The Ministry of Transportation and Communications yesterday announced plans to increase fines for origin laundering in free-trade zones to as high as NT$3 million (US$98,087), as part of its response to new US tariffs.
The proposed amendment to the Act for the Establishment and Management of Free Trade Zones (自由貿易港區設置管理條例) would increase penalties for firms that illegally re-export goods through Taiwan’s free-trade zones, which currently range between NT$30,000 to NT$300,000.
This is one-tenth of the Foreign Trade Act’s (貿易法) maximum penalty of NT$3 million for illegal transshipments or hiding the origin of goods.
Photo courtesy of Port of Keelung, Taiwan International Ports Corp
While it does not explicitly name China, it is understood that the measure is intended to prevent businesses from misrepresenting the origin of Chinese products.
Preventing illegal transshipments is a key government policy, the ministry said, adding that customs authorities would keep heightened monitoring, investigation and penalty measures in place.
Since May 7, the International Trade Administration has required that exporters of goods labeled as “made in Taiwan” to the US submit a certificate of origin.
The ministry has enhanced training for personnel, increased inspections and established a task force to oversee compliance with the free trade zone act, all aimed at stopping illegal re-exports.
The ministry is also considering increasing penalties of the free trade zone act to bring it in line with the Foreign Trade Act, which would result in a 10-fold increase.
It is currently proposing amendments to articles 17 and 38 — the former requires foreign goods be declared to customs, in accordance with regulations, and the latter imposes a fine of NT$30,000 to NT$300,000 and a six-month suspension from operating in the free-trade zone.
In more serious cases, a firm found to be illegally re-exporting goods could have its operating permit revoked.
The proposed amendment is in its public notice period. After, it would be sent to the Executive Yuan and Legislative Yuan for review.
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