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MOEA Promulgated Standards of Administrative Fines for Mainland Investors' Illegal Investments in Taiwan



The Ministry of Economic Affairs (MOEA) promulgated the MOEA Standards of Administrative Fines for Mainland Investors' Illegal Investments in Taiwan (the "Standards") on July 3, 2019, which took effect on June 1, 2019. The Standards is enacted for the enforcement of Article 93-1 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area (the "Act") and stipulates clear standards for imposing fines for Chinese investors' illegal investments in Taiwan that are in violation of Article 73 of the Act.
 
According to Paragraph 1, Article 93-1 of the Act, a Chinese investor, or a Chinese investor approved to invest in Taiwan as a foreign investor, that fails to apply for and obtain approval for its investment in Taiwan in accordance with Paragraph 1, Article 73 of the Act, may be subject to a fine ranging from NT$120,000 to NT$25 million. In this regard, Articles 3 and 4 of the Standards further stipulate that such fines shall be determined based on the amount of the investment and shall be the sum of the results separately calculated based on the following standards:
 
  • For investment of NT$1 million or below, the fine shall be NT$120,000.
  • For investment of over NT$1 million but not over NT$10 million, the fine shall be 1% of such amount.
  • For investment of over NT$10 million but not over NT$50 million or below, the fine shall be 2% of such amount.
  • For investment of over NT$50 million but not over NT$100 million, the fine shall be 3% of such amount.
  • For investment of over NT$100 million but not over NT$500 million, the fine shall be 4% of such amount.
 — For investment of over NT$500 million, the fine shall be 5% of such amount.
 
Pursuant to Paragraphs 2 to 4, Article 93-1 of the Act, failure to make filings for reinvestment, fund verification, or other matters in accordance with Paragraphs 3 and 4, Article 73 of the Act may be subject to a fine ranging from NT$60,000 to NT$2.5 million. The details with regard to the determination of the actual amount of fine are set forth under Articles 7 and 8 of the Standards.
 
In addition, Paragraph 5, Article 93-1 of the Act stipulates that if the agent of an investor files any false information intentionally or due to gross negligence, such agent may be subject to a fine ranging from NT$60,000 to NT$2.5 million. According to Article 10 of the Standards, if the impact of such false information is not material, a fine of NT$60,000 or more but less than NT$600,000 may be imposed; if the impact of such false information is material, a fine arranging from NT$600,000 to NT$2.5 million may be imposed.
 
Furthermore, the Standards sets forth specific scenarios where the competent authority may reduce or increase the fines based the facts on a case-by-case basis; provided, however that a reduced fine shall not be lower than the statutory minimum fine and an increased fine shall not be higher than the statutory maximum fine.


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