Introduction to the “Public Procurement for Startups” mechanism
Introduction to the “Public Procurement for Startups” mechanism
I.Backgrounds
According to the EU’s statistics, government procurement budget accounted for over 14% of GDP. And, according to the media report, the total amount of government procurement in Taiwan in 2017 accounted for nearly 8%. Therefore, the government’s procurement power has gradually become a policy tool for the government to promote the development of innovative products and services.
In 2017, the Executive Yuan of the R.O.C.（Taiwan）announced a government procurement policy named “Government as Good Partners with Startups （政府成為新創好夥伴）”[1] to encourage government agencies and State-owned Enterprises to procure and adopt innovative goods or services provided by startups. This policy was subsequently implemented through an action plan named “Public Procurement for Startups”（新創採購）[2] by the Small and Medium Enterprise Administration（SMEA）.The action plan mainly includes two important parts：One created the procurement process for startups to enter the government contracts market through inter-entities contracts. The other accelerated the collaboration of the government agencies and startups through empirical demonstration.
II.Facilitating the procurement process for startups to enter the government market
In order to help startups enter the government contracts market in a more efficient way, the SMEA conducts the procurement of inter-entity supply contracts with suppliers, especially startups, for the supply of innovative goods or services. An inter-entity supply contract[3] is a special contractual framework, under which the contracting entity on behalf of two or more other contracting parties signs a contract with suppliers and formulates the specifics and price of products or services provided through the public procurement process. Through the process of calling for tenders, price competition and so on, winning tenderers will be selected and listed on the Government E-Procurement System. This framework allows those contracting entities obtain orders and acquire products or services which they need in a more efficient way so it increases government agencies’ willingness to procure and use innovative products and services.
From 2018, the SMEA started to undertake the survey of innovative products and services that government agencies usually needed and conducted the procurement of inter-entity supply contracts for two rounds every year. As a result, the SMEA plays an important role to bridge the demand and supply sides for innovative products or services by means of implementing the forth-mentioned survey and procurement process. Moreover, in order to explore more innovative products and services with high quality and suitable for government agencies and public institutions, the SMEA actively networked with various stakeholders, including incubators, accelerators, startups mentoring programs sponsored by private and public sectors and so on.
Initially the items to be procured were categorized into four themes which were named the Smart Innovations, the Smart Eco, the Smart Healthcare, and the Smart Security. Later, in order to show the diversity of the innovation of startups which response well to various social issues, from 2019, the SMEA introduced two new theme solicitations titled the Smart Education and the Smart Agriculture to the inter-entities contracts.
Those items included the power management systems, the AI automated recognition and image warning system, the chatbot for public service, unmanned flying vehicles, aerial photography services and so on. Take the popular AI image warning system as an example, the system is used by police officers to make instant evidence searching and image recording. Other government agencies apply the innovative system to the investigation of illegal logging and school safety surveillance.
Moreover, the SMEA has also offered subsidy for local governments to buy those items provided by startups. That is the coordinated supporting measure which allows startups the equal playing field to compete with large companies. The Subsidy scheme is based on the Guideline for Subsidies on Procurement of Innovative Products and Services[3] (approved by the Executive Yuan on March 29, 2018 and revised on Feb. 20, 2021). In the Guideline, “innovative products and services” refer to the products, technologies, labor, service flows or items and services rendered with creative activities through deploying scientific or technical means and a certain degree of innovations by startups with less than five years in operation. Such innovative products and services are displayed for the inter-entity supply contractual framework administered by the SMEA for government procurement.
III.Accelerating the collaboration of the government agencies and startups through empirical demonstration
To assist startups to prove their concepts or services, and become more familiar with the governemnrt’s needs, the SMEA also created a mechanism called the “Solving Governmental Problems by Star-up Innovation”（政府出題˙新創解題）. It plans to collect government agencies’ needs, and then solicit innovative proposals from startups. After their proposals are accepted, startups will be given a grant up to one million NT dollars to conduct empirical studies on solution with government agencies for about half a year.
Take the cooperation between the “Taoyuan Long Term Care Institute for Older People and the Biotech Startup” for example, a care system with sanitary aids was introduced to provide automatic detection, cleanup and dry services for the patients’discharges, thus saving 95% of cleaning time for caregivers. In the past, caregivers usually spent 4 hours on the average in inspecting old patients, cleaning and replacing their bedsheets as their busy daily routines. Inadequate caregivers makes it difficult to maintain the care quality. If the problem was not addressed immediately, it would make the life of old patients more difficult.
IV.Achievements to date
Since the promotion of the products and services of the startups and the launch of the “Public Procurement for Startups” program in 2018, 68 startups, with the SMEA’s assistance, have entered the government procurement contracts market, and more than 100 government agencies have adopted the innovative resolutions. With the encouragement for them in adopting and utilizing the fruits of the startups, it has generated more than NT$150 million in cooperative business opportunities.
V.Conclusions
While more and more startups are obtaining business opportunities from the favorable procurement process, constant innovation remains the key to success. As such, the SMEA has regularly visited the government agencies-buyers to obtain feedbacks from startups so as to adjust and optimize the innovative products or services. The SMEA has also regularly renewed the specifics and items of the procurement list every year to keep introducing and supplying high-quality products or services to the government agencies.
[1] Policy for investment environment optimization for Startups（2017）,available at https://www.ndc.gov.tw/nc_27_28382.（last visited on July 30, 2021 )
[2] https://www.spp.org.tw/spp/（last visited on July 30, 2021 )
[3] Article 93 of Government Procurement Act：I An entity may execute an inter-entity supply contract with a supplier for the supply of property or services that are commonly needed by entities. II The regulations for a procurement of an inter-entity supply contract, the matters specified in the tender documentation and contract, applicable entities, and the related matters shall be prescribed by the responsible entity.
[4] https://law.moea.gov.tw/LawContent.aspx?id=GL000555（last visited on July 30, 2021）
Preface Considering that, many countries and regional international organizations already set up ABS system, such as Andean Community, African Union, Association of Southeast Asia Nations (ASEAN), Australia, South Africa, and India, all are enthusiastic with the establishment of the regulations regarding the access management of biological resources and genetic resources. On the other hand, there are still many countries only use traditional and existing conservation-related regulations to manage the access of biological resources. Can Taiwan's regulations comply with the purposes and objects of CBD? Is there a need for Taiwan to set up specific regulations for the management of these access activities? This article plans to present Taiwan's regulations and review the effectiveness of the existing regulations from the aspect of enabling the legal and effective access to biological resources. A recommendation will be made on whether Taiwan should reinforce the management of the bio-resources access activities. Review and Recommendation of the Regulations on the Legal and Effective Access to Taiwan's Biological Rersearch Resources （1）Evaluate the Needs and Benefits before Establishing the Regulation of Access Rights When taking a look at the current development of the regulations on the access of biological resources internationally, we discover that some countries aggressively develop designated law for access, while some countries still adopt existing regulations to explain the access rights. Whether to choose a designated law or to adopt the existing law should depend on the needs of establishing access and benefit sharing system. Can the access and benefit sharing system benefit the functioning of bio-technological research and development activities that link closely to the biological resources? Can the system protect the interests of Taiwan's bio-research results? In Taiwan, in the bio-technology industry, Agri-biotech, Medical, or Chinese Herb Research & Development are the key fields of development. However, the biological resources they use for the researches are mainly supplied from abroad. Hence, the likelihood of violating international bio-piracy is higher. On the contrary, the incidence of international research houses searching for the biological resources from Taiwan is comparatively lower, so the possibility for them to violate Taiwan's bio-piracy is very low. To look at this issue from a different angle, if Taiwan establishes a separate management system for the access of biological resources, it is likely to add more restrictions to Taiwan's bio-tech R&D activities and impact the development of bio-industry. Also, under the new management system, international R&D teams will also be confined, if they wish to explore the biological resources, or conduct R&D and seek for co-operation activities in Taiwan. Not to mention that it is not a usual practice for international R&D teams to look for Taiwan's biological resources. A new management system will further reduce their level of interest in doing so. In the end, the international teams will then shift their focus of obtaining resources from other countries where the regulation on access is relatively less strict. Before Taiwan establishes the regulations on the legal and effective access to bio-research resources, the government should consider not only the practical elements of the principal on the fair and impartial sharing of the derived interests from bio-research resources, but also take account of its positive and negative impacts on the development of related bio-technological industries. Even if a country's regulation on the access and benefit sharing is thorough and comprehensive enough to protect the interests of bio-resource provider, it will, on the contrary, reduce the industry's interest in accessing the bio-resources. As a result, the development of bio-tech industry will be impacted and the resource provider will then be unable to receive any benefits. By then, the goal of establishing the regulation to benefit both the industry and resource provider will not be realized. To sum up, it is suggested to evaluate the suitability of establishing the management system for the access to biological resources through the cost-effect analysis first. And, further consider the necessity of setting up regulations by the access the economic benefits derived from the regulation for both resource provider and bio-tech industry. （2）The Feasibility of Managing the access to Bio-research Resources from existing Regulations As analysed in the previous paragraphs, the original intention of setting up the Wildlife Conservation Act, National Park Law, Forestry Act, Cultural Heritage Preservation Act, and Aboriginal Basic Act is to protect the environment and to conserve the ecology. However, if we utilize these traditional regulations properly, it can also partially help to manage the access to biological resources. When Taiwan's citizens wish to enter specific area, or to collect the biological resources within the area, they need to receive the permit from management authority, according to current regulations. Since these national parks, protection areas, preserved areas, or other controlled areas usually have the most comprehensive collections of valuable biological resources in a wide range of varieties, it is suggested to include the agreements of access and benefit sharing as the mandatory conditions when applying for the entrance permit. Therefore, the principal of benefit sharing from the access to biological resources can be assured. Furthermore, the current regulations already favour activities of accessing biological resources for academic research purpose. This practice also ties in with the international trend of separating the access application into two categories - academic and business. Australia's practice of access management can be a very good example of utilizing the existing regulations to control the access of resources. The management authority defines the guidelines of managing the entrance of control areas, research of resources, and the collection and access of resources. The authority also adds related agreements, such as PIC (Prior Informed Consent), MTA (Material Transfer Agreement), and benefit sharing into the existing guidelines of research permission. In terms of scope of management, the existing regulation does not cover all of Taiwan's bio-research resources. Luckily, the current environmental protection law regulates areas with the most resourceful resources or with the most distinctive and rare species. These are often the areas where the access management system is required. Therefore, to add new regulation for access management on top of the existing regulation is efficient method that utilizes the least administrative resources. This could be a feasible way for Taiwan to manage the access to biological resources. （3）Establish Specific Regulations to Cover the Details of the Scope of Derived Interests and the Items and Percentage of Funding Allocation In addition to the utilization of current regulations to control the access to biological resources, many countries establish specific regulations to manage the biological resources. If, after the robust economic analysis had been done, the country has come to an conclusion that it is only by establishing new regulations of access management the resources and derived interests of biological resources can be impartially shared, the CBD (Convention of Bio Diversity), the Bonn Guidelines, or the real implementation experiences of many countries can be an important guidance when establishing regulations. Taiwan has come up with the preliminary draft of Genetic Resources Act that covers the important aspects of international access guidelines. The draft indicates the definition and the scope of access activities, the process of access applications (for both business and academic purpose), the establishment of standardized or model MTA, the obligation of disclosing the sources of property rights (patents), and the establishment of bio-diversity fund. However, if we observe the regulation or drafts to the access management of the international agreements or each specific country, we can find that the degree of strictness varies and depends on the needs and situations. Generally speaking, these regulations usually do not cover some detailed but important aspects such as the scope of derived interests from biological resources, or the items and percentage of the allocation of bio-diversity fund. Under the regulation to the access to biological resources, in addition to the access fee charge, the impartial sharing of the derived interests is also an important issue. Therefore, to define the scope of interests is extremely important. Any interest that is out of the defined scope cannot be shared. The interest stated in the existing regulation generally refers to the biological resources or the derived business interests from genetic resources. Apart from describing the forms of interest such as money, non-money, or intellectual property rights, the description of actual contents or scope of the interests is minimal in the regulations. However, after realizing the importance of bio-diversity and the huge business potential, many countries have started to investigate the national and international bio-resources and develop a database system to systematically collect related bio-research information. The database comprised of bio-resources is extremely useful to the activities related to bio-tech developments. If the international bio-tech companies can access Taiwan's bio-resource database, it will save their travelling time to Taiwan. Also, the database might as well become a product that generates revenues. The only issue that needs further clarification is whether the revenue generated from the access of database should be classified as business interests, as defined in the regulations. As far as the bio-diversity fund is concerned, many countries only describe the need of setting up bio-diversity funds in a general manner in the regulations. But the definition of which kind of interests should be put into funds, the percentage of the funds, and the related details are not described. As a result, the applicants to the access of bio-resources or the owner of bio-resources cannot predict the amount of interests to be put into bio-diversity fund before they actually use the resources. This issue will definitely affect the development of access activities. To sum up, if Taiwan's government wishes to develop the specific regulations for the access of biological resources, it is advised to take the above mentioned issues into considerations for a more thoroughly described, and more effective regulations and related framework. Conclusion In recent years, it has been a global trend to establish the regulations of the access to and benefit sharing of bio-resources. The concept of benefit sharing is especially treated as a useful weapon for the developing countries to protect the interests of their abundant bio-research resources. However, as we are in the transition period of changing from free access to biological resources to controlled access, we are facing different regulations within one country as well as internationally. It will be a little bit disappointing for the academic research institution and the industry who relies on the biological resources to conduct bio-tech development if they do not see a clear principal direction to follow. The worse case is the violation of the regulation of the country who owns the bio-resources when the research institutions try to access, exchange, or prospect the biological resources without thorough understanding of related regulations. For some of Taiwan's leading fields in the bio-tech industry, such as Chinese and herbal medicine related products, agricultural products, horticultural products, and bio-tech products, since many resources are obtained from abroad, the incidence of violation of international regulation will increase, and the costs from complying the regulations will also increase. Therefore, not only the researcher but also the government have the responsibility to understand and educate the related people in Taiwan's bio-tech fields the status of international access management regulations and the methods of legally access the international bio-research resources. Currently in Taiwan, we did not establish specific law to manage the access to and benefit sharing of bio-resources. Comparing with the international standard, there is still room of improvement for Taiwan's regulatory protection to the provider of biological resources. However, we have to consider the necessity of doing so, and how to do the improvement. And Taiwan's government should resolve this issue. When we consider whether we should follow international trend to establish a specific law for access management, we should always go back to check the potential state interests we will receive and take this point into consideration. To define the interests, we should always cover the protection of biological resources, the development of bio-tech industry, and the administrative costs of government. Also the conservation of biological resources and the encouragement of bio-tech development should be also taken into consideration when the government is making decisions. In terms of establishing regulations for the access to biological resources and the benefit sharing, there are two possible solutions. The first solution is to utilize the existing regulations and add the key elements of access management into the scope of administrative management. The work is planned through the revision of related current procedures such as entrance control of controlled areas and the access of specific resources. The second solution is to establish new regulations for the access to biological resources. The first solution is relatively easier and quicker; while the second solution is considered to have a more comprehensive control of the issue. The government has the final judgement on which solution to take to generate a more effective management of Taiwan's biological resources.
An Analysis of the Recusal Mechanism in the Latest Revision of the Government Procurement Act and Regulations Governing Procurements for Scientific and Technological Research and DevelopmentAn Analysis of the Recusal Mechanism in the Latest Revision of the Government Procurement Act and Regulations Governing Procurements for Scientific and Technological Research and Development 1. Introduction Article 1 of the Government Procurement Act (hereinafter referred to as the Act) reveals that “This Act is enacted to establish a government procurement system that has fair and open procurement procedures, promotes the efficiency and effectiveness of government procurement operation, and ensures the quality of procurement.” Therefore, a recusal mechanism for reviewing qualification/disqualification of tenders and bidders is highly essential, for example, the head of the agency or its related persons should disclose the conflict of interests. After amended and promulgated on May 22, 2019 (Presidential Decree Hua-tzung-1 Yi No. 10800049691), the Act was revised with the identical legislative principle of the Act on Recusal of Public Servants Due to Conflicts of Interest. In other words, a more flexible and transparent mechanism has been adopted, which is more advanced and ideal for both procurement authority and external supervisors. 2. The New Recusal Mechanism of the Act Enhances the Flexibility and Transparency The revision struck out the Paragraph 4, Article 15 of the Act, and the regulation related to the recusal mechanism shall be comply with the Act on Recusal of Public Servants Due to Conflicts of Interest, especially the qualification/disqualification provision of the “related persons.” The new government procurement procedure adopted a more flexible and transparent practice, “disclosure in advance and publication afterwards.” The detailed analysis is as follows. (1) Before the Act amended, the personnel of a procuring entity and its related persons shall withdraw themselves from the procurement. Before the Act amended, the personnel of a procuring entity and its related persons shall withdraw themselves from the procurement. According to the previous Paragraph 4 of Article 15 (4), “Suppliers or persons in charge shall not participate in the procurement if they have connections with the agency’s head described in Paragraph 2. However, if the implementation of this paragraph is against fair competition or public interest, the exclusion can be exempted with the authority’s approval.” The Paragraph 2 mentioned specified, “The personnel of a procuring entity shall withdraw themselves from procurement and all related matters thereof if they or their spouses, relatives by blood or by marriage within three degrees, or family members living together with them have interests involved therein.” Simply put, legislators considered that suppliers or persons in charge shall not participate in an agency's procurement if they have conflict of interests with its head. For instance, the spouses, all the relatives within the third degree by consanguinity (blood) or by affinity (marriage), or family members living together with the head of the agency, cannot involve in the procurement of the agency. Furthermore, if a legal entity or an organization is directed by the relatives of the head of a government agency mentioned, it is disqualified from the procurement. (2) After the Act amended, the recusal of related persons substituted by self-disclosure and information publication norms According to the Amendment, the Act was amended because the content of the article is existed in Article 9 of Act on Recusal of Public Servants Due to Conflicts of Interest; thus, Article 15 of the Act is hereby deleted. Recalling Article 9 of the previous Act on Recusal of Public Servants Due to Conflicts of Interest, “A public servant and his related persons shall not conduct transactions such as subsidizing, sales, lease, contracting, or other transactions conducted with consideration with the organ with which the public servant serves or the organs under his supervision.” For this reason, the amendment to Article 15 of Government Procurement Act is to regulate the mechanism of withdrawal of relevant parties by Article 14 of the existing Act on Recusal of Public Servants Due to Conflicts of Interest. However, the amendment of this article is greatly affected by the interpretation of judicial court no. 716, so it is necessary to briefly describe its key points as follows. On the basis of the Judicial Yuan Justice Interpretation No. 716 [Transactions between public officials and their associates and service agencies shall be prohibited), adopting a constitutional interpretation of Article 9 of Act on Recusal of Public Servants Due to Conflicts of Interest, grand justice agreed this article does not contradict the proportion principle of article 23 of Constitution of the Republic of China (Taiwan), and it does not violate Article 15 “The right of existence, the right of work, and the right of property shall be guaranteed to the people” and Article 22 “All other freedoms and rights of the people that are not detrimental to social order or public welfare shall be guaranteed under the Constitution”, either. However, for public officials, if they are not allowed to participate in trading competition, it will result in the monopoly of other minority traders, which is not conducive to the public interest. Therefore, this interpretation holds that if the agency has conducted open and fair procedures in the transaction process, and there is sufficient anti-fraud regulation, whether there is still a risk of improper benefit transmission or conflict of interest, and it is necessary to prohibit the transaction of public officials' associates, the relevant authorities should make comprehensive review and improvement as soon as possible. Accordingly, following interpretation no. 716, Act on Recusal of Public Servants Due to Conflicts of Interest was amended and published with 23 articles on 13 June, 2018. The withdrawal of interested parties is provided for in Article 14 and an additional six exceptions are provided, including: (1) The procurement carried out by public notice under the Government Procurement Act or pursuant to Article 105 of the same Act. (2) The property right in interest created for the procurement, sale by tender, lease by tender or tender solicitation carried out by public notice in a fair competitive manner pursuant to laws. (3) Subsidy requested in the legal capacity under laws; the subsidy to the public servant’s related person in an open and fair manner pursuant to laws, or the subsidy which might be against the public interest if it is prohibited and is granted subject to the competent authority’s approval. (4) The subject matter of the transaction is provided by the organ with which the public servant serves or the organs under his supervision, and traded at the official price. (5) The lease, acquisition, discretionary management, improvement and utilization of national non-public real estate requested by the state-owned enterprise in order to execute the national construction projects or public policies, or for the purpose of public welfare. (6) The subsidy and transaction under the specific amount. The above amendments make the transactions between public officials and related parties that should be avoided in the past partially flexible now. In accordance with Paragraph 2 of the same article, in the case of the first three paragraphs of the proviso of Paragraph 1, the applicant or bidder shall voluntarily state his/her identity in the application or tender documents. After the subsidy or transaction is established, the agency shall disclose it together with its identity. That is to say, the self-disclosure is required beforehand and the information will go public afterwards to meet public expectations of transparency. This is also conducive to the supervision of all sectors, and conforms to the intention of the grand justice’s interpretation. The reason why there is no need for government procurement to withdrawal is that the announcement process of the procurement is made in accordance with Government Procurement Act (including open tendering, selective tendering and restricted tendering through the announcement). There are strict procedures to follow and there is no conflict between the conflict of interest of public officials and the spirit of legislation. As to Paragraph 2 of other legal orders, the property right in interest created for the procurement, sale by tender, lease by tender or tender solicitation carried out by public notice in a fair competitive manner pursuant to laws. The legislative explanations are exemplified by the procurement (e.g. procurements for scientific and technological research and development) handled by the announcement in accordance with Fundamental Science and Technology Act. 3. Conclusion: It is suggested that relevant withdrawal regulations should be amended as soon as possible in procurements for scientific and technological research and development The strike-out of the recusal provision of the Act does not mean that government procurement stoke out the recusal mechanism. The recusal mechanism is still stated in Article 14 of Act on Recusal of Public Servants Due to Conflicts of Interest. In addition to the advantages of the same regulations on the prohibition of transactions between related parties, it also enables the regulators with open and fair procedures and sufficient prevention of fraud, such as government procurement, to avoid evading so as not to harm the public interest. At the same time, supplemented by open and transparent disclosure, the amendment is a positive change of legislation. Meanwhile, this paper believes that Government Procurement Act has adopted the mechanism of flexibility and transparency requirements for the procurement object avoidance regulations, and procurements for scientific and technological research and development should revise relevant withdrawal regulations as soon as possible. In accordance with Paragraph 4 of Article 6 of Fundamental Science and Technology Act and the authorization, Regulations Governing Procurements for Scientific and Technological Research and Development (hereinafter referred to as the regulatory regulations) is established. According to Article 8 (2) and (3) of the regulation, a responsible person, partner, or representative of the public school, public research institute (organization), or juristic person or entity performing the scientific research procurement may not serve as a responsible person, partner, or representative of the supplier. The supplier and the juristic person or entity performing the scientific research procurement may not at the same time be affiliated with each other, or affiliated to the same other enterprise. From the perspective of the article structure, the withdrawal regulation for scientific research procurement is within the norm of Article 15 of Government Procurement Act before the amendment, but it includes regulations for affiliated enterprises, which is not included in Article 15. The amendment to Article 14 of Act on Recusal of Public Servants Due to Conflicts of Interest also states that the proviso of Paragraph 1 of scientific research procurement “other procurements that are regulated by fair competition and by means of an announcement procedure” can also prove that the mechanism for scientific research procurement should adopt this provision. Therefore, it is recommended that the original procurements for scientific and technological research that is independent from Government Procurement Act should be amended by the competent authority as soon as possible in order to comply with the relevant provisions of Article 8 of Regulations Governing Procurements for Scientific and Technological Research and Development and to comply with the original intention of the Regulations Governing Procurements for Scientific and Technological Research and Development, and to avoid stricter regulations on scientific procurement than government procurement. Meanwhile, it is in accordance with the spirit of the grand justice’s interpretation No. 716.
Executive Yuan roll-out The Policy of “The Free Economic Pilot Zones”Executive Yuan roll-out The Policy of “The Free Economic Pilot Zones”1.Executive Yuan approved a Bill titled “The Free Economic Pilot Zones Special Act”The “Free Economic Demonstration Zones” (hereinafter as FEDZs) is a critical part to improve the liberalization and internationalization of the economy of Republic of China (R.O.C). By deregulation, FEDZs was conceived as trial zones. Once the results of the program were promising, it would be expanded to the entire country. In order to engage in the regional economic and trade integration, the Executive Yuan approved a Bill titled “The Free Economic Pilot Zones Special Act” (hereinafter as Bill) on April 26th, 2013.On Mar 6th, 2014, the Joint Economic, Internal Administration , and Finance Committee of the Legislation Yuan (the Congress) discussed the Bill for reports and questions. By the end of the March, 2014, the Congress will hold five public hearings. Not until the discussion of the Bill item by item and the passage in the Congress, the second stage of the FEDZ program would not be initiated. There are five main points, including the treatments on foreigners and people from mainland China, tax incentives for Taiwanese businessman, foreign professionals and foreign companies, regulations on untaxed goods and labor, regulations on industrial development, such as the agriculture and the medical, and certain new items on education and professional services.For the reason that the government considered the need of human resources to sustain the operation of the industries, the Executive Yuan is trying to promote innovative education in FEPZs. Since the education requirements for both of public and private universities are unified in local, colleges and universities were restrained and missed some great opportunities to discover their own niches in education. Hence, innovative education in FEPZs is trying to help higher education system to introduce foreign education resources and foresight concepts, and to attract more international students. The innovative educational projects within FEPZs will also facilitate the cooperations among domestic and foreign universities, and set up experimental branch campuses, colleges, degree programs or professional courses. Besides, the financial service sector is also included. Since FEDZs is an important pusher for R.O.C to move forward in regional economic integration, accordingly, the most significant liberate item for the financial industry in the FEPZs is to allow offshore banking units and offshore security units to provide financial products and service (e.g. OSU and OBU). Meanwhile, the financial industry is predicted to receive an NTD$140 billion or more in revenues over the next five year.In summary, FEPZs is regarded as a engine propelling liberalization and internationalization. To gain the international competitiveness, the government will continue to promote policies and measures. By establishing the free economic demonstration zone, it is expected to create innovative effects into the education system and to create more job opportunities.2.Legislation Yuan has reviewd “The Free Ecomonic Pilot Zones Special Act”The Republic of China (R.O.C) have been carried out “free economic” recent years, by promoting “Free Economic Pilot Zone” (hereinafter as FEPZs) to encourage every industrial and foreign investment. Besides, FEPZs will not only keep talents and technologies in R.O.C but also liberalize and internationalize our economic.The Executive Yuan had approved a Bill titled “The Free Economic Pilot Zones Special Act” (hereinafter as the Bill) on Dec. 26th, 2013. At the end of May, the Joint Economic, Internal Administration, and Finance Committee of the Legislation Yuan (the Congress) have taken five public hearings for the Bill, and amended the Bill according to the advices proposed by specialists. Not until the deliberation of the Bill item by item and its passage in the Congress, the second stage of the FEDZ program would not be initiated. There are five main points, including the treatments on foreigners, tax incentives for R.O.C businessman, foreign professionals and foreign companies, regulations on untaxed goods and labor, regulations on industrial development, such as the agriculture and the medical service, and certain new items on education and professional services.The government considers that there have to be enough human resource to sustain the opened industries, so Executive Yuan is trying to promote innovative education in FEPZs. The core concept of FEPZs is foresight, liberalization and internationalization, the premier said, and the higher education systems belong to high-end service and have much more marketability and variability compared to other education systems. Through innovative and efficient way to manage the school could let University being much more liberalized. Furthermore, the higher education systems in R.O.C. have to connect with international education to avoid being marginalized. Our first stage of education innovation will promote to set up “degree programs” and “professional courses”. The first phase for the Ministry of Education is going to found “degree programs” or “professional courses” through collaboration way. The Ministry of Education will also draw up related regulations or guidance on standards for school cooperation, co-regulation, setup conditions, supervision, enrolling new student, and recruiting staff.? Once the Bills pass, The Ministry of Education plans to establish “branch school” and “independence campus” helping R.O.C. higher education goes internationalized.On the other hand, Our medical service also has strong international competitiveness. R.O.C is engage in developing international medical and health industry. The premier said, the Ministry of Health and Welfare have proposed some measures, such as limitation to the number of medical centre, medical personnel working hours, and NHI is not allow to use in the zones.The premier added, on the extemporaneous sittings, “The Free Economic Pilot Zones Special Act” will be the priority bills and be deliberated in the end of June By establishing the free economic demonstration zone, it is expected to propel R.O.C take part in Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).3.Executive Yuan’s rapid roll-out of “The Free Economic Pilot Zones”, and has published a report concerning the legal and economic implications of its the BillThe “Free Economic Pilot Zones” (hereinafter as FEPZs) plays a pivotal role in promoting market liberalization, especially at an international level. Premier of the Executive Yuan, Mr. Jiang Yi-Hua has stated that the “market economy” and “innovation economy” allows for tremendous economic prosperity to be embraced by the Republic of China (hereinafter as R.O.C). The seizing of such opportunity has been the goal of government efforts, which can be attested by the recent proposal of the “The Free Economic Pilot Zones Special Act” (hereinafter as the Bill), currently undergoing review and consultation proceedings. The Premier further stressed that the national economy should not be left excluded from international commerce, on the other hand, it is imperative that closer economic bonds with other nations are forged, therefore allowing itself open up to wider scope of opportunities for growth. The key in rendering this possible is through the enactment of laws. At a time, when Trans-Pacific nations, including the United States of America, Japan and countries from Southeast Asia, are working towards regional economic cooperation, if R.O.C. is to be left out, it is feared that its position in the global market would further be marginalized.The core innovative strengths of the FEPZs include “Smart Logistics”, “International healthcare services”, “Value added agriculture”, “Financial Services”, “Education Innovation”, all of which are implemented by employing R.O.C.’s finest workforce, knowledge, information and communications technology (ICT), geographical position and cross-strait relationship advantages, leading way for an advantageous basis for pioneering economic development. The first stage of development will be based on 6 locations proximal to the sea (including Keelung Port, Taipei Port, Kaohsiung Port, Suao Harbor, Anping Port, Taichung Port) and Taoyuan Aerotropolis and Pingtung Agricultural Biotech Park. The second stage of development would only commence after the Bill have been approved by the legislative Yuan, which would attract much capital investment, hence boosting high employment rates. Presently, besides the aforementioned regions opened up for the FEPZs, other cities and industrial sites (including those from offshore islands), are striving to gain membership of the FEPZs, or applying for empirical research of the FEPZs.The Executive Yuan has published a report concerning the legal and economic implications of its the Bill on May 2014. The report largely consists of assessments made by varying governing bodies, such as Ministry of Home Affairs, Financial Supervisory Commission etc., on the implications of the draft concerning real estate, employment, fiscal income, logistics, conditions for medical care, agriculture, higher education, social environment and social wealth redistribution etc.Furthermore, international attention has been closely centered on the progress of FEPZs. During the “The third review of the trade policies and practices of Chinese Taipei” after R.O.C accession to the World Trade Organization (WTO) held on the 17th of September 2014 in Geneva, each member state has demonstrated expectations arising out of the direction and planning undertaken for the FEPZs. National economic and international commercial reforms are under way and have seen much progress in further promoting the overall strength of the economic system, in an effort to respond to the rapid global political and economic developments, for example, through the signing of Economic Cooperation Framework Agreement (ECFA), and the implementation of FEPZs policies. In the future, it will be expected that R.O.C. will strive for a more integral international commercial system, allowing much capital investment inflows as well as the cultivating of high-caliber human resources.To promote more liberal and internationalized development of Taiwan economy, government of Republic of China (R.O.C) approved the “Free Economic Pilot Zone (FEPZ) Plan,” which the Bill is currently censored in Legislation Yuan and the measures would be implemented in two phases. The first phase of FEPZs would be initiated within six free trade ports, Taoyuan airport free trade zone, and Pingtung Agricultural Biotechnology Park; other industries that match up with the idea of liberalization, internationalization and foresight can all be incorporated into FEPZ through continuing examination under Execution Yuan. After this special legislation is passed, the set-ups of demonstration zones can be applied by authorities either of central or of local government and the related promotion works of the second phase will be unfolded immediately.Heading to the target of becoming Kin-Xiao (Kinmen and Xiaomen) Free Trade Zone, Kinmen government planned to apply to be one of the FEPZs and thus cooperated with Taiwan Institute of Economic Research (TIER) on December 11, for a commissioned research (which was later released on the conference of accelerating Kin-Xia FTZ on December 19) on evaluating if Kinmen is qualified for an application of FEPZs. Kinmen’s critical location and the featured industries have composed a perfect environment complying with the ideas such as value-added agriculture, international healthcare and innovative education for FEPZ. For instance, the white liquor industry in Kinmen represents the international management and promotion of agricultural products, and is the best example for value-added agriculture. “Long-term Healthcare Village in Kinmen,” which is currently developing in Kinmen, would also be a drive for international healthcare industry. Based on the Taiwan-featured culture, “International Education City” could be developed with a liberal and innovative atmosphere, which would attract famous schools in world to set up their branch school in Kinmen. Above all, Kinmen County vice Mayor, Wu Yo-Chin, indicated that Kinmen would be the first choice for FEPZ and would hold the key to open a new gate for the Cross-Strait. The vice Mayor emphasized that Kinmen government has well budgeting and financial management, which needn’t the extra aids from central government, yet Kinmen was excluded in the first phase of FEPZs. Although Kinmen would apply to be a FEPZ in the second phase after the special legislation passed, Kinmen still strived for taking part in the first phase of FEPZs due to the uncertain schedule for implementation of regulations on FEPZs.National Development Council (NDC), however, gave an opinion on issue of Kinmen applying to be in the first phase of FEPZs, which declared again the original plan for the first phase only included six free trade ports, Taoyuan airport free trade zone, and Pingtung Agricultural Biotechnology Park. NDC also suggested Kinmen could still follow after the first phase and apply to be a FEPZ in the second phase.
Taiwan Recent Regulatory Development- Promoting Biotech and New Pharmaceuticals IndustryOver the past twenty years, the Government has sought to cultivate the biopharmaceutical industry as one of the future major industry in Taiwan. Back in 1982, the Government has begun to regard biotechnology as a key technology in Technology Development Program, demonstrated that biotechnology is a vital technology in pursuit of future economic growth. Subsequently, the Government initiated national programs that incorporated biotechnology as a blueprint for future industrial development. In order to enhance our competitiveness and building an initial framework for the industry, The Executive Yuan has passed the Biotechnology Industry Promotion Plan. As the Government seeks to create future engines of growth by building an environment conducive for enterprise development, the Plan has been amended four times, and implemented measures focused on the following six areas: related law and regulations, R&D and applications, technology transfer and commercialization, personnel training, investment promotion and coordination, marketing information and marketing service. In 2002, the Executive Yuan approved the Challenge 2008, a six-year national development plan, pointing out biotechnology industry as one of the Two Trillion, Twin Stars industries. The Government planned for future economic growth by benefiting through the attributes of the biotechnology: high-tech, high-reward and less pollution. Thus, since 1997 the Strategic Review Board (SRB) under the Executive Yuan Science and Technology Advisory Panel has taken action in coordinating government policies with industry comments to form a sound policy for the biotechnology industry. Additionally, a well-established legal system for sufficient protection of intellectual property rights is the perquisite for building the industry, as the Government recognized the significance through amending and executing related laws and regulations. By stipulating data exclusivity and experimental use exception in the Pharmaceutical Affair Act, tax benefits provided in Statute for Upgrading Industries , Incentives for Production and R&D of Rare Disease Medicine, Incentives for Medical Technology Research and Development, provide funding measures in the Guidance of Reviewing Programs for Promoting Biotechnology Investment. Clearly, the government has great expectation for the industry through establishing a favorable environment by carrying out these policies and revising outdated regulations. Thus, the Legislative Yuan has passed the “Act for The Development of Biotechnology and New Pharmaceuticals Industry” in June, 2007, and immediately took effect in July. The relevant laws and regulations became effective as well, driving the industry in conducting researches on new drugs and manufacturing new products, increasing sales and expanding the industry to meet an international level. For a biopharmaceutical industry that requires long-term investment and costly R&D, incentive measures is vital to the industry’s survival before the product launches the market. Accordingly, this article will be introducing the recent important regulation that supports the biopharmaceutical industry in Taiwan, and analyzing the government’s policies. Biotechnology is increasingly gaining global attention for its potential in building future economic growth and generating significant profits. In an effort to support the biotechnology industry in Taiwan, the Government has made a step forward by enacting the “Act for the Development of Biotech and New Pharmaceutical Industry”. The biopharmaceutical industry is characterized as high-risk and high-reward, strong government support and a well-developed legal system plays a vital role from its establishment throughout the long term development. Therefore, the Act was enacted tailor to the Biotech and New Pharmaceutical Industry, primarily focuses on tax benefits, R&D activities, personnel recruitment and investment funding, in support of start-up companies and attracting a strong flow of funding worldwide. To pave the way for promoting the biopharmaceutical industry and the Biotech and New Pharmaceutical Company, here the article will be introducing the incentive measures provided in the Act, and supporting development of the industry, demonstrating the efforts made by the Government to build a “Bio-tech Island”. Reference “Act for Development of Biotech and New Pharmaceutical Industry”, webpage of Law and Regulations Database of the Republic of China. 4 July, 2007. Ministry of Justice, Taiwan. 5 Nov. 2008 http://law.moj.gov.tw/Eng/Fnews/FnewsContent.asp?msgid=3180&msgType=en&keyword=undefined
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