What legislative changes are proposed to close the chip export loophole?

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Proposed Legislative Changes to Address Chip Export Loophole

A proposed amendment to Taiwan's Foreign Trade Act aims to criminalise the export of semiconductor chips to mainland China. Lawmaker Chung Chia-pin plans to introduce this amendment, which would specifically include a "mainland China semiconductor chip clause." This addition is intended to close what Chung describes as a loophole in existing legislation, which he asserts was created during the administration of former president Ma Ying-jeou and has not been rectified by subsequent governments.
Amendment to Foreign Trade Act

The legislative initiative centres on modifying the Foreign Trade Act to explicitly prohibit the export of semiconductor chips to mainland China. This proposed clause seeks to establish a clear legal framework that would prevent such shipments, addressing concerns that current laws are insufficient. The intention is to align Taiwan's regulations with international export control objectives, particularly those set by the United States regarding advanced AI chips.
Identification of Existing Legal Gap

Chung Chia-pin has identified a specific legal deficiency that facilitates the alleged smuggling of advanced chips. He contends that a loophole was established in the Foreign Trade Act under the previous Kuomintang-led government, and that despite changes in administration, this gap has persisted. This legislative gap means that exporting AI chips to mainland China is not currently a criminal offence under Taiwanese law, even though it violates US export controls.
Rationale for Legislative Action

The push for legislative change stems from ongoing investigations into the alleged smuggling of high-end AI chips, such as those manufactured by Nvidia, to China. Prosecutors are investigating multiple companies and individuals suspected of forging documents to facilitate these shipments. Experts and lawmakers alike have highlighted that the absence of specific legislation in Taiwan makes it challenging to prosecute such activities effectively, underscoring the need for a clear legal deterrent.

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What legislative changes are proposed to close the chip export loophole?

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