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Cablegate: Exbs: Taiwan Monthly Reporting Cable - July 2008

VZCZCXYZ0004
PP RUEHWEB

DE RUEHIN #1142/01 2180515
ZNR UUUUU ZZH
P 050515Z AUG 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 9662
RHMFIUU/USCBP WASHINGTON DC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS AIT TAIPEI 001142

SENSITIVE
SIPDIS

STATE FOR ISN/ECC - YWONG, ACHURCH, AND ROWEN
STAE ALSO FOR EAP/TC - SBREMNER
CBP/INA FOR DKING
DOE FOR ENERGY/NNSA FOR TPERRY AND SJONES

E.O. 12958: N/A
TAGS: ETTC MNUC PARM PREL KSTC KNNP TW
SUBJECT: EXBS: TAIWAN MONTHLY REPORTING CABLE - JULY 2008

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

A. (SBU) Transfer of Intangible Technology Legislation: On July 20,
the Advisor learned that the Executive Yuan (EY) withdrew twelve
bills submitted by the former administration, including the proposed
Sensitive Technologies Protection Law.

(SBU) According to an official from the National Science Council
(NSC), the withdrawn technology transfer bill is the one that was
originally proposed six years ago and revised several times since
then. The NSC was notified by the EY of its intent to withdraw the
bill before the public announcement in July. The official stated
that withdrawal of pending legislation is standard procedure when a
new administration takes office.

(SBU) The official explained that, for several months, the NSC has
been working closely with the Legislative Yuan (LY) to draft new
legislation which will be reviewed and approved by relevant agencies
such as the Ministry of Economic Affairs (MOEA) prior to being
submitted to the LY for passage.

The NSC official did not give a timeframe for submitting the
legislation but predicted that the process for passage would be
smoother this time around.

B. (SBU) In late June and early July, several newspapers reported
that Taiwan would consider allowing 12-inch wafer fabrication
investment by Taiwan companies in China. The newspapers reported
that the relaxation of investment restrictions would occur in the
fall. The Advisor contacted the Bureau of Foreign Trade (BOFT) and
the Industrial Development Bureau (IDB) of MOEA, and the NSC to
confirm the news reports. Officials from all three offices stated
that the news reports were premature and that Taiwan officials have
not had interagency meetings to discuss the issue. In fact, IDB
official stated that his office held one intra-office meeting to
date to discuss increasing the wafer fabrication investment in
China. The IDB official did indicate that Taiwan is moving in that
direction. He explained that "core technology" would remain in
Taiwan; that the move will increase Taiwan companies'
competitiveness in China; and that the relaxation would follow the
international trend in semiconductor manufacturing while adhering to
Wassenaar Arrangement controls of dual-use items.

(SBU) None of the officials were willing to provide information on
specific implementation plans or a timeline. They all stated that
the process has several bureaucratic layers it must go through
before reaching the EY, and that the process has not yet begun.
Also, the officials stated that any change related to wafer
fabrication investment would require LY approval.

II. COMPLETED ACTIONS FOR THE REPORTING PERIOD.

A. SITE ASSESSMENTS AND MEETINGS DURING REPORTING PERIOD:

(SBU) On July 31, the Advisor attended the Keelung Field Practice on
International Ship and Port Facility Security Disaster Prevention
organized by the Keelung Harbor Police. Sixteen offices
participated in the exercise including the Customs, the Harbor
Police, the Harbor Bureau, the National Police, the Coast Guard, and
the Ministry of National Defense. The half-day exercise simulated
land, sea, and air rescue of a hostage situation, decontamination of
hazardous material, and controlled detonation of explosives detected
through mobile VACIS scanner. The observations from this exercise
will be used to customize an upcoming EXBS HAZMAT Response training
program.

B. BLUE LANTERN:

No checks were conducted by the Advisor during the reporting period.


III. TRAINING CONDUCTED DURING REPORTING PERIOD:

A. (SBU) From July 8-10, the Advisor participated as a technical
expert in an EXBS-funded U.S.-Vietnam program on Strategic Trade
Control Licensing. Vietnam is beginning to develop a system to
control exports of strategic items. Due to its growing investment
in Vietnam, Taiwan is interested in sharing its export control
systems development experience with Vietnam, especially in the area
of industry outreach, as Vietnam is developing its own system.

B. (U) From July 23-24, the EXBS held an Industry-Government
Outreach Program in Taipei. Forty-five industry and 15 Taiwan
official representatives attended the training. The attendees had
an opportunity to view the internal control program (ICP) baseline
software and get an update on Taiwan-specific ICP software
development by BOFT and CTP, the State Department contractor that is
leading the software development. The ICP was enthusiastically
received by company representatives. Currently, Taiwan-specific
software development is expected to be completed by December 2008.
The software will be internet-based and hosted by BOFT on its
website.

III. UPCOMING TRAINING:

A. (SBU) From August 6-7, along with an official from ISN/CTR, the
Adviso
r will provide an update to Singapore interagency officials
on changes to the Wassenaar Arrangement control list and U.S.
implementation of those changes. This is the same update provided
to Taiwan officials in March. Also, Taiwan is looking for
opportunities to engage Singapore so that Taiwan can have a better
understanding of how Singapore implements transit and transshipment
controls of strategic items. Transit and transshipment controls is
an area of export controls that Taiwan is continuing to develop.

B. (SBU) On August 18, the EXBS Advisor will review South Korea's
Yestrade, an internet-based license processing and internal control
system, along with a State Department official from ISN/ECC. Since
South Korea is a few steps ahead of Taiwan in setting up internal
controls for companies and industry-government relations, Taiwan is
interested in learning about Korea's experience in working with
companies to set up internal controls.

V. UPCOMING MEETINGS:

(SBU) The Advisor is in the process of setting up meetings with
officials from the Taiwan External Trade Development Council
(TAITRA) to discuss Taiwan's trade missions to North Korea and
Burma.

VI. RED FLAG ISSUES:

None.

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

YOUNG

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