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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 Bill

The “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.

※Executive Yuan roll-out The Policy of “The Free Economic Pilot Zones”,STLI, https://stli.iii.org.tw/en/article-detail.aspx?no=55&tp=2&i=168&d=7241 (Date:2026/01/22)
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Taiwan's Approach to AI Governance

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A Preferred Model for Taiwan’s agency level AI risk categorization and management: A Cross-Jurisdictional Perspective

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It will then explain why the U.S. model is more suitable for Taiwan than those of other jurisdictions. Finally, it will conclude with recommendations for the government. I. Overview of the U.S. M-25-21 Framework Issued in April 2025 under Executive Order 14179, M-25-21 directs federal agencies to accelerate the adoption of artificial intelligence while maintaining a set of minimum safeguards. The memorandum identifies three priorities—innovation, governance, and public trust—and structures AI oversight around these principles. It requires every executive branch agency to designate a Chief AI Officer (CAIO), a senior official empowered to promote AI innovation, maintain a current inventory of AI use cases, and ensure that processes such as determining “high-impact” uses are in place. Rather than imposing a centralized management system, M-25-21 allows each agency to make context-sensitive determinations and to accept or waive risk management requirements. This approach recognizes that agencies vary widely in mission and capacity and are best positioned to understand the potential risks and benefits of AI within their own domains. The memorandum defines high-impact AI as systems whose outputs serve as a principal basis for decisions or actions with legal, material, binding, or significant rights and safety consequences. It offers a non-exhaustive list of presumed high-impact categories, including safety-critical functions of critical infrastructure, traffic management, patient diagnosis, blocking protected speech, and law enforcement applications. If an agency official determines that a specific AI use within these categories does not meet the high-impact definition, they must submit written documentation to notify the CAIO. By tying the definition to the effect of an AI system’s output rather than to a fixed sectoral list, M-25-21 provides a flexible method for identifying high-risk AI applications while preserving room for innovation. II. Key Features of the U.S. M-25-21 Framework A. Minimum Risk Management Practices To ensure protection without creating excessive barriers, M-25-21 specifies a set of minimum risk management practices that each agency must apply when using high-impact AI. Agencies are required to conduct pre-deployment testing under realistic conditions to confirm that AI systems perform as intended and to prepare appropriate risk mitigation plans. Even when agencies lack access to source code or training data, they are expected to use alternative testing methods—such as querying the AI service and observing its outputs—to assess performance and potential risks. Before deploying a high-impact AI system, agencies must complete an AI impact assessment. This assessment must explain the system’s intended purpose and expected benefits, analyze the quality and appropriateness of the data used, and evaluate potential impacts on privacy, civil rights, and civil liberties. It should also include a cost analysis, planned reassessment schedules and procedures, and comments highlighting potential concerns or gaps from an independent reviewer who was not involved in the system’s development. Importantly, the assessment must carry the signature of an accountable official who formally accepts the risk of deploying the AI system. Once deployed, agencies are expected to monitor AI systems continuously for performance drift, security vulnerabilities, or unforeseen adverse effects, and to implement appropriate mitigations and maintain documentation. Human oversight is equally essential: operators must receive specific training to interpret AI outputs, intervene when necessary, and use fail-safes or override mechanisms to minimize the risk of significant harm in high-impact situations. To protect the public, M-25-21 insists that individuals affected by AI-enabled decisions have access to timely human review and opportunities to appeal adverse outcomes. Appeals should not impose unnecessary burdens on individuals or the administration. Furthermore, agencies are expected to seek feedback from end users and the public to inform AI-related decision-making. These combined practices—testing, assessment, independent review, monitoring, human oversight, remedies, and feedback—form a balanced foundation for responsible AI use. The memorandum also requires agencies to safely discontinue any high-impact use cases that fail to comply with the minimum practices. B. Waiver System: Purpose and Conditions A distinctive feature of M-25-21 is its formal system for waivers from the minimum risk management practices. The waiver mechanism exists to reconcile two priorities: ensuring safety and rights protections on the one hand, and enabling innovation and rapid response on the other. Waivers may be considered when following a particular requirement would actually increase risks to safety or rights overall, or when compliance would create an unacceptable impediment to critical agency operations. For example, during a natural disaster or public health emergency, strict adherence to every procedural requirement might delay the deployment of an AI application that could save lives. In such situations, the CAIO may authorize a waiver to permit rapid deployment while still tracking and reassessing the use. Waivers for pilot programs are equally important for encouraging experimentation and innovation. They allow agencies to conduct small-scale, time-limited AI projects without implementing all minimum risk management practices, provided certain conditions are met: the pilot must be certified by the CAIO, centrally tracked, offer opt-in and opt-out options for individual participation, and apply minimum risk management practices where practicable. The memorandum imposes safeguards on this flexibility. Every waiver must be documented with a written determination explaining the reasoning, centrally tracked, and reassessed annually or whenever significant changes to the AI application’s conditions or context occur. CAIOs retain the power to revoke waivers at any time, and agencies must report any granted or revoked waiver to OMB annually and within 30 days of significant modifications. This approach maintains accountability while preventing rigid rules from becoming obstacles to effective governance. C. Disclosure Requirements for High-Impact Use and Waivers M-25-21 strongly emphasizes transparency as a pillar of public trust. Each agency must maintain an inventory of all AI use cases, submit it to OMB, and post a public version on the agency’s website. This inventory should be updated annually and, ideally, throughout the year to reflect the agency’s current use of AI. Transparency ensures that the public, civil society, and oversight bodies can understand where AI is influencing important government decisions without exposing sensitive or classified details. Similarly, agencies must publicly release summaries of each waiver or determination, including the justification, or explicitly indicate when no determinations or waivers are active. By making these summaries visible, the system builds confidence that waivers are granted for legitimate reasons. At the same time, OMB retains the authority to request detailed records concerning exception determinations within presumed high-impact categories. This combination of public disclosure and federal oversight helps maintain trust while safeguarding privacy, national security, and proprietary information. III. Why M-25-21 Stands Out for Taiwan’s AI Governance among Global Approaches Taiwan’s draft AI Basic Law envisions a decentralized system in which each agency determines its own risk classification and management practices[3]. The U.S. framework aligns closely with this philosophy. By empowering agencies to identify high-risk AI use cases tailored to their specific contexts, M-25-21 helps ensure that AI governance remains grounded in operational realities. At the same time, adopting M-25-21’s baseline practices, waiver safeguards, and disclosure requirements would provide consistency and public accountability across agencies. The combination of minimum risk management practices and transparent waiver use would encourage innovation while reassuring the public that any exceptions are justified, continuously monitored, and effectively controlled. Furthermore, embracing an approach that reflects emerging international consensus—particularly the emphasis on transparency in both U.S. and EU regimes—would position Taiwan to harmonize with global AI governance trends and strengthen its credibility in international markets. In contrast, the European Union’s AI Act predefines high-risk categories and mandates strict conformity assessments, CE Marking, and post-market monitoring[4]—an approach that is comprehensive but resource-intensive and may not suit all agencies equally. Australia’s ongoing discussions had been trending toward a similarly comprehensive model, but there has recently been backlash against this approach. Korea’s AI Basic Act[5] references high-risk AI only in broad terms and leaves most operational details undefined. M-25-21 strikes a middle ground, offering minimum yet concrete safeguards while preserving the flexibility agencies need to tailor governance to their specific domains. IV. Recommendations and Conclusion Based on this analysis, this research recommends that each agency designate a senior AI leader similar to a CAIO, maintain a public inventory of high-impact AI use cases, and publish summaries of waivers or determinations while safeguarding sensitive information. Agencies should also be encouraged to share AI resources and lessons learned to reduce duplication and strengthen governance maturity across government. Over time, these risk management practices can be refined in response to operational experience and evolving international standards. By adopting these principles, Taiwan can empower its agencies to innovate responsibly, protect citizens’ rights, and build public trust—ensuring that AI deployment across government remains both effective and aligned with global best practices. [1]〈政院通過「人工智慧基本法」草案 建構AI發展與應用良善環境 打造臺灣成為AI人工智慧島〉，行政院，https://www.ey.gov.tw/Page/9277F759E41CCD91/5d673d1e-f418-47dc-ab35-a06600f77f07（最後瀏覽日期︰2025/09/15）。 [2] United States Office of Management and Budget (OMB), M-25-21 Accelerating Federal Use of AI through Innovation, Governance, and Public Trust, https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-21-Accelerating-Federal-Use-of-AI-through-Innovation-Governance-and-Public-Trust.pdf (last visited Sept 15, 2025). [3] 蘇文彬，〈行政院通過AI基本法草案，將不設立AI專責機關〉，iThome，https://www.ithome.com.tw/news/170874（最後瀏覽日期︰2025/09/15）。 [4] Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonised rules on artificial intelligence and amending Regulations (EC) No 300/2008, (EU) No 167/2013, (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1139 and (EU) 2019/2144 and Directives 2014/90/EU, (EU) 2016/797 and (EU) 2020/1828 (Artificial Intelligence Act), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32024R1689 (last visited Sept 15, 2025). [5] 인공지능발전과신뢰기반조성등에관한기본법안，https://www.law.go.kr/%EB%B2%95%EB%A0%B9/%EC%9D%B8%EA%B3%B5%EC%A7%80%EB%8A%A5%20%EB%B0 %9C%EC%A0%84%EA%B3%BC%20%EC%8B%A0%EB%A2%B0%20%EA%B8%B0%EB%B0%98%20%EC%A1%B0 %EC%84%B1%20%EB%93%B1%EC%97%90%20%EA%B4%80%ED%95%9C%20%EA%B8%B0%EB%B3%B8%EB%B2 %95/(20676,20250121) (last visited Sept 15, 2025).

Strengthening Taiwan’s Pharmaceutical Resilience: Legal Reflections from the European Union’s Critical Medicines Act

Strengthening Taiwan’s Pharmaceutical Resilience: Legal Reflections from the European Union’s Critical Medicines Act 2025/11/15 Introduction: From Vulnerability to Vision For Taiwan, an island state positioned at the crossroads of geopolitical tension and globalized medical trade, the question of pharmaceutical resilience is no longer a technical concern but a constitutional one. A nation’s ability to secure the continuous availability of essential medicines defines not only its public health capacity but the very credibility of its governance. In this light, the European Union’s (hereunder, the “EU”) proposed Critical Medicines Act (hereunder, “EU CMA”) offers Taiwan an illuminating case of how law can move beyond crisis management toward systemic foresight[1]. Resilience in the pharmaceutical sector is not merely about supply stability; it embodies a triple constitutional function—protecting life and health as fundamental rights, safeguarding national security through stable access to critical goods, and reinforcing trust in regulatory governance. Law thus becomes the medium through which uncertainty is rendered governable. The global pandemic revealed that the absence of legal foresight can paralyze even the most advanced health systems, exposing the structural fragility behind administrative efficiency. While Taiwan’s current pharmaceutical regulatory framework remains largely event-driven, reactive, and post-facto, the EU CMA exemplifies an industry-oriented, anticipatory, and pre-emptive model. The contrast underscores a jurisprudential lesson: resilience cannot be legislated through emergency decrees alone; it must be architected through a continuous, legally structured process that anticipates vulnerabilities before they materialize. This article identifies three foundational principles embedded in the EU CMA—visibility, diversification, and agility—and explores how these principles could guide Taiwan in constructing a forward-looking pharmaceutical resilience regime. The goal is not imitation, but inspiration—extracting from the EU experience a conceptual framework for a resilient Taiwanese pharmaceutical order. The EU CMA as a Law of Foresight The EU CMA represents a paradigm shift in pharmaceutical governance. Instead of fragmented national reactions to shortages, the Act establishes a Union-wide framework “to strengthen the availability and security of supply of critical medicinal products” through coordinated information systems, joint vulnerability assessments, and strategic industrial actions[2]. Its architecture reflects a policy-cycle logic: identification of critical medicines (Union list), assessment of vulnerabilities (harmonized monitoring), and action to strengthen capacity (strategic projects, coordinated procurement). Each stage is legally codified and procedurally transparent. The EU CMA thus transforms resilience from a policy aspiration into a governance architecture mandated by law. This approach reveals a fundamental evolution in regulatory philosophy: from law as reaction to law as anticipation. The EU does not merely respond to pharmaceutical disruptions; it legislates the ability to foresee them. This transformation elevates resilience from a managerial tool to a juridical principle that guides administrative behavior and industrial coordination. In this sense, the EU CMA operates as a constitutional statute of preparedness—one that embeds strategic vigilance within the ordinary operations of the market. Moreover, the Act’s systemic design demonstrates a rare synthesis of industrial, health, and competition policies under a unified legal grammar. By integrating economic instruments (such as incentives for local production) with public health imperatives (such as the availability of essential drugs), the EU CMA transforms siloed policy domains into a coherent resilience regime. It institutionalizes coordination not as an afterthought but as a binding legal discipline. Crucially, the EU’s approach embodies what might be called the legality of anticipation: law as an instrument that compels foresight. Resilience here is treated as a public good, transcending national borders but rooted in legal coordination. For Taiwan—whose pharmaceutical imports are geographically concentrated and whose market size limits domestic leverage—the lesson is profound: foresight must be institutional, not intuitive. Visibility: Law as an Instrument of Anticipation At the heart of the EU CMA lies the principle of visibility—the legalization of information as a tool of preparedness. The Act mandates the creation of a Union list of critical medicines[3] and a continuous monitoring system for supply vulnerabilities, coordinated through the Critical Medicines Coordination Group[4]. By institutionalizing information flows, the EU transforms data into a public good and transparency into an act of resilience. Visibility performs a dual function. On one hand, it is technocratic, enabling states to detect early signals of supply risk. On the other, it is constitutional, embedding accountability within knowledge. Uncertainty, when unregulated, leads to discretion; when structured, it becomes a risk, which law can govern. The EU CMA thus converts chaos into cognition—an epistemic transformation at the heart of modern administrative law. For Taiwan, this implies a shift from episodic crisis reporting toward permanent, cross-sectoral data governance. Information duties should not be seen as bureaucratic burdens but as civic infrastructures that permit collective foresight. Visibility, therefore, is not simply about surveillance but about legally enabling knowledge—the first step toward prevention rather than post-hoc management. Diversification: Embedding Resilience into Market Rationality The second principle, diversification, redefines efficiency itself. The EU CMA promotes manufacturing capacity within Europe under the doctrine of “open strategic autonomy”[5]. It supports Strategic Projects that enhance production, encourages cooperation with like-minded countries, and authorizes procurement methods that reward resilience factors alongside price—what EU law calls “MEAT” (Most Economically Advantageous Tender)[6]. This reframes the very idea of market rationality: security and competition are not opposites but complements. Law functions here as a corrective to market myopia, ensuring that the invisible hand does not ignore visible fragility. By quantifying resilience as a measurable value, the EU transforms precaution into an economic variable. For Taiwan—whose procurement and reimbursement systems have historically emphasized price containment—this perspective opens conceptual space. Resilience should not be perceived as inefficiency, but as intertemporal justice: a society’s investment in its future continuity. A diversified system—of suppliers, regions, and regulatory instruments—creates not redundancy but adaptability. In this sense, diversification is law’s expression of prudence in an interconnected economy. Agility: From Administrative Response to Legal Readiness The third principle, agility, captures the law’s capacity to act swiftly yet lawfully. The EU CMA institutionalizes flexibility through accelerated procedures for strategic projects, coordinated procurement frameworks, and crisis response mechanisms[7]. These powers are accompanied by procedural safeguards and sunset clauses, ensuring proportionality and reversibility. Agility thus represents legality in motion: action without arbitrariness. It reconciles speed with scrutiny by embedding emergency measures within predefined legal channels. The lesson for Taiwan is both institutional and philosophical—true readiness is not improvisation, but preparation that preserves legitimacy. In Taiwan’s current system, regulatory energy peaks during emergencies and dissipates thereafter. A mature resilience framework would instead cultivate continuous readiness—administrative structures that learn, anticipate, and adapt. Agility, understood legally, means codifying responsiveness as a standing competence of governance. It is the hinge connecting foresight and execution, legality and flexibility. Taiwan’s Legal Trajectory: From Event-Driven to Industry-Oriented Regulation Comparatively, Taiwan’s Pharmaceutical Affairs Act—even with its proposed amendments—remains largely event-driven and post-crisis in design[8]. Regulatory intervention often follows episodes of shortage or disruption. While recently introduced draft revisions strengthening supply chain obligations[9], these proposed revisions still operate primarily within a reactive paradigm. By contrast, the EU CMA envisions an industry-oriented, anticipatory, and system-based model. It embeds resilience into the legal DNA of pharmaceutical policy—linking regulation, industrial strategy, and public health. For Taiwan, this means evolving from regulatory firefighting to regulatory design: from curing failures to cultivating foresight. To achieve this, Taiwan’s legal development must transcend compliance formalism and embrace a culture of legal learning—where rules are not static commands but adaptive instruments of governance. The transition from event-driven to foresight-driven lawmaking will not only strengthen national health security but also elevate Taiwan’s position in the network of like-minded economies pursuing resilient supply systems. Conclusion: Toward a Resilient Legal Modernity The EU Critical Medicines Act demonstrates that law can be an architecture of anticipation. Its three pillars—visibility, diversification, and agility—form a grammar of resilience that integrates market mechanisms, administrative capacity, and democratic legitimacy. For Taiwan, the value of this model lies not in replication but in reflection. Visibility teaches that knowledge must be institutionalized. Diversification reminds us that resilience can coexist with efficiency. Agility shows that speed and legality are not mutually exclusive. Together, they suggest a new philosophy of governance: one that replaces reaction with design, and uncertainty with structured foresight. Yet the deeper lesson of the EU CMA is that resilience is not simply a functional attribute of a regulatory system—it is a constitutional virtue of modern states. To build resilience is to affirm the social contract anew: to promise citizens not that crises will never occur, but that when they do, institutions will stand ready, transparent, and just. This transforms law from a mirror of disorder into an instrument of collective composure. For Taiwan, embracing resilience as a constitutional principle means reimagining the relationship between law, science, and sovereignty. In a world where disruption is perpetual—whether by pandemics, trade shocks, or technological change—resilience becomes the language through which legality and modernity converge. It marks the transition from governing by reaction to governing by imagination. While the EU CMA relies on the Union’s vast market power to incentivize and coordinate pharmaceutical resilience, Taiwan faces a distinct structural challenge: its market size, though dynamic, cannot generate comparable leverage on a global scale. This asymmetry compels Taiwan to craft a dual strategy—anchoring its domestic resilience through legal foresight, while simultaneously aligning with international frameworks that promote secure and diversified supply chains. How Taiwan can reconcile these two imperatives—maintaining openness and integration with global partners, yet safeguarding autonomous resilience at home—will define the next frontier of its pharmaceutical governance. It is within this strategic and normative intersection that the Institute for Information Industry’s Science and Technology Law Institute (STLI) will continue its research efforts, exploring legal architectures capable of linking Taiwan’s national resilience with the broader ecosystem of global health security. Ultimately, resilience is not merely a regulatory principle but a moral commitment to time—a covenant between generations that law will foresee, prepare, and preserve. As Taiwan refines its pharmaceutical governance, the lesson from the EU CMA is both institutional and existential: to govern resilience is to govern the future itself, and to govern the future is to affirm the dignity of foresight as the highest form of rule of law. [1] EUROPEAN COMMISSION, Proposal for a Regulation of the European Parliament and of the Council laying down a framework for strengthening the availability and security of supply of critical medicinal products as well as for improving the availability of, and access to, medicinal products of common interest (Critical Medicines Act), COM(2025) 102 final (Mar. 11, 2025), https://health.ec.europa.eu/document/download/2abe4fc8-059e-47d9-a20a-d9e3bfc5dc2c_en?filename=mp_com2025_102_act_en.pdf (last visited Nov. 2, 2025). [2] id. at Page 17. [3] id. at Page 27. [4] id. at Page 35. [5] CRITICAL MEDICINES ALLIANCE, STRATEGIC REPORT OF THE CRITICAL MEDICINES ALLIANCE (Feb. 28, 2025), https://health.ec.europa.eu/document/download/3da9dfc0-c5e0-4583-a0f1-1652c7c18c3c_en?filename=hera_cma_strat-report_en.pdf (last visited Nov. 2, 2025). [6] EUROPEAN COMMISSION, Proposal for a Regulation of the European Parliament and of the Council laying down a framework for strengthening the availability and security of supply of critical medicinal products as well as for improving the availability of, and access to, medicinal products of common interest (Critical Medicines Act), COM(2025) 102 final (Mar. 11, 2025), https://health.ec.europa.eu/document/download/2abe4fc8-059e-47d9-a20a-d9e3bfc5dc2c_en?filename=mp_com2025_102_act_en.pdf (last visited Nov. 2, 2025). [7] id. at Page 7. [8] Pharmaceutical Affairs Act (Taiwan), Ministry of Justice, https://law.moj.gov.tw/ENG/LawClass/LawAll.aspx?pcode=L0030001 (last visited Nov. 2, 2025). [9] 〈衛生福利部公告「藥事法」部分條文修正草案〉，法源法律網，https://www.lawbank.com.tw/news/NewsContent.aspx?NID=206187.00（最後瀏覽日：2025/11/03）。

Introducing and analyzing the Scope and Benefits of the Regulation「Statute for Upgrading Industries」in The Biotechnology Industry in Taiwan

The recent important regulation for supporting the biopharmaceutical industry in Taiwan has been the 「Statute for Upgrading Industries」 (hereinafter referred to as 「the Statute」).The main purpose of the Statue is for upgrading all industry for future economic development, so it applies to various industries, ranging from agriculture, industrial and service businesses. In other words, the Statute does not offer incentive measures to biopharmaceutical industry in particular, but focuses on promoting the industry development in general. Statute for Upgrading Industry and Related Regulations Generally speaking, the Statute has a widespread influence on industry development in Taiwan. The incentive measures provided in the Statute is complicated and covered other related regulations under its legal framework. Thus, the article will be taking a multi-facet perspective in discussing the how Statute relates to the biopharmaceutical industry. 1 、 Scope of Application According to Article 1 of the Statute, the term 「industries」 refers to agricultural, industrial and service businesses. Consequently, nearly all kinds of industries fall under this definition, and the Statute is applicable to all of them. Moreover, in order to promote the development and application of emerging technology as well as cultivating the recognized industry, the Statute provides much more favorable terms to these industries. These emerging and major strategic industries includes computer, communication and consumer electronics (3C), precise mechanics and automation, aerospace, biomedical and chemical production, green technology, material science, nanotechnology, security and other product or service recognized by the Executive Yuan. 2 、 Tax Benefits The Statute offers several types of tax benefits, so the industry could receive sufficient reward in every way it could, and promote a sound cycle in creating new values through these benefits. (1) Benefits for the purchase of automation equipment The said procured equipment and technology over NTD600, 000 may credit a certain percentage of the investment against the amount of profit-seeking enterprise income tax payable for the then current year. For the purchase of production technology, 5% may be credited. For the purchase of equipment, 7% may be credited. And any investment plan that includes the purchasing of equipment for automation can qualify for a low-interest preferential loan. Besides, for science-based industrial company imported overseas equipment that is not manufacture by local manufactures, from January 1, 2002, the imported equipment shall be exempted from import and business tax. And if the company is a bonded factory, the raw materials to be imported from abroad by it shall also be exempt from import duties and business tax. (2) Benefits for R&D expenditure Expenditure concurred for developing new products, improving production technology, or improving label-providing technology may credit 30%of the investment against the amount of profit-seeking enterprise income tax payable for the then current year. Research expenditures of the current year exceeding the average research expenditure for the past two years, the excess in research expenditure shall be 50% deductible. Instruments and equipments purchased by for exclusive R&D purpose, experimentation, or quality inspection may be accelerated to two years. At last, Biotech and New Pharmaceuticals Company engages in R&D activities, such as Contract research Organization (CRO), may credit 30% of the investment against the amount of profit-seeking enterprise income tax payable. (3) Personnel Training When a company trained staff and registered for business-related course, may credit 30% of the training cost against the amount of profit-seeking enterprise income tax payable for the then current year. Where training expenses for the current year exceeds the two-year average, 50% of the excess portion may be credited. (4) Benefit for Newly Emerging Strategic Industries Corporate shareholders invest in newly emerging strategic industries are entitled to select one of the following tax benefits: A profit seeking enterprise may credit up to 20% of the price paid for acquisition of such stock against the profit seeking enterprise income tax. An individual may credit up to 10%. As of January and once every year, there will be a 1% reduction of the price paid for acquisition of such stock against the consolidated income tax payable in the then current year. A company, within two years from the beginning date for payment of the stock price by its shareholders, selects, with the approval of its shareholder meeting, the application of an exemption from profit-seeking enterprise income tax and waives the shareholders investment credit against payable income tax as mentioned above. However, that once the selection is made, no changes shall be allowed. (5) Benefits for Investment in Equipment or Technology Used for Pollution Control To prevent our environment from further pollution, the Government offers tax benefits to reward companies in making improvements. Investment in equipment or technology used for pollution control may credit 7% of the equipment expenditure, and 5% of the expenditure on technology against the amount of profit-seeking enterprise income tax payable for the then current year. For any equipment that has been verified in use and specialized in air pollution control, noise pollution control, vibration control, water pollution control, environmental surveillance and waste disposal, shall be exempt from import duties and business tax. And for investment plans that planned implementation of energy saving systems can apply for a low interest loan. (6) Incentive for Operation Headquarter To encourage companies to utilize worldwide resources and set up international operation network, if they established operation headquarters within the territory of the Republic of China reaching a specific size and bringing about significant economic benefit, their following incomes shall be exempted from profit-seeking enterprise income tax: The income derived from provision of management services or R&D services. The royalty payment received under its investments to its affiliates abroad. The investment return and asset disposal received under its investment to its affiliates abroad. (7) Exchange of Technology for Stock Option The emerging-industrycompany recognized by government, upon adoption of a resolution by a majority voting of the directors present at a meeting of its board of directors attended by two-thirds of the directors of the company, may issue stock options to corporation or individual in exchange for authorization or transfer of patent and technologies. (8) Deferral of Taxes on the Exchange of Technology for Shares Taxes on income earned by investors from the acquisition of shares in emerging-industry companies in exchange for technology will be deferred for five years, on condition that the shares exchanged for technology amount to more than 20% of the company's total stock equity and that the number of persons who obtain shares in exchange for technology does not exceed five. 3 、 Technical Assistance and Capital Investment The rapid industry development has been closely tied to the infusion of funds. In addition to tax benefits, the Statute incorporates regulations especially for technical assistance and capital investment as below: (1) In order to introduce or transfer advanced technologies, technical organization formed with the contribution of government shall provide appropriate technical assistance as required. (2) In order to advance technologies, enhance R&D activities and further upgrade industries, the relevant central government authorities in charge of end enterprises may promote the implementation of industrial and technological projects by providing subsidies to such R&D projects. (3) In order to assist the start-up of domestic small-medium technological enterprises and the overall upgrading of the entire industries, guidance and assistance shall be provided for the development of venture capital enterprises.

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