Identifier
Created
Classification
Origin
06TAIPEI1899
2006-06-02 09:01:00
SECRET
American Institute Taiwan, Taipei
Cable title:  

MTAG: UPDATE ON TAIWAN EXPORT CONTROL

Tags:  ECCT PARM MTCRE JP TW 
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VZCZCXRO5761
OO RUEHFK RUEHGH RUEHHM RUEHNH
DE RUEHIN #1899/01 1530901
ZNY SSSSS ZZH
O 020901Z JUN 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0491
INFO RUEHRL/AMEMBASSY BERLIN PRIORITY 0124
RUEHBY/AMEMBASSY CANBERRA PRIORITY 4203
RUEHLO/AMEMBASSY LONDON PRIORITY 0138
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RUEHGP/AMEMBASSY SINGAPORE PRIORITY 6459
RUEHKO/AMEMBASSY TOKYO PRIORITY 7737
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RUEHHM/AMCONSUL HO CHI MINH CITY PRIORITY 0054
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S E C R E T SECTION 01 OF 02 TAIPEI 001899 

SIPDIS

SIPDIS

STATE FOR EAP/TC AND ISN/MTR
DEPT PLEASE PASS TO NSC WASHDC, PRIORITY

E.O. 12958: DECL: 06/04/2026
TAGS: ECCT PARM MTCRE JP TW
SUBJECT: MTAG: UPDATE ON TAIWAN EXPORT CONTROL

REF: A. TAIPEI 328

B. TAIPEI 1566

C. TAIPEI 429

D. STATE 36441

E. STATE 79175

Classified By: AIT DEPUTY DIRECTOR David J. Keegan, REASONS 1.4 B/C

S E C R E T SECTION 01 OF 02 TAIPEI 001899

SIPDIS

SIPDIS

STATE FOR EAP/TC AND ISN/MTR
DEPT PLEASE PASS TO NSC WASHDC, PRIORITY

E.O. 12958: DECL: 06/04/2026
TAGS: ECCT PARM MTCRE JP TW
SUBJECT: MTAG: UPDATE ON TAIWAN EXPORT CONTROL

REF: A. TAIPEI 328

B. TAIPEI 1566

C. TAIPEI 429

D. STATE 36441

E. STATE 79175

Classified By: AIT DEPUTY DIRECTOR David J. Keegan, REASONS 1.4 B/C


1. (S) Summary and introduction: AIT believes that while
problems remain in Taiwan's export control regime, the
"gameplan" developed by ISN/MTR and AIT in August 2005 has
led to significant improvements. Since January 2006, when
AIT prepared ref A evaluation of Taiwan's overall export
control situation, there has been further progress. The most
significant recent improvements include Taiwan's June 1
implementation of the gameplan commitment to expand its
sensitive commodity list (SCL) (ref B),and improved
information sharing with law enforcement officials from other
countries, notably, Japan. There has also been some
improvement in Taiwan interagency coordination. Among the
ongoing problems we see are resistance from industry, and
Taiwan's legislative gridlock. End summary and introduction.


2. (S) On June 1 Taiwan took another step forward in
implementing its export control gameplan commitments when an
expanded SCL and stricter transit/transshipment regulations
came into effect (described ref B). The Bureau of Foreign
Trade (BOFT) has been busy in recent weeks trying to educate
both private industry and enforcement officials about the new
requirements. On May 30, AIT joined a BOFT outreach event
attended by about 80 officials from a variety of Taiwan
agencies and 60 company representatives and heard the
following concerns, which BOFT promised to later raise with
U.S. agencies:

-- Some companies complained that they have no idea why their
products have been added to the SCL. The BOFT response to
these complaints was "we sympathize and want to minimize the
damage to Taiwan industrial competitiveness, but the U.S.
wants these additional items added." Note: When BOFT
requested U.S. assistance in explaining why specific items
needed to be added to the SCL, U.S. agencies accused Taiwan
of deliberately delaying implementation (refs C&D). End note.

-- One company representative noted that the export permits

are only valid for one month and that manufacturers will need
to apply for the permit before they sign a sales contract.
Since some commodities take several months to produce the
permit may expire before the commodity is shipped.

-- Several companies complained that they had already signed
contracts to supply commodities on the expanded SCL with firm
delivery dates. They worried they would be charged with
breach of contract due to the 30-day delay for export permit
approval. BOFT responded that it would prepare an English
language announcement of the new requirement that exporters
could show to their customers to explain the delay.

-- One company representative noted that it could not supply
information about the end users needed in the export permit
application because the importers are trading companies or
wholesale dealers.


3. (S) BOFT is proud of the progress it has made in recent
months in export control coordination with other countries,
another element of the gameplan. As examples of
coordination, BOFT cited export control training in Japan in
February, the Japan-sponsored industry outreach seminar in
Taipei this March, and several joint investigations into
cases where Japanese products were being exported via Taiwan
to restricted areas. In May, Taiwan export control officials
toured Customs operations in Australia. Germany has invited
BOFT officials to attend an end user verification seminar in

TAIPEI 00001899 002 OF 002


Berlin mid-June. However, discussions with the UK have not
yet resulted in concrete exchanges.


4. (S) Since January, Taiwan has responded to several U.S.
requests for investigation and information. For example, ref
C, in addition to requesting assistance in explaining why
items had been added to the SCL, also reported that Taiwan
had provided several key documents related to Iran Multimat
Company's attempts to procure goods in Taiwan. BOFT again
went out on a legal limb in supplying us with confidential
documents that could still result in prosecution of the
officials involved in supplying them to us. Most recently,
in response to ref E demarche, BOFT reports that it has
already sent a letter to the Roundtop Company requesting
detailed information on its dealings with Iran companies, and
has instructed Taiwan Customs to put Roundtop on a Customs
watch list.


5. (S) An ongoing problem in Taiwan's export control system
is the inability of the Executive (EY) to compel the
legislature to pass needed legislation. The lingering
Sensitive Technology Protection Law still has not passed its
first reading in the legislature, and seems unlikely to be
considered before the legislature re-convenes in September.
As has happened with IPR and U.S. beef, Taiwan's EY finds it
politically expedient to cast the U.S. as the "heavy" forcing
officials to do things they would rather not. AIT will
continue to work with Taiwan EY officials and legislators to
convince them that effective export control serves Taiwan's
own best interests.
YOUNG