Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 25 
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since its accession to the WTO in January 2002, the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu (Chinese Taipei) has c ontinued to liberalize its trade regime;  this 
liberalization involved tariffs as well as non-tariff measures, such as prohibitions and licensing. 
2. The tariff is Chinese Taipei's main trade polic y instrument and a significant source of tax 
revenue (5.8% of total taxes collected in 2004).  Nonetheless, most products are subject to applied 
tariffs not greater than 10%, and about 31% of all tariff lines are duty free.  In 2005, the simple average applied MFN tariff rate was 7.8%, down from 9.5% in 2002.  All tariff lines are bound and 
most applied rates coincide with bound rates, th ereby imparting a high degree of predictability to 
Chinese Taipei's tariff schedule.  The current av erage bound MFN rate is 8.1%, compared with the 
final bound rate of 7.7%.  At the same time, non- ad valorem  duties are an element of the tariff, 
particularly in agriculture.  Such duties, which acc ount for 1.8% of all lines, are indicated clearly in 
Chinese Taipei’s tariff schedule;  they tend to involve high ad valorem  equivalents.  About 130  tariff 
lines, including certain agricultural products, passenge r cars and chassis, were subject to tariff rate 
quotas in 2005.  Chinese Taipei grants preferen tial access to imports from Panama under the free-
trade agreement between Chinese Taipei and Panama .  The simple average tariff rate under this 
preferential arrangement is 3.9%;  zero rates applie d to 74.5% of all tariff lines in 2005, and are to 
apply to 97% of all tariff lines by 2014. 
3. Additional charges, such as a trade promoti on service fee and harbour service dues, are 
imposed on Chinese Taipei's imports and exports.  Harbour-service dues on domestic trade are 60% 
lower than those for overseas routes. 
4. Chinese Taipei’s non-tariff measures involve mainly prohibitions and licensing requirements.  
Since 2002, Chinese Taipei has substantially redu ced the number of products subject to these 
measures;  56 tariff lines are currently subject to import prohibition, and 24 lines, including certain 
metal products, to import licensing (February 2006).  There are no quantitative import restrictions.  
Prohibitions on the cross-strait movement of goods from China affect some 2,200 tariff lines at the 
HS ten-digit level. 
5. Chinese Taipei has not used countervailing or safeguard measures since its accession to the 
WTO;  however, it does maintain anti-dumping me asures on two products.  Special safeguards are 
applied in agriculture. 
6. In government procurement, the relevant legisla tion allows the margin of preference to local 
suppliers up to 3% and procuring entities may request  tenderers to purchase locally produced goods.  
However, these preferences appear to be little u sed.  Non-Chinese Taipei suppliers accounted for 
around 17% of the total value of government proc urement in 2004 and around 11% of the total 
number of contracts awarded.  About 25% of a ll procurement is awarded through selective and 
limited tendering procedures. 
7. State trading in Chinese Taipei involves rice and banknote paper. 
8. Chinese Taipei maintains prohibitions and licen sing requirements on its exports mainly on 
grounds of essential security and public safety.  Expo rts of some fish, including trout and salmon, is 
prohibited.  Chinese Taipei has not notified any export subsidies to the WTO. WT/TPR/S/165 Trade Policy Review 
Page 26 
 
 
9. Nonetheless, various forms of assistance, includi ng subsidies, are provided for agricultural, 
fisheries and industrial products and activities. 
10. In 2005, about 25% of Chinese Taipei’s standard s were aligned to international standards.  
Chinese Taipei accepts non-Chin ese Taipei test data based on reciprocal arrangements. 
11. Chinese Taipei adopted various laws and regulati ons to ensure the protection of intellectual 
property rights;  it has intensified efforts to enforce laws and regulations in this regard. 
12. Competition policy in Chinese Taipei has, by  and large, remained unchanged since its 
accession to the WTO.  Statutory monopolies exist in petroleum, electricity, sugar, steel, and water 
supply industries.  Certain activities, such as expor t and import cartels, may be exempted from the 
application of the Fair Trade Law, if approved by  the Fair Trade Commission.  Engaging in prohibited 
anti-competitive practices incurs penalties including imprisonment. 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration, documentation, and procedures 
13. Importation into Chinese Taipei is governed mainly by the Customs Act1 and the Foreign 
Trade Act.2  Companies must register with the Bureau of Foreign Trade (BOFT) in order to engage in 
import (or export) business.3  To register as an importer (or exporter), an applicant must submit an 
application form and a copy of their companie's re gistration certificate; applications can be submitted 
electronically or in hard copies.  Registration is free of charge.  According to the authorities, no 
minimum investment requirements are imposed on ei ther domestic or non-Chinese Taipei importers 
(or exporters).  Branch offices of non-Chinese Taipei  enterprises registered in Chinese Taipei may 
apply for registration as importers (or exporters).   Except for such branch offices, non-permanent 
residents are not normally allowed to enga ge in imports/exports on a professional basis.4 
14. Import declaration normally takes place within 15 days following the arrival date of the 
means of transport by which the goods were ca rried.  Documents required for import include the 
import declaration form, invoice, and a packing list.  Shipments must be cleared under one of three modes:  "by-pass", "document review" or "documen t review and physical examination", determined 
by computerized selectivity criteria based on  various factors, such as reputation of 
importers/exporters, duty rates, a nd destination of imports/exports.
5  Currently, the average time 
required for customs clearance (from submission of documents to issuance of duty memo or release of consignment) is about 13 minutes for air cargo and two hours for sea cargo.  
15. Data provided by the authorities indicate that 99%  of customs declarations in Chinese Taipei 
are processed electronically, using the Unite d Nations/Electronic Data Interchange for 
Administration, Commerce and Transport (UN/EDIF ACT) model.  A web-ba sed "application service 
                                                     
 
1 The Act was adopted in 1967 and last amended in 2004. 
2 The Act was adopted in 1993 and last amended in 2002. 
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 There have been only two individual cases of licence applications by non-Chinese Taipei applicants;  
these were, exceptionally, approved by the BOFT. 
5 About 78% of air cargo and 53% of sea cargo declar ations are processed through the "by-pass" mode, 
which requires no document review or physical examination; about 14% of air cargo and 34% of sea cargo 
declarations are cleared under the "document review" m ode, and around 7.6% of air cargo and 13% of sea cargo 
declarations are processed thro ugh the "document review and physical examination" mode.  Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 27 
 
 
provider declaration system", for filing declarations  through the Internet, has been available since 
2004.  Chinese Taipei has also been implementing a variety of systems designed to simplify customs clearance.  Simplified clearance for express consignm ent, which allows the payment of duties on-line, 
has been implemented since 2001
6, and the post clearance audit system, which allows selected 
shipments to be released prior to a thorough re view of documents and accounting books, has been 
implemented since December 2001.  Since 2005, cons olidated payment of duties and charges, in 
which authorized importers may pay duties on a mont hly basis and are subject to lower rate of cargo 
examination, has been allowed.7 
16. If Customs believes that regulations are bei ng breached, it may inspect import and export 
cargoes by virtue of the Customs Law or rele vant laws and regulations, including the  Anti-Smuggling 
Act.  If a violation of the Act is suspected in a declaration of import or export cargoes, Customs may 
impose penalties, including warnings, fines, and susp ension or repeal of privileges prescribed in the 
Customs Law.8  If importers/exporters disagree with decisions by Customs on tariff classification, 
customs value, amount of duty to be made up, or  special duty of imported goods, they may file a 
protest with the Customs and/or appeal , in accordance with the Customs Act.9 
(ii) Customs valuation and rules of origin 
(a) Customs valuation and preshipment inspection 
17. Customs valuation in Chinese Taipei is on the basi s of c.i.f. value denominated in NT dollars.  
According to the Customs Act, the customs value of imports is determined primarily on the basis of 
the transaction value (i.e. the actual price payabl e or paid for the goods when sold for export).10  Since 
November 2004, the Directorate General of customs h as authorized field customs offices to be fully 
responsible for the verification of the customs value of imported goods.11  A valuation database, based 
on risk management techniques, has been establishe d to assess the accuracy of the value declared by 
importers, with a view to detecting undervaluation. 
18. Chinese Taipei does not use preshipment inspection. 
                                                      
 6 Express consignments are limited to shipments ot her than controlled commodities, contraband, IPR-
infringing articles, live animals/plants, and conserved wildlife and their products;  and shipments with gross 
weight per package of not more than 70 kg. 
7 In the period between January 2005 and September 2005, 9% of all import declarations for air cargo 
and 4.1% of all import declarations for sea cargo were made through the consolidated clearance system. 
8 These privileges include:   on-line electronic data transmission a nd import/export declaration, express 
consignment clearance, b onded goods storage, and monthly payment of duties and charges. 
9 Articles 45-47.  There were 4,258 appeals made to the Customs in 2004, of which 759 were upheld;  
there were 2,939 appeals in 2005, of which 590 upheld. 
10 Chinese Taipei has committed itself to implementing the WTO Customs Valuation Agreement fully 
without recourse to transition periods (WTO document WT /ACC/TPKM/18, 5 October 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 (based on th e unit price of the imported product sold in Chinese 
Taipei subject to deduction of any commission paid (or to be paid), and addition of profits, customs duties, 
taxes, transport and insurance costs, and other general expenses) or computed value (the sum of production costs and expenses, profits and general expenses, and the transport and associated cost);  if neither of these methods 
can be used, the customs value is determined based on available data. 
11 Previously, the customs value of imported goods had been verified by the Department of Valuation 
of the Directorate Ge neral of Customs. WT/TPR/S/165 Trade Policy Review 
Page 28 
 
 
(b) Rules of origin 
19. Chinese Taipei uses both non-preferential and preferential rules of origin.12  Its non-
preferential rules of origin are based on:  the wholly produced criterion and the substantial transformation criterion.  If more than two count ries or areas are involved in the production of goods, 
the country or area in which the goods underwent last  substantial transformation is deemed to be the 
country or area of origin of the goods.  Substantia l 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 value of the non-originated parts or materi als.  Preferential rules of  origin are applied to 
imports under free-trade agreements. 
(iii) Tariffs 
(a) Overview 
20. The Customs Import Tariff Schedule of Chinese Taipei is based on the Harmonized 
Commodity Description and Coding System (HS).  The current Schedule, based on the 2002 version 
of the HS, has been employed since 2004.  All tari ff lines of Chinese Taipei are bound, with most of 
the applied rates coinciding with current boun d rates;  98.2% of all tariff lines involve ad valorem  
duties.  In 2005, Chinese Taipei’s simple averag e applied MFN tariff rate was 7.8%;  the average 
applied rate of preferential duties under the free-trade agreement with Panama was 3.9%. 
21. Total tariff revenues have been decreasing graduall y;  compared with 2001, tariff revenue in 
2004 was about 15% lower, perhaps reflecting tariff cuts between these years. (Table III.1).  Tariffs 
accounted for 5.7% of total tax revenues in 2004, down from 7.4% in 2001. 
(b) Tariff structure 
22. In 2005, Chinese Taipei’s tariff schedule consiste d of 8,839 tariff lines at the HS eight-digit 
level.  Its applied tariff schedule has three distinct set s of rates:  the first (MFN rates) applies to goods 
from WTO Members or countries and areas that ac cord reciprocal treatment to Chinese Taipei
13;  the 
second set is preferential rates14;  and the third set applies to imports not covered by the first two sets.  
The third set of rates are either higher than or equa l to those in the other two sets.  Applied MFN rates 
covered 97.9% of total imports in 2002 ;  this ratio rose to 98.4% in 2004. 
                                                      
12 Chinese Taipei's rules of origin are set out in Ar ticle 28 of the Customs Act, the Rules of Origin on 
Imported Goods of 30 September 1994, and the Regulations Governing the Determination of Country of Origin 
of an Import Good of 30 September 1994. 
13 Chinese Taipei receives recipro cal treatment in:  American Samo a, Anguilla, Azerbaijan, Bahamas, 
Cambodia, Ethiopia, Holy See, Iran, Iraq, Afghanistan, Kazakhstan, Lao People's Democratic Republic, 
Lebanon, Liberia, Libya, Marshall Islands, Monaco, Montserrat, Nauru, New Caledonia, Puerto Rica, Russian 
Federation,  Saudi Arabia, Somali DR, Eritrea, Sudan, Sy ria, Tahiti, Cape Verde, Equatorial Guinea, Kiribati, 
Palau, Sao Tome and Principe, Tonga, Tuvalu, Ukraine, Union of Comoros, Vanuatu, Viet Nam, Western 
Samoa, and Yemen.  
14 Currently, Panama is the only be neficiary of preferential rates as a consequence of its free-trade 
agreement with Chinese Taip ei (Chapter II(5)(ii)). Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 29 
 
 
Table III.1 
Tax revenues, 2001-04 
(NT$ billion and per cent) 
 2001 2002 2003 2004 
Total 1,257.9 1,225.6 1,252.7 1,387.3 
Taxes 95.4 97.2 97.4 97.6 
Customs duties 7.4 7.0 6.6 5.7 
Mining concession taxa 0.0 0.0 0.0 0.0 
Profit-seeking enterprise income tax 18.6 13.5 17.1 17.4 
Individual income tax 19.5 18.5 15.8 15.5 
Estate and gift tax 1.8 1.9 2.4 2.1 
Commodity tax 10.6 11.7 11.7 11.5 
Tobacco and alcohol ta x n.a. 3.4 4.0 3.5 
Securities and transacti ons tax 5.1 6.3 5.5 6.1 
Futures transactions tax 0.2 0.2 0.4 0.6 
Business tax 16.2 17.5 15.8 16.8 
Land tax 7.4 8.0 8.9 9.7 
Land value tax 4.0 4.1 4.1 3.8 
Land value increment tax 3.4 3.9 4.9 5.9 
House tax 3.8 3.8 3.8 3.6 
Vehicle license tax 3.6 3.7 3.8 3.6 
Deed tax 0.7 0.8 0.9 0.9 
Stamp tax 0.6 0.6 0.6 0.6 
Amusement tax 0.1 0.1 0.1 0.1 
Monopoly revenuesb 4.6 0.0 n.a. n.a. 
Financial enterprises business tax n.a. 2.1 1.8 1.7 
Health and welfare surcharge on tobacco n.a. 0.7 0.8 0.7 
n.a. Not applicable. 
a The amount of tax is less than 0.1% of the total. 
b Monopoly taxes on tobacco and alcohol were abolished in 2002 and replaced by the tobacco and alcohol tax. 
Source:  Information provided by the Chinese Taipei authorities.  
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 2005, ad valorem  duties involved 98.2% of all tariff lines15;  non- ad valorem  duties are mainly on 
agricultural products, such as animal products, vege tables and prepared food products, and one tariff 
line in industrial products.16  Seasonal tariffs are applied to some  fruit, such as oranges, grapefruits, 
lemons and limes.17  Out-of-quota tariff rates currently apply on 129 tariff lines (1.5% of all lines);  
50.7% of these involve ad valorem  rates of duty. 
24. Changes to Chinese Taipei’s tariff schedule are us ually proposed by the relevant authorities 
(e.g. the industrial and agricultural auth orities) to the Customs Tariff Commission.18  After review and 
                                                      
15 Non- ad valorem  duties consist of specific and alternate dutie s;  in 2005, specific and alternate rates 
involved 1.0% and 0.8% of all lines, respectively. 
16 This concerns mixed metal scrap (HS8112.9222). 
17 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 October to end-December of the same year. 
18 The Commission is established in accordance with the Customs Act.  Its members are from:  the 
Ministry of Economic Affairs;  the Council of Economic Planning and Development;  the Council of WT/TPR/S/165 Trade Policy Review 
Page 30 
 
 
discussions, the Commission adopts its own proposal fo r tariff changes, which is submitted to the 
Ministry of Finance and subsequently the legislature for approval.19  After amending more than 
4,000 tariff lines in 2002 to implement its concession commitments for accession to the WTO, 
Chinese Taipei amended the schedule in 2004 in order to adopt HS2002.  Tariffs were lowered 
unilaterally on some 35 items (HS eight digits), including melon seeds, parts and accessories of 
bicycles, preparations and charges for fire-extingui shers, parts and accessories of motor vehicles, saw-
blades for stone cutting purpose. 
(c) Bound and applied rates 
25. All tariff lines in Chinese Taipei's tariff schedule are bound.  In 2005, the simple average 
bound rate was 8.1%;  in its 2005 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 average bound rate was 23.1% for agricu ltural products (WTO definition), and 5.2% for 
non-agricultural products.20  The final average bound rate is e xpected to be 7.7% (Table III.2).21 
26. Chinese Taipei's simple average applied MFN tari ff rate declined to 7.8% in 2005, from 9.5% 
in 2002 (Chart III.1).  In 2005, 30.9% of tariff lines were duty-free and 52.0% were at rates of 10% or 
lower.  Applied rates at 100% or  higher, involving some 39 agricultur al products (at HS eight digits), 
accounted for 0.4% of tariff lines.  On non-agricultu ral products, tariffs higher than 50% were applied 
to some 53 lines;  they involved mainly fish a nd passenger cars and chassis (all subject to TRQs).  
Applied tariff rates in 2005 ranged from 0% to 1,069.9%;  the highest rate was the ad valorem  
equivalent of a specific out-of-quota rate for certain rice products.  Tariffs on about 9.4% of all tariff 
lines were above 15%;  this accounted for 41.5% of agricultural products and 3.3% of non-agricultural 
products (Chart III.2). 
27. Ad valorem  equivalents (AVEs) were provided by the authorities (for 2002-04) for 
approximately 67.5% of non- ad valorem  rates.  The simple average rate for all AVEs supplied is 
130%;  of the top 100 tariffs, 42 were non- ad valorem  rates.  Hence, non- ad valorem  rates tend to 
conceal relatively high tariff rates. 
28. Agriculture receives much higher tariff protection than non-agricultural products;  the simple 
average applied MFN rate for agricultural products  (WTO definition) in 2005 was 22.3% compared 
with 5.0% for non-agricultural products (Table III.3) .  The highest tariff rate applied to agricultural 
products was 1,069.9% (rice) and that on non-agricult ural products was 90% (fish).  Tariffs of 15% or 
below (not including duty-free items)  applied to 35% of agricultural products and to 64.4% of 
industrial goods.  The range of tariffs was also much greater for agricultural products than for non-
agricultural products in 2005. 
                                                                                                                                                                     
Agriculture;  the Bureau of Foreign Trade, MOEA ;  the Industrial Development Bureau, MOEA;  the 
Directorate General of Customs, MOF;  the Department of Customs Administration, MOF;  and four to six members appointed by the MOF.  
 19 After its accession to the WTO, Chinese Taipei amended its tariff schedule in 2004 to lower rates for 
35 tariff lines (at HS eight-digit level). 
20 In 2005, the applied MFN rates for three (HS) tariff lines (2907.1510, 2920.9031, and 5802.3010) 
exceed corresponding bound rates;  th e authorities intend to lower the app lied rates within the bound rates, 
pending approval from the legislature. 
21 Based on Chinese Taipei's accession commitments, ta riff cuts are to be fully  implemented in 2011. 
The simple average of applied MFN rates increased in 2002, partly reflecting the "tariffication" of some 
250 products that had been subject to import prohibition until May 2002 (section (v) below). Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 31 
 
 
Table III.2 
Structure of the MFN tariff, 2001-05 
(Per cent)  
    2001 2002 2003 2004 2005 Bounda 
 Bound tariff       
1. Bound tariff lines (% of all tariff lines)b n.a. 99.7 100.0 100.0 100.0 100.0 
2. Simple average bound rate .. 9.7 9.6 8.7 8.1 7.7 
 Agricultural products (HS01-24) .. 27.2 29.8 28.1 24.6 23.4 
 Industrial products (HS25-97) .. 6.2 5.3 4.6 4.5 4.3 
 WTO agricultural products .. 25.0 28.2 27.0 23.1 22.7 
 WTO non-agricultural products .. 6.9 6.1 5.3 5.2 4.8 
 Textiles and clothing .. 10.2 9.6 9.0 9.0 8.9 
3. Tariff quotas (% of tariff lines) .. 1.6 1.9 1.9 1.5 0.9 
4. Duty-free tariff lines (% of tariff lines) .. 16.9 17.0 30.2 30.2 30.7 
5. Non- ad valorem  tariffs (% of tariff lines) .. 2.1 2.3 1.9 1.8 1.8 
6. Non- ad valorem  tariffs with no AVEs (% of tariff lines) .. 0.9 1.1 0.7 0.6 0.6 
7. Nuisance rates (% of tariff lines)c .. 5.0 8.9 3.7 3.9 3.5 
 Applied tariff       
8. Simple average applied rate 8.2 9.5 9.4 8.6 7.8 .. 
 Agricultural products (HS01-24) 20.0 26.8 29.6 28.0 23.8 .. 
 Industrial products (HS25-97) 6.0 5.9 5.1 4.4 4.4 .. 
 WTO agricultural products 17.0 24.7 28.0 26.8 22.3 .. 
 WTO non-agricultural products 6.7 6.6 5.9 5.1 5.0 .. 
 Textiles and clothing 10.1 10.0 9.4 8.9 8.9 .. 
9. Domestic tariff "peaks" (% of all tariff lines)d 7.7 3.4 3.5 4.0 5.0 .. 
10. Global tariff "peaks" (% of all tariff lines)e 11.8 11.7 10.9 9.5 9.3 .. 
11. Overall standard deviation of tariff rates 9.6 30.2 34.2 32.3 28.7 .. 
12. Coefficient of variation of tariff rates 1.2 3.2 3.7 3.8 3.7 .. 
13. Tariff quotas (% of all tariff lines) .. 1.6 1.9 1.9 1.5 .. 
14. Duty-free tariff lines (% of all tariff lines) 16.9 18.4 18.4 30.8 30.9 .. 
15. Non- ad valorem  tariffs (% of all tariff lines) 1.8 2.1 2.3 1.9 1.8 .. 
16. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 1.4 0.9 1.2 0.7 0.6 .. 
17. Nuisance rates (% of all tariff lines)c 4.7 5.5 9.1 4.6 4.8 .. 
.. Not available. 
n.a. Not applicable. 
a Based on 2005 tariff schedule. 
b Calculations for 2002 are ba sed only on bound tariff lines (99.7% of total tariff lines). 
c Nuisance rates are those greater than zero, but less than or equal to 2%. 
d Domestic tariff peaks are defined as those exceeding three ti mes the overall simple average applied rate (indicator 8). 
e Global tariff peaks are defined as those exceeding 15%. 
Note: The 2002 and 2003 tariffs are based on HS96 nomenclature ;  2004 and 2005 tariffs are based on HS02 nomenclature.  
Calculations exclude in-quota rates.  Three-year (2002-04) average  AVEs have been used where av ailable;  where they are not 
available the ad valorem  part of compound and alternate rates is used. 
Source:  WTO Secretariat calculations, based on data provided by the Chinese Taipei authorities.  
 WT/TPR/S/165 Trade Policy Review 
Page 32 
 
 
05101520253035
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Chart III.1
MFN tariff averages by HS section, 2002 and 2005
Per cent
Source :   WTO Secretariat calculations, based on data provided by the Chinese Taipei authorities.2002
2005
01 Live animals and prod.        
02 Vegetable products
03 Fats and oils      04 Prepared food, etc.05 Mineral products06 Chemical and prod.07 Plastic and rubber
08 Hides and skins
09 Wood and articles10 Pulp, paper, etc.11 Textiles and articles12 Footwear, headgear13 Articles of stones
14 Precious stones, etc.
15 Base metals and prod.16 Machinery17 Transport equipment18 Precision instruments19 Arms and ammunition
20 Miscellaneous manuf.
21 Works of art, etc.
Note:      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.MFN applied average 2005
(7.8%)
MFN applied average 2002
(9.5%)
 
 Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 33 
 
 
 
 (18.5%) 
 (37.5%) 
 (21.7%) 
 (10.5%) 
 (5.5%) 
 (2.3%). 
 (1.5%) 
 (2.4%)
(2.3%)(1.4%).(30.9%)
(33.0%)
(19.0%)
(7.8%)
(1.9%) (3.8%) 
05001,0001,5002,0002,5003,0003,5004,000
Duty free >0- 5 >5-10 >10-15 >15-20 >20-25 >25-30 >30Figures in parentheses denote the share of total lines.   Calculations exclude in-quota rates.  Three-year (2002-04) average AV Es have 
been used where available;  where they are not available the ad valorem  part of compound and alternate rates is used.  Totals do not 
add to 100% as no tariff rates are available for 14 and 4 specific lines, respectively, for 2002 and 2005.  Number of tariff linesChart III.2
Distribution of MFN tariff rates, 2002 and 2005
Tariff rates (%)
Note:MFN 2002
MFN 2005
Source :  WTO Secretariat calculations, based on data  provided by the Chinese Taipei authorities.
 
Table III.3 
Summary analysis of the Chinese Taipei's MFN tariff, 2002-05  
 MFN 2002 MFN 2003 MFN 2004 MFN 2005 
 No. of 
linesa Average 
(%) Range 
(%) Average 
(%) Range 
(%) Average 
(%) Range 
(%) Average 
(%) Range 
(%) 
Total 8,839 9.5 0-964.2 9.4 0-1,069.9 8.6 0-1,069.9 7.8 0-1,069.9 
By WTO definition          
Agricultural 
products 1,416 24.7 0-964.2 28.0 0-1,069.9 26.8 0-1,069.9 22.3 0-1,069.9 
Live animals and 
products thereof 192 54.8 0-400 51.0 0-370 44.5 0-340 18.8 0-45 
Dairy products 46 33.5 0-173.3 32.9 0-166.5 31.9 5-146.9 31.8 5-146.9 
Coffee and tea, 
cocoa, sugar, etc. 248 19.6 0-168 35.4 0-1,069.9 34.9 0-1,069.9 31.1 0-1,069.9 
Cut flowers and 
plants 128 3.3 0-25 3.3 0-24.4 3.2 0-24 3.2 0-24 
Fruit and 
vegetables 297 34.4 0-964.2 32.9 0-893.1 31.1 0-822.1 31.1 0-822.1 
Grains 16 2.0 0-6.5 132.5 0-800.7 132.5 0-800.7 132.5 0-800.7 
Oils seeds, fats, 
oil and their 
products 112 35.1 0-872.1 32.7 0-808.1 29.1 0-744.2 29.1 0-744.2 
Table III.3 (cont'd) WT/TPR/S/165 Trade Policy Review 
Page 34 
 
 
 MFN 2002 MFN 2003 MFN 2004 MFN 2005 
 No. of 
linesa Average 
(%) Range 
(%) Average 
(%) Range 
(%) Average 
(%) Range 
(%) Average 
(%) Range 
(%) 
Beverages and 
spirits 95 18.5 0-42.5 18.4 0-41.2 19.4 0-40 19.1 0-40 
Tobacco 13 19.6 13-27 19.1 13-27 18.5 13-27 18.0 13-27 
Other agricultural 
products, n.e.s. 269 9.3 0-800 8.9 0-740 8.6 0-680 6.3 0-620 
Non-agricultural 
products (excl. 
petroleum) 7,395 6.6 0-106 5.9 0-98 5.1 0-90 5.0 0-90 
Fish and fishery 
products 265 26.9 0-106 25.4 0-98 23.5 0-90 23.4 0-90 
Mineral products, 
precious stones, 
etc. 511 4.3 0-27 4.0 0-21 3.6 0-17.7 3.5 0-15.1 
Metals 921 5.9 0-12 4.2 0-11.5 2.6 0-10 2.5 0-10 
Chemicals and 
photographic 
supplies 1,542 3.8 0-35 3.3 0-27.5 2.7 0-20 2.7 0-20 
Leather, rubber, 
footwear, travel 
goods 219 5.9 0-17 5.7 0-13.5 5.5 0-10 5.5 0-10 
Wood, pulp, paper 
and furniture 377 4.1 0-15 2.4 0-14.7 0.8 0-12.5 0.8 0-12.5 
Textiles and 
clothing 1,229 10.0 0-19 9.4 0-15.5 8.9 0-14.2 8.9 0-14.2 
Transport 
equipment 229 17.0 0-60 16.1 0-60 14.8 0-60 14.6 0-60 
Non-electric 
machinery 840 4.2 0-27 3.7 0-22 3.2 0-20 3.2 0-20 
Electric 
machinery 525 5.4 0-25 4.8 0-20 4.2 0-15 4.1 0-15 
Non-agricultural 
products, n.e.s. 737 4.5 0-24.4 3.9 0-21.8 3.3 0-19.2 3.2 0-16.6 
Petroleum 28 6.4 0-11 5.9 0-10.5 4.8 0-10 4.6 0-10 
By sectorb          
Agriculture and 
fisheries 579 18.5 0-964.2 19.1 0-893.1 18.3 0-822.1 18.2 0-822.1 
Mining 151 0.6 0-7.5 0.6 0-7.5 0.6 0-7.5 0.5 0-7.5 
Manufacturing 8,108 9.0 0-872.1 8.8 0-1,069.9 8.0 0-1,069.9 7.2 0-1,069.9 
excluding food 
processing 7,106 6.0 0-60 5.2 0-60 4.5 0-60 4.4 0-60 
By stage of 
processing          
First stage of 
processing 1,122 16.0 0-964.2 17.1 0-893.1 16.3 0-822.1 15.7 0-822.1 
Semi-processed 
products 2,718 5.9 0-168 6.2 0-1,069.9 5.5 0-1,069.9 5.1 0-1,069.9 
Fully-processed 
products 4,999 9.9 0-400 9.3 0-446.5 8.5 0-446.5 7.5 0-446.5 
a Number of lines correspond to the 2004  and 2005 tariff schedule. 
b ISIC (Rev.2) classification;  electricity, gas and water are excluded (1 tariff line). 
Note: Calculations exclude in-quota rates.  Three-year (2002-04) av erage AVEs have been used wher e available;  where they are n ot 
available the ad valorem  part of compound and alternate rates is used. 
Source:  WTO Secretariat calculations, based on data provided by the Chinese Taipei authorities.  Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 35 
 
 
(d) Tariff escalation 
29. Out of 8,839 tariff lines in Chinese Taipei’s  2005 tariff schedule, 1,122 lines concerned 
first stage processing, 2,718 lines semi-process ed manufactures and 4,999 lines fully processed 
products, based on International St andard Industrial Classification.  The average applied rate for 
manufacturing was 7.2%.  Tariff escalation is present in a number of sub-sectors, most notably 
textiles, petroleum, coal, and non-meta llic mineral products (Chart III.3).22  Tariff escalation results in 
a bias against imports of more pr ocessed goods and therefore gives an effective rate of protection to 
the processed goods that is higher than the nominal rate.23  Consequently, in the absence of GSP or 
other preferences, tariff escalation can impede th e industrialization of deve loping countries and LDCs 
seeking to export products with hi gher value-added to Chinese Taipei. 
(e) Preferences 
30. Currently, Panama is the sole beneficiary of Chinese Taipei’s preferential tariff rates.24  Under 
the Chinese Taipei–Panama FTA, the simple average applied tariff is 3.9%, while the average is 
17.9% for agricultural products (WTO definition) and 1.2% for industrial products.  Zero rates applied 
to 74.5% of all tariff lines in 2005, and are to apply to 97% of all tariff lines by 2014. 
(f) Tariff exemptions and concessions 
31. 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 matter and sa mples of no commercial value or a value below the 
prescribed ceiling. 
32. The Ministry of Finance has aut hority to adjust to customs duti es 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.25  Adjustments are allowed within 50% of the statutory duty rate or quantity and may be 
applied for up to one year.  By this means, th e MOF decreased customs duties on fertilizers from 2% 
to 1% in 2004 (Table III.4). 
 
                                                      
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.  It is defined as ERP = (V D – 
VW)/V W, where V D is the value-added in the given sector at domestic prices, which includes tariffs, and V W is 
value added at world prices.   If the nominal tariff on the final product is t, the share of each imported input i in 
the total value of the final product is ai, and the nominal tariff on each imported input is ti, then the effective rate 
of protection can be written as:  ERP = ( t - Σaiti)/(1 - Σai).   Thus, if  t = 10%, ti  = 5% for all inputs and Σai = 
0.6, the ERP is nearly 20% (see Corden, 1971). 
24 Following the entry into force of  a free-trade agreement between Chinese Taipei and Panama in 
2004, imports from Panama increased by 276.4% compared with 2003;  this suggests that the agreement may 
have resulted in some trade diversion.  
25 Article 71, Customs Act. WT/TPR/S/165 Trade Policy Review 
Page 36 
 
 
n.a.n.a.05101520253035404550
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishing Chemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherChart III.3
Tariff escalation by 2-digit ISIC industry, 2002 and 2005
n.a.n.a.05101520253035404550
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherAverage applied rate in manufacturing
(9.0%)
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 :Per cent
First stage of processing Fully processed Semi-processedPer cent
Average applied rate in manufacturing
(7.2%)2002
2005
 Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 37 
 
 
Table III.4 
Adjustment of customs duties in 2004 (for the period 4 October 2004-3 October 2005) 
Tariff 
number Description "temporarily 
adjusted rate" 
(per cent) "applied rate 
(per cent) 
31021010 Urea, for fertilizers use 1 2 
31021020 Urea, coated 1 2 
31051000 Goods in this chapter in tablets or  similar forms, or in packages of a 
gross weight not exceeding 10 kg. 1 2 
31052000 Mineral or chemical fertilizers c ontaining the three fertilizing elements:  
nitrogen, phosphorus and potassium 1 2 
31053000 Diammonium hydrogenorthophos phate (diammonium phosphate) 1 2 
31054000 Ammonium dihydrogenorthop hosphate (monoammonium phosphate) 
and mixtures thereof with di ammonium hydrogenorthophosphate 
(diammonium phosphate) 1 2 
31055100 Other mineral or chemical fertili zers containing nitrat es and phosphates 1 2 
31055900 Other mineral or chemical fe rtilizers containing the two fertilising 
elements, nitrogen and phosphorus 1 2 
31056000 Mineral or chemical fertilizers containing the two fertilizing elements, 
phosphours and potassium 1 2 
31059000 Other fertilizers 1 2 
38249052 Chemical fertilizers, other than those in Chapter 31 1 2 
Source: Information provided by the Chinese Taipei authorities.  
(g) Temporary admission of goods 
33. Certain goods that are re-exported w ithin six months of importation26, and re-imports within 
one year of exportation27 are admitted duty free.28  Under bilateral ATA (Admission 
Temporaire/Temporary Admission) Carnet agreements (Chapter II(5)(ii)), instead of import or export 
declaration, the duty-payer may present a carnet.  If goods are not re-exported within the prescribed time-limit, the institution acting as guarantor as prescrib ed in the carnet is responsible for paying the 
duty.  If the goods are re-imported after th e time-limit, normal customs duties apply.  
(h) Tariff rate quotas (TRQs) 
34. TRQs were introduced into Chinese Taipei in 2002.  Currently, 129 tariff lines (1.5% of all 
tariff lines), including 20 agricultural and fisher y products (103 tariff lines) and passenger cars and 
                                                     
 
26 These goods include:  dutiable samples;  articles for scientific research, experiments, and/or 
exhibition;  costumes and paraphernalia of entertainment troupes;  cinematographic equipment and supplies for making movies and/or television films;  instruments and tools needed for installation and repair of machines; 
containers used for importing cargoes;  finished products imported for repair and maintenance;  and other 
articles approved by the Ministry of Finance.  
 
27 Re-imports are defined as imports of exported goods within one year of the date of export or within 
the time limit approved by the Ministry of Finance for goods;  to be considered as re-imports, the exporter of the goods must also be importer. 
28 Samples, articles for scientific research, engineering machinery, cinematographic equipment and 
supplies carried by professionals engaged in making motion pictures and/or television films, instruments and tools needed for installation and repair of machines, articles for exhibition, artwork, containers used for 
importing cargoes, costumes and paraphernalia of entertainment troupes, copies of motion pictures and video 
tapes mailed overseas by government agencies and other similar articles approved by the Ministry of Finance. Article 53, Customs Act. WT/TPR/S/165 Trade Policy Review 
Page 38 
 
 
chassis (26 tariff lines) are subject to TRQs.29  TRQs on agricultural products are based on global 
quotas;  those on passenger cars and chassis are based on country-based quotas (Tables AIII.1). 
35. Allocation of quotas on agricultural products is based on the amounts imported in the 
previous two years, or through open bidding, under "the method of allocation in advance".30  TRQs on 
passenger cars and are to be eliminated in 2011. 
36. Specific conditions regarding the allocation of a TRQ are published in the government 
bulletin;  for the "method of allocation in advance", such conditions must be published 60 days before 
the initial date of "application period", durin g which the authorities accept applications.  Any 
enterprise registered with the Bureau  of Foreign Trade as an importer or exporter is eligible to apply 
for TRQs.  Under the method of auctioning tariff  quotas, recipients are selected on the basis of 
bidding price per unit amount.  The recipients must pay the premium within 30 days of the day after 
the bids are opened.  Recipients selected under the first-come, first-served system must pay a bond to 
ensure complete utilization of the quotas;  if the q uota is entirely used within its validity, the bond is 
refunded.31 
37. The method of allocation, the beginning and final days of application for allocation, eligibility 
for application for allocation, application proce dures, the collection of premiums or performance 
bonds, and other related issues regarding the im plementation of the TRQ are announced by the 
Ministry of Finance and published in the government official journal before the application period.  
Once the application period is closed, the relevant  authorities publish the details of allocation.  The 
authorities maintain that domestic and non-Chinese Taip ei applicants for TRQs are treated equally in 
the allocation procedures. 
38. In 2004, actual in-quota imports were either zer o or less than 20% of the quotas for bananas, 
garlic bulbs, dried day lily, bete l nuts, pineapples, mangoes, sha ddocks, persimmons , dried longans, 
mackerel, carangid, and sardine.  According to the authorities, imports of certain fruit  products were 
low mainly because of Chinese Taip ei's SPS measures against fruit flies;  low in-quota imports of 
other products were due to over-supply, low market prices, or reduced consumption. 
(i) Duty drawbacks 
39. Duty refunds (or offsetting) are governed by the Customs Act and the Regulations Offsetting 
or Refund of Duties and Taxes on Raw Materials for Export Products.  Customs duty and taxes on 
raw materials are refundable, inter alia,  if they are used for products that have been exported;  
application for refund must be made within one and a half years of the date on which the raw 
materials were imported.  The criteria for refu nd of customs duties and commodity taxes on raw 
materials are established by the Ministry of Econom ic Affairs on a case-by-case basis according to the 
production process.  
                                                      
29 Agricultural products subject to TRQs are: deer velvet, fresh pears, bananas, red beans, liquid milk, 
peanuts, garlic bulbs, dried shiitake mushrooms, dried day lilies, young coconut, betel nuts, pineapples, 
mangoes, shaddocks, persimmons, dried longans and longan pulp, rice and rice products;  and fish are mackerel, 
carangid, and sardines. 
30 Allocation of certain quotas for 2002 and 2003 was made on a first-come, first-served basis.  Under 
the method of allocation in advance, quotas are allocated in accordance with  the order of application 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.  
31 Unused quotas under the first system for agricultural products can be reallocated on a first-come, 
first-served basis.  The performance bond of quotas paid by the initial quota recipients are not refunded or transferred if they do not import th e products concerned within the period  specified in the quota certificate. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 39 
 
 
(iv) Other charges affecting imports 
40. Indirect taxes, including the business tax, the co mmodity tax (applied mainly to rubber tyres, 
cement, machine-made cool drinks, flat glass, oil and gas, certain electric appliances, and motor vehicles), and the tobacco and alcohol tax are levi ed at the same rates on imports as on domestically 
produced goods and services (section (4)(i)).  The business tax is levied on the import price plus 
customs duty and the commodity tax or the tobacco and alcohol tax, where applicable. 
41. A Trade Promotion Service Fee is charged at the rate of 0.0425% of the price of imports and 
exports to support trade-promotion activities.  Fees ar e charged on the f.o.b. price of exports and the 
c.i.f value of imports.  The Trade Promotion Fund, fina nced mainly by this fee, is managed by a Trade 
Promotion Fund Management Committee.  About one quarter of the total of 21 members of the 
Committee are the representatives of exporters and importers;  the Chamber of Commerce, Federation 
of Industries, Chamber of Exporte rs and Importers, Exporters and Im porters Associations of Taipei 
and Kaohsiung, External Trade Development Council,  and Textile Federation are represented in the 
Committee. 
42. Harbour dues are collected with a view to enha ncing the development of commercial ports;  
the dues are based on the gross tonnage of ships entering the port (ship port dues), number of 
passengers departing (passenger port dues), and the "revenue tons"
32 of loaded or unloaded cargoes 
(cargo port dues).33  Non-Chinese Taipei and domestic ships ar e subject to the same harbour dues for 
the same shipping routes;  nonetheless, harbour du es are higher for overseas than for domestic routes 
(Table III.5).  The authorities consider that such differences arise from differences in the quality of 
services provided on these routes.  The dues collect ed are mainly used for the construction and 
development of the commercial port. 
Table III.5 
Commercial port dues, 2005 
Type of dues Rates 
Ship port dues  
Overseas shipping routes NT$0.5/gross ton 
Domestic shipping routes 40% of the rate for overseas shipping routes 
Passenger port dues NT$40/passenger 
Cargo port duesa  
Overseas shipping routes  
Bulk and general cargoes NT$7 to NT$19/revenue ton 
Full container load cargoes ( ≤ 20 ft)  NT$274-NT$684 
Full container load cargoes ( ≥ 21 ft) NT$547-NT$1,368 
Less than container load cargoes NT$80/revenue ton 
Domestic shipping routes 40% of rates for overseas shipping routes 
a No cargo dues are charged if the total amount of cargo dues is less than NT$100. 
Source: Information provided by the Chinese Taipei authorities.  
43. In accordance with Article 101 of the Customs Act, Customs may collect charges for some 
services, such as supervision fee, cargo examinat ion fee, Customs sealing fee, escorting fee, 
certificate issuance fee, bonded warehouse stocktak ing charge, and duty drawback service charge 
(Table III.6). 
                                                      
32 Revenue tons (or charged tons) are the greater of measurement tons or weight tons. 
33 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). WT/TPR/S/165 Trade Policy Review 
Page 40 
 
 
Table III.6 
Customs service fees and charges, 2005 
Fee/charge Amount 
Special supervision fee NT$450/bonded vehicle/sh ift;  NT$1,000/container terminal (air cargo 
terminal)/shift;  NT2,000/ship(aircraft)/shift 
Special cargo examination fee NT$1,300 
Customs sealing fee NT$50/container or bonde d truck (customs-certified autonomous 
management firms);  NT$100/containe r or bonded truck (other firms) 
Customs escorting fee NT$600/time;  NT1, 700/time;  NT$3,700/time ;  NT$4,600/time 
Certificate issuance (rene wal) fee NT$2,000 (issuance);  NT$1,000 (renewal) 
Bonded warehouse stocktaking charge NT$15,000/day 
Duty drawback service charge 0.5% of amount of  duty refunded;  0.2% of  amount of tax refunded 
Navigation aids charges NT$2/ tonne 
Source: Information provided by the Chinese Taipei authorities.  
(v) Import prohibitions, restrictions, and licensing 
44. Chinese Taipei has eliminated some non-tariff measures since its accession to the WTO.  It 
maintains no quantitative import restrictions.  Ch inese Taipei relaxed im port prohibitions on 252 
categories (ten-digit HS Code) of goods in 2002;  most of  these tariff lines have been subject to tariff 
rate quotas since then.  Imports of rice and rice products, which were subj ect to quantitative import 
restrictions before 1 January  2003, are currently subject to tari ff rate quotas;  the minimum access 
commitments for rice imports have been in place since 2002.  In February 2006, 56 tariff lines were subject to import bans, 24  lines to import licensing, and 129 lines to TRQs.  Chinese Taipei reduced 
the number of items subject to import licences from 130 to 38 (HS ten digits) up on its accession to 
the WTO in January 2002, and to 24 in 2005.  
45. 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;  these measures are stipulated in th e Regulations Governing Import of Commodities and 
the Regulations Governing Export and Import of Stra tegic High-Tech Commodities.  To facilitate the 
implementation of the regulations, the Consolidated List of Commodities Subject to Import 
Restriction (or the Negative List)
34 and the List of Commodities Assisted by Customs for Import 
Examination have been adopted since 1 July 1994. 
46. As at early February 2006, 56  items (0.5% of total tariff lines, HS ten digits) are prohibited 
from importation into Chinese Taipei (these do not  include prohibitions on cross-strait trade 
concerning some 2,200 tariff lines, which are gove rned under specific laws and regulations 
concerning cross-strait trade).  Cross-strait trade can  only be made by indirect shipment through a 
third port, usually Hong Kong, China.  These 56  items involve mainly products such as narcotics, 
toxic chemicals, hazardous wastes, and HCFC (hydr ochlorofluorocarbon) compounds that are subject 
to trade restrictions under international agreemen ts.  According to the authorities, dog meat is 
prohibited based on concerns over public morality, and puffer fish is prohibited to protect human and 
animal health (Table AIII.2).  As at early February  2006, 24 items (about 0.3% of the total tariff lines) 
require import permits.  The items that are curren tly restricted include rough diamonds, iron or steel, 
                                                      
34 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 list are prohibited 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. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 41 
 
 
lead, cadmium and chromium wastes and scraps, methyl bromide,  and chemicals restricted under the 
Montreal Protocol (Table AIII.3). 
47. The Bureau of Foreign Trade (BOFT) of the Ministry of Economic Affairs is the main 
authority in charge of issuing import permits fo r products on the List of Commodities Subject to 
Conditional Import;  respective administrative offi ces of economic processing zones or science-based 
industrial parks are responsible for issuing permits for relevant products entering the zones.  Before 
the BOFT issues an import permit, certain conditi ons as prescribed by the regulations must be 
fulfilled;  these include the approval by other agen cies responsible for the relevant categories.  The 
criteria and procedures for approval by other agen cies are publicly announced.  According to the 
authorities, import permits allow Customs to confirm that the prescribed import conditions have been 
met and accelerate the customs clearance.35   
48. The List of Commodities Assisted by Custom s for Import Examination covers products 
subject to requirements imposed by ot her laws or decrees for regulatory purposes.36  These products 
can be imported only if approved by relevant authorities in charge of various sector-specific laws;  
sector- or product-specific requirements include CITES permits, food additiv es/pesticides/medicine 
registration certificates, tobacco/alcohol business li cences, medical market device market licences, 
and supervisory approval for expl osives, medicated cosmetics, or environmental agents.  Import 
permits issued by the BOFT are not required for th ese products.  According to the authorities, these 
requirements are not generally trade restrictive. 
49. Applications for import permits can be submitte d in writing or electronically.  Import permits 
are valid for six months from the date of issue, with  the possibility of extension for not more than six 
months each time within one month before the expi ry.  Extensions may be granted no more than 
twice.  The import clearance certificate required for optical disk manufacturing equipment has no time limit.
37  No licensing fees and/or other administrative charges or deposit or advance payments are 
required in relation to obtaining import licences. 
50. On 19 October 2004, import licensing requirements on 465 types of iron and steel products 
were abolished;  currently six types of iron a nd steel products are subject to such requirements.38  
Nonetheless, imports of the 465 types are monitored for statistical purposes with a view to taking 
necessary measures against a surge of impor ts of these products into Chinese Taipei. 
(vi) Contingency measures 
(a) Anti-dumping and countervailing actions 
51. Chinese Taipei's use of anti-dumping and countervailing measures is based on the Customs 
Act and the Implementation Re gulation on the Imposition of Countervailing and Anti-Dumping 
Duties of 3 July 1984.39  The Regulation was last amended in February 2005.  The amendments 
                                                      
35 WTO documents G/LIC/N/1/TPKM/4 an d G/LIC/N/3/TPKM/2, 30 July 2004. 
36 Products assisted by the Customs for import ex amination include: live br eeding animals and their 
embryos;  tuna (yellow-fin, bluefin, southern bluefin, swordfish and big-eye tuna);  tobacco and alcohol 
products;  oil and petroleum products;  fishing boats and vessels;  firearms and ammunition;  drugs, medicine 
(human, veterinary, raw, medicated co smetics, etc.) and medical devices;  cinema films;  controlled radio 
frequency devices;  electronic amusement machines;  and optical disk manufacturing equipments.  
37 WTO documents G/LIC/N/1/TPKM/4  and G/LIC/N/3/TPKM/2, p. 3. 
38 WTO documents G/LIC/N/1/TPKM/6 and G/LIC/N/2/TPKM/4, 20 December 2004. 
39 WTO documents G/ADP/N/1/TPKM/1 an d G/SCM/N/1/TPKM/1, 5 June 2002. WT/TPR/S/165 Trade Policy Review 
Page 42 
 
 
concerned, inter alia :  the qualification of complaint40, the de minimus  clause, information to be 
included in the public notice of determination, admi nistrative review, sunset review, and notification 
to the exporting countries concerned rega rding the initiation of investigations. 
52. Anti-dumping or countervailing measures may be initiated upon written application by 
producers or related commercial, industrial, labour , or agricultural associations or other legal 
organizations;  the application must be submitted to the Ministry of Finance (MOF) and contain 
information, inter alia,  describing alleged dumping and causati on of injury to Chinese Taipei's 
industry.  The Tariff Commission of the MOF must decide within 40 days of the application whether or not to initiate investigation.  The MOF is responsible for investigating whether the imported 
product is subsidized or dumped, while the Ministry  of Economic Affairs (MOEA) is responsible for 
investigating whether the subsidized or dumped product causes injury to the domestic industry. 
53. Provisional protection may be applied by the MO F if a preliminary positive determination of 
the existence of a subsidy or dumping is made.  The final determination by the Tariff Commission 
concerning the imposition of countervailing and anti- dumping duties is concluded on the basis of 
investigations by both the MOEA and the MOF, within 210 days of the Tariff Commission's decision 
to initiate an investigation.
41  Anti-dumping and countervailing duties may be in force for five years;  
they may not exceed the dumping margin of, or the subsidy given for, the imported goods.  The MOF may initiate ex officio  a review process regarding the continuatio n of these duties;  such a review may 
also be introduced upon the request of the applicant or any other interested party. 
54. Three anti-dumping measures are in force (Decemb er 2005) on two products:  art paper from 
Japan, effective as of 20 July 2000, and portland  cement from the Republic of Korea and the 
Philippines, effective from 19 July 2002.  Anti-dumping action on art paper from Japan was undergoing a sunset review initiated on 19 Janua ry 2005 (Table III.7).  No anti-dumping cases are 
currently under investigation.
42  Chinese Taipei has not imposed any countervailing measure since its 
accession to the WTO in January 2002. 
Table III.7 
Anti-dumping measures in forcea, December 2005 
Products and countries of origin Da te of imposition Measure imposed 
Art paper  20.07.2000  
Japanb  8.21% - 44.58% 
Portland cement 19.07.2002  
Korea, Rep. of  110.97% -126.81% 
Philippines  42% - 104.48% 
a Since 1992, 11 anti-dumping measures have been imposed by Chin ese Taipei.  Apart from the two products currently subject to 
anti-dumping duties as illustrated in the tabl e, anti-dumping duties were imposed on sodium  dithionite from Japan;  nitrocellul ose 
from Brazil;  bars and wire rods, hot-rolled,  of iron or non-alloy steel  from Brazil;  polypropylene from Japan and South Korea ;  
high density and low density polyethylene from South Korea;  bars  and rods of stainless steel fr om Japan;  H-beam, hot-rolled o f 
iron or non-alloy steel from South Korea, Poland, Russia and Japa n;  and uncoated stress-relieved  steel wires from South Korea 
and India. 
b The review to revoke the duty started in 2005. 
Source:  WTO documents G/ADP/N/85/TPKM;  G/ADP/N/92/ TPKM;  G/ADP/N/98/TPKM;  G/ADP/N/105/TPKM;  
G/ADP/N/112/TPKM;  G/ADP/N/119/TPKM;  G/ ADP/N/126/TPKM;  and G/ADP/N/132/TPKM.  
                                                      
40 "Qualification of complaint" refers to information about the product, the applicant and the subsidy or 
dumping of the product. 
41 WTO document G/ADP/N/1/TPKM/1/Corr.1 and G/SCM/N/1/TPKM/1/Corr.1, 12 June 2002. 
 42 WTO document G/ADP/N/132/TPKM, 26 August 2005. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 43 
 
 
(b) Safeguards 
55. The Customs Act stipulates that Chinese Taipei  may retaliate against any discriminatory 
treatment of goods exported from Chinese Taipei or carried by Chinese Taipei transport.43  To date, 
no such retaliatory measures have been imposed on imported goods. 
56. Chinese Taipei has not taken any safeguard measures.44  These measures ar e governed by the 
Foreign Trade Act and the Rules for Handling Import Relief Cases.45  On 21 April 2005, the "Rules 
for Handling Import Relief Cases Regarding Textiles a nd Clothing" were abolishe d, in response to the 
lifting of quotas on textiles and clothing under the Agreement on Textiles and Clothing.46  
(vii) Government procurement 
57. In 2004, the total value of government procur ement in Chinese Taipei was NT$821.7 billion, 
or about 8% of GDP.  Relevant procuring entiti es in Chinese Taipei may accord domestic suppliers 
preference over non-Chinese Taipei suppliers in the award of contracts, except where prohibited by 
agreements to which Chinese Taipei is a party.  Although Chinese Taipei has reached agreement with 
existing Parties on the substance of its term s of accession to the plurilateral Agreement 
on Government Procurement, the formal decision on  its accession to the Agreement has yet to be 
taken.  It is participating in the ongoing renegotia tion of the Agreement in regard to both the text of 
the Agreement and coverage commitments pursu ant to Article XXIV:7 of the Agreement. 
58. Government procurement is regulated by the Government Procurement Act of 27 May 1998, 
which entered into force on 27 May 1999, and re lated regulations.  Th e Public Construction 
Commission (PCC) coordinates Chinese Taipei’s policies on government procurement.47  In recent 
years, Chinese Taipei has taken various transpar ency-enhancing initiatives, including extension of 
time-limits for tendering, publicizi ng procurement information, discl osure of awarding information, 
establishing a procurement opportunity database,  publishing a daily procurement gazette, and 
establishing the Complaint Review Board for Government Procurement (CRBGP).48 
59. Procurement contracts for not  less than NT$1 million for construction work, property, and 
services are awarded through open, selective, or li mited tendering procedures.  In principle, all 
procurement contracts of a value of NT$1 million or over must use open tendering, where 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 applied.  According to the authorities, 
both domestic and non-Chinese Taipei suppliers face th e same requirements in tendering.  About 75% 
of all procurement is awarded through op en tendering procedures (Table III.8). 
                                                      
43 Articles 67, 68, and 70, Customs Act, as amended on 5 May 2004. 
 44 WTO documents G/SG/N/2/TPKM and G/SG/N/3/TPKM, 22 May 2002. 
45 Amendments to the Rules were made on 30 D ecember 1998, 21 June 2000, 15 February 2002, 
31 July 2002, 4 September 2002, 8 October 2003, 30 November 2004, and 4 April 2005.  
46 WTO document G/SG/N/1/TPKM/2/Suppl.2, 20 May 2005. 
47 The PCC's specific responsibilities include formul ating procurement policies and drafting laws, 
review and approval of standard procurement contracts, compiling statistics, and handling complaints in relation 
to procurement.  Procurement control units monitor and supervise procurement affairs. 
48 The CRBGP was established by the authorities to recei ve and review complaints by suppliers against 
procuring entities in procurements reaching the threshold for publication (i.e. NT$1 million).  If a breach of 
rules by a procuring entity is established, the Board reviews decisions by the entity.  The Board may also act as a mediator. WT/TPR/S/165 Trade Policy Review 
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Table III.8 
Procurement share by type of procedure, 1999-04 
Year Item Open tendering Selective tendering Limited tendering 
Construction 95.79 0.55 3.66 
Properties 92.82 2.86 4.32 
Services 51.01 1.43 47.56 1999a 
Percentage of total valueb 88.41 1.25 10.34 
Construction 88.66 2.80 8.54 
Properties 58.96 21.84 19.19 
Services 75.76 6.66 17.58 2000 
Percentage of total value 76.42 10.16 13.42 
Construction 93.23 0.48 6.29 
Properties 53.72 29.19 17.09 
Services 76.68 3.63 19.69 2001 
Percentage of total value 76.22 11.64 12.14 
Construction 92.02 1.20 6.78 
Properties 47.35 35.79 16.86 
Services 72.44 2.85 24.71 2002 
Percentage of total value 73.21 13.67 13.12 
Construction 92.56 3.49 3.95 
Properties 60.36 28.10 11.54 
Services 75.97 3.82 20.21 2003 
Percentage of total value 77.45 13.32 9.24 
Construction 86.49 4.02 9.50 
Properties 39.76 32.34 27.90 
Services 76.25 5.48 18.27 
Percentage of total value 66.14 15.46 18.40 2004 
TOTAL 75.01 12.09 12.90 
a The 1999 statistics are incomplete as the GP Act entered into effect in May 1999. 
b The statistics include procurement with a value of more than NT$1,000,000. 
Source:  Information provided by the Chinese Taipei authorities.  
60. Selective tendering involves pre-qualification sel ection among interested suppliers that submit 
their qualification documents upon public notice;  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 takes a long time;  if the supplie rs' 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 extreme urgency;  or the procurement is of a nature of follow-up 
maintenance by the current supplier. 
61. To ensure transparency in government proc urement procedures, Chinese Taipei publishes a 
daily Government Procurement Gazette  (GPG) and a government procurement information system 
(GPIS) database free of charge. Procurement notices , invitations to tender and contract awards are 
published in the daily GPG, whereas the GPIS pr ovides information on legal framework, tendering 
information of all levels of the government, awardi ng of bids, and procedures for handling disputes.  
An electronic procurement system through the Internet has been used since July 2002.49 
                                                      
49 By December 2004, 10,523 proc urement contracts were open for e-bidding though the Internet. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 45 
 
 
62. By law, government procurement must be conducted on a non-discriminatory basis, unless 
there is "due proper cause".50  With regard to participation of non-Chinese Taipei suppliers, the 
principle of reciprocity is applied.51  Non-Chinese Taipei suppliers accounted for 16.6% of the total 
value of government procurement in 2004 and 10. 7% of the total number of contracts awarded 
(Table III.9). 
Table III.9 
Procurement by origin, 1999-04 
(NT$ billion and per cent)  
 1999a 2000 2001 2002 2003 2004 
Total valueb 312.3 615.4 829.9 728.7 1,006.0 821.7 
Share       
Domestic 92.89 86.39 85.69 85.51 82.19 83.42 
Non-Chinese Taipei 7.11 13.61 14.31 14.49 17.81 16.58 
Number of contracts awarded 32,533 137,885 153,368 146,996 144,763 137,038 
Share       
Domestic 93.11 92.89 89.86 88.76 89.2 89.35 
Non-Chinese Taipei 6.89 7.11 10.14 11.24 10.80 10.65 
a The 1999 statistics are incomplete as the GP Act came into effect in May 1999. 
b The statistics include procurement not covered by th e WTO/GPA and with a value of more than NT$100,000. 
Source:  Information provided by the Chinese Taipei authorities.  
63. A local supplier may be given preference over non-Chinese Taipei suppliers in the award of 
contracts, if that local supplier contributes at leas t 50% value added, or supplies construction work or 
services;  the margin of preference is up to 3%.  The margin of preference and the starting and the 
expiry dates of the preference period for partic ular tenders are to be published in the GPG.  
Nonetheless, since the GP Act entered into for ce in May 1999, no such preferences have been 
published;  the authorities state that the scope of th e preference is not yet prescribed.  The law allows 
procuring entities to request tenderers to purchase lo cally produced goods, to transfer technology, to 
make an investment, to facilitate local exports, or to take any other similar measures;  such requests 
are to be realized within the context of  industrial cooperation programmes (ICPs).52 
64. Protests  regarding tender documentation, evaluation, or the award of a contract may be filed 
with the procuring entity concerned.  In the event that the supplier objects to a decision made by the 
procuring entity, a complaint may be filed with  the Complaint Review Board for Government 
Procurement (CRBGP) within 15 days of the decisi on.  The review by the CRBGP must be completed 
within 80 days of receipt of the complaint and communicated to the complaining supplier and the 
procuring entity within ten days of the decision.  A supplier  may file an administrative suit with the 
High Administrative Court within two months of receipt of the CRBGP's decision.53  A  d i s p u t e  
arising from the performance of a contract may be brought to the CRBGP for mediation or to an arbitration institution.  Betw een 2002 and end September 2005, 2, 018 cases were brought to the 
                                                     
 
50 Article 6, Government Procurement Act. 
51 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). 
52 ICPs are designed to promote technology and industrial capability in Chinese Taipei.  The agreement 
concluded between the authorities of Chinese Taipei and th e contractor sets forth the minimum requirements to 
implement the ICP, whereby activities pertaining to local procurement, technology transfer and training, direct 
investment, and R&D may be included.  According to the authorities, less than 0.01% of all procurement 
contracts require the ICP. 
53 Article 22, Regulations Governing the Complaint Review for Government Procurement.  Between 
May 1999 and November 2005, 311 cases  were brought to High Administrative Court. WT/TPR/S/165 Trade Policy Review 
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CRBGP of the Public Construction Committee  (Table III.10).  If a non-Chinese Taipei supplier does 
not have a domicile, office, or place of business in Chinese Taipei, its rights to file a complaint must be applied through a local agent. 
Table III.10 
Bid-challenge cases, 2002 to September 2005 
Period Result of complaint Number of cases Percentage of sub-total 
Substantially resolved 272 47.6 
Procedurally resolved 299 52.4 2002 
Sub-total 571 100 
Substantially resolved 312 51.2 
Procedurally resolved 297 48.8 2003 
Sub-total 609 100 
Substantially resolved 283 57.8 
Procedurally resolved 207 42.2 2004 
Sub-total 490 100 
Substantially resolved 195 56.0 
Procedurally resolved or in process 153 44.0 Sept. 2005 
Sub-total 348 100 
 TOTAL 2,018  
Source: Information provided by the Chinese Taipei authorities.  
65. Bid-rigging has rarely been inv estigated by the authorities;  they consider that the relevant 
provisions of the GP Act relating to the general principles of fairness, reasonableness and competition 
prevent the occurrence of bid-rigging.  Since the GP  Act entered into force in May 1999, the Fair 
Trade Commission has not dealt with bid-rigging co mplaints involving government procurement;  
instead, the CRBGP has been dea ling with such bid-rigging. 
(viii) State-trading activities 
66. According to the authorities, state-trading involves only rice and banknote paper.54  The stated 
aims of state trading include:  ensuring stable  market conditions by controlling domestic production 
and securing supply; controlling imports; and stabilizing the income of producers. 
67. 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.  For example, the Agriculture and Fo od Agency of the Council of Agriculture has the 
exclusive right to import certain amount of rice;  and the Central Engraving and Printing Plant (CEPP) 
retains the exclusive right to print currency and to import banknote paper. 
(ix) Countertrade 
68. Chinese Taipei does not use countertrade.55 
                                                      
54 Chinese Taipei notified the WTO (WTO document G/STR/N/10/TPKM of 4 August 2004) that state 
trading involved sugar, salt, bananas, rice, banknote paper, tobacco and alcohol products.  According to the authorities, the exclusive rights granted to the state-owned sugar company to import sugar was abolished on 
7 February 2005, and the state-trading regime for bananas was eliminated in January 2005. 
55 Barter trade in certain fruits was previously mainta ined with the Republic of Korea;  it was abolished 
in 1997. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration, documentation, and procedures 
69. Registration and documentation requirements for ex ports are, 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)). 
70. Export from Chinese Taipei is governed by the Customs Act, Foreign Trade Act and 
pertaining regulations, including the Regulations Governing Export of Commodities.  An export 
declaration form must be submitted along with load ing lists, booking notes, packing list, and, if 
relevant, export permits a nd other required documents. 
(ii) Export taxes, charges, and levies 
71. Chinese Taipei does not levy export taxes.  N onetheless, exports are subject to a trade 
promotion service fee and harbour service dues (secti on (2)(iv)).  Exported goods are exempt from the 
commodity tax, tobacco and alcohol tax, and VAT.  
(iii) Export prohibitions, restrictions, and licensing  
72. The structure of export restrictions is simila r 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 Customs for Export Examination.  The negative list consists of the 
List of Commodities Subject to Export Control (pro ducts that cannot be exported except under special 
circumstances, in which case the BOFT grants sp ecial permits) and the List of Commodities Subject 
to Conditional Export (products that can be e xported under certain conditions, such as approval by 
relevant authorities).  Chinese Taipei does not main tain any quantitative restri ctions on exports.  The 
authorities are not aware of any voluntary export r estraints used in Chinese Taipei.  Cross-strait 
movement of goods can only be undertaken by indi rect shipment through a third port, usually Hong 
Kong, China. 
73. Export prohibitions cover some 48 tariff lines (HS ten-digit level), mainly products that are 
banned under international c onventions, such as toxic chemicals, ar ms and ammunition, and narcotics.  
In addition, exports of trout and salmon produc ts, plants used for pharmaceutical purposes and 
antiques are prohibited.  Exports of certain fish, including trout and salmon, are prohibited for reasons 
of fishery conservation (Table AIII.4). 
74. Another 41 items are currently subject to export licensing (7 February 2006) (Table AIII.5).  
Until 2005, export licensing mainly concerned textiles and clothing;  of 845 items subject to export 
licensing, 802 related to textiles under export quota restrictions.56 
75. Products "assisted by the Cu stoms for export examination"  include agricultural products57, 
methyl bromide, drugs and medical devices, chips, and IP products, including optical disks.  Like 
imports, exportation of these products require  approval from the relevant authorities.  
                                                      
56  With the phase-out of the WTO Agreement on Te xtiles and Clothing, the quantitative restrictions 
were eliminated on exports of 802 categories of textile  goods maintained under bilateral agreements between 
Chinese Taipei and Brazil, Canada, the European Communities, Turkey, and the United States. WT/TPR/S/165 Trade Policy Review 
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76. Export permits are valid for 30 days from their da te of issuance.  Applications may be made 
to the BOFT in writing or electronically.  Exporters of high-tech products that the authorities deem to 
be "strategic" must apply for an export permit unde r the Regulations Governing Export and Import of 
Strategic High-Tech Commodities.  A special taskfor ce is established to inves tigate suspected trade in 
strategic high-tech goods and to determine their destination and purpose.  Destination-specific 
restrictions apply only to "strategic" high-tech products and products that are regarded by the 
international community to be supporting terrorism.58   
77. Exports bearing a trade mark or copyright are subject to special monitoring by Customs under 
the Trademark Export Monitoring System (TEMS) with a view to preventing infringement of 
intellectual property rights.59 
(iv) Export operations of state-owned enterprises 
78. The authorities state that no exclusive rights or privileges have been granted to Taiyen 
Biotech Co. Ltd. to export salt since 20 January 2004, as it was privatized on 14 November 2003;  the state trading regime for bananas was also abolished in January 2005.
60  According to the authorities, 
no exclusive rights have been granted to any company to export sugar. 
(v) Export finance, insurance, and guarantees 
79. The state-owned Export-Import Bank is one of th e main institutions that promotes exports and 
provides export credit insurance, re-lending, and ot her kinds of export financing facilities.  The re-
lending facility is provided by the bank to overseas banks in order to facilita te exports of goods from 
Chinese Taipei.  The bank also provides export credit, with 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 upon export performance.  
(vi) Export promotion and assistance 
80. Chinese Taipei’s export promotion schemes are aimed at helping exporters to explore and 
expand markets, improve product quality, and upgr ade product image.  A non-profit organization, 
TAITRA, is responsible for implementing major trade promotion programmes and projects 
(Box III.1).  Besides contributing to the TAITRA , the government provides 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.  Between 
2002 and 2005, total export promotion support by th e government amounted to NT$7,061.9 million.  
Government support for export promotion ac counts for around 0.1% of its annual budget 
(Table III.11). 
                                                                                                                                                                     
57 Live breeding animals and their embryos, tuna (yellow-fin, bluefin, southern bluefin, swordfish, and 
big-eye tuna), eel, an d certain vegetables. 
58 These are based on United Nations Security Council Resolution 1373 of 28 September 2001 and 
subsequent resolutions adopted in relation to the condemnation of terrorism.  
59 Articles 10-17, Regulations Governing Export of  Commodities.  The TEMS was jointly established 
by relevant offices of the Bureau of Foreign Trade, the Ministry of Economic Affairs and the Directorate 
General of Customs.  Under the TEMS, trade mark holders must submit relevant information concerning their 
graphical representation of the trade mark, list of licen see companies, and the duratio n of the license agreement 
to the Bureau of Foreign Trade.  Customs authoritie s at all inspection points examine any trade mark 
infringement, based on the information of approved trade marks stored in the government's database.  
60 The authorities state that some information contained in WTO document G/STR/N/10/TPKM, 
4 August 2004 need to be updated. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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Box III.1:  About TAITRA activities 
Chinese Taipei’s External Trade Development Council (TAIRA) was founded in 1970 with the primary 
objective of providing support for trade promotion.  Jointly sponsored by the government and industrial and commercial associations, it assists business es and manufacturers to reinforce their global 
competitiveness and to cope with challenges in non -Chinese Taipei markets.  In addition, TAITRA 
undertakes initiatives to help non-Chinese Taipei busi nesses establish a wider presence in Chinese Taipei. 
TAITRA has developed a trade promotion and information network comprising over 700 specialists in 
more than 40 branch offices worldwide and the two si ster organizations, the Far East Trade Services, Inc. 
(FETS) and the Taipei World Trade Center (TWTC).  TA ITRA's major functions include:  market research 
and information service, market development, exhibition and convention service, design promotion, trade 
education, and web service. 
TAITRA is in charge of implementating the Global Export Promotion Programme, which is aimed at 
assisting businesses to expand their markets overseas.  Measures are target at specific markets, including 
Chinese Taipei’s traditional markets such as Japan a nd European countries, and its potential markets in 
south-east Asia, central Asia, and so uth America.  The programme also targets traditional industries such as 
textiles, and potential industries such as electronics, information technolo gy, and electrical machinery.  The 
overall promotion strategy is partic ipation in the multilateral trade nego tiations for better market access for 
Chinese Taipei's exports.  The programme comprises such measures as strengthening export financing and 
insurance; assisting businesses to use the Internet to  develop business opportunities; assisting businesses to 
eliminate trade barriers;  and enhancing the training of marketing personnel. 
Assisting companies to expand overseas markets includes:  organization of various trade symposia and 
fora;  sponsorship of corporate trade negotiation meetings;  and developing marketing channels.  Overseas 
branch offices work together to help Chinese Taipei's enterprises conduct in-depth market research and 
promote their products in overseas markets.  Since its launch in 2002, out of 747 cases generated by 
350 local companies, 214 were accepted by TAITRA. 
Source:   Information provided by the 
Chinese Taipei  authorities.  
Table III.11 
Government support for export promotion, 2002-05 
(NT$ million) 
Year TAITRA Integrating efforts to explore new 
markets Image Enhancement Plan 
2002 1,600.0 150.0 135.6 
2003 1,451.5 150.0 139.0 
2004 1,336.3 200.0 146.2 
2005 1,430.3 220.0 103.0 
Source:  Information provided by the Chinese Taipei authorities. 
(vii) Free zones (export processing zones, scien ce-based industrial parks and free-trade 
 zones) 
81. The first export processing zone (EPZ) in Ch inese Taipei was established in 1966.  Since 
then, the concept of free zones has expanded to embrace not only manufacturing, but trade, warehousing, distribution, marketing, and other services.  Ten EPZs hosting about 340 enterprises are WT/TPR/S/165 Trade Policy Review 
Page 50 
 
 
currently operational, with total investment of US$3.9 billion.61  There are also six science-based 
industrial parks (SIPs)62 and five free-trade zones.63 
82. Imports into free zones are exempt from custom s duty and other taxes.  Commodities shipped 
from the zones to non-bonded areas are subject to dom estic import and export regulations.  Businesses 
within free-trade zones are allowed to employ non -Chinese Taipei persons up to 40% of the total 
number of employees.  Entities operating within the z ones, enjoy equal treatment in terms of duties 
and all taxes, including income taxes. 
83. In 2004, the total value of trade into and out of EPZs and SIPs amounted to US$40.1 billion 
(11.7% of total trade of Chinese Taipei).  Exports  from EPZs and SIPs accounted for 12.8% of total 
exports, and imports into EPZs and SIPs 10.6% of total imports.  At the end of 2004, 67.8% of 
production in EPZs was exported and the rest entered the local market;  45.7% of production in 
Hsinchu Science Park was exported and the rest entered the local market. 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax-related assistance 
84. The principal indirect taxes in Chinese Taipei  are the business tax, commodity tax, and 
tobacco and alcohol tax.64  The main direct taxes are the individual income tax and profit-seeking 
enterprise income tax (corporate tax).  Indirect ta xes and direct taxes accounted for 44.2% and 55.8% 
of Chinese Taipei's total tax revenue, respectively, in 2004.65 
Indirect taxes  
85. Business tax is applied to sales of goods and services in two forms:  non-value-added and 
value-added.  The non-value-added component is applied to gross receipts of insurance, banking, 
investment trusts, securities, commercial paper, a nd pawnshop businesses;  the rate is 2% of the sales 
of goods and services.66  Exemptions from the business tax include, inter alia:   sales of land;  medical 
and education services;  goods or services sold by c ooperatives and associations to their members;  
proceeds from goods sold in tenders;  services by postal and telecommunication offices;  unprocessed 
raw agricultural products;  sales of rice and flour;  sal es of fixed assets;  gold bars and bricks;  and the 
                                                      
61 Businesses that can be established in the EP Zs include:  machinery and equipment, medical 
equipment; electronics;  chemicals and biochemicals;  te xtiles 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 set for businesses to start the operations in EPZs are 
NT$80 million for warehousing industries and NT$1 million for others.  
62 SIPs are established mainly to encourage the development of industrial technology and to promote 
high-tech industries.  The first SIP was established in 1980. 
63 A free trade zone is an area situated  within the controlled district of an airport or seaport, or within 
an industrial park, export processing zone, science-based industrial pa rks, or other areas as approved for the 
purpose of conducting domestic and non-Chinese Taipei bu siness activities.  Five approved free trade zones to 
date are Keelung, Kaohsiung, Taipei, and Taichung free-trade harbours and Taoyuan free-trade airport zone. 
64 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.  
65 Indirect taxes accounted for 43 %, 46.9%, and 45.2% of total revenue in 2001 , 2002, and 2003, 
respectively. 
  66 The rate is 1% for reinsurance premiums of insurance businesses;  1% and 0.1%, respectively, for 
small businesses and consignees of agricultural wholes ale markets and 15% or 25% for special beverage and 
food services (night clubs and restaurants). Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
 Page 51 
 
 
sales of financial derivative products.  The VAT co mponent is applied to all other businesses at the 
rate of 5%.  The business tax is calculated on the basis of actual sales. 
86. The commodity tax is a special excise tax imposed at the same rate on imported and domestic 
products; depending on the product, the tax can be in the form of ad valorem  or specific duties.  
Goods subject to commodity tax include rubber tires , cement, machine-made cool drinks, flat glass, 
oil and gas, certain electric appliances, and motor vehicles (Table AIII.6).  The differential treatment 
between imported and domestic goods, in terms of the basis for calculating the commodity tax67, was 
eliminated in amendments to the Commodity Tax Act in October 2001.  The base for the commodity 
tax is the manufacturers' net selling price for domesti cally produced goods, and the c.i.f. price plus the 
corresponding customs duty for imports.  Exemptions from commodity tax include raw materials used 
for manufacturing other taxable commodities, expor ted goods, and goods for exhibition but not for 
sale. 
87. The tobacco and alcohol tax, as prescribed in the Tobacco and Alcohol Tax Act of 2000, is 
charged at various rates (Table III.12).  Manufactur ers are required to register with tax collection 
authorities before commencing production.  Tobacco pr oducts are also subject to health and welfare 
surcharges;  the surcharge is u sed to finance the health insura nce programme and other programmes 
related to health and welfare. 
Table III.12 
Tobacco and alcohol tax, 2005 
Taxable items Tax amounts Health and welfare surcharge 
Tobacco products   
Cigarettes NT$590 per 1,000 sticks NT$500 per 1,000 sticks 
Cut tobacco NT$590 per kg. NT$500 per kg. 
Cigars NT$590 per kg. NT$500 per kg. 
Other tobacco products NT$590 per kg. NT$500 per kg. 
Alcohol   
Brewed alcoholic beverages   
Beer NT$26 per litre  
Other brewed alcoholic beverages NT$7 per litre and per degree of alcohol content  
Distilled spirits NT$185 per litre  
Reprocessed alcoholic beverages   
Alcohol contents exceeding 20 ％ by volume NT$185 per litre  
Alcohol contents less than 20 ％ by volume NT$7 per litre and per degree of alcohol  
Rice spiritsa NT$185 per litre  
Cooking alcoholic beverages  NT$22 per litre  
Other alcoholic beverages  NT$7 per litr e and per degree of alcohol content  
Ethyl alcohol  NT$11 per litre  
a Rice spirits constituted a monopoly prior to the implementation of  the Act.  If the selling price is higher than the regulate d price, 
the vendor is subject to a penalty of NT$2,000 per bottle (Article 21, Tobacco and Alcohol Tax Act). 
Source: Information provided by the Chinese Taipei authorities. 
                                                      
67 Previously, there was discrimination between imported and domestically produced goods in terms of 
the commodity tax:  the tax on imports was the sum of the taxable value, the customs duties, and harbour 
construction dues multiplied by the tax rate on domestic goods.  The calculation was based on the wholesale 
price or a 12%  promotional expense (WTO document WT/ACC/TPKM/18, 5 October 2001). WT/TPR/S/165 Trade Policy Review 
Page 52 
 
 
Direct taxes  
88. Revenue from individual income tax and prof it-seeking enterprise income tax accounted for 
15.5% and 17.4%, respectively, of total tax revenue in 2004.  The highest marginal rate of individual 
income tax was 40% in 2004;  the highest rate of  profit-seeking enterprise income tax, applied if 
taxable income is over NT$100,000, was 25%.  Accord ing to the authorities, the effective rate of 
profit-seeking enterprise income tax was 17.5% in 2003.68 
Tax incentives 
89. Both domestic and non-Chinese Taipei businesses ar e eligible for tax incentives directed at 
facilitating automation and "newly-emerging, importa nt and strategic" industries, R&D, pollution 
control, energy conservation, and personnel trai ning (Chapter II(6)(iii)).  Income tax incentives 
include:  accelerated depreciation on certain equipmen t and facilities;  a deduction 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, important and strategic" 
industries.  Tax incentives in relation to the cust oms tariff include exemption from import duties and 
business taxes for certain industries;  tax exemption in  relation to merger and acquisition;  granting of 
investment loss reserve;  investment tax credits fo r shareholders of emerging,  important, and strategic 
industries;  tax exemption for royalties for pers onal creations or innovations;  and exemption from 
income tax on technical royalty payments. 
90. Annual estimates of the total amount of tax reve nues forgone as a result of these and other tax 
measures are publicly available; for example, in 2004, the latest year for which such data are 
available, total tax revenues forgone amounted to NT$53 billion.  However, no data are available on 
the estimated tax revenue forgone as a result of indi vidual tax incentives, nor on the cost effectiveness 
of various tax incentives.  Publication of a breakdow n of estimates of tax re venues forgone (so-called 
"tax expenditures") along the lines of practices in many OECD countries, together with studies evaluating the cost effectiveness of such incentiv es, would enhance the transparency of such 
measures, and thus public accountability, thereby cont ributing to more effective tax policy in Chinese 
Taipei. 
91. 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.  In so far as tax incentives have stimulated investment in the latter, 
they may well have unduly distorted the allocati on of resources at the expense of total factor 
productivity, a major determinant of competitiveness.
69 
(ii) Subsidies 
92. According to the authorities, Chinese Taipei do es not provide prohibited subsidies within the 
meanings of Article 3 of the Agreement on Subsidies and Countervailing Measures.  
                                                      
68 Effective rate = (tax payable – tax cred it for upgraded equipment)/taxable income. 
69 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. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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93. Chinese Taipei provides subsidies to selected products and activities in agriculture, fisheries, 
and industry.70  In agriculture, subsidies are provided fo r the production of rice, sorghum and feed 
corn, sweet potatoes, beans, tob acco leaves, certain vegetables, and sugar.  In fisheries, the 
government implements buy-back programmes for fi shing vessels, subsidies for stopping fishing, 
grants for the use of water-recirculation devices used in aquaculture, marine insurance for fishing 
vessels and fishermen, and aqua-cultural facilities loan programmes.  In the industrial sector, the 
government provides subsidized loans for small a nd medium-sized enterprises (SMEs), for product 
marketing, and for overseas investment and construc tion projects.  The government also provides tax 
incentives and funds for development of "newly-emerging, important and strategic" industries and for 
regional development".71  These support schemes are contingent neither on export performance nor 
upon the use of domestic over imported goods.  According to the authorities, domestic and non-Chinese Taipei enterprises are eligible for these subsidies on an equal basis. 
94. According to the authorities, subsidies provide d to the above-listed activities, in the period 
2002-04, totalled NT$134.2 billion:  NT$36.7 b illion in 2002, NT$41.3 billion in 2003, and 
NT$56.2 billion in 2004. 
(iii) Trade-related investment measures 
95. Chinese Taipei does not maintain any local-content requirements.  
(iv) Standards and other technical requirements 
(a) Standards, technical requirements, and inspection 
96. Chinese Taipei’s main legal instruments regula ting standardization and inspection include the 
Standards Act, the Weights and Measures Act, and the Commodity Inspection Act.  These are 
enforced by the Ministry of Economic Affairs.  Chinese Taipei’s standards are intended to promote standardization, pursue quality improvement  for products, processes and services, increase 
productivity, and ensure adequacy of production, tran sportation, marketing, and consumption so as to 
promote public safety.  Domestic standards are voluntary, except for those designated as technical 
regulations. 
97. Services provided by the Bureau of Standard s, Metrology and Inspection (BSMI) under the 
Ministry of Economic Affairs  include:  the development and promotion of standards;  commodity 
inspections in accordance with ma ndatory technical regulations;  and voluntary product certification 
and management systems certification.  The BSMI has concluded cooperation arrangements with 
32 organizations in 24 countries.
72  The BSMI is responsible for th e full implementation of the Mutual 
Recognition Agreement on Electro-Magnetic Compatibility.73  The Bureau is an associate member of 
the General Conference of Weights and Measures,  and signed the Mutual Recognition Arrangement 
                                                      
70 WTO document G/SCM/N/123/TPKM, 3 August 2005. 
71 WTO documents G/SCM/N/95/TPKM and /123/TPKM, 8 February 2005 and 3 August 2005. 
72 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, Poland, Saudi Arabia, Singapore, South Africa, Sweden, Switzerland, Thailand, the United Kingdom, the United States, and Viet Nam.  
73 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). WT/TPR/S/165 Trade Policy Review 
Page 54 
 
 
of the International Committee of Weights and M easures on 4 June 2002.  The BSMI participates in 
APEC and the Organisation Internationale de Métrologie Légale (OIML) on issues related to 
standardization, metrology, and conformity assessment  systems. The BSMI acts as the enquiry point 
under the WTO Agreement on Technical Barrier to Trade.  The BSMI is not a member of the ISO or 
the IEC. 
98. As of the end of October 2005, there were 13,981 domestic standards in Chinese Taipei;  of 
these, 612 (4%) were designated as technical regula tions.  Data provided by the authorities indicate 
that about 25% of domestic standards were harmonized with international ones in 2004. 
(Table III.13).74  The BSMI adopts relevant standards when the scope, grade, condition, and level of 
application are appropriate for domestic circumstances.  The rate of harmonizing newly introduced 
domestic standards with existing international ones was 93% in 2002, 86% in 2003 and 100% in 
October 2005.  The higher rates of harmonization pertain to  environmental management, information 
and communication, and wood industry products. 
Table III.13 
Domestic standards and their equivalence to international standards, end-October 2005 
Domestic standards equivalent to 
international standardsb 
Area Total 
domestic 
standards Existence of 
international 
standardsa Mandatory 
technical 
regulation Voluntary 
standards 
Civil engineering and architecture 662 26 4  16  
Mechanical engineering 2,183 359 19  147  
Electrical engineering 1,037 204 71  26  
Electronic engineering 848 219 3  185  
Automotive and aerospace engineering 494 119 4  11  
Railway engineering 86 26 0  24  
Shipbuilding engineering 404 148 0  0  
Ferrous materials and metallurgy 387 159 2  69  
Non-ferrous materials a nd metallurgy 272 81 0  38  
Nuclear engineering 57 7 0  3  
Chemical industry 2,803 1,544 12  1,287 
Textile industry 334 46 0  9  
Mining 343 109 0  56  
Agriculture 451 80 1  52  
Food 527 196 104  71  
Wood industry 86 86 6  40  
Pulp and paper industry 207 204 0  41  
Environmental management 17 17 0  17  
Ceramic industry 418 21 0  14  
Domestic wares 343 17 0  11  
Table III.13 (cont'd) 
                                                      
74 At the end of October 2005, 4,983 domestic standards had corresponding international standards;  
about 71% of these domestic standards were aligned to international standards. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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Domestic standards equivalent to 
international standardsb 
Area Total 
domestic 
standards Existence of 
international 
standardsa Mandatory 
technical 
regulation Voluntary 
standards 
Medical equipments and appliances 338 82 0  31  
Information and communication 671 625 0  606  
Industrial safety 196 117 0  57  
Quality control 70 70 0  70  
Physical distribution and packaging 189 21 0  16  
General and miscellaneous 558 400 61  332  
Total 13,981 4,983 287  3,229  
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. 
99. Procedures for adopting new domestic standards in Chinese Taipei begin with the submission 
of a proposal by any person, government agency or organization to the BSMI.  Proposals are reviewed 
by the Standards Review Council, then the St andards Technical Committee (or other professional 
organizations or expert delegated by the BSMI) drafts a proposal.  The  BSMI solicits comments on 
the proposal from the general public, and the final draft is submitted to the MOEA for approval.  
Chinese Taipei allows 60 days for comments by inte rested parties on draft standards.  Notices of 
proposed technical regulations, standards, and pro cedures for conformity assessment are published in 
the government gazette .  Since 2002, Chinese Taipei has submitted notifications under Articles 2 
and 5 of the TBT Agreement (Table AII.1). 
100. Mandatory technical regulations are governed by  the relevant authorities under various laws 
and regulations;  these authorities issue conformity ce rtificates.  Technical regulations are applied for 
certain chemical products, electrical produc ts, electronic and mechanical products. 
101. Products subject to mandatory technical regulations are subject to commodity inspection in 
accordance with the Comm odity Inspection Act.75  Inspection is carried out by the BSMI with regard 
to domestically produced agricultural, industria l, and mining commodities, imported products and 
those destined for exportation.  Inspection of  relevant imports increased from 274,385 cases in 2000 
to 335,780 cases in 2004 (Table III.14).  This may ha ve been due to a substantial increase in the 
inspection of live animals and animal products, from 19,719 in 2000 to 82,692 in 2004.  Commodity 
inspection is conducted under four schemes:  batc h-by-batch, monitoring, registration of product 
certification, and declaration of conformity.76  The authorities are of the view that Chinese Taipei 
                                                      
75 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. 
 76 Since 1 January 2004, products for batch inspection have been required to pass type approval in 
advance;  these products include elect rical, electronic, and IT products.  Th e testing standards of type approval 
are the same as those under the Registration of Product Certification (RPC) Scheme.  The scheme is being 
implemented in order to replace batch- by-batch inspection and avoid multiple inspections of products of similar 
type.  There are alternative conformity assessment proc edures that manufactures may choose to demonstrate 
compliance of their products with mandatory inspection requirements.  For example, mechanical products 
(except bars and rods) and electrical products (except for AC motors) are subject to either type-approved batch 
inspection or RPC;  chemical products such as fire-retar dant articles, wall or ceiling coverings, tyres, and toys 
are subject to either monitoring insp ection or RPC; chemical products su ch as safety articles and PVC are WT/TPR/S/165 Trade Policy Review 
Page 56 
 
 
applies the same type of commodity inspection procedures to domestically produced goods and 
imports.77  The commodity inspection standards are dete rmined and identified in accordance with the 
obligations required by international conventi ons, and in reference to domestic standards. 
102. Manufacturers may apply for conformity certificati on by the standards authority in regard to 
relevant domestic standards.  Those that meet th e certification requirements are permitted to use the 
Chinese Taipei certification mark.  According to the authorities, Chinese Taipei’s conformity 
assessment requirements do not creat e unnecessary obstacle to trade. 
103. The BSMI may accept test results, inspection certificates and/or other relevant certification 
documents of Chinese Taipei’s trading partners, subject to its bilateral or multilateral mutual 
recognition agreements. 
Table III.14 
Commodity inspection, by type, 2000-04  
Year Total Export inspection Import inspection Inspection for domestic 
market 
2000 361,078 10,520 274,385 76,173 
2001 388,491 12,374 311,319 64,798 
2002 339,377 1,342 300,376 37,659 
2003 336,097 n.a. 320,805 15,292 
2004 344,923 n.a. 335,780 9,143 
n.a. Not applicable. 
Source: BSMI (2004),  "The Statistical abstract of standard s, metrology and inspection", Vol. 54.  
(b) Sanitary and phytosanitary arrangements 
104. Main laws and regulations governing sanitary and phytosanitary (SPS) measures include the 
Statute for Prevention and Control of Infectious An imal Diseases, the Plant Protection and Quarantine 
Act, the Law Governing Food Sanitation, the Qu arantine Requirements for the Importation of 
Animals or Animal Products, and the Quarantine Requi rements for the Importation of Plants and Plant 
Products.  The Bureau of Animal and Plant Health Inspection and Quarantine (BAPHIQ), under the 
Council of Agriculture, is responsible for animal and plant disease  control, health inspection and pest 
control, quarantine, veterinary drug administration,  and meat hygiene and inspection.  The BAPHIQ's 
responsibilities include:  establishing and executing SPS-related policies, la ws, and regulations; 
planning, implementating and supe rvising SPS-related programmes and projects;  data collection and 
risk analysis;  SPS-related scientific and technologi cal research and development;  and implementing 
and supervising import and export in spection and quarantine operations.  The BSMI performs 
mandatory inspection of imported food products under  the commission of the Department of Health, 
which is the competent authority for regulating food products. 
105. Under the Plant Protection and Quarantine Act78, imports (or transhipments) of soil and plants 
require Council of Agriculture approved.  Plants or  plant products subject to quarantine requirements 
must be imported with a phytosanitary certificate is sued by the exporting country.  An importer must 
                                                                                                                                                                     
subject to batch-by-batch inspection or RPC.  Gas hose, word-processing machines, and hard disc devices are 
subject to declaration of conformity;  AC motors, bars and rods, automatic data processing machines, and radio-
broadcasting receivers are subject to RPC. 
77 Chinese Taipei introduced the Supplier's Declarati on of Conformity (SDoC) in 2001 and introduced 
self-verification for measuring instruments in 2003;  35 electronic and chemical products have been covered by 
the SDoC since 2002. 
78 The Act was promulgated on 10 January 1996 and subsequently amended in 2000, 2001, and 2002. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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apply for the plant quarantine before the arrival of plants or plant products at the port of entry to 
Chinese Taipei.  Exporters of plants or plant produc ts may apply for a phytosanitary certificate, if so 
requested by an importing country. 
106. Chinese Taipei has been a member of the OIE (t he Office International des Epizooties) since 
1954.  Chinese Taipei concluded a bilateral ar rangement with the New Zealand Commerce and 
Industry Office in Taipei concerning cooperation on plant quarantine issues on 17 December 1999, to 
promote mutual cooperation.  SPS measures are al so covered in the free-trade agreement with 
Panama.79  
107. Bilateral technical consultations  and negotiations with trading partners and participation in 
multilateral organizations, such as the WTO SPS Co mmittee and the OIE, are under the responsibility 
of the BAPHIQ.  In developing sanitary and phytosan itary standards, relevant international biological 
and entomological publications are consulted.  In addition, comments on proposed measures are 
sought from the public.  According to the author ities, Chinese Taipei recognizes non-Chinese Taipei 
quarantine standards and SPS measur es as equivalent as long as these achieve the appropriate level of 
sanitary and phytosanitary protection. 
108. 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 extension for another five years. 
109. Chinese Taipei is not a member of either Code x or International Plan t Protection Convention. 
(v) Intellectual property rights 
(a) Overview 
110. In recent years, Chinese Taipei has amended substantially its major laws on intellectual 
property rights (IPR) and strengthened its enfor cement measures (Table AIII.7).  The Intellectual 
Property Office, established in 1999 under the Minist ry of Economic Affairs, is responsible for the 
formulation of IPR-related policy;  administratio n of IPR registration and public IP awareness;  
settlement of disputes and enforcement of IPR-re lated laws;  inter-agenc y coordination;  and 
promotion of cooperation with Ch inese Taipei's trading partners. 
111. In accordance with relevant laws and regul ations, both domestic and non-Chinese Taipei 
applicants for IPR protection in Chinese Taipei re ceive the same level of protection;  application 
procedures in terms of time and fees concerned are also the same80;  applicants with no domicile or 
business office in Chinese Taipei must appoint a certified trade mark or patent agent. 
112. In 2004, 40.3% of all patent applications were submitted by non-Chinese Taipei applicants 
and 42.6% of the total approved patents concerned non-Chinese Taipei applicants.  The share of non-
Chinese Taipei applicants in the total trade mark s applications was 21.2%;  26.8% of all approved 
trade marks pertain to overseas applicants (Table III.15). 
                                                      
79 In the FTA, Chinese Taipei and Panama agreed to set up a committee on SPS measures. 
80 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 a signatory to a regional/multilateral agreement to which Chinese Taipei is also a signatory;  or 
that country has not concluded an agreement with Chinese Taipei on reciprocal protec tion of IPRs (patents and 
trade marks);  or if the Acts of th e country do not accept patent applica tions filed by Chinese Taipei persons 
(Article 4, Patent Act;  Article 3, Trademark Act;  an d Article 5, Integrated Circuit Layout Protection Act). WT/TPR/S/165 Trade Policy Review 
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Table III.15 
IPR applications and approvals, 2001-04 
(Number and per cent) 
Patents Trade marks  
Applications Approved Applications Approved/published 
2001 Total 67,860 53,789 59,158 75,731 
 Domestic 59.25  60.07  69.81  72.82 
 Overseas 40.75  39.93  30.19  27.18 
2002  Total 61,402 45,042 61,729 64,032 
 Domestic 58.51 55.16 73.55 68.48 
 Overseas 41.49 44.84 26.45 31.52 
2003 Total 65,742 53,034 65,907 54,335 
 Domestic 60.33 58.37 74.16 71.89 
 Overseas 39.67 41.63 25.84 28.11 
2004 Total 72,082 27,717 61,667 59,240 
 Domestic 59.68 57.42 78.83 74.84 
 Overseas 40.32 42.58 21.17 25.16 
Source: Information provided by the Chinese Taipei authorities. 
113. Chinese Taipei committed to fully apply the TR IPS Agreement by the date of its accession to 
the WTO;  the authorities state that they have fully applied the Agreement.  Apart from TRIPS, 
Chinese Taipei ensures cooperation on, and protection of, IPRs within the framework of the APEC.  
Chinese Taipei is not a signatory to any conventions  of the World Intellectual Property Organization.  
Chinese Taipei has sought to implement cross-bor der IP protection requirements and obligations 
through bilateral instruments, particularly prior to its accession to the WTO.  Chinese Taipei has 
signed 18 bilateral IP arrangements.81 
(b) Copyright and neighbouring rights 
114. The latest amendments to the Copyright Act c oncern adoption and clarification of exclusive 
rights;  the use and protection of copyrights in the context of the current digital environment;  
strengthening enforcement rules with regard to piracy and infringement;  strengthening dispute 
settlement rules;  enhancing the rights of Customs on  suspected infringements;  balancing of interests 
between the rights of right-owners and users;  achieving a balance between private and public 
interests;  increasing fines;  and conferring on the police administrative power to confiscate.82  The 
Copyright Act, as amended in 2003, increased terms of imprisonment and classified reproduction and 
distribution of pirated optical disks as a public cr ime, i.e., prosecution may be undertaken without 
complaint by the right holder. 
115. According to the  Copyright Act, copyright is conferred on oral and literary works, musical 
works, dramatic and choreographic works, artistic works, photographic works, pictorial and graphical 
works, audiovisual works (cinematography), sou nd recordings (phonograms), architectural works, 
computer programs, derivative works, compilation work s, and performances.  No legislation exists for 
the protection of broadcasting organizations. 
116. Works of citizens of Chinese Taipei’s trading pa rtners are also protected, provided they are 
first published in Chinese Taipei, or within 30 days  of being published else where, and provided the 
trading partner extends similar protection to work s of Chinese Taipei persons.  Copyright protection 
                                                      
81 These are with Austria, Australia, Chile, Cost a Rica, El Salvador, the European Communities, 
France, Germany, Guatemala, Japan, Liechtenstein, th e Netherlands, Nicaragua, New Zealand, Paraguay, Spain, 
the United Kingdom, and the United States.  
82 The amendment entered into force on 1 September 2004. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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commences from the point of accomplishment of the work and is extended for the lifetime of the 
author plus 50 years. 
(c) Patents 
117. The latest amendments to the Patent Act entere d into force on 1 July 2004.  The amendments 
concerned:  the rules regarding the specification document;  clarification of patent rejection 
conditions;  repeal of opposition proceed ings;  annual patent fees;  exclusive rights to preclude offers 
for sale;  and the repeal of criminal liabilities for utility model and design patents. 
118. 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 
granted for 10 years, and for design patents 12 years. 
119. Applicants for a patent must submit to the Intellectual Property Office an application, a 
specification (the title of the inve ntion, abstract, and the scope of  claims), and necessary drawings.  
When a patent application is granted, it is published in the Patent Gazette   
120. Plant varieties are protected under the Plant Va riety and Plant Seed Act.  The law covers a 
plant varieties that have the characteristics of nove lty, distinctness, uniformity, and stability, as well 
as an appropriate plant variety denomination. 
(d) Trade marks and geographical indications 
121. Trade mark protection is valid initially for ten years, but is renewable.  The Trademark Act of 
6 May 1930, was last amended on 28 May 2003.  The amendment included, inter alia :  expanding the 
definition of a trade mark to include both goods  and services;  allowing monochrome, monotone, and 
three-dimensional shapes to be part  of trade marks;  allowing single  registration for goods and 
services in several classifications  (classes);  providing for oppositi on after registration;  introducing 
control measures on imports and exports83;  and provisions regarding th e marks of geographic origin 
and "collective membership".84 
122. Claims for priority rights are allowed within six months of the day of filing the trademark 
with relevant authorities of a WTO Member.  Claims  for priority rights in Chinese Taipei must be 
made at the same time as an application for tradem ark 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. 
123. Chinese Taipei protects geographical indications (GIs) under the Trademark Act.85  T o  
recognize GIs and generate a GI protection list, Chin ese Taipei promulgated the Operational Points on 
Application for Registration of GIs as Certification Marks on 2 September 2004. 
                                                      
 83 For example, the Customs may suspend the release of imported or exported goods upon the request 
of the trade mark holder. 
84 "Collective trade mark" registration allows re gistration by business associations, social 
organizations, or any other group that exists as a juridical person with a view to identifying the goods or services provided by its members, and therefore distinguishing these goods or services from those provided by others. 
85 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/165 Trade Policy Review 
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(e) Integrated circuits 
124. Layout of integrated circuits are protected by the Integrated Circuit Layout Protection Act of 
11 August 1995, and its latest amendment on 12 June 2002.86  Registration is available for integrated 
circuit layouts that comply with the criteria of orig inality;  protection is for ten years from the date of 
application or the date of first commerc ial exploitation, whichever comes first. 
(f) Trade secrets 
125. Chinese Taipei protects trade secrets under the Trade Secrets Act, promulgated on 
17 January 1996;  trade secrets are defined as "any  method, technique, process, formula, programme, 
design, or other information that may be used in the course of production, sales, or operations".  
Infringement of trade secrets may incur civil remedi es, such as the destruction of products generated 
from the misappropriation.87  Undisclosed test data have been pr otected by the Pharmaceutical Affairs 
Act since 5 February 2005.  Agri-pesticides are cons idered a trade secret in accordance with the Rules 
of Agro-pesticide Toxicological Tests.  Trade secret s are apparently not protected if their owner's 
home country has not signed a bilateral agreemen t concerning trade secrets with Chinese Taipei, or 
does not provide legal protec tion to trade secrets owned by Chinese Taipei persons.88  Nonetheless, 
according to the authorities, trade secrets are protected  in Chinese Taipei in conformity with Article 3 
of the TRIPS Agreement. 
(g) Compulsory licensing 
126. Under Chinese Taipei's IP laws, compulsory li censing is allowed in the event of domestic 
emergencies, or to make non-profit-seeking use of a patent or circuit layout for the enhancement of 
public welfare.  If a licensing agreement with reas onable commercial terms a nd conditions and within 
a reasonable period of time fails, or if the patent ee has imposed restrictions on competition or has 
created unfair competition, the authorities may grant a compulsory licence.89  If the reasons for a 
compulsory licence for a patent or circuit layout  cease to exist, the compulsory licence may be 
terminated upon application.  A compulsory licence may be granted for making a commercial sound recording of a musical work, if the work has been  published for six months or more by an earlier 
sound recording and compensation is paid.  No com pulsory licences are granted for utility models and 
designs.  To date, there has been one case of compulsory licensing in Chinese Taipei.
90  
127. Chinese Taipei imposes no restrictions on royalty payments for licensing IPRs, based on the 
principle of freedom to private contracts.  None theless, once economic rights holders join one of the 
                                                      
86 The amendments concerned administrative rules, su ch as notifications to the applicant and a time-
frame for the submission of  a defence statement. 
87 Misappropriation of trade secrets includes:  acqui ring a trade secret by improper means;  acquiring, 
using or disclosing a trade secret due to "gross negligence";  and using or disclosing by improper means (e.g. 
theft, fraud, and coercion) a le gally acquired trade secret.  
88 Article 15, Trade Secrets Act. 
89 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 combination of the two are licensed. 
90 On 30 July 2002, a Chinese Taipei company applied for a compulsory license on five patent rights 
(concerning rewritable compact discs) owned by a non- Chinese Taipei company.  The Intellectual Property 
Office granted the licence on 26 July 2004.  The patentee appealed to the Committee of Appeal of the MOEA on 
26 August 2004.  The appeal is currently in process. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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seven copyright intermediary organizations91, rates are examined and approved by the Copyright 
Regulatory and Mediation Board.92 
(h) Parallel imports 
128. 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.  Parallel imports of copyrighted products are prohibited;  anyone that 
imports these goods without the authorization of the right-holder is considered to have infringed the 
rights and is subject to civil liability. 
(i) Enforcement of IPRs 
129. All IP laws contain provisions on remedies in case  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.  Criminal liabilities ar e incurred upon infringement of copyrights and trade 
marks;  infringers are subject to imprisonment of not more than seven  years and to a fine of up to 
NT$8  million.  Provisional measures of protection are provided for under the Civil Procedures Act. 
130. Prosecutors and police may act e x officio  in case of trade mark infringement.  Customs may 
suspend ex officio  the release of goods suspected of infringing IP Rs.  In the case of optical disk piracy 
deemed to violate the Copyright Law,  the prosecutor's office may initiate a public prosecution. 
131. Since Chinese Taipei’s accession to the WTO, it has adopted various measures to strengthen 
the enforcement of IPR legislation.  Under th e IPR Action Plan 2003-2005, the Anti-Counterfeiting 
Committee and Joint Optical Disks Enforcement Taskforce were established to combat IPR 
infringements.  A reward plan was organized for in formants on illegal optical disk plants.  A special 
IPR police force was also established in 2004 to carry  out random raids at night markets and retail 
shops suspected of piracy, and a Coordination Committee on IPR protection was set up by the high prosecutor's office of the Ministry of Justice to st rengthen enforcement of the IPR laws, particularly 
against piracy.  Specific control measures on imports  and exports have been taken in accordance with 
the following directives:  the Operational Dir ections for Customs Authorities in Implementing 
Measures for Protecting the Rights and Interests of Patent, Trademark, and Copyright (1 June 2005);  
Export Monitoring System of Trademarks (September  1994);  Inspection for Exports of Audio-visual 
Copyrighted Works and OEM audio CDs (2000);  Operational Directions for the Enforcement 
Taskforce against Exports of Pirated Optical Disks;  Inspection System on Optical Disk 
Manufacturing Implement and Optical Disks;  and Inspection System on Export Chip Products with 
Mask-ROM. 
132. The total number of adjudicated cases fell from 2,797 to 2,581 between 2004 and 2005.  In 
2005, about half of total adjudicated cases resulted in imprisonment (Tables III.16  and III.17).
93  The 
                                                      
 91 A copyright intermediary organization is an organization approved and registered according to the 
Copyright Intermediary Organization Act, on behalf of copyright owners to manage and exercise rights and 
perform obligations. Currently, there are seven copyright intermediary organizations (concerning musical 
works, sound recordings and audiovisual works) in Chinese Taipei. 
 92 The Board (or committee) is established pursuant to  Article 83 of the Copyright Act.  According to 
Article 82 of the Copyright Act, the committee is responsible, inter alia , for intermediation in copyright disputes 
and the deliberation of copyright royalties, submitted by copyright intermediary organizations. WT/TPR/S/165 Trade Policy Review 
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authorities plan to set up a special IP court in the n ear future;  the judiciary is currently preparing the 
proposal for review and approval by the legislature. 
Table III.16 
IP cases investigated and concluded by district public prosecutors' offices, 2001-04 
(Persons and per cent) 
Types of offences (affirmed cases)  
Total Copyright Trade mark Patenta 
2001 6,133 4,457 1,180 496 
2002 5,704 3,847 1,358 499 
Per cent change 
2002/2001 -7.0% -13.7% 15.1% 0.6% 
2003 6,545 3,256 2,558 731 
Per cent change 
2003/2002 14.8% -15.4% 88.4% 46.5% 
2004 4,885 2,332 2,526 27 
Per cent change 
2004/2003 -25.4% -28.4% -1.2% -96.3% 
a According to the authorities, the decrease in the number of affirmed patent cases in  2004 was a result of the decriminalizati on of 
patent infringement pursuant to the new Patent Act. 
Source: Information provided by the Chinese Taipei authorities. 
Table III.17 
IP adjudication findings, 2002-05 
(persons) 
Adjudication  
Total Imprisonment Detention Fines Not guilty Others 
2002 2,634 1,498 160 52 350 574 
2003 3,552 1,896 441 89 379 747 
2004 (Jan-Dec) 2,797 1,348 750 87 299 313 
Per cent of cases  48.19% 26.81% 3.11% 10.69% 11.19% 
2005 (Jan-Dec) 2,581 1,301 776 82 189 233 
Per cent of cases   50.40% 30.06% 3.18% 7.32% 9.03% 
Per cent change -7.72% -3.49% 3.46% -5.75% -36.79% -25.56% 
Source: Information provided by the Chinese Taipei authorities.  
133. Data provided by the authorities indicate that, in th e first half of 2004, the number of violators 
discovered dropped by 36.5% over th e same period of 2003;  booths selling pirated optical disks in 
the night markets decreased by over a half and the number of stores selling pirated musical compact 
disks declined from 300 to 129. 
                                                                                                                                                                     
93 Chinese Taipei has been criticized by its trading pa rtners for its discriminatory treatment of domestic 
and non-Chinese Taipei companies in legal actions.  No n-Chinese Taipei companies were required to submit 
new notarized and legalized powers-of- attorney (POAs) each time with each complain t, whereas for domestic 
companies the requirements were less stringent.  However, the authorities contend that the issue has been 
solved;  the judiciary has issued a nu mber of notices stating that non-Chin ese Taipei companies are not required 
to submit an additional POA once the authenticity of POAs are established. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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(vi) Privatization of state-owned enterprises 
134. The current programme to privatize Chinese Taip ei's state-owned enterprises (SOEs) began in 
1989, based on the Act of Privatization of SOEs.94  The first privatization of an SOE under the 
programme took place in 1992.  Between 1998 and 2001 , privatization was mainly in state-owned 
banks and insurance companies.  In 2005, the Co operative Bank and Chunghwa Telecom, Co., Ltd. 
were privatized through stock sales with the total proceeds of NT$287.4 billion.  
135. Privatization is carried out mainly through the sale of shares and assets;  other methods are:  
formation of a privately-owned enterprise by joint ve nture with private individuals;  merger with an 
existing private enterprise; and/or capital incr ease.  Following privatization approval by the 
government, privatization is negotiated with a counterpart selected through public invitation.95  The 
authority in charge of the SOE is responsible for its privatization. 
136. Since the beginning of the privatization pr ocess (to October 2005), 34 SOEs (about 70% of 
SOEs planned to be privatized) have been pr ivatized;  the total proceeds amounted to about 
NT$710 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.  By the end of 2004, the share of SOEs in the GDP was 4.7% or NT$482.6 billion (6.4% 
at the end of 2001);  employees in SOEs accounted for about 1.7% of all employees in Chinese Taipei in 2004.  In 2004, SOEs generated 8.4% of imports and 1.7% of expor ts (7.4% of imports and 1.1% of 
exports in 2002). 
137. Fifteen SOEs in petroleum, aerospace, shipbuilding, iron, electric power, water supply, 
tobacco and liquor, banking, rail transport, postal services, are chemical manufacturing, are to be 
privatized.  Schedules for privatizing nine of these  are being re-evaluated, are suspended or remain 
undecided.  According to the authorities, the latest date for the privatization of SOEs is foreseen in 
2008 (Table AIII.8). 
(vii) Competition policy 
138. The Fair Trade Law (FTL) of 1991 is the lega l basis for Chinese Taipei's competition policy;  
the latest amendment entered into force on 6 Febr uary 2002.  The Fair Trade Commission (FTC),  
established on 4 February 1992, is the main  authority responsible for such policy
96;  it investigates any 
violation of the FTL and may take administrativ e measures including cease orders and fines.  The 
FTC had 214 staff in 2005, and its budget w as about NT$349 million (217 and NT$361 million 
in 2002). 
139. Under the FTL, price fixing, bid-rigging, market  sharing, and other "concerted actions" are 
generally prohibited.97  However, the Fair Trade  Commission may approve certain cases such as:  
(a) unifying the specifications or models of goods  for cost reduction, quality improvement, or 
efficiency increasing purposes;  (b) joint research and development;  (c) export cartels;  (d) import 
                                                      
94 According to the Act, a state-owned enterprise is an enterprise either solely owned by the 
government or jointly operated or invested with private parties, where the government share exceeds 50% of the capital. 
 95 "Public invitation" means opening up privatization to the public after obtaining approval from the 
government. 
96 The FTC has nine commissioners.  Their term of  office is three years, with the possibility of 
re-appointment for one more term. 
97 Under the FTL, "concerted actions" refer to any form of mutual action or understanding with 
competitors with regard to prices, quantity, technology, pr oducts, facilities, trading coun terparts or trading areas. WT/TPR/S/165 Trade Policy Review 
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cartels;  (e) actions to meet economic downturns ;  and (f) actions by small and medium-sized 
enterprises to jointly improve efficiency.  In addition, exclusions from the FTL's provisions are 
granted in cases of:  explicit exclusions in Banki ng Law (Article 62), Financial Holding Company 
Law (Article 19), Financial Institutions Merger Ac t (Article 13), Insurance Law (Article 149-7));  
individual sectors with competition rules (telecommunications);  and specific sectors that grant or 
require certain anti-competitive practices (for exampl e, laws regulating professionals and the practice 
of fee standards set by professional associations).  Two applications for the approval of concerted 
actions were made in 2004, one of which was a pproved;  a decision on the other application was 
carried over to 2005.  According to the authorities,  the commercial operations of government agencies 
may be subject to the FTL. 
140. 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.98  Statutory monopolies exist in petroleum, electricity, sugar, steel, and water supply 
industries. 
141. The FTL generally prohibits mergers.99  Nonetheless, they can be permitted by the FTC "to 
the extent that they do not impede competition", or if the overall economic benefits of the merger 
outweigh the disadvantages resulting from restraints on competition that the merger would cause.  A 
"pre-merger notification", which replaced the "pre-m erger approval application"  in 2002, is required 
by the FTC.100  A total of 33 mergers were notified to the FTC in 2004, down from 50 in 2003.  Of the 
33 mergers notified, 17 have been permitted.  Resa le price maintenance is prohibited;  the FTC is 
required to apply the rule of "reasonable in prin ciple" to other types of vertical restraints.101  
142. Violations of the FTL are subject to:  FTC to cease administrative orders, rectify the conduct, 
or take corrective measures within the prescribed ti me;  administrative penalty of between NT$50,000 
and NT$25 million;  imprisonment of not more than th ree years, or a fine of up to NT$100 million or 
a combination of the two.  In 2004, a total of 1,331 cases were processed by the FTC (Table III.18).  
Appeals against the FTC's orders and pe nalties may be filed with the government102;  in 2004, there 
were 166 appeals, compared with 268 in 2002. 
143. The authorities are not aware of any import or ex port cartels in Chinese Taipei.  Nonetheless, 
in view of the difficulties in uncovering cartels, th e Commission is planning to introduce a leniency 
programme, which is to provide amnesties to parties of  a cartel that first notified the FTC of the cartel. 
 
                                                      
98 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 reaches three-fourths of the market.   
99 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.   
  100 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. 
101 Fair Trade Law, Articles 18 and 19.  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. 
102 According to the Administrative Appeal Act of 2000,  anyone who believes that his right or interest 
was unlawfully or improperly injured by a government agency's administrative action is entitled to file an 
administrative appeal with the government. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu WT/TPR/S/165 
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Table III.18 
Enforcement statistics related to competition policy, 2001-04 
(Number of cases defendants) 
Fiscal year  
2001 2002 2003 2004 
A. Cases processed 1,832 1,614 1,329 1,331 
Cases concluded in current year, total 1,404 1,284 1,056 1,012 
Ruling on the violation of the FTL  193 189 123 101 
No-action decision  252 218 195 176 
Administrative action  6 4 3 8 
Review terminated  825 798 659 680 
Cases consolidated  128 75 76 47 
Pending at year-end  428 330 273 319 
B. Rulings by the FTC 213 218 187 135 
Order to cease or rectify conducta 208 195 178 118 
Finea 168 192 148 124 
Operation suspended  n.a. n.a. n.a. n.a. 
Order to close business  1 2 n.a. n.a. 
C. Appeals  358 268 247 166 
Cases concluded in current year, total  265 211 160 134 
Rejected  231 166 132 116 
Original decision repealed  10 5 11 2 
Not accepted  23 25 13 13 
Withdrawn  n.a. n.a. 3 3 
Partially rejected (or not accepted)  1 15 1 n.a. 
Cases pending  93 57 87 32 
D. Court judgements (initial) with regard to defendants involvedb 148 50 38 44 
Guilty 13 12 14 28 
-  imprisonment n.a. n.a. 5 25 
-  under custody n.a. n.a. 1 n.a. 
-  criminal fine n.a. n.a. 8 3 
Not guilty 128 13 14 9 
Rejected 3 22 4 4 
Beyond jurisdiction 2 2 2 0 
Listed as wanted 2 0 3 1 
Withdrawn n.a. 0 0 2 
Others 0 1 1 0 
n.a. Not applicable. 
a Takes into account the duplicate calculations for an illegal action liable to more than one penalty.  Therefore, the sum of d ifferent 
types of rulings does not equal the total number of rulings. 
b Other judgements include rejection by the court, withdrawal of the case due to not  falling under the jurisdiction, and others . 
Source: Information provided by the Chinese Taipei authorities. 
144. Chinese Taipei has concluded anti-trust cooperati on agreements regarding the application of 
competition and fair trading laws with Australia , New Zealand, and France in 1996, 1997, and 2004 
respectively.  The FTC also signed a tri-lateral cooperation agreement with the competition authorities 
of Australia and New Zealand in 2002.