萬國法律事務所

Taiwan's Judiciary and Organic Laws and Statutes Committee has completed the preliminary deliberation of the bill for the Foundation Act. With concession by the DPP, legislators finally compromised on the idea of specific legislation for religious foundations. However, most of the disputes have not been settled and await consultation among the political parties.

Ming-Tang Chen, Administrative Deputy Minister of the Ministry of Justice, indicated that after deliberation of the provisions in the bill for the Foundation Act, the level of regulation would differ in accordance with various methods of funding. Foundations that rely on private donations will be subject to minimum regulation in an effort to respect self-governance, while foundations that rely on government donations will be subject to a higher level of regulation. It is expected that the Act, when in force, will enhance the legal system for the approximately six thousand foundations.

The KMT proposal was to exclude religious foundations from application of the Foundation Act. KMT Legislator, Ming-Tzung Tseng, stated, “The Ministry of Justice and the Ministry of Interior have different opinions as to whether religious foundations should be regulated by the Foundation Act. If there is no clear position on religious foundations, it would be better not to apply the Act.” Hence, KMT legislators boycotted the agenda processing yesterday.

Aiming to address human resources management issues, provisions to prevent conflicts of interest were included in of the draft bill at the preliminary deliberation. Directors, supervisors, chief executives, and or persons in equivalent positions, would be required to avoid conflicts of interest. Interested persons may include spouses and relatives within the second degree of kinship with abovementioned persons. Any person who violates these provisions would be liable for compensation, or could be removed from his/her position. In order to prevent situations in which personal gains are claimed due to false public interests, the provision stipulated that the property, interests, and other income received by the foundations would not be distributed. The maximum fine for violation of this stipulation would be as high as two million New Taiwan Dollars.

In the bill proposed by the Executive Yuan, in addition to provisions related to the required disclosure of pertinent information and foundations’ financial statements, provisions regarding the establishment of accounting systems and internal controls and auditing for reporting to the relevant authorities to prevent tax evasion or other illegal matters were all retained after the preliminary deliberation.