萬國法律事務所

Taiwan's Legislative Yuan passed a draft of the Development of the National Defense Industries Act on 31 May 2019. The draft Act addresses upon the government's policies and needs the following key points:

1. According to Articles 4 and 5, a legal person, institution, or organization (“entity”) incorporated in accordance with the laws of Taiwan may apply for a certificate regarding the ranking of qualified military goods suppliers. The relevant authority shall evaluate and rank the entities in three tiers based on certain conditions, including technological capability, operation size, and experience in researching, developing, manufacturing, and maintenance, the record of collaboration between industry and academia, and the potential to enhance domestic employment and production. The relevant authority shall conduct regular annual safety inspections of such suppliers and their sub-suppliers, and may carry out such inspections from time-to-time, if necessary.

2. According to the Article 6, where the person in charge of or the agent or employee of such qualified entity has committed a crime such as accepting bribes or disclosing national security classified information or business confidential information, and if said person is finally sentenced to imprisonment without probation, or has his/her sentence commuted to a fine or community service, such qualified entity's application for the certificate shall be rejected by the relevant authority for a period of more than one year and less than three years after its certificate is revoked.

3. In order to safeguard national security, Article 22 stipulates that key components or raw materials for the research, development, manufacture, and maintenance of specifically listed military goods shall not come from China, Hong Kong, and or Macao, or from entities in other regions in which a person or entity from China, Hong Kong, and or Macao has invested, unless such key components or raw materials are otherwise approved by the Executive Yuan due to special needs. 4. According to the Article 12, the Government may, based upon the Government's policies and needs, reward certain qualified entities by providing donations, subsidies, priority rights to purchase, mortgages, and preferential interest rates.