Taiwan Tightens Grip: Hefty Fines Loom for Companies Mislabeling Product Origins

Crackdown on Origin Fraud Aims to Safeguard Trade Integrity and Protect Taiwanese Businesses

In a move signaling its commitment to fair trade practices, Taiwan's Ministry of Economic Affairs is implementing stricter measures to combat origin fraud. Speaking at the legislature in Taipei, Minister of Economic Affairs J.W. Kuo (郭智輝) announced that companies found in violation of country-of-origin laws will face fines ranging from NT$60,000 to a substantial NT$3 million (US$1,845 to US$92,251). Furthermore, serious breaches could lead to the suspension of a firm's operations.

The government's intensified focus on origin fraud stems from its significance in ongoing tariff negotiations between Taiwan and the United States, as highlighted by Minister Kuo during a meeting of the Economics Committee. Responding to concerns raised by Democratic Progressive Party (DPP) Legislator Chiu Yi-ying (邱議瑩) regarding potential exploitation by China through product mislabeling, Minister Kuo assured the committee that the ministry is closely monitoring the situation and has prepared effective countermeasures.

Minister Kuo emphasized a multi-pronged approach to tackle this issue, stating, "We will monitor import volumes, strictly enforce penalties with fines from NT$60,000 to NT$3 million per violation and revoke import-export licenses of fraudsters." The ministry also plans to bolster anti-dumping investigations and enhance awareness among local businesses.

Data from the Ministry of Finance reveals that nearly 800 cases of origin fraud have been recorded since 2020, resulting in fines totaling NT$29.58 million. These violations are related to the Foreign Trade Act (貿易法) and the Act for the Establishment and Management of Free Trade Zones (自由貿易港區設置管理條例).

At a separate meeting of the legislature’s Finance Committee, Minister of Finance Chuang Tsui-yun (莊翠雲) affirmed the government's commitment to preventing attempts to disguise the origin of Chinese-made products. A dedicated task force has been established to improve inspections of illegal transshipments at customs, aiming to prevent the misuse of Taiwan as a base for re-exports to the US to evade higher duties. Minister Chuang suggested that the Ministry of Transportation and Communications, which oversees the free trade zones, consider increasing fines, currently set at NT$30,000 to NT$300,000, to align with the higher penalties stipulated by the Foreign Trade Act.

Additionally, National Development Council Minister Paul Liu (劉鏡清) announced that the state-run National Development Fund has issued directives to its portfolio companies, mandating that they refrain from any country-of-origin mislabeling. According to Minister Liu, the council had received over 40 responses as of the previous day.

In related news, Minister Kuo also addressed the potential impact of tariffs imposed by US President Donald Trump on Taiwanese semiconductor manufacturers, noting that the primary effect would be on their US-based clients. He affirmed that the government will collaborate with these clients to advocate for a more favorable tariff rate for Taiwanese manufacturers.