VZCZCXYZ0000
PP RUEHWEB

DE RUEHIN #2486/01 3190952
ZNR UUUUU ZZH
P 150952Z NOV 07
FM AIT TAIPEI
TO RHMFIUU/USCBP WASHINGTON DC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 7384
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
INFO RHMFISS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS AIT TAIPEI 002486 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR ISN/ECC - YWONG, ACHURCH AND KCROUCH 
DEPT FOR EAP - SBREMNER 
CBP/INA FOR RWATT AND JGOUGE 
DEPT FOR ENERGY/NNSA FOR T. PERRY AND S. JONES 
 
E.O. 12958: N/A 
TAGS: ETTC MNUC PARM PREL KSTC KNNP TW
SUBJECT: EXBS: TAIWAN MONTHLY REPORTING CABLE - OCTOBER 2007 
 
¶I.  BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY 
MANAGERS: 
 
(SBU) During the week of November 19, the EXBS Advisor will be in 
Washington, D.C. for her 6-month review and consultation. 
 
II. COMPLETED ACTIONS FOR THE REPORTING PERIOD. 
 
¶A.  SITE ASSESSMENTS AND MEETINGS DURING REPORTING PERIOD: 
 
¶1. (SBU) On October 23, the EXBS Advisor, CSI Consultant and AIT 
Regional Security Officer met with the Ministry of Justice 
Investigation Bureau (MJIB) to discuss on-going cooperation on 
investigations, including investigations of export control 
violations.  Mr. Yeh Cherng-Maw, Director General of MJIB welcomed 
the AIT visitors and stressed the important export control 
enforcement work being done by both sides.  DG Yeh stated that, 
recently, more MJIB agents are interested and are involved in export 
control investigations.  He stated that the export control work of 
MJIB was a topic of discussion at a recent meeting he had with 
President Chen Shui-bian.  DG Yeh also stated that he was briefed on 
the Washington export control meeting held in September and that he 
was pleased to hear the meeting was very productive and positive for 
both sides.  The EXBS Advisor echoed the sentiments voiced by DG Yeh 
and thanked him for his office's participation in the Washington 
meeting. 
 
¶2. (SBU) October 24, the EXBS Advisor and Econoff met with Chun-Nen 
(Jimmy) Huang, Chair of Department of Security Management of the 
Kainan University in Taipei County.  (Professor Huang participated 
in post-shipment outreach visits organized by the Bureau of Foreign 
Trade (BOFT) of the Taiwan Ministry of Economic Affairs in August 
2007.)  The meeting was to discuss Professor Huang's study on 
investments and relocation of Taiwan companies to China.  Professor 
Huang stated that, based on his research thus far, it appears that 
the major reasons for Taiwan companies moving to China are lower 
production costs (31.3%); innovation plateau and 
mergers/acquisitions/joint ventures by companies (20.3%); human 
capital, investment opportunity, competition (15.6%); and 
governmental policy, including export control rules (14.1%).  (The 
percentages are based on responses by 100+ Taiwan companies that 
attended the Taiwan-Germany Industry Outreach program on October 5.) 
 Professor Huang found that the current trend is for companies to 
move back to Taiwan due to the regulatory environment in China, 
rather than a rush of investments in China as has been the case in 
the past.  Professor Huang plans to use his findings to make 
recommendations to Taiwan officials on what Taiwan can do so that 
Taiwan companies will invest in Taiwan rather than move overseas. 
He suggested that his recommendations would include investments by 
Taiwan in certain key sectors such as semiconductors, electronics, 
computers, and mechanical manufacturing (e.g., machine tools) and 
offering incentives such as tax breaks and research and development 
opportunities for companies. 
 
¶3. (SBU) On October 25, the EXBS Advisor visited Siemens Taiwan 
Limited for a demonstration of Damex, Siemens' proprietary internal 
control program for export controls.  Damex was developed by Siemens 
headquarters in Germany with customization at specific "country" 
levels.  For example, the system used by the Taiwan company has 
search tools for the United States, Germany, the United Kingdom, 
Japan and Taiwan rules and regulations, including published "watch 
lists" by the countries.  Siemens is in the process of upgrading 
Damex, which will be completed in 2008. 
 
¶B.  BLUE LANTERN: 
 
(U)  AIT did not receive Blue Lantern check requests during the 
reporting period. 
 
¶C.  TRAINING CONDUCTED DURING REPORTING PERIOD: 
 
(U) The Department of State, through Los Alamos Technical 
Associates, Inc., conducted the two-day Transit/Transshipment 
training on October 30-31 in Taipei.  Forty-six Taiwan officials 
participated in the program.  Officials from the Japanese, South 
Korean, and German representative offices attended certain parts of 
the program.  The participants were about evenly split between those 
who have attended previous EXBS programs and those attending for the 
first time.  The participants were mostly interested in 
transit/transshipment control implementation by other countries such 
as the United States and Singapore, including transit license 
processing; the legal basis for compliance by forwarders and 
shippers; and customs practices and procedures for 
transit/transshipment.  A reporting cable from Washington will have 
a detailed agenda, attendee list, and analyses of feedback and 
questions from participants. 
 
III. UPCOMING TRAINING: 
 
¶1. (U) The week-long Targeting and Risk Management training 
implemented by Customs and Border Protection originally planned for 
the week of November 12 in Kaohsiung has been postponed until spring 
¶2008. 
 
¶2. (U) The three-day Commodity Identification Training program 
implemented by the Department of Energy is being planned for 
February 2008 in Kaohsiung. 
 
IV. UPCOMING MEETINGS 
 
(SBU) On November 8 and 9, the EXBS Advisor and Econoff will meet 
with officials of the Southern Taiwan Science-Based Industrial Park 
in Tainan and with representatives of Corning Display Technologies 
Taiwan; Applied Materials Taiwan Ltd.; ChipMos Technologies, Inc.; 
Kenmos Technology Co., Ltd.; and Great Wall Enterprises Co., Ltd. 
The Advisor's focus for the meetings will be export control 
licensing processes and procedures by the Tainan Science Park and by 
companies located in the Science Park.  (Science Parks have separate 
export control licensing authority from the BOFT.)  The meetings 
will be used to assess the program needs, if any, of the Science 
Park and the companies located in the Science Park. 
 
¶V. RED FLAG ISSUES: 
 
None. 
 
POC for this report is Mi-Yong Kim, EXBS Advisor. 
Telephone 886 2 2162 2347. 
 
YOUNG