The Executive Yuan today is expected to approve draft amendments to the Foreign Trade Act (貿易法) aimed at preventing companies from shipping China-made products to Taiwan to receive a “Made in Taiwan” (MIT) certificate of origin, an anonymous source said.
The amendments were published last month by the Bureau of Foreign Trade amid an ongoing US-China trade dispute.
To evade US tariffs on Chinese goods, a number of products from China destined for the US have been found making stopovers in Taiwan to gain an MIT label to conceal their source, the Ministry of Economic Affairs said last month.
Under the amendments, firms found guilty of illegally exporting “strategic high-tech goods” to non-restricted regions, applying and using false certificates of origin, illegally transferring goods, labeling false countries of origin or disturbing trade through undue means would face a fine of NT$60,000 to NT$3 million (US$1,929 to US$96,432), up from NT$30,000 to NT$300,000.
The amendments would also introduce a system to reward people who report breaches, which would prevent false labels from prompting foreign inspections of Taiwanese firms, and affecting the overall interests and reputation of domestic industries, the source said.
The act has not been amended in 10 years, they added.
Domestic businesses have said that the current fines are not high enough to prevent firms from illegally changing their products’ country of origin, they said.
The bureau last year began requiring stricter management of certain goods, including solar power products, bicycles, and metal screws and nuts.
It previously found that solar photovoltaic products made in China and exported to Taiwan had been labeled as being from Vietnam, the source said, adding that it now requires to see certificates of origin when goods are imported to Taiwan.
The bureau has also established a monitoring system for bicycle parts, about which domestic businesses have expressed concern, they said.
If the prices of the imports are too low, the bureau would look into the matter through the industry’s association and customs, they added.
Since last year, the bureau has been cooperating with customs to remind businesses that goods on which the US has raised tariffs need to fulfill the MIT requirements to receive an MIT certificate of origin, they said.
To receive a certificate, the goods would need to have increased in value by 35 percent from when they were imported to when they were processed and exported, they added.