萬國法律事務所

The Chinese Government issued Measures for the Security Review of Foreign Investment (“MSRFI”), which came into effect on 18 January 2021.
 
Taiwan's Ministry of Economic Affairs (“MOEA”) indicated that the MSRFI applies to all Taiwan investors.  If a Taiwan investor intends to invest in businesses in China that fall within the scope of reviewable investments/transactions under the MSRFI, such as an investment in the military industry, industries related to national defense security, and investments in areas surrounding military facilities, important agricultural products, energy and resources, heavy equipment manufacturing, material infrastructure, material transportation services, material cultural products and services, material information technology and Internet products and services, material financial services, key technologies, among others, that related to national security will also fall within the penumbra of reviewable investments/transactions.  Under the MSRFI, the aforesaid investors must obtain prior approval in accordance with the MSRFI for such investments in China.
 
In addition, MOEA stated that MSRFI does not provide a specific definition for some terms referred to in the MSRFI, such as “material”, “key technologies”, and “related to national security”.  Therefore, it is likely that the foreign investors will encounter a high degree of uncertainty with respect to the application and enforcement of the MSRFI.  Further, as penalties will be imposed on investors who violate the MSRFI, MOEA reminds Taiwan investors to carefully consider such risk.
 
MOEA also indicated that Taiwan investors intending to invest in China should note the new laws and regulations to be issued by Chinese Government recently and the relevant impacts attributed to such new laws and regulations, such as the Anti-Monopoly Law and the Measures for the Security Review of Securities Transaction.