Ministry says banks can retrieve unpaid loans

Staff writer, with CNA

Sun, Nov 24, 2013 - Page 3

If the Republic of China’s diplomatic allies default on loan payments to the nation, local banks in those countries are to ensure that they meet their obligations through lawsuits, the Ministry of Foreign Affairs said.

According to the ministry, the nation’s loans to its diplomatic allies are made through domestic commercial banks in the form of business loans.

When a contract is signed, the bank includes an article that ensures the ally honors its obligations and pays back its loans, it said.

If an ally were to default on payments, domestic banks would file a lawsuit to claim the amount, the ministry said.

The ministry was responding to media reports that said in the past it extended loans to Taiwan’s allies via state-controlled banks.

As of the end of last year, a total of US$156.64 million in such loans were still outstanding, including US$117.3 million that was loaned to “former allies.”

The report alleged Taiwan would not be guaranteed to get back this amount even if the banks filed lawsuits and won litigation.

The ministry’s clarification came after Taiwan and the Gambia broke diplomatic relations in the past week.

The West African nation owes Taiwan US$10 million in outstanding loans.

In related developments, former Gambian ambassador to Taiwan Alhagie Ebrima Jarjou departed from Taipei on Friday.

Taiwan terminated diplomatic relations with the Gambia on Monday following the surprise announcement by Gambian President Yahya Jammeh on Nov. 14, which ended 18 years of formal ties.

Jarjou was seen off by the director-general of the ministry’s Department of Protocol Richard Shih (石瑞琦), who is a former ambassador to the Gambia, at the Taiwan Taoyuan International Airport.

Jarjou said that the only thing he could say was “thanks” as he repeatedly expressed his gratitude to the nation.

Jarjou said that although Jammeh made the decision, he still believes the friendship between Taiwan and the Gambia remains, and that the people of the two countries will treat each other as friends.

Former ambassador to the Gambia Samuel Chen (陳士良) returned to Taiwan on Wednesday.

The loss of diplomatic relations with the Gambia means Taiwan now has 22 diplomatic allies.