(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contract;
(ii) the protection of the privacy of the individual in relation to the processing and dissemination of personal data and the protection of confidentiality of personal records and accounts; or
(iii) safety;
(d) measures considered to be necessary for the protection of the essential security interests:
(i) taken in time of war, or armed conflict, or other emergency; or
(ii) relating to the implementation of policies or international agreements respecting the non-proliferation of weapons; or
(e) measures taken with the aim of contributing to the efforts under the United Nations Charter for the maintenance of international peace and security.
2. In cases where any measure as referred to in paragraph 1 is taken in the Area of either Side, that Side shall, prior to the entry into force of the measure or as soon thereafter as possible, provide the other Side with information regarding the following elements of the measure:
(a) sector and sub-sector or matter;
(b) any provisions of this Arrangement affected by the measure;
(c) legal source of the measure;
(d) succinct description of the measure; and
(e) purpose of the measure.
Article 19.
1. It is understood that, in either Side, measures not conforming with Article 3 relating to cross-border capital transactions and Article 15 may be adopted or maintained:
(a) in the event of serious balance-of-payments and external financial difficulties or threat thereof within the Area of that Side; or
(b) in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies in the Area of that Side.
2. Measures referred to in paragraph 1:
(a) shall be consistent with the Articles of Agreement of the International Monetary Fund;
(b) shall not exceed those necessary to deal with the circumstances set out in paragraph 1;
(c) shall be temporary and shall be eliminated as soon as conditions permit;
(d) shall be promptly notified to the other Side; and
(e) shall avoid unnecessary damages to the commercial, economic and financial interests of the investors of the other Side.
Article 20.
It is understood that measures may be taken in the Area of either Side relating to financial services for prudential reasons, including measures for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by an enterprise supplying financial services, or to ensure the integrity and stability of the financial system, provided that such measures are not used as a means of undermining the investment activities of an investor of the other Side.
Article 21.
1. In the Area of either Side, intellectual property rights shall be protected adequately and effectively, and the intellectual property protection system shall be administered in an efficient and transparent manner. For this purpose, both Sides shall promptly consult with each other at the request of either Side, so that the factors which are recognized as having adverse effects to investments of investors may be removed.
2. It is understood that this Arrangement does not affect the exercise of rights or the implementation of obligations under multilateral agreements in respect of protection of intellectual property rights in force in the Area of either Side.
3. Notwithstanding Article 4, it is understood that the treatment accorded to investors of any other countries or regions and to their investments in the Area of either Side by virtue of multilateral agreements in respect of protection of intellectual property rights may not be extended to investors of the other Side and to their investments, when such multilateral agreements are not in force in the Area of the other Side.
Article 22.
Nothing in this Arrangement covers taxation measures.
Article 23.
1. Both Sides shall establish a Joint Committee (hereinafter referred to as "the Committee") with a view to accomplishing the objectives of this Arrangement. The functions of the Committee shall be:
(a) to discuss the implementation and operation of this Arrangement;
(b) to discuss the exceptional measures maintained, amended, modified or adopted in the Area of either Side as referred to in paragraph 1 of Article 8, for the purpose of contributing to the reduction or elimination of such exceptional measures;
(c) to discuss the exceptional measures adopted or maintained in the Area of either Side as referred to in paragraph 2 of Article 8, for the purpose of encouraging favorable conditions for investors; and
(d) to discuss any other investment-related matters concerning this Arrangement.
2. The Committee may, as necessary, make appropriate decisions or recommendations by consensus to both Sides for the more effective functioning or the attainment of the objectives of this Arrangement.
3. The Committee shall be composed of representatives of each Side. The Committee may, upon mutual consent of both Sides, invite representatives of relevant entities with the necessary expertise relevant to the issues to be discussed, and hold joint meetings with the business sector.
4. The Committee shall determine its own rules of procedure to carry out its functions.
5. The Committee may establish sub-committees and delegate specific tasks to such sub-committees.
6. The Committee and the sub-committees established pursuant to paragraph 5 shall meet upon the request of either Side.
Article 24.
Either Side recognizes that it is inappropriate to encourage investment by investors of the other Side and of any other countries or regions by relaxing the health, safety or environmental measures, or by lowering the labor standards.
Article 25.
1. It is understood that the benefits of this Arrangement may be denied by either Side to an investor of the other Side that is an enterprise of the other Side and to its investments, if the enterprise is owned or controlled by an investor of any other country or region and the authorities in the Area of the denying Side adopts or maintains measures with respect to the other country or region:
(a) that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits were accorded to the enterprise or to its investments; or
(b) that prohibit or restrict investment in accordance with the existing laws and regulations in the Area of the denying Side.
2. It is understood that the benefits of this Arrangement may be denied by either Side to an investor of the other Side that is an enterprise of the other Side and to its investments, if that enterprise is owned or controlled by an investor of any other country or region and that enterprise has no substantial business activities in the Area of the other Side.
Note 1: For the purposes of this Article, unless otherwise stipulated in the existing laws and regulations referred to in sub-paragraph 1(b), an enterprise is:
(a) "owned" by an investor if more than fifty (50) percent of the equity interest in it is owned by the investor; and
(b) "controlled" by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions.
Note 2: Either Side, when there arises a change in conditions for the denial of benefits as referred to in paragraphs 1 and 2, shall notify the other Side of the change in advance. In that event, both Sides shall consult with each other with a view to reviewing and amending, if necessary, this Article.
Article 26.
1. This Arrangement shall enter into force on the date that both Sides inform each other that respective procedures have been completed. It shall remain in force for a period of ten years after its entry into force and shall continue in force unless terminated as provided in paragraph 6 of this Article.
2. This Arrangement also covers all investments of investors of either Side acquired in the Area of the other Side in accordance with the applicable laws and regulations inthat Area prior to the entry into force of this Arrangement.
3. It is understood that claims arising out of events which occurred or had been settled prior to its entry into force shall be put outside the scope of this Arrangement.
4. The Annexes to this Arrangement shall forman integral part of this Arrangement.
5. Either Side may at any time request consultations with the other Side for the purpose of amending this Arrangement.
6. Either Side may, by giving one year's advance notice in writing to the other Side, terminate this Arrangement.
Conclusion
This Arrangement has been made in the English language. In witness whereof, the representative of the Association of East Asian Relations and the representative of the Interchange Association, signed this Arrangement in Taipei, on September 22, 2011.
FOR THE ASSOCIATION OF EAST ASIAN RELATIONS:
FOR THE INTERCHANGE ASSOCIATION:
Attachments
Annex I. Schedule of the association of east asian relations reservations for measures referred to in paragraph 1 of article 8
1. This Schedule sets out with respect to the Association of East Asian Relations, pursuant to paragraph 1 of Article 8, the existing measures that are not covered by the following provisions of this Arrangement:
(a) Article 3 ;
(b) Article 4 ; or
(c) Article 7 .
2. Each Schedule entry sets out the following elements:
(a) "Sector" refers to the general sector for which the entry is made;
(b) "Sub-Sector" refers to the specific sector for which the entry is made;
(c) "Industry Classification" refers, where applicable, and only for transparency purposes, to the activities covered by the entry according to the relevant classification codes;
(d) "Provisions Concerned" specifies the provisions referred to in paragraph 1 for which the entry is made;
(e) "Level of Authority" indicates the level of the authorities maintaining the measure(s) for which the entry is made;
(f) "Measures" identifies the existing laws, regulations, or other measures for which the entry is made. A measure cited in the Measures element:
(i) means the measure as amended, continued, or renewed as of the date of entry into force of this Arrangement, and
(ii) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure; and
(g) "Description" illustrates, with regard to the provisions referred to in paragraph1, the non-conforming aspects of the existing measures for which the entry is made.
3. In the interpretation of each entry, all elements of the entry shall be considered. Each entry shall be interpreted in the light of the relevant provisions of this Arrangement for which the entry is made. The "Measures" element shall prevail over all the other elements.
1.
Sector: All sectors
Sub-Sector:
Industry Classification:
Provisions Concerned: Article 3 Article 4
Level of Authority: Central
Measures: Article 17, 18, 19 and 20 of the Land Law of June 14, 2006.
Description: Land used for forests reserves, fisheries and aquaculture, hunting reserves, desalination fields, mineral deposits areas, water resources, military purposes, and land adjacent to the frontiers shall not be leased to and transferred to foreigners, or used as collateral to foreigners.
Japanese nationals (natural and legal persons) shall have the same rights to acquire land in Taiwan as those accorded to the citizens of Taiwan acquiring land in Japan in accordance with the applicable laws and regulations in Japan, provided that such acquisition of land in Taiwan by Japanese nationals is consistent with the purposes and uses specified in Article 19 of the Land Act and not subject to the restrictions of Article 17 of the same Act.
2.
Sector: Mining
Sub-Sector: Industry Classification:
Provisions Concerned: Article 3
Level of Authority: Central
Measures: Article 6 of Mining Law of December 31, 2003
Description: Mining concessions are granted only to natural persons having citizenship of Taiwan or legal persons incorporated and registered with the authorities of Taiwan.
3.
Sector: Construction Services
Sub-Sector:
Industry Classification:
Provisions Concerned: Article 3 Article 4
Level of Authority: Central and regional
Measures: Article 69 of Construction Industry Act of May 26, 2010
Description: Unless otherwise prohibited by law or any convention or treaty signed by the authorities of Taiwan, if the contract amount for a public construction project provided by the authorities of Taiwan exceeds 1 billion NT dollars, the foreign construction company shall perform the contracting project together with a local general constructor.
4.
Sector: Services incidental to energy distribution
Sub-Sector:
Industry Classification:
Provisions Concerned: Article 3
Level of Authority: Central and regional
Measures: Article 16 of the Statute for Regulating Privately-owned Utilities of April 26, 2000 Article 4 of Nature Gas Act of February 1, 2011
Description: Privately-owned utilities companies shall not have foreign stockholders or mortgage their property to foreigners for funds unless having been approved by the Executive Yuan of Taiwan.
Foreign equity in public gas utilities should be less than 50% in total.
Any person without citizenship of Taiwan is not qualified as a promoter, director or supervisor of the company's board of directors.
Electricity transmission and distribution services are franchised only to an enterprise owned by the authorities of Taiwan.
5.
Sector: Education services
Sub-Sector:
Industry Classification:
Provisions Concerned: Article 3 Article 7
Level of Authority: Central and regional
Measures: Article 82 of Private School Law of January 16, 2008 Article 9 of Supplementary and Continuing Education Law of June 23, 2004
Description: Foreigners or foreign legal persons recognized by Japanese law may not establish primary school and junior high school within Taiwan, in accordance with Private School Law.
The president of the institution providing adult education (CPC 924) and other education and training services (CPC929) is under the competency of the educational authorities of municipality, county or city. Some local educational authorities require that the president should be a citizen of Taiwan.
6.
Sector: Transport services
Sub-Sector: Internal waterway transport, and cabotage
Industry Classification:
Provisions Concerned: Article 3
Level of Authority: Central
Measures: Article 4 of Shipping Law of January 30, 2002 Articles 8 of the Law of Ships of December 8, 2010
Description: Foreign vessels may not navigate between ports of Taiwan to transport passengers and cargos unless a franchise is granted.
Foreign vessels shall not stay in any harbor or port other than those announced by the authorities of Taiwan as international ports, unless otherwise specially approved by such authorities or for seeking shelter.
7.
Sector: Transport services
Sub-Sector: Maritime Transportation Services and the Operation of vessels carrying the flag Taiwan
Industry Classification:
Provisions Concerned: Article 3 Article 7
Level of Authority: Central
Measures: Article 9 of Shipping Law of January 30, 2002 Article 5 of the Law of Ships of December 8, 2010 Articles 5, 25 and 25-1 of the Seafarer Law of January 30, 2002
Description: The Regulation of Permission and Administration for Employing Foreign Seafarers of August 12, 2011 The authorities of Taiwan may adopt or maintain any measure relating to the provision of maritime transportation services and the operation of its vessels, including but not limited to the following:
1. Any person desiring to engage in maritime transportation services as a vessel carrier shall carry the flag of Taiwan and produce relevant documents to the authorities.
2. The term "vessels carrying the flag of Taiwan" means ships which are approved by and registered in the shipping administration authority pursuant to relevant laws of Taiwan. A ship may apply for such registration if:
(a) The ship is owned by the authorities of Taiwan,
(b) The ship is owned by the citizens of Taiwan, or
(c) The ship is owned by any of the following companies, which are incorporated under the laws of Taiwan, with principal offices situated within Taiwan:
(1) An unlimited company, of which all shareholders are citizens of Taiwan.
(2) A limited company, of which at least half of the capitals are owned by citizens of Taiwan and the director authorized to represent such company is a citizen of Taiwan. However, capitals owned by citizens of Taiwan shall exceed half of total capitals if the ships of such company are engaged in international voyages.
(3) A joint company, of which all shareholders with unlimited liabilities are citizens of Taiwan.