February 2023
Teresa Huang and Sally Yang
I. Introduction – the inclusion of the protection of national core key technologies in the Amendments to the National Security Act
The Legislative Yuan adopted the draft Partial Amendments to the National Security Act (hereinafter, the “Act”) by three readings on May 20, 2022 with the Amendments promulgated by way of the Presidential Decree of June 6, 2022 and the effective date to be set by the Executive Yuan. These Amendments, which have attracted extensive attention, are highlighted below:
1. Addition of a prohibited category involving the trade secret misappropriation of national core key technologies
These Amendments specifically provide that no person may engage in any of the following acts for any foreign countries, the Mainland China, Hong Kong, Macau, overseas hostile forces, or various organizations, institutions, or groups they establish or substantially control or any persons they dispatch:
a. Obtaining trade secrets that are national core key technologies by way of theft, embezzlement, fraud, duress, unauthorized reproduction, or other improper methods, or using and disclosing them after obtaining.
b. Knowing or possessing trade secrets that are the national core key technology, and reproducing, using, or disclosing the trade secrets without authorization or exceeding the scope of authorization.
c. Possessing trade secrets that are national core key technologies and failing to delete, destroy, or conceal such trade secrets after being notified by the trade secrets owner to do so.
d. Obtaining, using, or disclosing trade secrets that are national core key technologies with the knowledge that they are learned or possessed by others under the circumstances set forth in the preceding three subparagraphs.
It is also specifically stipulated that no person may engage in any of the acts set forth in the subparagraphs of the preceding paragraph in an attempt to use trade secrets that are national core key technologies in foreign countries, Mainland China, Hong Kong, or Macau. (Article 3, Paragraphs 1 and 2)
2. Definition of “national core key technologies”
“National core key technology” refers to a technology whose inflow into foreign countries, Mainland China, Hong Kong, Macau, or overseas hostile forces will significantly undermine national security, industry competitiveness, or economic development, and which meets one of the following two conditions and is submitted to the Legislative Yuan for recordation after being effectively announced by the Executive Yuan: (1) control should be imposed based on “international conventions, national defense needs, or national key infrastructure security protection considerations,” or (2) the “technology can lead to the generation of leading technologies or significantly enhance the competitiveness of important industries in this country.”
The National Science and Technology Council (hereinafter, the “NSTC”) shall consult relevant authorities to prescribe the procedure for determining national core key technologies and the regulations for other compliance matters (Article 3, Paragraphs 3 and 4).
3. Criminal liability for violations
Any person who violates one of the provisions of the subparagraphs of Article 3, Paragraph 1 of the Act shall be punished by imprisonment of five to twelve years and may also be fined NT$5,000,000 to NT$100,000,000; and any person who violates Article 3, Paragraph 2 shall be punished by imprisonment of three to ten years and may also be fined NT$5,000,000 to NT$50,000,000. Attempted offenders of the above two categories shall both be punished (Article 8, Paragraphs 1 to 3).
II. Regulations related to the determination of national core key technologies
In accordance with the authorization of Article 3 of the Act, the NSTC pre-announced two draft regulations on December 30, 2022, namely, the draft Regulations on Determination of National Core Key Technologies and the draft Regulations on Identification of Government Subsidized, Commissioned or Funded National Core Technologies Projects. Any opinions on the drafts may be presented to the NSTC within 60 days. The two drafts are respectively highlighted below:
1. Highlights of the Regulations on the Determination of National Core Key Technologies
(1) The NSTC shall establish the National Core Key Technology Review Committee (hereinafter, the “Review Committee”) to handle the determination, modification, and other deliberations of categorization related to national core key technologies (hereinafter, the “Key Technologies”). The Review Committee shall consist of 21 to 27 commissioners. The Chairman of the NSTC shall serve as the convener, and representatives from government agencies, scientific and technological research institutions, national defense, intelligence, and Mainland affairs agencies, as well as scientific and technological experts and scholars and experts in leading technologies or industries with significant influence on economic development, etc., shall serve concurrently as commissioners (Articles 2 and 3).
(2) The Review Committee shall meet at least once a year to determinate Key Technologies items, and may invite representatives of interested parties and other relevant experts to attend to provide opinions (Article 5).
(3) The submission of determination of Key Technologies items shall include the following information: the description, characteristics, and efficacy of the technology in the Key Technologies item submitted for determination, an explanation as to why the Key Technologies item so submitted meets the definition of the national core key technology under the Act, and the opinions of experts, scholars, industry representatives, etc. (Article 6).
(4) At the request of Key Technologies holders or in the event of change in the industry environment or technological development, the key technology authority may submit this matter for determination after it has been reviewed by experts (Article 9).
2. Highlights of the Regulations on Identification of Government Subsidized, Commissioned or Funded National Core Technologies Projects
(1) The business commissioned, subsidized, or funded by government agencies (institutions) up to a certain threshold that pertains to national core key technologies refers to the business related to a commissioned, subsidized, or funded project that meets the following conditions:
a. The research and development results expected or produced by a scientific and technological research and development project are part of the national core key technologies announced by the Executive Yuan.
b. “More than half” of the funds for the implementation of a national core key technology research and development project are commissioned, subsidized, or provided by government agencies (institutions) (Article 2).
(2) The commissioning, subsidizing, or funding agency shall take an inventory of the projects that have been terminated for less than three years, are intended to be implemented or controlled within three months after the Executive Yuan announces the addition or change of national core key technologies. The above-mentioned agency shall also notify the National Immigration Agency of the Ministry of the Interior and the parties concerned of the list of the “project host” and the “personnel privy to the technological secrets for being involved in the national core key technologies” with the NSTC copied. This shall also apply to change of the Key Technologies items, change of the determination results, or change of the personnel involved (Article 3 and 4).
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