Government to amend law to punish local proxies of Chinese capital
Taipei, Sept. 22 (CNA) Taiwan's government recently announced that it will soon amend existing laws governing cross-strait exchanges to impose a maximum three-year sentence and a maximum possible fine of NT$15 million (US$540,005) on Taiwanese proxies of Chinese companies who facilitate Chinese investment in Taiwan without government permission.
The Mainland Affairs Council (MAC) announced on Sept. 8 that it will soon amend the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, which stipulates that no Chinese competent authorities, individual, organization, or any company in which they have invested can invest in Taiwan without government permission.
Currently, Article 40-1 of the Act stipulates only that no Chinese company can engage in business activities in Taiwan without government permission.
The MAC proposed amendment to articles 40-1 will now include companies in third areas invested in by Chinese capital.
The Ministry of Economic Affairs (MOEA) will be responsible for defining what constitutes a company invested in by Chinese capital based in a third area, according to the MAC.
In addition, the MAC proposed an amendment to article 93-1 fining Taiwanese shell companies formed by proxies that act in the interests of Chinese enterprises by investing in Taiwan without permission, a maximum of NT$25 million.
Meanwhile, an amendment to article 93-2 will impose a maximum three-year jail sentence and a possible maximum fine of NT$15 million on the owners of those Taiwanese companies.
According to the MAC, the amendments are proposed in response to increasing illegal activity over the years with Chinese companies using "local collaborators" or proxies to invest in Taiwan without government permission.
Illegal investments by Chinese capital can seriously damage market order in Taiwan and adversely affect the nation's economy, the MAC said.
The proposed amendments have to clear the legislative floor before taking effect.
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