Taking the Next Step in GRP

One of AmCham Taiwan’s most significant achievements has been its championing of a sufficient notice-and-comment period for new government regulations. Acting on the Chamber’s recommendations, Taiwan in 2016 adopted a 60-day timespan for public review and response to proposed rule changes – in line with the standard in the United States and most advanced economies. The previous period of 14 days had then only recently been increased from an even more inadequate seven days.  

The directive was a major advance in transparency and encouraging stakeholder involvement. Providing an opportunity to address any difficulties before a measure goes into effect helps ensure that proposed new regulations will be realistic and effective.  

The principle of maintaining proper consultation with stakeholders was also enshrined in the Good Regulatory Practices (GRP) chapter of the U.S.-Taiwan Initiative on 21st-Century Trade, signed earlier this year. Although some provisions mandated in the agreement were slightly looser than those already in Taiwan, the Taiwanese authorities confirmed that they would continue to follow the stricter domestic procedures. 

At the same time, the 21st-Century Initiative breaks some new ground. For example, it commits government agencies to publish, before December 31 each year, a list of new and amended regulations that they plan to put forward in the year ahead, giving enterprises and other stakeholders time to prepare. The Initiative also calls for an intergovernmental committee to “monitor implementation of the obligations” in the GRP chapter and “facilitate enhanced regulatory cooperation.” The committee provides another channel for AmCham to raise specific regulatory issues on behalf of its committees.  

Despite this substantial progress, clarification is still needed in several crucial respects. One is whether the 60-day provision applies to revisions in Administrative Rules (行政規則) instituted for the implementation of Regulations (法規命令), or only to the regulations themselves. Changes in administrative rules can also have a substantial impact on company operations. 

New or amended laws are likely to have even greater impact. Notice-and-comment restrictions cannot bind the legislative process itself, but when adopting the 60-day standard in 2016, the government said it would apply the 60-day standard to Executive Yuan drafts of proposed legislation “applicable to trade, investment, and IPR matters.” However, some bills seem to have been excluded from this practice. In the spirit of GRP, a broad interpretation of the applicability to trade and investment is needed – defining the scope not just as the investment approval process, for example, but as covering the effect on companies already invested in Taiwan and perceptions of the overall investment climate. 

Another concern is the “comment” portion of the notice-and-comment procedure. Public input is useless if the suggestions are not taken seriously. So far, too few submissions have received a meaningful response from the competent authorities. 

Finally, the permitted exceptions to the 60-day standard in cases of “emergencies” or other urgent matters require further attention. Although the government has recently provided helpful guidance in more explicitly defining the conditions qualifying for these exclusions, continuous oversight will be needed to ensure the provision is not abused. 

Taiwan has already made huge strides toward establishing a regulatory system facilitating stakeholder participation. With just a few more improvements, it will be able to take pride in being a global role model in GRP, raising Taiwan’s attractiveness to multinational investors.