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ECCT makes progress on issues raised in 2016 Position Paper

The European Chamber of Commerce Taiwan (ECCT) announced today that it has made progress on 15 of the issues that were raised in its 2016 Position Papers. The announcement follows the chamber's meeting with the National Development Council (NDC) which was attended by Taiwan's major government ministries and agencies to discuss the government's official reply to the business issues raised in the papers. The annual meeting brought together around 40 officials from a number of government ministries and agencies to discuss priority issues with co-chairs of the ECCT's industry and support committees. The meeting was the culmination of dozens of bilateral meetings held between the ECCT and various government agencies over the course of the past year. The meeting was formally opened by NDC Minister Lin Chu-chia and followed by opening remarks from ECCT Vice Chairman Giuseppe Izzo. The rest of the meeting was chaired by NDC Deputy Minister Lin Huan. During the meeting, ECCT delegates discussed unresolved issues with government representatives.

In his opening remarks, ECCT Vice Chairman Giuseppe Izzo remarked that ECCT members are not just investors but also stakeholders in Taiwan's economy as tax payers and employers, which generate wealth for the Taiwan economy and help Taiwan to move up the value chain. He pointed out that the global economy is stagnating and Taiwan has been negatively affected. Exports have fallen for 13 consecutive months and the February Purchasing Managers' Index (PMI) fell to 41.4, indicating that there will be a decline in future economic activity. In these tough times, he made the point that for Taiwan to survive and thrive, it needs a regulatory environment that is competitive and in line with the best international standards and best practices. He emphasized that most of the recommendations in the ECCT's position papers are aimed at making Taiwan more international and more competitive and therefore hoped that the government would view the recommendations as constructive advice to improve the business environment in Taiwan for the benefit of ECCT members as well as the Taiwan economy and society. At the conclusion of the meeting Vice Chairman Izzo described the discussions as very constructive and productive that saw positive steps forward on many issues. He praised officials who attended the meeting, especially Deputy Minister Lin Huan who was very thorough and deliberate in his approach. The deputy minister asked in-depth questions on almost every issue and made a concerted effort to forge a mutual understanding between officials and ECCT members on difficult issues. In addition, he frequently offered suggestions on how to reach practical and mutually-beneficial solutions.

At the meeting government officials undertook to take action on a number of issues. On issues where progress was not made, government agencies agreed to re-evaluate some of their current positions and arrange follow-up meetings with the ECCT in the weeks ahead.
ECCT committees and issues where progress has been made

Automotive

Issue: CO2 emission standards for new vehicles
Progress made: The Bureau of Energy (BoE) has committed to providing a derogation mechanism related to fuel efficiency requirements for small quantities of vehicles. The mechanism will refer to European Union (EU) practices and ECCT members were invited to give opinions on the first draft of the programme in early 2016.

 

Issue: Encouraging fuel economy and carbon reduction technologies
Progress made: A subsidy for scrapping or exporting old vehicles (including sedans, light-duty commercial vehicles and motorcycles) has been introduced by the Ministry of Finance (MoF) following an amendment to the Commodity Tax Act, Article 12-5. It took effect on 6 January 2016.

 

Issue: Tyre grading and labelling standards:
Progress made: The BoE has commissioned a feasibility study project on tyre grading and labeling standards. Based on the study, authorities plan to make the inspection of tyres mandatory in future and develop a tyre grading/certification system, taking into consideration noise emissions, wet grip performance and energy efficiency.

 

Issue: Regulations for classic cars
Progress made: The Ministry of Transportation and Communications (MoTC) has held several meetings to hear opinions from the industry and other agencies on the subject of management measures to license classic cars. The MoTC has drawn on ECCT recommendations in its draft regulations for classic cars, including the definition and the method of recognition of classic cars and restrictions on daily use.

Banking

Issue: Allowing foreign banks to issue perpetual or subordinated notes
Progress made: The Financial Supervisory Commission (FSC) has announced that it will allow foreign banks to issue subordinated notes in Taiwan. The Taipei Exchange (TPEx) and the Securities and Futures Bureau (SFB) will hold further discussions on amendments to the relevant regulations.

Issue: Allowing banks to develop digital banking business
Progress made: The FSC has announced that it will provide banks with greater operational flexibility in line with the best international practices by accepting the position proposed by the Bankers Association of the Republic of China (BAROC) that e-tokens should be regarded as a sufficient safety measure when making payments for large amounts as long as risk management requirements can be implemented.

Better Living

Issue: Equality of treatment for foreign residents
Progress Made: The NDC has issued an official notice to all government departments stating that they should treat Alien Residence Certificates (ARC) and Alien Permanent Residence Certificates (APRC) as equivalent to Taiwanese identity documents for identification purposes.

Electrical Engineering & Equipment

Issue: Localization of Air Circuit Breaker (ACB) certificates

Progress made: The Bureau of Standards Metrology and Inspection (BSMI) has developed a measure to accept IEC testing reports for Voluntary Product Certification (VPC) applications. The measure allows industry players to apply for new VPC certification using their existing TaiPower certificate and IEC testing reports. However, this new measure is only valid until 2018 and the description of the VPC application procedure to take effect after 2018 is ambiguous. Therefore, the committee will continue to hold discussions with the BSMI on a long-term measure that would avoid double-testing and achieve harmonization of the IEC and CNS standards.

Insurance

Issue: Expanding the business scope of e-commerce for the insurance industry
Progress made: The FSC has announced the fourth phase of measures to relax rules governing online insurance business and amended guidelines on e-commerce business for the insurance industry, which broadens the scope of products that can be sold online to conventional life insurance and interest-sensitive annuity insurance policies.

Luxury Goods

Issue: Promoting Taiwan as a luxury shopping destination
Progress Made: The government has launched several initiatives to promote shopping in Taiwan (including luxury good products) to Meeting Incentive, Conference and Exhibition/Events (MICE) groups from several countries as well as high-spending tourists from mainland China. Several city governments are also using various platforms (including printed and digital media) to attract visitors from overseas.

Medical Device

Issue: Fast Track review
Progress made: The Taiwan Food and Drug Administration (TFDA) has undertaken to complete Quality System Documentation (QSD) renewal processes for medical device product licences within 120 days in future (unless supplementary documents are required). The process previously took from nine months to over a year.

Pharmaceutical

Issue: Sustainable management of drug expenditure
Progress made: The National Health Insurance Administration (NHIA) has agreed to hold a meeting with industry representatives to review the Price Volume Agreement (PVA) system and the procedures of the Pharmaceutical Benefit Reimbursement Scheme (PBRS) committee. In addition, the NHIA has agreed to refund claw back amounts from the PVA scheme that exceed the Drug Expenditure Target (DET) budget to the NHI Foundation.

Retail & Distribution

Issue: Products labeling issues - Commodity labeling law
Progress made: On 20 November 2015 the Department of Commerce (DoC), under the Ministry of Economic Affairs issued an interpretation Ruling Letter on Article 9 of the Commodity Labelling Act stating that general commodities that are non-perishable are to be exempted from the requirement to print the day of manufacture. Instead commodity products will only need labels which include the month and year of manufacture. Previously, all products, including non-perishable items and even furniture, had to be labelled with a manufacturing year, month and day, resulting in a considerable time and cost burden for manufacturers, importers and retailers to print special labels for products designated to be sold in Taiwan. The ruling letter therefore marks a breakthrough that will save time and costs for manufacturers, importers and retailers.

Tax

Issue: Establishment of an independent tax court
Progress made: The Judicial Yuan has employed professional tax experts to work on tax cases in the Supreme Administrative Court, Taipei High Administrative Court, Taichung High Administrative Court and Kaohsiung High Administrative Court in order to raise the efficiency of processing relevant tax cases.

Travel & Tourism

Issue: Marketing Taiwan
Progress Made: The Tourism Bureau upgraded its website in 2015 and launched a new version on 1 January 2016 in order to provide the most updated information.

About the ECCT
With over US$33 billion in direct foreign investments, European business interests account for the largest share of foreign investments in Taiwan. The European Chamber of Commerce Taiwan is the only foreign nationwide business chamber in Taiwan and the principal organisation promoting European business interests in Taiwan. The chamber represents over 800 members from around 400 companies and organisations. Through a network of 30 industry and support committees, the ECCT has been successful in addressing specific concerns and providing concrete recommendations to all levels of government to facilitate improving the business environment. The ECCT annually publishes a series of position papers that comprise issues identified by its committees as hindering the further development of their respective industries and provide recommendations to the government of Taiwan for improvement of the business environment on general issues as well as industry-specific problems. They also serve to keep the European Commission, the European Parliament as well as the governments of individual European Union member states informed about Taiwan's business environment.

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