To tackle so-called “origin laundering,” lawmakers have put forward proposals to amend the Act Governing Relations with Hong Kong and Macau (香港澳門條例) to prevent China from abusing substantial transformation of goods by passing them through the two territories.
“Origin laundering” refers to the deceptive practice of misrepresenting a product’s country of origin — often to evade tariffs or trade restrictions.
Democratic Progressive Party (DPP) Legislator Tsai Yi-yu (蔡易餘), who initiated the proposal, said that since the passage of the Hong Kong and Macau act, Taiwan has considered the two territories’ residents separate from the People’s Republic of China (PRC).
Photo: AFP
However, the distinction between China and Hong Kong has become increasingly blurred since the adoption of Article 23 of the Hong Kong Basic Law last year, which has largely integrated the territory into China’s political, economic and social structures, Tsai added.
The proposed amendment seeks to change past references of “Hong Kongers” as “foreigners” and past references of “Hong Kong-based investors” as “foreign investors,” Tsai said.
The proposed amendment also says that all transactions, investments or technical collaborations with Hong Kong and Macau should observe regulations under the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例) due to the similarity of rules between the two acts.
Prior to proposing the amendment, Tsai on April 11 called for the government to freeze the Hong Kong and Macau act per Article 60 of the act.
Article 60 states that “should any change occur in the situation of Hong Kong or Macau such that the implementation of this act endangers the security of the Taiwan Area, the Executive Yuan may request the President to order suspension of the application of all or part of the provisions of this act ... Should the application of any part of this act be suspended and no other laws or regulations be formulated to govern relations between the Taiwan Area and Hong Kong or Macau, the relevant provisions of the Act Governing the Relations Between the People of the Taiwan Area and the Mainland Area shall apply.”
Premier Cho Jung-tai (卓榮泰) at the time said he would instruct the Mainland Affairs Council to look into the issue, adding that how Taiwan views Hong Kong and Macau should no longer be based on past relations with the two territories, but rather based on considerations of national and economic security.
US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, although a week later he announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most US imports worldwide, including from Taiwan.
The US is not only concerned with “reciprocal” tariffs and non-tariff barriers, but has also emphasized the issue of origin laundering, Cho said.
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