registration 
2004 Total 72,082 27,717 21,893 61,667 54,912 
 Domestic 59.68 57.42 80.40 78.83 73.25 
 Overseas 40.32 42.58 19.60 21.17 26.75 
2005 Total 79,442 n.a. 57,236 63,580 55,181 
 Domestic 60.07  n.a. 73.95 79.05  77.53 
 Overseas 39.93  n.a. 26.05 20.95  22.47 
2006  Total 80,988 n.a. 48,774 65,457 54,597 
 Domestic 60.04 n.a.  69.24 78.08 76.88 
 Overseas 39.96 n.a.  30.76 21.92 23.12 
2007 Total 81,834 n.a. 49,006 62,111 51,326 
 Domestic 60.60 n.a.  69.52 76.27 76.31 
 Overseas 39.40 n.a.  30.48 23.73 23.69 
2008 Total 83,613 n.a. 42,283 60,120 49,500 
 Domestic 61.40 n.a.  76.54 76.31 75.19 
 Overseas 38.60 n.a. 23.46 23.69 24.81 
2009 (Jan-Nov) Total  56,296  n.a 32,643  43,256  36,157  
 Domestic 64.51 n.a 76.83 78.76 73.75 
 Overseas 35.49 n.a 23.17 21.24 26.25 
n.a. Not applicable. 
a "Approval" is the number of published a pprovals.  This system was replaced by the published certificate system on 1 July 2004 , 
which issues a certificate at the same time as the approval is published. 
Source: Information provided by the Chinese Taipei authorities.  
(a) Copyright and neighbouring rights   
117. During the period under review, the Copyright Act was amended three times.103  Amendments 
passed in May 2006 related to infringement, offence, and complaint procedures.  The July 2007 amendments concerned the definition of infringemen t of copyright or plate rights, and corrective 
action taken by an enterprise violating certain provisi ons of the Act by means of public transmission;  
these amendments made it illegal, and subject to civ il and criminal liability, for anyone to provide file 
sharing services (such as "peer-to-peer" (P2P)) or other technology with the intent to facilitate 
infringement on the Internet and gain profits as a result thereof.
104  These amendments also provide 
authorization to close an infringing "peer-to-peer" service once there is a conviction.  The May 2009 
amendment introduced changes consisting of new provi sions on the limitations of liability for internet 
service providers (ISP);  reportedly, this is a si gnificant advance and the logical step following the 
P2P legislation in 2007.  The revision is to clarify th e legal liability of an ISP when its client uses the 
provided service to engage in copyright infringement activities over the Internet.  However, if the ISP, 
after being notified by the rights holders, remove s or disables access to the alleged infringing 
materials, this may serve as the basis for legal liability exemption.  This revision would enhance 
                                                      
103 For further details on these amendments, s ee TIPO online information.  Viewed at: 
http://www.tipo.gov.tw/en/AllInOne_Show.aspx?p ath=2557&guid=26944d88-de19-4d63-b89f-864d2bdb2dac& 
lang=en-us [22 July 2009]. 
104 File sharing is the practice of distributing or providing access to digitally stored information, such as 
computer programs, multi-media (audio, video), documents, or electronic books.  It may be implemented in a 
variety of storage, transmission, and distribution models.  One of the most popular options for sharing files on the Internet is peer-to-peer networks (International Intellect ual Property Alliance, 2009). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 67 
 
 
copyright protection as it encourages ISPs to act e xpeditiously to deter copyright infringement on 
Internet.  The amendment to the Copyright In termediary Organization Act was adopted in 
January 2010;  as a result, the copyright collective management system should be operated in a more 
orderly manner, the rights of copyright owners s hould be protected, and copyright users should be 
facilitated in obtaining a licence. 
118. Copyright is granted for oral and literary work s, musical works, dramatic and choreographic 
works, artistic works, photographic works, pict orial and graphical works, audiovisual works 
(cinematography), sound recordings (phonograms) , architectural works, computer programs, 
derivative works, compilation works, and artists' performances.  No legislation exists for the 
protection of broadcasting organizations.   
119. Works of citizens of Chinese Taipei's trading part ners are protected when there is a reciprocal 
arrangement with TIPO contained in a bilatera l or multilateral agreement.  Works of citizens 
originating in countries without these reciprocity arrangements are also protected provided they are published first in Chinese Taipei, or within 30 da ys of being published el sewhere.  In general, 
copyright protection commences from the point of accomplishment of the work and is extended for 
the lifetime of the author plus 50 years, with the exception of certain categories of works, such as 
photographic works, audiovisual works, sound reco rdings, and artists' performances, which are 
granted 50 years protection from the time of their public release. 
(b) Patents 
120. The Patent Act has not been amended during the review period.  Amendments to the 
implementation rules of the Act, to reduce the e-fi ling application fees, and to the patent rules and 
regulations, to further simplify the e-filing appli cation forms, were made in May and August 2008, 
respectively.  A Patent Attorney Act for the establishment of a comprehensive IPR legal system, 
enhancement of applicatio n quality, and strengtheni ng the rights of patent applicants was passed on 
11 January 2008.
105  At end 2009, the authorities were working on the legislative procedure to amend 
the Patent Act.  The main amendment areas incl ude expanding the use of the grace period, allowing 
animal and plant patents, adapting the applicati on format, introducing a reinstatement mechanism, 
experimental exemption, clarifying the requirement s of the patent term extension on pharmaceutical 
patents, introducing the Paragraph 6 mechanism of the Doha declaration, compulsory licensing, and 
the invalidation procedures.  For the purpose of legi slative transparency, the authorities held 23 public 
hearings, and circulated each version of the amendments.  
121. Patents are granted for inventions, utility models , and designs.  Protection of patent rights for 
inventions is for 20 years from the date of filing the patent application;  protection for utility models is 
10 years, and for design patents 12 years.  TIPO handles patent applications;  when a patent is 
granted, it is published in the Patent Gazette .  
122. Plant varieties are protected under the Plant Vari ety and Plant Seed Act.  The law covers plant 
varieties that have the characteristics of novelty, distinctness, uniformity, and stability, as well as an 
appropriate plant variety denomination.  
(c) Compulsory licensing 
123. In May 2008, the legislature accepted the Prot ocol Amending the TRIPS Agreement;  in the 
context of the amendment of the Patent Act, the legislative work to incorporate the Paragraph 6 
                                                      
105 TIPO online information.  Viewed at:  h ttp://www.tipo.gov.tw/en/A llInOne_Show.aspx?guid= 
437f62da-1b07-42c9-a0cf-c5ecdc241397&lang=en-us&path=1458. WT/TPR/S/232 Trade Policy Review 
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mechanism of the Doha declaration is under way.106  Under Chinese Taipei's IPR laws, compulsory 
licensing is allowed in the event of domestic emer gencies, or to make non-profit-seeking use of a 
patent or circuit layout for the enhancement of  public welfare.  If a licensing agreement with 
reasonable commercial terms and cond itions and within a reasonable peri od of time fails, or if the 
patentee has imposed restrictions on competition or  has created unfair competition, the authorities 
may grant a compulsory licence.107  If the reasons for a compulsory licence for a patent or circuit 
layout cease to exist, the compulsory licence may be terminated upon application.  Concerning 
copyright protection, a compulsory licence may be  granted for making a commercial sound recording 
of a musical work, if the work has been publis hed for six months or more by an earlier sound 
recording and compensation is paid.  No compul sory licences are granted for utility models and 
designs.  To date, there have been two cases of compulsory licensing for rewritable/recordable 
compact discs and for the Tamiflu  anti-virus drug.108  
124. Chinese Taipei imposes no restrictions on royalty payments for licensing IPRs, based on the 
principle of freedom to private contracts.  Howe ver, once economic rights holders join one of the 
seven copyright intermediary organizations, rat es are examined and approved by the Copyright 
Regulatory and Mediation Board.  Nevertheless, in  respect of the free negotiation mechanism of the 
licensing market, Chinese Taipei's forthcoming amendments to the Copyright Intermediary 
Organization Act (section (a) above) would replace the existing re-approval system with one where 
reporting of the rate change would suffice.  The co mpetent authority would only examine the royalty 
rate in the case of a dispute.  A royalty rate parame ter for calculating the rate of royalty has also been 
incorporated in the amendments as a reference ra te for a copyright intermediary organization.  
(d) Trade marks and geographical indications 
125. Trade mark protection is valid initially for ten y ears, and is renewable.  The Trademark Act of 
6 May 1930, was last amended on 28 May 2003;  the Enforcement Rules of the Act were last 
amended on 3 September 2007.109  The amendment related to file opposition procedures and 
designated the class(es) of goods or services.  At end 2009, the authorities were drafting amendments 
to 109 acticles of the Trademark Act.  Planned am endments include:  extending the scope of trade 
                                                      
106 Amendments relating to the granting of a compulsory licence would be as follows:  in the event of 
domestic emergencies or other circumstances of extreme urgency, the competent patent authority may issue 
compulsory licences by Decree or notification from the required government agencies;  in the event that the 
patent owner has imposed restrictions on competition or has committed unfair competition, as determined by a 
court judgment or disposition by the Fair Trade Co mmission of the executive;  and in the event of 
non-commercial public use or the exploitation of first patent, if the a pplicant has failed to reach a licensing 
agreement under reasonable commercial terms and conditions within a reasonable period ( Managing IP 
magazine , 20 June 2008.  Viewed at:  http://www.managingip.com/Article/1960252/Taiwan-approves-
compulsory-licensing-change.html [27 July 2009]). 
107 Article 76-2 of the Patent Act provides the basis for competitive granting of compulsory licences.  
By virtue of Article 45 of the Fair Trade Act, th e Fair Trade Commission investigates if competition is 
restrained.  The FTC adopted Guidelines on Technology Licensing Arrangements on 18 January 2001, whereby 
patents, know-how, or a combination of the two are licensed. 
108 The first compulsory licence, which concerned rewritable/record able compact discs (CDRs), a 
technology developed by a non-Chinese-Taipei company, da tes back to 2004 and was appealed by the patentee;  
it was terminated with effect from 1 June 2007.  On 8 December 2005, the authorities issued a licence to allow 
local companies to manufacture generic versions of Tamiflu .  The Tamiflu  compulsory licence was terminated 
on 31 December 2007;  there was no dome stic manufacture and/or export of Tamiflu  during the compulsory 
licence period (Europa online information.  Viewed at:  http://trade.ec.europa.eu/doclib/docs/2008/january/ 
tradoc_137634.pdf [27 July 2009]). 
109 For further details on this amendment, see TIPO online information.  Viewed at:  
http://www.tipo.gov.tw/en/AllInOne_Show.aspx?pat h=2532&guid=5b1c65cb-267c-4d0d-b95c-275ad8f50fc4& 
lang=en-us [27 July 2009]. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 69 
 
 
mark protection to all signs that can be represen ted graphically;  inserting relief measures in case of 
failure to comply with time limits;  extending th e condition on applying the provision of "well-known 
trade mark being deemed as infringement" from actual dilution of the distinctiveness or reputation to 
likelihood of dilution;  and inserting regulations whereby Customs provide relevant information 
regarding infringing goods to the right holder.  For the purpose of legislative transparency, the 
authorities held six public hearings and four semina rs, and circulated all versions of the amendment. 
126. A claim for priority rights is allowed within six months of the day of filing a trade mark with 
the relevant authorities of a WTO Member.  A claim for priority rights in Chinese Taipei must be 
made at the same time as an application for trade mark is filed in Chinese Taipei;  a certified copy of 
the application admitted by the applicant's country must be submitted within three months of the day 
following filing in Chinese Taipei.   
127. Chinese Taipei protects geographical indications (GIs) under the Trademark Act.110  T o  
recognize GIs and generate a GI protection list, Chin ese Taipei promulgated the Operational Points on 
Application for Registration of GIs as Certifica tion Marks on 2 September 2004.  The Operational 
Points were replaced by the Examination Guidelin es on Certification Marks, Collective Trademarks 
and Collective Membership Marks on 25 July 2007.  
(e) Integrated circuits 
128. Layouts of integrated circuits are protected by the Integrated Circuit Layout Protection Act of 
11 August 1995, last amended in 2002.   Registration is available for integrated circuit layouts that 
comply with the criteria of originality;  protection is for ten years from the date of application or the 
date of first commercial exploita tion, whichever is first.   
(f) Trade secrets 
129. Chinese Taipei protects trade secrets under the Trade Secrets Act of 17 January 1996.  
Undisclosed test data have been protected by the Pharma ceutical Affairs Act since 5 February 2005.  
Agri-pesticides are considered a trade secret in accordance with the Ru les of Agro-pesticide 
Toxicological Tests.  Trade secrets are apparently not protected if their owner's home country has not 
signed a bilateral agreement on trade secrets with Ch inese Taipei, or does not provide legal protection 
for trade secrets owned by Chinese Taipei persons.  Nonetheless, according to the authorities, trade 
secrets are protected in Chinese Taipei in conform ity with Article 3 of the TRIPS Agreement.  
(g) Parallel imports 
130. Parallel imports are allowed for patented goods ;  the court determines the exhaustion of 
rights.  This also applies to utility models and designs.  Parallel imports of trademarked goods and 
layout designs are also allowed.  By contrast, para llel imports of copyrighted products are prohibited;  
anyone who imports these goods without the authori zation of the right-holder, with the limited 
exception stipulated in the Copyri ght Act, such as personal luggage , etc., is considered to have 
infringed the rights and is subject to civil liability.   
                                                      
110 Protection for GIs on wines and spirits is also contained in the Tobacco and Alcohol Administration 
Act;  Article 33 of the Act provides that labelling should not constitute false or misleading representation. WT/TPR/S/232 Trade Policy Review 
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(h) Enforcement of IPRs 
131. Since its previous TPR, Chinese Taipei has c ontinued to adopt measures to strengthen the 
enforcement of its IPR legislation.  Enforcement efforts have resulted in piracy-rate decreases in 
certain major areas of copyright infringement, such  as those of music CDs and business software.111  
132. The Ministry of Economic Affairs IPR Action Plan for 2006-08 focused on Internet 
infringements, college campus piracy, and enhanc ing law enforcement officials' capacity and 
capability to implement IPR protection measures.112  In April 2007, the Ministry of Education (MOE) 
called for the issuance of additional programm es to deal with a number of campus-based 
infringements, including the wide use of TANet for P2P file sharing and other infringements.  The 
current IPR Action Plan, for 2009-11, which was approved on 2 February 2009, aims to build a 
stronger environment for IPR protection.113  It includes continued effo rts toward investigation, 
education, and awareness;  IPR protection on college campus;  and internationa l cooperation.  It also 
contains a number of new objectives, such as a dvocating legislation for the new ISP Bill to the 
Copyright Act, reviewing and integrating trad e mark export-monitoring measures, and studying 
unlawful practices like international circulation of counterfeit goods, counterfe it branding techniques, 
and unauthorized use of well-known trade marks by companies or business establishments.  In 2003, 
an Inter-agency Coordination Taskforce for IP En forcement was established to monitor the policy, 
legal framework, and enforcement in this area.  With the cooperation of several governmental and 
non-governmental institutions it has been acknowle dged for combating IPR infringement by several 
international governments and agencies.114  
133. All IP laws contain provisions on remedies in ca se of infringement.  In addition, right holders 
may bring legal actions based on civil, administrative, and criminal codes, as well as the Civil, Administrative, and Criminal Procedures Acts.  Infringements of IPRs result in, inter alia , 
destruction, disposition, suspension by Customs of  the release of goods, or confiscation (if so 
requested by the injured party), and fines.  Cr iminal liabilities upon infringement of copyrights and 
trade marks have been strengthened considerably;  infringers are now subject to imprisonment of not 
less than five years (not more than seven years in 2006) and to a fine of up to NT$5 million per 
infringement found (a total of NT$8 million per case in  2006).  Provisional measures of protection are 
provided for under the Civil Procedures Act.  
134. Prosecutors and police may act e x officio  in case of trade mark infringement.  As from 2004, a 
special IPR police (IPRP) force h as carried out random raids at night markets and retail shops 
suspected of piracy, and a Coordination Committ ee on IPR protection, focused mainly on the 
coordination of enforcement actions, was set up by the high prosecutor's office of the Ministry of 
                                                     
 
111 According to the 2009 Intellectual Property Allian ce (IIPA) Report, music CD piracy was estimated 
to have fallen from 36% in 2004 to 22% in 2008 and business software from 43% to 39% (Chinese Taipei Representative Office in Belgium, 2007;  and Inte rnational Intellectual Property Alliance, 2009). 
112 Chinese Taipei Representative Office in Belgium (2007). 
113 Ministry of Economic Affairs online information,  1 May 2009.  Viewed at: http://www.tipo.gov.tw/ 
en/News_NewsContent.aspx?NewsID=3436 [27 July 2009]. 
114 The Inter-agency Coordination Taskforce for IP Enforcement comprises representatives from the 
executive, the judiciary, the Fair Trad e Committee, the Ministry of Justice, the Ministry of Finance (Directorate 
General of Customs), the Ministry of the Interior (NPA, including IPR Police), the Ministry of Education, and 
the Ministry of Economic Affairs (TIPO, BOFT, JODE).  Its work has received the acknowledgement of trading 
partners, such as the United States, the EU, and Japan, as well as the IFPI (International Federation of the 
Phonographic Industry), MPA (Music  Publishers' Association), BSA (Bus iness Software Alliance), and TBPA 
(Book Publishers Association). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 71 
 
 
Justice to strengthen enforcement of the IPR laws, particularly against piracy.115  Specific control 
measures on imports and exports ar e taken.  Customs may suspend ex officio  the release of goods 
suspected of infringing IPRs.  In the case of optical disk piracy deemed to violate the Copyright Act, 
the prosecutor's office may initiate a public prosecution.   
135. To better cope with technically challenging IP R infringement cases, a Specialized IPR Court 
and the IPR Branch of the Chinese Taipei Hi gh Prosecutors Office commenced operations on 
1 July 2008.  At end 2009,  2,242 cases had been filed with the Court, of which 348 involved foreign 
nationals;  1,024 were civil lawsuits, 542 were cr iminal lawsuits, and 676 were administrative 
lawsuits.116  The IP Office of the High Prosecuto rs Office had received 425 cases, of which 
236 involved copyright violation and 107 trade mark  violation.  Overall, between 2005 and 2009, 
most of the investigated cases related to copyright and trade mark infringements (Table III.10).  The 
total number of adjudicated cases rose from 2,605 to 3,066 as a result of the strengthening of the 
penalties.  In 2008, less than half of total adj udicated cases resulted in imprisonment (Table III.11). 
Table III.10 
IP cases investigated and concluded by di strict public prosecutors' offices, 2005-09  
(Persons and %) 
Types of offence (affirmed cases)  
Total Copyright Trade mark Patent 
2005 5,415 2,541 2,862 12 
2006 6,381 3,565 2,801 15 
% change 2005/06 17.84 40.30 -2.13 25.00 
2007 8,058 4,481 3,576 1 
% change 2006/07 26.28 25.69 27.67 -93.33 
2008 8,003 4,184 3,814 5 
% change 2007/08 -0.68 -6.63 6.66 400.00 
2009 (Jan-Oct) 5,878 3,041 2,761 76 
% change 2008/09 (Jan-Oct) -10.55 -10.27 -13.12 1,800.00 
Source: Information provided by the Chinese Taipei authorities. 
136. Despite this considerable progress and c ontinuous government action for enhancing 
enforcement of IPR legislation, challenges appear to  remain in some areas, including the availability 
of counterfeit pharmaceuticals in Chinese Taipei, infringement of copyrighted material on the 
Internet, illegal textbook copying on and around university campuses117, trade mark counterfeiting (of 
cigarettes, alcohol, clothing, and luxury goods, mostly smuggled in or transhipped from abroad), sale of counterfeit goods over the Internet and inadequate protection for the packaging, configuration, and 
outward appearance of products (trade dress).
118  Reportedly, the Government's university computer 
network, TANet, which is operated by the Ministry of Education (MOE), continues to be widely used 
for Internet piracy, including unaut horized peer to peer (P2P) file sharing of all types of copyright 
                                                      
115 Its membership consists of the NPA (Ministry of th e Interior), the Investigation Bureau (Ministry of 
Justice), the TIPO (Ministry of Economic Affairs), an d the Directorate General of Customs (Ministry of 
Finance). 
116 The IPR court consists of nine judges and nine technical examination officers (transferred from 
TIPO) who have been allocated to first instance trials  (International Intellectual Property Alliance, 2009). 
117 These also include journals, En glish language teaching materials, and professional reference books 
(International Intellectual Property Alliance, 2009). 
118 USTR (2009);  and China Post,  "Value of seized cigarettes, alcohol nearly doubles in '07", 
19 January 2008.  Viewed at:  http://www.chinapost.com.tw/business/2008/01/19/139658/Value-of.htm [13 May 2009]. WT/TPR/S/232 Trade Policy Review 
Page 72 
 
 
material, including scanned acad emic texts and journals.119  On 25 November 2008, the MOE issued 
an order prohibiting the use of P2P file sharing software on TANet;  the order allows for some 
exceptions in certain circumstances, but the MOE ha s requested each level of the educational system 
to implement this new policy.120  However, it appears that a number of college and university students 
have sought to bypass the MOE's TANet rules an d avoid MOE monitoring by using the ADSL 
broadband service from private ISPs other than TANet to access the Internet.  
Table III.11 
IP adjudication findings, 2005-09  
(Persons and %) 
Adjudication  
Total Imprisonment Detention Fines Acquitted Others 
2005 2,605 1,303 776 82 203 241 
2006 2,616 1,380 708 101 188 239 
2007 (Jan-Dec) 2,869 1,545 787 102 118 317 
% of cases .. 53.85 27.43 3.56 4.11 11.05 
2008 (Jan-Dec) 3,066 1,477 949 71 163 406 
% of cases  .. 48.17 30.95 2.32 5.32 13.24 
% change 6.87 -4.40 20.58 -30.39 38.14 28.08 
2009 (Jan-Oct) 1,930 865 597 58 128 282 
% of cases .. 44.8 30.9 3.01 6.63 14.61 
% change -28.6 -34.46 -28.84 -9.38 -9.29 -30.54 
.. Not available. 
Source:  Information provided by the Chinese Taipei authorities. 
(vi) Government-owned enterprises 
137. Government involvement in the economy remains in, inter alia , petroleum, aerospace, 
shipbuilding, steel, sugar, electric power, water s upply, tobacco and liquor, banking, rail transport, 
banking, insurance, engineering, postal services;  market monopolies are retained in electric power, 
water supply, and postal services (Table AIII.4).  As indicated earlier (section (2)(viii)), a 
government-owned firm is considered as privatiz ed once it looses its monopoly rights and/or the 
Government reduces its shareholding.  Duri ng the period under review, the contribution of 
government-owned enterprises to GDP dropped from 8.3%  (2004) to 4.3% (20 08), ostensible due to 
privatization, while they continue d to employ more than 104,000 pe rsons, thus indicating a sharp drop 
in labour productivity.  No recent data were made available by the authorities on the participation of 
government-owned enterprises in production and trad e;  in 2004, their trading operations accounted 
for 8.4% of total imports and 1.7% of exports.    
138. Chinese Taipei's privatization process, which began in 1989, has been carried out mainly 
through the sale of shares and assets.  Other methods  are:  formation of a privately owned enterprise 
by joint venture with private individuals;  merger with an existing private en terprise;  and/or capital 
increase.  Following approval by the Government, pr ivatization is negotiated with a counterpart 
selected through public invitation.  The authority in  charge of the government-owned entrerprise is 
responsible for its privatization.  
139. During the period under review, there has been a "release" of governme nt-owned shares of 
three firms (shipbuilding, steel, dynamite plant) (Table AIII.4).   Reportedly, the Financial Supervisory 
                                                      
119 International Intellectual Property Alliance (2009). 
120 International Intellectual Property Alliance (2009). Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 73 
 
 
Commission has mapped out a mid- and long-term plan to promote the listing of government-owned 
enterprises in shipbuilding, tobacco an d liquor, petroleum, power, and sugar.121 The virtual standstill 
in the privatization process over recent years is, inter alia,  due to:  the opposition from government-
owned enterprises employees;  the legislators' demands  for privatization plans to be reported to the 
legislature;  and the requirement to amend or adjust certain laws (e.g. the Electricity Act) in order to 
proceed with privatization.  Since the begi nning of the privatization process in 1989, 
38 government-owned enterprises (of the 67 scheduled ) have been privatized;  proceeds total about 
NT$700 billion.  The proceeds are handed over to the Treasury as a financial resource for capital 
expenditures and a special fund for compensation of special losses, including compensation to employees.   
(vii) Competition and consumer protection policy 
140. During the period under review, no amendments we re made to the Fair Trade Law (FTL) of 
1991, the legal basis for Chinese Taipei's competition policy.  Under the FTL, price fixing, market 
sharing, and other "concerted ac tions" are generally prohibited.
122  However, the Fair Trade 
Commission, the main authority in this area, may approve certain cases, such as:  unifying the 
specifications or models of goods for cost reduc tion, quality improvement, or efficiency increasing 
purposes;  joint research and development;  export car tels;  import cartels;  actions to meet economic 
downturns;  and actions by small and medium-sized  enterprises to jointly improve efficiency.  In 
addition, exclusions from the FTL provisions are gr anted in cases of:  explicit exclusions in the 
Banking Law, Financial Holding Company Law, Fina ncial Institutions Merger Act, and Insurance 
Law;  sectors with individual competition rules (tel ecommunications);  and specific sectors that grant 
or require certain anti-competitive practices (for example, laws regulating professionals and the 
practice of fee standards set by professional associat ions, Chapter IV).  Since 2006, the FTC has not 
rejected any application for concerted action;  it has approved seven applications for concerted action 
with limited time period or other conditions to ensure fair competition in the market.123  B e t w e e n  
2006 and October 2009, the FTC also approved 17 cases of application for extension of the approved 
concerted actions;  16 were joint shipment of th e bulk import wheat or grains, and one was a joint 
operation of ferry operators, approved in 2006.  The authorities indicated that the commercial operations of government agencies may be subject to the FTL.  
141. The FTL permits "monopolies" as long as they do not abuse their market power;  this applies 
to "monopolistic" enterprises whose monopolistic status is protected or approved by other laws and 
regulations.
124  Statutory monopolies exist in electricity, water supply, and postal services. 
                                                      
121 China Post,  "TTLC to release 51% of stakes by end of  2009", 2 September 2008.  Viewed at:  
http://www.chinapost.com.tw/business/2008/ 09/02/172830/TTLC-to.ht m [27 July 2009]. 
122 Under the FTL, "concerted actions" are any form of mutual action or understanding with 
competitors with regard to prices, quantity, technology, pr oducts, facilities, trading coun terparts or trading areas. 
123 The applications involved:  3 computer manufacturers, for joint research and development on 
upgrading notebook technology;  4 ferry operators, for jo intly arranging shifts, selling tickets, and using unified 
tickets;  20 food manufacturers, for joint shipment of bu lk import of corn;  4 airline companies, for the joint 
application of unconditional endorsement and transfer of tick et vouchers on a route;  2 airline companies, for the 
joint application of unconditional endorsement and transfer of ticket vouchers on a route;  4 television 
companies, for joint purchase of the broadcasting right of the Beijing 2008 Summer Olympic Games;  and 
28 cable companies, for a joint formulation of a uniform specification standard of technology of cable TV set 
top boxes. 
124 In the FTL, "monopolies" exist if the market share of an enterprise in a relevant market reaches 
one-half of the market, the combined market share of two enterprises reaches two thirds, or the combined 
market share of three enterprises reac hes three fourths of the market.   WT/TPR/S/232 Trade Policy Review 
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142. Mergers are generally prohibited unless permitted by the FTC "to the extent that they do not 
impede competition", or if the overall economic be nefits of the merger outweigh the disadvantages 
resulting from restraints on competiti on that the merger would cause.125  A "pre-merger notification" 
is required by the FTC.126  A total of 65 mergers were notified to the FTC in 2008, down from 77 in 
2006, a peak year during the review period;  this drop seems to be due to a sharp decrease in capital 
and resources for merger as a resu lt of the financial crisis in 2008.  Of the 65 mergers notified, 
36 have been permitted.   
143. Resale price maintenance is prohibited;  the FTC  is required to apply the rule of "reasonable 
in principle" to other types of vertical restraints.127  
144. Violations of the FTL are subject to:  FTC action to cease administrative orders, rectify the 
conduct, or take corrective measures within the prescr ibed time;  administrative penalty of between 
NT$50,000 and NT$25 million;  and impr isonment of not more than three years, or a fine of up to 
NT$100 million or a combination of the two.  In 200 8, a total of 1,725 cases were processed by the 
FTC, almost 30% more than in 2004 (Table AIII.5).  Appeals against the FTC's orders and penalties 
have also risen;  in 2008, there were 194 appeals, up from 166 in 2004. 
145. The FTC remains concerned about the operation of import and export cartels.  According to 
Article 14 of the FTL, any act related to engageme nt of an import or export cartel should obtain a 
prior approval from the FTC.  In October 2008, the FTC investigated an unapproved import cartel for 
soybeans and imposed a fine of NT$10.9 million on the four companies involved.  However, in view 
of the difficulties in uncovering cartels, the Commissi on has introduced a leniency programme, which 
will provide an amnesty to the party of a cartel that  first notifies the FTC of the cartel, in a draft 
amendment of the FTL. 
146. Chinese Taipei has anti-trust cooperation agre ements with Australia and France on the 
application of competition and fair trading laws.  The FTC also has a tri-lateral coope ration agreement 
with the competition authorities of Australia an d New Zealand.  In 2007, the FTC signed a 
memorandum of understanding with Mongolia on cooperation on competition law; and in 2009, 
Chinese Taipei signed a memorandum of unders tanding with Canada on the application of 
competition laws. 
147. Consumer protection is governed by the pr ovisions of the Consumer Protection Law, 
Enforcement Rules of the Consumer Protection La w, and Guidelines for Consumer Protection in 
e-Commerce.128  The Consumer Protection Commission (CPC) studies, proposes, reviews, and 
supervises the implementation of basic policies in th is area by the pertinent ministries and agencies 
under the executive and the provincial, municipal, c ounty, and city governments.  The key aspects of 
the CPC's current work consist of: improving la ws, regulations, and mech anisms of consumer 
protection;  strengthening the administrative oversi ght of business; strengthening consumer awareness 
and education;  pro-actively handling consumer disp utes;  enhancing the monitoring and review of the 
agencies in charge;  supporting consumer protection groups and providing subsidies;  strengthening 
                                                      
125 The definition of a "merger" includes:  holding or acquisition of more than one third of total shares 
of an enterprise;  lease of the whole or major part of the business of an enterprise;  joint operation by enterprises on a regular basis;  and direct or indirect control of business operations of another enterprise.   
126 A pre-merger notification allows enterprises wishing to merge to proceed with the merger if no 
action is taken within 30 days of notification to the FTC. 
127 Other types of vertical restraints defined in the FTL include non-price vertical restraints, such as 
those causing another enterprise to discontinue supply, purchase or other business transactions for the purpose 
of injuring a particular enterprise. 
128 For more information, see CPC online informa tion.  Viewed at:  http://www.cpc.gov.tw/en/. Separate Customs Territory of Taiwan, WT/TPR/S/232 
Penghu, Kinmen and Matsu Page 75 
 
 
service through the use of information systems;  and promoting the handling of cross-border 
consumer disputes.   In recent years, the main types of consum er disputes by category were related to 
transportation and communications, finance and insurance, home purchasing, online gaming, and 
household electronic goods.