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Taiwan – Agreements Signed On Investment Protection And Customs Cooperation With The Mainland.

10 October, 2012


Legal News & Analysis – Asia Pacific – China – International Trade


The Mainland’s Association for Relations across the Taiwan Straits (ARATS) and Taiwan’s Straits Exchange Foundation (SEF) met on August 9, 2012 in Taipei for the 8th round of discussions on the two cross-Straits agreements: (i) the Cross-Straits InvestmentProtection and Promotion Agreement (IPA); and (ii) the Cross-Straits Customs Cooperation Agreement (“Customs Agreement”). 
The IPA is the first post-ECFA agreement since the entry into force of the Mainland-Taiwan Economic Cooperation Framework Agreement (ECFA) on June 29, 2010. Under the IPA, the two sides pledge to offer “just and fair treatment” and full protection and security to their respective investors and investment. Compared to earlier rounds of negotiations on the IPA, the final version of the IPA includes provisions on the protection of indirect investment from Taiwan to Mainland China via a third country or region. 
With respect to the dispute settlement mechanism, both sides agree to offer several settlement options, including negotiations between disputing parties, local dispute settlement authorities, the investment division of the Cross-Straits Economic Cooperation Committee (ECC), and local courts. Notably, a new mechanism to solve disputes out of court will be available to both Taiwanese and Mainland private firms, who can use either a Taiwan or Mainland arbiter at a place that both parties agree upon. However, some Taiwanese social groups monitoring the cross-Straits discussions have criticized the limits of the dispute resolution mechanism under the IPA, saying that the parties should have included an international dispute resolution mechanism. 
Finally, as the IPA only concerns future policies, both sides agree to gradually remove existing policies that are not in line with the IPA and gradually remove restrictions on investment projects in order to create a fair environment and promote two-way investment. 
Customs Agreement
The Customs Agreement aims to promote conformability, transparency and consistency of customs procedures in line with related World Customs rganization (WCO) provisions, including in the areas of information exchange of classification, customs valuation and certificate of origin requirements as well as cooperation in customs supervision and smuggling investigations. It also promotes the use of radio-frequency identification (RFID) technology, the development of a paperless customs clearance program, and the mutual recognition of Authorized Economic 
Operators (AEO). 
The two agreements are expected to take effect after both parties complete their respective internal legal procedures.
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Please note these links are to Chinese language websites. 



For further information, please contact:


Samuel Scoles, White & Case


Patrick Ma, White & Case

Christopher Corr, White & Case


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