Progress made on 2018 Position Paper issues

21 November 2018

At the release of its 2019 Position Papers today, the ECCT announced progress on a number of issues. Since the publication of the 2018 Position Papers, 8 issues have been successfully resolved, sufficient progress has been made in 11 issues and they have therefore not been raised again and 10 issues have been partially resolved.

The following issues have been resolved:

Better Living

ARC number format to be made compatible with ROC IDs: The National Development Council (NDC) and the Ministry of the Interior (MOI), have announced a solution to resolve the problem of different number formats used on Alien Resident Certificate (ARC) and Alien Permanent Resident Certificate (APRC) identity cards. Under the solution, devised by the MOI in conjunction with the National Development Council (NDC), the format of ARCs/APRCs will be made compatible with that of ID numbers provided to ROC nationals. Under the solution, the numbers 7, 8 and 9 would replace the second letter in the ARC/APRC numbers to denote the cardholder’s gender. The lack of compatibility of ID numbers has for years denied ARC/APRC holders access to many services which they may be eligible for, such as online commerce, hospital visits and other activities. The measure, once implemented, would make life easier for foreigners. The resolution of this issue comes after many years of advocacy by the ECCT, particularly the Better Living committee, and marks a significant step forward towards ensuring fair treatment of foreign nationals.

Human Resources

Amendments to the Labour Standards Law (LSL) - Five day workweek and total working hours: In the amended LSL, although the ‘rest day’ is not abolished, the overtime pay for rest days is calculated based on actual number of overtime hours, as opposed to the inflated overtime hours set forth in the original provision that 1-4 hours will be regarded as four hours, and so on.

Amendments to the Labour Standards Law - Overtime hours: In the amended LSL, the maximum number of overtime hours per month has been increased from 46 hours per month to 54 hours per month and 138 hours every three months, as long as employers have obtained consent from employee unions or labour management committees.

Amendments to the Labour Standards Law - Leave encashment: In the amended LSL, employees are provided with the right to carry forward their untaken paid annual leave for one year.

Medical Device

Registration - Change of review authority from the TFDA to the CDE: The initial plan to change the review authority from the Food and Drug Administration (FDA) to the Center of Drug evaluation (CDE) was terminated in early 2018 and a final decision was made for the FDA to continue to serve as the review authorisation body for medical device products.

Pharmaceutical

Financial barriers - Managed Entry Agreements (MEA): In September 2018 amendments to articles in Chapter 3 of the National Health Insurance Benefits and Reimbursement Scheme to adopt MEA were announced.

Retail & Distribution

Transparency and consistency of government policies - Unified and consistent English translations: The Legal Affairs Committee of the Executive Yuan (EY) has undertaken to provide consistent and speedier translations of regulations. The EY has announced an amendment to the “National Guidelines on English translation of regulations” to require: 1) consistent English translations in all regulations and 2) more timely English versions for trade, investment, and IPR-related regulations.

Technical barriers to trade for European food products - Efficiency of the import process for organic food: The Taiwan Food and Drug Administration (FDA) clarified the role it will play in the labelling process for imported organic food. Based on the FDA’s response, ECCT members have been assured that the FDA’s role will not conflict with that of the Council of Agriculture (COA), thereby resolving the issue.

Mostly resolved issues

Although not completely resolved, owing to sufficient progress made, the following issues have not been raised again in the 2019 Position Papers.

 

Banking

Further relaxing regulations governing “derivatives information and advisory” business - Broadening the definition of an entity’s size: A relaxation of the amendment to the Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business was announced by the Financial Supervisory Commission (FSC) on 1 February 2018. The FSC expanded the eligibility of High Net Worth Investors (HNWI) to include qualified 100%-owned subsidiaries. This is in line with the committee’s recommendation and helpful for foreign banks to develop their business.

Further relaxing regulations governing “derivatives information and advisory” business - Lowering the rating requirement for issuers selling OSPs to retail investors: The credit rating requirement for issuers/guarantors of Offshore Structured Products (OSP) has been lowered to A/A2.

Better Living 

Equality of treatment for foreign residents - National health insurance for new-born babies: The National Health Insurance Administration (NHIA) has addressed the issue of a lack of coverage for new-born babies and legislation to this effect has been implemented.

Electrical Engineering & Equipment

Smart cities - Energy storage systems: Smart grid and energy storage system provisions have been included into the government’s energy transformation policies. Members of the committee look forward to seeing a detailed plan being developed and discussed with the industry before finalisation.

Healthcare Enhancement

Sustainable ideas for cost-effective healthcare services - Sufficient investment in the national vaccination programme: The Ministry of Health and Welfare increased its vaccine fund from NT$2.29 billion in 2017 to NT$3.13 billion in 2018, as recommended by the committee.

Retail & Distribution

Transparency and consistency of government policies - Misuse of administrative means to avoid procedures required by law: The FDA has followed the committee’s recommendation by announcing and publishing explanatory documents accompanying draft regulation announcements.

Tax

Allowing foreign professionals tax deductions for children’s basic education fees: The Ministry of Finance (MOF) has offered a solution to the issue under existing tax rules.

Relaxing the rules preventing companies from reducing the profit allocation results of transfer pricing: The MOF has been working on the research and drafting of further guidance to address the issue and has undertaken to draft guidance by the end of 2018.

Technology

Promoting fintech and innovative e-commerce: The “Financial Technology Development and Innovative Experiment Act” was implemented on 30 April 2018, in line with the committee’s recommendation. However, the government stated that, at the current stage, it is not suitable to lower the paid-in capital requirements of the Act Governing Electronic Payment Institutions (the EPI Act) and the Act Governing Issuance of Electronic Stored Value Card (the ESVC Act) substantially in order to maintain stable and secure business operations and thus protect the general public.

Legal framework for autonomous driving: The Executive Yuan approved a draft of the “Unmanned Vehicle Technology Innovation and Test Act on 17 May 2018, which is expected to provide some flexibility in the testing of innovative unmanned vehicles by exempting them from the application of some mandatory traffic regulations. The draft act will be sent to the Legislative Yuan for review.

Cyber Security Management Act: The Legislative Yuan passed the Cyber Security Management Act on 11 May 2018, which clarified the definition of “critical infrastructure” and “critical infrastructure operator” as recommended in last year’s paper.

Partially resolved issues

The following issues were partially resolved over the past year (the government has taken action to resolve certain aspects of the issue but because other aspects remain unresolved, the issue is raised again).

Automotive

Environmental issues - Encouraging the disposal of old vehicles: An Amendment to Vehicle License Tax Act was passed by the Legislative Yuan on 15 November 2017 to waive licensing taxes for electric cars until 31 December 2021. In addition, the Ministry of Finance (MOF) announced on 4 July 2018 that the scrappage subsidy of NT$50,000 is also applicable to new electric car purchases after scrappage. However, more could be done to speed up the replacement of old vehicles.

Environmental issues - Complementing the scrappage scheme for commercial vehicles: The MOF announced on 30 January 2018 a tax deduction of NT$50,000 for truck owners who scrapped old (Euro I and Euro II) trucks and purchased new ones. It is also understood that the MOF is considering introducing further incentives in the form of tariff reductions as we recommended in last year’s paper.

Environmental issues - Encouraging fuel economy and carbon reduction technologies in passenger vehicles: The premier announced in December 2017 Taiwan’s timelines for New Energy Vehicles (NEVs). However, the relevant planning for passenger and commercial vehicles and infrastructure development has not yet been announced. In addition, the Bureau of Energy (BOE) has taken into consideration the committee’s recommendations to allow more flexibility and incentives for new energy vehicles in its new fuel efficiency standards.

Environmental issues - Noise control for vehicles – Phase VI Approval Regulations: “Effective implementation date of vehicle noise, emission management and related regulations”): The Environmental Protection Administration (EPA) has consulted the industry and has referred to UNECE R51-03 in developing its Phase VI approval regulations. However, the regulations have not yet been finalised.

Better Living

Equality of treatment for foreign residents - Making the APRC truly permanent: The passage of the “Act for the Recruitment and Employment of Foreign Professionals” loosens restrictions on the long-term validity of APRCs. Unfortunately this improvement applies only to “professionals”, and not long-term residents who have achieved their APRCs through marriage or relatives, resulting in inequality of treatment.

Electrical Engineering & Equipment

Harmonization with international safety standards - Development of the power distribution industry: The Taiwan Power Research Institute (TPRI) has been assessing the possibility of establishing local testing capacities for IEC 61439. However, until facilities are available most Taiwanese low voltage switchgear manufacturers will not be able to take advantage of new business opportunities. Another impediment to business is inconsistent standards