Export controls and Taiwan: a tedious topic

Taiwanese factories, among the globe's top producers and suppliers of high-tech dual-use goods, churn out much that the world's wicked might want to get their hands on.

However, although Taipei insists that it remains committed to nonproliferation of weapons of mass destruction, the United States has for decades doubted that the island's authorities are thorough when checking on what local manufacturers and agents squeeze in shipping containers.

A diplomatic cable released on Jan. 25 by WikiLeaks suggest that the de facto US embassy in Taiwan believes the island's export control system lags far behind those in places likes Hong Kong, Singapore and South Korea. The cable also revealed that almost nobody relevant seems to care.

Taiwan is neither a member of the United Nations nor of any of the major multilateral export control regimes. And, while a handful of mega-sized companies are among the top shippers, difficult-to-inspect small and medium-sized enterprises account for as much as 85 percent of the island's high-tech manufacturers, neither.

The past two years have produced headlines describing Taiwanese SMEs that allegedly supplied Iran with components related to the manufacture of WMDs. For instance in 2009, Heli-Ocean Technology Co., whose Web site offers "valves, scroll pumps, rotary pumps, roots pumps, turbo pumps, helium leak detectors, helium compressors and cryopumps," was found to have sold 108 Swiss-made nuclear-related transducers to Iran via China.

Another Taiwanese SME listed by Iran Watch, a Washington-based NGO, is Taipei's Landstar Tech, a supplier of dual-use goods to Iran. On August 27, 2010, Landstar's Chen Yi-Lan, aka Kevin Chen, was sentenced in the US to three and a half years in prison on charges of conspiring to illegally export 120 US-made circular hermetic connectors and 8,500 glass-to-metal seals to Iran through Taiwan. Apparently seeking to take advantage of Taiwan's lax export controls, Chen planned to transport what could function doubly as missile components.

Ta Chen Stainless Pipe Co., Ltd. Also could function as a supplier to the Iranian WMD program, according to Iran Watch. The company, which engages in the design, manufacture and sale of a number of stainless steel products, allegedly supplied Taghtiran Kashan Co, an Iranian manufacturer of pressure vessels, heat exchangers, boilers, reactors, storage tanks and recuperators. Taghtiran Kashan was listed by the British government in 2008 as an entity of potential concern for WMD-related procurement.

The WikiLeaks cable indicates that US's efforts to push Taiwanese authorities to prevent their exporters from putting the US technological edge on the battlefield into jeopardy were met with a mix of profound helplessness and indifference.

According to the cable, at a meeting between the American Institute in Taiwan and then-vice minister of economic affairs Lin Sheng-chung on July 21, 2009, the Americans asked that Taiwan prioritize the importance of export controls as the island "currently lags far behind places likes Hong Kong, Singapore and South Korea in the way export control is managed."

Six days later at another meeting between the American officials and Chang Chih-yu, the then-director of the Executive Yuan's Office of Homeland Security, Chang said Taiwan's biggest concern is industry compliance. Chang, who according to the cable doesn't have an export control background, lamented that Taiwan companies endlessly complain about compliance with export controls and how any measure to strengthen it will affect their bottom line.

The American side, however, responded by pointing out that industry complaints about export controls are not unique to Taiwan, and that all companies, everywhere complain about export controls.

The Taiwanese official then plainly told the Americans that export controls are not Taiwan's top priority, adding that few Taiwanese high-level officials truly understand what export controls are and how their management affects Taiwan's international standing.

Chang then said the main concern for Taiwan is controlling commodities exported to China. Here, the cable noted that Taiwan has stricter rules on exports of certain commodities to China than the US, and that for goods shipped to other countries, such as Iran or North Korea, export control are less of a concern for Taiwan.

The meeting allegedly concluded with Chang agreeing with the advice and comments from the American side regarding the deficiencies and ways to remedy them. He promised that he would explore whether his office could host regular interagency meetings on export controls.

Here, the cable notes that Taiwan already has an interagency export control committee, but that that committee has not met for over a year. Repeatedly asked about the matter, Chang simply responded by saying that Taiwan does not have the personnel to work on it.

The leaked cable hardly went unnoticed to the Taiwanese government. Four days after the cable was published, media close to the ruling Kuomintang (KMT)-leaning media reported that to better carry out the goal of international cooperation in export controls, a government panel that monitors Taiwan's strategic high-tech exports has been reshuffled and now has 10 members.

It was reported that a weekly cross-agency meeting will be held with the panel to address individual cases and also to implement a mechanism to monitor high-tech exports.

Time will likely tell whether this reshuffle will genuinely affect Taiwan's attitude in regards of export controls, or whether it will be something that can be categorized as lip-service to please Washington. Approached for comment by Asia Sentinel, various Taiwanese political scholars stated that they have never heard of it.