There has been a string of cases recently in which senior management figures in Taiwanese companies have been handed custodial sentences by US courts, or forbidden from leaving the country. Most of these were prosecuted by the US Department of Justice under US antitrust laws. Taiwan relies on foreign trade and the US is a very important market for its exports, which makes this a trend with potentially significant implications.
The US wields considerable influence and US antitrust laws give local courts statutory jurisdiction over foreign defendants. According to the effects principle, should the US be affected by any anti-competitive practices carried out by a party operating overseas, US courts have the legal right to regulate or apply sanctions to said party. These sanctions can be either civil or criminal in nature. The size of the fines imposed has increased in recent years. Several Japanese companies have been fined US$100 million and British Airways, Korean Air, Japan Airlines, Mitsubishi Corp and Takeda Pharmaceutical have all been fined by US courts under this law.
In recent years, the US has also imposed heavier sanctions on individuals violating antitrust laws and demanded progressively longer sentences for overseas nationals. Although the department of justice provides guidance and information on how to avoid such violations and on what is considered acceptable behavior, antitrust litigation can be a drawn out process, and enormously expensive.
It is therefore vital that Taiwanese companies know how to mount an effective defense, present facts and figures beneficial to their case, select a US lawyer and deal with the often daunting civil, criminal and administrative procedures. This is knowledge they will need if they inadvertently get on the wrong side of the law or feel they have been unjustly accused.
Unfortunately, neither the Ministry of Foreign Affairs, overseas representative offices, the Ministry of Justice, the Ministry of Economic Affairs nor the Fair Trade Commission have much experience in dealing with such matters. Another problem is that government agencies tend to wait until a case is brought against an individual or company before they turn their attention to it, rather than amassing the relevant legal information before this happens. This means they tend to be unprepared when the time comes.
The situation is exacerbated by the highly theoretical approach to the law taken by legal departments in universities or at Academia Sinica. These tend to concentrate on academic research and rarely turn their attention to the practicalities of litigation in Taiwan or abroad. At present, there is no US civil litigation course available in any law department in Taiwan.
Antitrust laws give prosecutors excessive power and it is not uncommon for the basic rights of a company or its chief executive officer to be infringed. Such litigation can affect the future prospects of local companies.
As part of the recent AU Optronics case, US lawyers specializing in antitrust cases were brought in. These lawyers were able to use the pre-trial discovery system in the US to gather information relevant to the case, both by written interrogatories and oral examination, from the US government and third parties, as well as subpoenas for admissions and written documents considered beneficial to the defense.
A number of channels are open to government agencies in Taiwan to deal with the issues touched on here. They could for example, provide legal or administrative advice to the defendant. There is also no reason they could not communicate with the US side. Under US law, it is permissible to submit opinions and information relating to cases even when they are still in process.
It is not uncommon for the court of the next instance to receive what are referred to as amicus curiae (“friend of the court”) briefs from government departments, civic groups, civil rights groups and justice ministries. Such briefs consist of unsolicited, volunteered information or learned treatises felt to have some bearing on the case by an individual or organization not party to the case at hand.
For example, when Taiwan was not allowed to take part in the 1980 Winter Olympics in the US, a Taiwanese athlete, Liang Jen-kui (梁仁貴), appealed to the New York State Court to have the Olympic Committee’s decision overturned to allow Taiwan to compete. On the advice of the US State Department, the court ruled that this was a political, not a legal, matter.
The US government also once tried to pressure the Taiwanese government over an intellectual property rights case, using a variety of methods and even trying to influence the outcome of the ongoing case. In response, the Taiwanese government made its position clear, through various channels, to the US government and then shared the information it had with countries in which fines had already been awarded.
We could make a start by ensuring we have all the relevant information at our fingertips. This is something government, industry — including workers’ unions and trade associations — and academia could take responsibility for, by collecting relevant data, training experts in the field and sending officials abroad to examine overseas reports.
This kind of information would be invaluable to Taiwanese exporters, ensuring they are both forewarned and forearmed, which would prevent companies from running into trouble abroad, and in the event that they did, would help to reassure them that they have the full support of people back home.
Yang Chung-sen is a partner at the New Hope law firm and a chair professor at National Taiwan University.
TRANSLATED BY PAUL COOPER
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