2021-09-06

Taiwan's National Security Act to be Amended to Protect the Semiconductor Industry and Key Defense Technologies

 
In the BITMAIN Technologies Ltd. talent poaching case, each of the convicted persons was fined only NT$ 300,000 as a deferred prosecution penalty.   This insubstantial penalty  attracted the attention of a Chinese-funded company seeking to illicitly obtain secrets and information regarding Taiwan's industry and technology.
 
Taiwan's Executive Yuan claimed that in order to strengthen the protection of technology, the Government has adopted a cross-ministerial strategy.  Based on the Trade Secrets Law, under the authority of the Ministry of Economic Affairs, the Ministry of Justice will amend the National Security Law with respect to key technologies, such as semiconductors, aerospace warships, and agricultural.  If a case involves economic espionage or trade secrets, the sanction will up to 12 years of imprisonment.  The Mainland Affairs Council has indicated that it wants stiffer punishments for Chinese-funded companies engaged in talent poaching.
 
Officials of the Executive Yuan have stated that they are currently adopting many strategies to strengthen technical protection, such as amending article 13-2 of the Trade Secrets Act, to stipulate that any person who misappropriates another's trade secret for the purpose of using the trade secret in foreign jurisdictions, mainland China, Hong Kong, or Macau, shall be sentenced to imprisonment for a term of between 1 year and 10 years, and in addition thereto, a fine in an amount of between NT$ 3 million and NT$ 50 million may be imposed currently.  Further, the National Security Law will be amended to prohibit anyone infringing the trade secrets of Taiwan’s national core technologies for a foreign country, China, Hong Kong, Macao, or institutions established and specified as foreign hostile forces.
 
As to what technologies are listed as "key technologies", officials indicate that the Ministry of Science and Technology will conduct a review and make a determination.  Currently, industries that are relevant to Taiwans economy and defense advantages, include advanced semiconductor manufacturing processes, national defense technologies involving the design and manufacture of planes and warships, agricultural core technologies, and key biotechnologies.
   
Furthermore, to prevent Chinese-funded branches from engaging in illegal talent poaching, the Mainland Affairs Council wants to increase punishments and amend Article 40-1 of the Act Governing the Relations between the People of the Taiwan Area and the Mainland Area.  Such enhanced sanctions would prohibit Chinese profit-seeking enterprises from engaging in any business activities in Taiwan unless such a company is permitted by the competent authorities in Taiwan and such company has established in the Taiwan Area a branch or liaison office.
 
Attorney Weng Wei-lun (翁偉倫), a former prosecutor, advised that there is currently no law that restricts people from engaging in specific industries, and that presently, such restrictions will infringe people's right to work and may thus be unconstitutional.  Therefore, the most feasible way now to protect high technology is through the use of "Non-Competition" stipulations that require employers to reasonably compensate employees for their agreement to refrain from competing with the employer, and entering into after-resignation business strife limitation agreements with relevant employees.
 
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