AmCham Taipei Taiwan White Paper at Mid-Cycle

Some items are making progress, but none have yet been entirely resolved.

The December issue of Taiwan Business TOPICS – coming at the half-way point between publication of editions of AmCham Taipei’s Taiwan White Paper – is an opportune time to evaluate the progress made so far in dealing with the issues raised in the previous White Paper. The 2016 Taiwan White Paper, issued at the beginning of June, contained a total of 79 suggestions from AmCham’s various committees and industry groups on ways to improve Taiwan’s business climate. Under coordination by the Executive Yuan’s National Development Council, the relevant government ministries and agencies reviewed the suggestions and in October provided the AmCham committees with an item-by-item response.

The Chamber’s Government and Public Affairs Department then queried the committees, asking them to assign each White Paper recommendation to one of five categories – 1) Solved: Conclusive action has been taken on the issue, with a fair and transparent record of implementation. It is no longer considered a problem. 2) In Progress: The issue is currently receiving satisfactory follow-up action from the government. 3) Under Observation: The government has given the issue some initial attention, but it is too early to assess the prospects for resolution. 4) Stalled: No substantial discernible progress has occurred. 5) Dropped: Although not resolved, the issue is no longer a committee priority.

The most common designation was “3” – under observation. “That’s probably an inevitable result in a year of transition, with a newly elected administration taking over the reins of government,” says AmCham Taipei president Andrea Wu. “The 2016 White Paper was issued less than two weeks after the new administration entered office. It takes time for the new top officials in the various ministries to learn the issues and set their priorities.”

Although no issue was reported as being completely resolved, a number of committees responded that tangible progress was being made in certain areas:

Asset Management. The committee’s Suggestion 1, which called for the Financial Supervisory Commission (FSC) to “continue to relax the regulatory restrictions on onshore funds and DIM accounts, and align policy with global practice,” consisted of a number of sub-items. One was to encourage the healthy development of multi-asset products. This September the FSC responded positively by proposing an amendment to the SITE Fund Act that would add “multi-asset” onshore funds to the list of permitted fund types. A second item recommended that the government “enable investment-linked DIM (discretionary investment management) accounts to invest in derivatives for currency-hedging purposes.” Also in September, the FSC proposed amending investment-linked policy (ILP) regulations to allow such investment.

Infrastructure. Suggestion number 3 was “adopt new Demand Side Management technologies and provide greater support for offshore wind farm development.” Committee members noted that the Taiwan Power Co. has initiated a tender to select a Demand Response aggregator, while projects to develop offshore wind farms are moving forward.

Medical Devices. In a subsection of a suggestion about streamlining the medical device review system and making it more transparent and consistent, the Committee asked the Taiwan Food and Drug Administration (TFDA) to “accept the legal manufacturer as having responsibility for regulatory compliance” – in other words, the owner of the brand rather than the factory doing the production (which may be on a contract outsourcing basis). TFDA has given assurances that the rule will be revised.

Pharmaceuticals. In connection with Suggestion 1 – “Continue to strengthen IPR protection for innovative products, so as to ensure that the investment environment rewards innovation” – the Executive Yuan has sent bills to the Legislative Yuan for consideration that would create a patent linkage system and broaden data protection.

Public Health. The Committee’s Suggestion 3 proposed that the authorities “actively implement a national program for the prevention and control of viral hepatitis.” The Committee cited two positive steps in this direction: 1) the establishment of a National Hepatitis C Virus office under the Ministry of Health and Welfare to develop and implement national HCV education, screening and treatment policies, and 2) increased budget for 2017 for HCV treatment.

Retail. In line with the White Paper suggestion “Ensure that the food safety rules-making process is transparent, with the regulations based on scientific and statistical evidence,” the Committee expressed gratification that government decisions on food-safety issues now refer more frequently to “scientific basis” and “international practice,” not only to the “protection of citizens’ health.”

Tax. Suggestion 2 was “Review Taiwan’s tax policies with the aim of creating a favorable and competitive environment for attract high-caliber professionals. The Committee noted that the National Development Council is working on a plan, which will touch on taxation as well as other policies, to improve the environment for retaining talent in Taiwan.

“With another six months to go in this White Paper cycle, we look forward to further positive developments,” says Andrea Wu. “There is time both to complete resolution of the items already showing progress and to make significant headway in even more areas.”