EXBS: TAIWAN MONTHLY REPORTING CABLE - SEPTEMBER - OCTOBER

UNCLAS AIT TAIPEI 002345

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR ISN/ECC - YWONG, ACHURCH AND KCROUCH
DEPT FOR EAP - SBREMNER
CBP/INA FOR RWATT AND JGOUGE
DEPT FOR ENERGY/NNSA FOR T. PERRY AND S. JONES

E.O. 12958: N/A
TAGS: ETTC MNUC PARM PREL KSTC KNNP TW
SUBJECT: EXBS: TAIWAN MONTHLY REPORTING CABLE - SEPTEMBER - OCTOBER
5, 2007


I. BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY
MANAGERS:

(SBU) During the week of November 19, the EXBS Advisor will be in
Washington, D.C. for her 6-month review and consultation.

II. COMPLETED ACTIONS FOR THE REPORTING PERIOD.


A. SITE ASSESSMENTS AND MEETINGS DURING REPORTING PERIOD:


1. (SBU) On September 12 and October 2, the EXBS Advisor met with
Special Agents of the Ministry of Justice Investigation Bureau
(MJIB)and a Prosecutor from the Taiwan High Prosecutors Office of
the Ministry of Justice, respectively.

During the September 12 meeting, MJIB officials explained that their
mission is to investigate crimes related to corruption, election
fraud, money laundering, drug trafficking, cyber crime and national
security. Export controls, counter-terrorism, anti-terrorism, and
counter-proliferation fall under national security investigations.
The branch offices located throughout Taiwan actually investigate
cases under guidelines provided by headquarters. After an MJIB
Special Agent has gathered sufficient evidence on a case, the case
is then referred to the Prosecutors Office or to the Bureau of
Foreign Trade (BOFT) of the Taiwan Ministry of Economic Affairs for
disposition. MJIB does not have the authority to close out cases.
To date in 2007, MJIB investigated five export control cases, two of
which have been closed, two indicted, and one on-going.

During the October 2 meeting, the Taiwan High Prosecutors Office
official explained that when his office receives the case file, it
is assigned to a line Prosecutor. The assigned Prosecutor then will
review the file and determine whether sufficient evidence exists to
merit criminal prosecution; i.e., indict (bring formal charges)
against the accused. If the decision is not to indict, the assigned
Prosecutor will draft a "non-indictment" paper for the file. The
assigned Prosecutor can also decide to suspend the indictment for
less serious crimes and for first time offenders.

Prosecutors as well as the judge have the authority to grant search
warrants requested by investigators and to issue subpoenas to compel
testimony by witnesses. Prosecutors have the authority to settle
the penalty portion of a case if the statutorily imposed penalty
does not include the death penalty, life in prison, or more than
three years of imprisonment. Since export control violations carry
a maximum of two years of imprisonment, prosecutors can settle what
penalty can be imposed in export control cases. Prosecutors,
however, do not have the authority to settle the actual charges or
the count of charges. All settlements are approved by a judge.

For those cases that are not settled, the sitting judge renders the
final verdict. The judge will consider evidence submitted by the
government and the defense. The standard of proof for criminal
cases is "beyond a reasonable doubt." In 2003, criminal procedural
law was amended to include the right to cross-examine witnesses.


Local District Courts are trial courts and the High Court and the
Supreme Court are appeals courts. Only serious crimes can be
appealed to the Supreme Court. Because export control cases have a
statutory maximum of two years of imprisonment, they are not
considered serious crimes and cannot be appealed to the Supreme
Court.


2. (SBU) During the week of September 17, the EXBS Advisor was in
Washington, D.C. for export control meetings.


3. (U) On October 5, the EXBS Advisor participated in the
Taiwan-Germany Industry-Government Outreach Seminar in Taipei. One
hundred and ten company representatives attended; 42 representatives
from German-affiliated companies, 50 representatives from Taiwan
companies, and the remainder from "other" companies. (The
U.S.-affiliated companies fall under the "other" category.)

The one-day seminar consisted of reviews of German and Taiwan export
control systems; elements of internal controls promoted by Germany;
export control outreach programs by Taiwan; and presentations of
internal control programs by Siemens Limited Taiwan and DuPont
Taiwan Limited. Two export control officials from the Federal
Office of Economics and Export Control (BAFA) and one from the
German Federal Ministry of Economics and Technology (BMWi) traveled
from Germany to Taiwan for the seminar.

Not surprisingly, the questions from attendees centered on issues
related to identification of items on the control list; loss of
business opportunities due to export control compliance by
companies; costs associated with setting up an internal control
system (computer, software, personnel); license application
processing time; and extraterritorial application of export control
laws (this was a question for the United States since Germany and
Taiwan do not have reexport controls as implemented by the United
States). In responding to the questions, officials from Germany,
Taiwan, and the United States stressed the importance of building
export control knowledge within the company and the necessity of
corporate management's commitment to export controls. Siemens and
DuPont officials added that, while there is a direct cost associated
with complying with export control requirements, they have
successfully used their sound internal controls as a marketing tool
in international business.


B. BLUE LANTERN:

(SBU) On October 1, the EXBS Advisor accompanied officials of the
Directorate of Defense Trade Controls (DDTC) to a meeting with the
Taiwan Ministry of National Defense (MND) as part of DDTC's Blue
Lantern Team visit to Taiwan. The Blue Lantern Team briefed MND
officials on the legal basis for U.S. munitions controls; the
structure of DDTC; and purpose and goals of Blue Lantern checks.
The MND officials reviewed their organizational structure; legal
basis for Taiwan munitions controls; and MND's strategic plan for
the next five years. During the discussion, the MND officials
stated that a program that explains the complicated U.S. export
controls of munitions would benefit businesses that import U.S.
munitions and munitions parts into Taiwan. The Blue Lantern Team
stated that they are discussing organizing an Asia regional
munitions export control seminar with the Society for International
Affairs (SIA). (The SIA is a Washington-based nonprofit
organization that organizes munitions control programs in the United
States and overseas.) The Blue Lantern Team said they would inform
MND officials if such a program is organized.


C. TRAINING CONDUCTED DURING REPORTING PERIOD:

(U) No EXBS training was conducted during the reporting period.

III. UPCOMING TRAINING:

(U) The two-day Transit/Transshipment training, implemented by the
Department of State through Los Alamos Technical Associates, Inc. is
being planned on October 30-31 in Taipei.

(U) The week-long Targeting and Risk Management training implemented
by Customs and Border Protection is being planned for the week of
November 12 in Kaohsiung.

IV. UPCOMING MEETINGS

(SBU) On October 23, the EXBS Advisor and a Container Security
Initiative Consultant will meet with officials of the MJIB to
discuss recently reported export control cases.

(U) On October 24, the EXBS Advisor and an officer from the Economic
Section will meet with two professors from Kainan University in
Taoyuan County to discuss economic and security implications of
relocation of Taiwanese high-tech companies to the People's Republic
of China. The two professors participated in BOFT's visit to
certain import and export companies in August 2007.


V. RED FLAG ISSUES:

None.

POC for this report is Mi-Yong Kim, EXBS Advisor.
Telephone +886 2 2162 2347.

YOUNG