萬國法律事務所

As Taiwan’s semiconductor industry continues to play a vital and irreplaceable role in global supply chains, professional head hunting by Chinese companies has again aroused the public’s attention.  Recently, the Chinese semiconductor company "BITMAIN" was found to be head hunting for Taiwanese R&D talent with offers of high salaries conveyed by a Taiwanese middleman company, and over 200 people were “hunted” in the past three years.
 
Officials from Taiwan’s Ministry of Economic Affairs (MOEA) stated that Chinese companies frequently steal Taiwan’s intellectual properties or trade secrets by head hunting Taiwanese R&D talent and through mergers and acquisitions of Taiwanese companies.  As such, Taiwan’s Trade Secret Law was revised several years ago, and the regulations governing Chinese investment were also tightened in 2020.
 
Chinese companies have long been engaged in stealing intellectual property and trade secrets from Taiwan industries by head hunting.  In response to China's malicious head hunting activities, the Trade Secrets Law poses criminal liability to crimes committed in China and outside of Taiwan and sanctions violations with imprisonment of up to ten years.  Last year, the investigation secrecy order was introduced to avoid the leaking of trade secrets during investigations.
 
The counter measures against attempts at mergers and acquisitions by Chinese companies consist mainly of the tightening of the definition of "Chinese investor" as amended last year, that is, a company de facto controlled by a Chinese entity (whether or not it is a shareholder) falls into the definition of “Chinese investor” in the regulations now.  Secondly, the Chinese Communist party, Chinese Government, and Chinese military agencies are clearly prohibited from investing in Taiwan.
 
Although the revisions of the regulations make it more difficult for Chinese companies to conduct malicious head hunting activities aimed at Taiwanese talent via foreign companies; Chinese companies using a Taiwanese company as a middleman to conduct head hunting still pose a threat to Taiwanese industry, as they are not easily detected.  Therefore, the MOEA stated that it will transfer suspicious cases to the prosecutor’s office for further inspection, as any omission may cause irrecoverable harm to the Taiwan domestic industry.