1. Draft of Amendment to Criminal Code and Criminal Code of the Armed Forces
On 28 March 2019, the Executive Yuan passed the draft of amendment to Criminal Code and Criminal Code of the Armed Forces related to the drunk driving. We summarize the key points below:
(1) To add that the person who has committed the drunk driving under Article 185-3 of the Criminal Code or Article 54 of the Criminal Code of the Armed Forces and was convicted guilty by a court's final/conclusive judgment or the deferred prosecution disposition is confirmed, recommitted drunk driving and caused death to others within years, he/she shall be subject to life imprisonment of 7 years (or more) imprisonment; who caused serious injury to others, he/she shall be subject to 5 years (more) but less 12 years of imprisonment.
(2) To add that in the event that a person committed drunk driving and caused death to others with intention or reckless under Article 13 of the Criminal Code, he/she shall be subject to the liabilities of murder; a person committed drunk driving and caused serious injury to others, he/she shall be subject to the liabilities of assault.
Reported by: David Tsai / Naiju Kuan
2. Amendment to Banking Act
On 26 March 2019, the Legislative Yuan passed the third reading of the amendment to the Banking Act, which is pending the announcement by the President. We list the major points below:
(1) To require responsible persons to abide by non-compete obligations: To authorize the competent authority to prescribe regulations prohibiting involvement in conflict of interests by responsible persons of banks.
(2) To reinforce international cooperation in anti-money laundering: To stipulate that the government may enter into treaties or agreements with foreign governments, agencies, or international organizations, and provide necessary information to such foreign governments, agencies, or international organizations based on the principle of reciprocity and confidentiality.
(3) To update administrative control measures to effectively correct bank irregularities: To add the types of administrative impositions which may be taken by the competent authorities, such as limiting investments and ordering to wind down branches within a given period.
(4) Overall review of administrative fines in the penalty chapter: In order to enhance the effectiveness of financial supervision and to threaten illegal behaviors, to review the maximum amount of administrative fines in the penalty chapter. For material breach of banks, the maximum fine will be raised by a multiple of five (5), from NT$10 million to NT$50 million, while the maximum fine for the remaining provisions will be raised by a multiple of four (4). It is also added that the competent authority may adopt appropriate corrective measures rather than imposing fines for minor violations.
(5) To strengthen the management of credit card business: To increase penalties for violations of credit card business related management measures, and institutions operating credit card business are punishable.
(6) The consecutive penalties by "day" is amended to by "time".
Reported by: Stacy Lo / Eliza Lee
Securities and Exchange Act
3. Amendment to Securities and Exchange Act
On 26 March 2019, the Legislative Yuan passed the third reading of the amendment to the Securities and Exchange Act, which is pending the announcement by the President. We list the major points below:
(1) The audit committee is not required to approve the audited semi-annual financial reports.
(2) The time limit for the transfer of treasury stock provided under Article 28-2 is extended from 3 years to 5 years.
(3) Any person who acquires, either individually or jointly with other persons, more than ten percent of the total issued shares of a public company shall make a public announcement in addition to filing a report.
(4) The primary listed foreign companies on Taiwan Stock Exchange and Taipei Exchange and foreign companies traded on the emerging stock market shall establish a remuneration committee.
(5) The minimum amount of the administrative fines imposed on an underwriter for acquiring for its own account the securities underwritten by itself and the maximum amount of other administrative fines are increased.
Reported by: Stacy Lo / Cindy Chien
Statute for Industrial Innovation
4. Draft amendment to Statute for Industrial Innovation
On 21 March 2019, the Executive Yuan passed the amendment to the Statute for Industrial Innovation focusing on providing a stable environment for investment. We summarize the key points below:
(1) Where a state-owned enterprise is not in the form of a company or is a company established for the purpose of protecting right and interest of depositors, the requirement to allocate a portion of budgets to conduct R&D is not applicable.
(2) For stocks received by individuals as consideration of its intellectual property rights or acquired by academic creators, taxation of income tax upon the transfer of such stocks may be based on the "transferred price" or "acquisition price", whichever is lower, where relevant requirements are met.
(3) Tax deferral on employee stock compensation is also applicable to employees of controlling companies acquiring said compensation from subsidiaries
(4) For venture capital established under Limited Partnership Act whose total capital reaches NT$ 300 million in the current year, the aggregate capital to be attributed to each year within the territory of the R.O.C may be determined by the central competent authority on a yearly basis.
(5) The undistributed retained earnings that a company or a limited partnership use to invest within certain period may be deducted from the undistributed retained earnings for the tax purpose.
(6) The tax incentives provided in the Statute is extended for 10 years until 31 December 2029.
Reported by: Mike Lu / Cindy Chien
5. To Simply the Application Form for Foreign Company's Registration Application
On 15 March 2019, the Ministry of Economic Affairs (MOEA) issued a press release that where a foreign company applies to register to establish branch or office, it may supplement a photocopy of the landlord consent letter and title certificate with the competent authority within 30 days after approval date for registration.
Reported by: Mike Lu / Will Chen
Employment Service Act
6. Ruling of the Ministry of Labor
On 21 March 2019, the Ministry of Labor issued a ruling interpreting that "the scope of wage shall be disclosed or informed" stated in Subparagraph 6, Paragraph 2, Article 5 of the Employment Service means that when recruiting employees, the employer shall inform the applicant in advance of minimum regular wage of the vacancy, which shall be disclosed by way of the range, specific amount or minimum amount.
Reported by: David Tsai / Naiju Kuan
Act Governing Food Safety and Sanitation
7. Amendments to Act Governing Food Safety and Sanitation
The Legislative Yuan passed the amendment to Article 4 and Articles 3, 18-1, 47 and 57 of the Act Governing Food Safety and Sanitation on 19 and 22 March 2019, respectively. The President has not announced its effective date. We summarize the key points below:
(1) As competent authority forms food risk assessment advisory committee or food safety management measures advisory system, the ratio of their commissioners in one gender shall be at least one-third to enforce the spirit of international conventions to eliminate all forms of discrimination against women. (amend Article 4)
(2) The definition of "food processing aids" is newly added, which refers to the substance used in the manufacturing and processing procedures of food, to further differentiate the food additives and food processing aids. Such substance has no function in the final food products and shall be removed before the final food products are packed. The remains of food processing aids shall be inevitable and not be intended. (amend Article 3 to add newly Subparagraph 12)
(3) It is newly added that the usage of food processing aids in the manufacturing of food or food materials by food enterprises shall comply with the safety/sanitation/quality standards promulgated by central competent authority, which enhances the food processing aids sanitation standards prescribed by the Ministry of Health and Welfare from current secondary regulations to laws level. Meanwhile, the usage of food processing aids shall not have the potential to harm health of human body. (newly add Article 18-1)
(4) The punishment against Article 18-1 is newly added. Anyone violating the standards under Article 18-1 and failing to correct within designated period would be fined from NT$30,000 to NT$3 million. If the violation is serious, business of violators would be suspended or stopped or relevant company/business/food enterprises registration thereof would be abolished. (amend Article 47 to newly add Subparagraph 7)
(5) The Subparagraph 13 of Paragraph 1 is amended to Subparagraph 14 thereof to respond the amendment to Article 47. (amend Article 51)
Reported by: Kang-Shen Liu / Chen-Chi Wang
Enterprises in Securities and Futures
8. Requirement for Setting Up Corporate Governance Senior officer
On 15 March 2019, the Financial Supervisory Commission ("FSC") issued a ruling (Ref. No. Jing-Guan-Zheng-Quan-Zi-1080305776) under the authorization of Paragraph 1, Article 36-3 of the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets to require the following entities to be equipped with a corporate governance senior officer, who is the chief officer in charge of corporate governance related affairs, before the deadline below:
(1) Listed/OTC-listed integrated securities firms and integrated securities firms which are the subsidiaries of financial holding companies: By the end of June 2019; and
(2) Integrated securities firms which has issued stock in accordance with the Securities and Exchange Act and listed/OTC-listed futures commission merchants: By the end of June 2021.
Reported by: Jeffrey Liu / Caitlyn Kao
On 18 March 2019, the FSC announced the amendment to the Regulations Governing the Supervision of Insurance Solicitors (Regulations). We summarize the key points below:
(1) An insurance company may check on the registration status of salespersons with the relevant association.
(2) Whether the salesperson may be registered with another insurance company or insurance agent company not engaging in the same type of insurance business shall be agreed upon by both parties. The consent from the company is deleted.
(3) The wording of "other violations of laws or regulations damaging the image insurance industry" stated in Subparagraph 18, Paragraph 1, Article 19 of the Regulations is amended to "other misconducts in conducting the business as a salesperson".
Reported by: David Tsai / Will Chen
On 19 March 2019, the FSC announced the draft amendments to the "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies", "Regulations Governing Appointment and Exercise of Powers by Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter", "Regulations Governing Procedure for Board of Directors Meetings of Public Companies", "Regulations Governing Exercise of Powers by Audit Committees of Public Companies" and "Regulations Governing Authentication of the Shares and Bonds Issued by Public Companies" to cope with the recent amendment to the Company Act. We summarize the key points below:
(1) The spouse and close relatives of a manager level employee is not allowed to serve as an independent director;
(2) An independent director is not permitted to provide and has not provided (i) audit related service or (ii) business, legal, financial and accounting related services, to the extent of a material level which refers to an accumulated amount of NT$500,000 during the two (2) years before the election and during the term of office;
(3) When providing a recommended slate of independent director candidates, certain required documents are removed;
(4) Where the remuneration committee discusses about its member’s remuneration, it shall explain at a meeting that if the member’s interest is likely to be detrimental to the interest of the Company, he/she shall not participate in the discussion, and he/she shall not vote nor exercise the voting right on behalf of any other remuneration committee members;
(5) Where a board meeting is convened by more than half of the directors by themselves, the chairman of the meeting shall be elected from among such directors;
(6) In the event that the spouse or close relatives within the second degree of kinship of a director, or a company with which the director has controlling/affiliated relationship, has interests in the matters under discussion in the Board of Directors, such director shall be deemed to have a personal interest in the matter;
(7) In the event that the spouse or close relatives within the second degree of kinship of an independent director has interests in the matters under discussion in the audit committee of public companies, such independent director shall be deemed to have a personal interest in the matter.
Reported by: Mike Lu / Bella Chiu
Fair Trade Act
11. Preannouncement of the draft amendment to Article 28 of Fair Trade Act
On 18 March 2019, the Fair Trade Commission preannounced the draft amendment to Article 28 of the Fair Trade Act for public consultation. In response to the draft amendment to Article 41 of the same act about the interruption and the calculation after the resume of investigation of penalty prescription, the Paragraph 4, Article 28 of the Fair Trade Act is thus deleted.
Reported by: Kang-Shen Liu / Paul Hsu
12. Amendment to Notary Act
On 19 March 2019, the Legislative Yuan passed its third reading of the amendment to the Notary Act, we summarize the key points below:
(1) It amends and adds the conditions under which a person shall not be appointed as a notary public or a notary public shall be removed from his/her position.
(2) 2. It amends the wordings in response to the Convention on the Rights of Persons with Disabilities.
Reported by: David Tsai / Paul Hsu
13. Amendment to Regulations Governing Acquisition of Land Right for Foreigners in Taiwan
The Ministry of the Interior amended Item 4 of the Regulations Governing Acquisition of Land Right for Foreigners in Taiwan on 21 March 2019, which include the following:
(1) Unless the laws provide otherwise, a foreign entity must be recognized under Taiwan laws before acquiring or creating rights on land.
(2) Where a foreign company applies for land registration in Taiwan, the application shall in general be submitted by the head office accompanied with its registration certificate.
(3) Where a foreign company only has a representative office in Taiwan in accordance with Article 386 of Company Act, it may not apply for land registration.
Reported by: Kang-Shen Liu / Hsiyen Hsu
Medical Care Act
14. Draft of Amendment to Medical Care Act
On 14 March 2019, the Ministry of Health and Welfare announced the draft amendment to the Medical Care Act. We summarize the key points below:
(1) To add that medical institutions shall enroll all employees who qualify as the employee under the Labor Insurance Act in the labor insurance. (Article 24-1)
(2) To add that medical institutions shall be subject to the inspection and data collection of the competent authority with respect to the matter related to the labor right and interests of doctors. (Article 26)
(3) To add that medical institutions shall enroll medical staff in medical liability insurance or provide protection equivalent to medical liability insurance in other means. The rules related to the insurance premium, required contents for the contract and the standard of equivalent to medical liability insurance or other matters are authorized to be stipulated by the central competent authority. (Article 82-1)
(4) To add "the protection of labor right and interests of doctors" in chapter 4-1 and stipulate that the regulation under this chapter shall be applicable to employed doctors, which excludes the doctors eligible for the application of the Labor Standers Act or employed or engaged by the public institution in accordance with the laws. (Article 83-1)
(5) Medical institutions and employed doctors shall execute employment contract and the matters agreed upon in writing. The matters which shall or shall not be stipulated in the contract are authorized to be stipulated by the central competent authority. (Article 83-2)
(6) The years of service of doctors shall be combined. (Article 83-3)
(7) Medical institutions shall provide necessary protection felicities and transportation to employed doctors working at night shift. (Article 83-4)
(8) The compensation for the employed doctor who suffers occupational injury. (Article 83-5 to 83-7)
(9) Medical institution shall reserve the pension for employed doctors according to the Labor Pension Act. (Article 83-8)
(10) The punishment for violating the liabilities to enroll labor insurance, medical business liability and labor interests and rights of doctors. (Article 102, 104-1, 104-2, 114-1)
(11) The amendment will be enforced 1 year after the announcement.
Reported by: David Tsai / Naiju Kuan