Taipei is planning to crack down on illegal China-bound investments, with stricter rules and harsher penalties, according to an amended draft bill.
Mainland Affairs Council (MAC) officials confirmed the plan yesterday at its news briefing.
The penalties for those who break the law on such investment will face fines of up to NT$25 million and jail terms of up to 2-years if the bill is passed.
The amendment is expected to be sent to the legislature for review during the next legislative session, which begins in September. The bill, however, will not be retroactive, so those violating the law before it takes effect will not be punished.
Seeking to more effectively manage China-bound investment, the Ministry of Economic Affairs (MOEA) and the MAC are jointly seeking to amend related articles in the Statute Governing Relations Between the People of the Taiwan Area and the Mainland Area (兩岸人民關係條例).
Under current rules, people who wish to invest in China must obtain permission from the government. At the moment, violations bring fines of NT$1 million to NT$5 million.
Present rules also allow for fines to accrue continuously until illegal investments are completely pulled out of China.
In addition, the new rules add criminal liabilities in cases which are not remedied after fines are imposed.
Illegal investors face no criminal sanctions at present.
The purpose of the amendment, according to MAC Vice Chairman Jonathan Liu (
"The volume of money that Taiwan's businesspeople invest in China varies widely. Some investments are small scale while others are huge. The present punishments of NT$1 million to NT$5 million are too heavy for small scale investments, but much to mild to discourage big investors," Liu said.
He added that the new criminal liabilities should help ensure the effectiveness of the regulations.
Officials from the MAC, who wish to remain anonymous, admitted yesterday that although the government plans the toughening regulations to stop illegal investments, the measure will be "hard to carry out."
"In practice, it is very difficult to find who is investing without permission. Last year, for example, there were only three or four cases uncovered and prosecuted," he said.
It is widely believed that over half of the investments in China that originate in Taiwan are made without permission.
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