Deregulation Task Force:
Summary Report

• The First Department of the Commission was responsible for the deregulation of the service industry sector;

• The Second Department of the Commission was responsible for the deregulation of the manufacturing industry sector;

• The Legal Department of the Commission was responsible for the formulation and analysis of relevant laws and regulations;

• The Planning Department of the Commission was responsible for the coordination and handling of relevant administrative affairs.

The different divisions under each department were responsible for inviting relevant enterprises, organizations, scholars, and research institutions for seminars and public hearings, or to conduct relevant researches through collaboration projects.

2. Work Areas

(1) To compile and analyze relevant deregulation experiences from different countries;

(2) To review the state of regulation in different markets and formulate a table indicating the state of regulation;

(i) To handle, on a case by case basis, individual cases that seriously hinder market competition;

(ii) To initiate investigations and analyze the factors which can be regarded as improper regulations;

(iii) To review the pricing mechanisms within the industries which may exist market failure;

(iv) To explore the possibility of liberalizing those oligopoly and monopoly markets.

(3) To formulate detailed plans for deregulation:

(i) To formulate the timetable for deregulation based on the restricted items as listed in the proposed list of deregulated items;

(ii) To compile and categorize administrative orders and measures which can not be exempted by the Fair Trade Law (hereafter the Law) or which are in conflict with the Fair Trade Law;

(iii) To review the comments of the different government agencies relating to deregulation, and to review and revise the deregulation plan accordingly;

(iv) To draft a deregulation report.

3. Implementation Procedures

(1) To select the proposed deregulation items in the specified markets and sort out laws and regulations with possible impact on market competition;

(2) To complete the interim report, draft the deregulation action plan, and submit the plan to the Cabinet for review;

(3) To revise the action plan for deregulation in accordance with instructions from the Cabinet;

(4) To consult with the different government agencies and review the revised action plan;

(5) To complete the final report and submit the report to the Cabinet for review;

(6) To forward correspondences to the relevant government agencies requesting collaborative efforts in accordance with the instructions from the Cabinet.

• Invited the CEPD and RDEC, the relevant competent authorities, industry representatives, scholars, and experts to consult and discuss issues relating to the implementation of deregulation efforts;

• In accordance with instructions from the Cabinet, the Commission referred to the comments of the CEPD and RDEC and categorized the regulations in the different markets as follows:

1. Restrictive measures that were in violation of the Law;

2. Restrictive measures imposed due to policy considerations but were not in violation of the Law;

3. Restrictive measures requiring policy adjustments.

The Commission, in its final report, revised some of the flaws in its interim report, and included the its comments and actions taken in the relevant sections of the report.

• The action plans as stated in the interim report were divided into those for the specific markets and those pertaining to the laws and regulations. The concrete actions taken were described under the following classifications: case-by-case implementation, policy review measures in coordination with other government agencies, revision and abolition of laws, and the establishment of inter-departmental committees.

In reference to the comments of the CEPD, issues relating to policy adjustments and the establishment of inter-departmental committees were submitted to the Cabinet to determine whether the CEPD shall be in charge of its implementation.

• Policy suggestions and action plans were proposed in the interim report. However, the policy suggestions were general comments, and will be replaced by a concrete action plan and its implementation results during the final report.

In relation to the deregulation of the 12 specific markets, the Commission adopted the following four concrete measures toward the service and manufacturing industry: case-by-case implementation, policy review measures in coordination with other government agencies, revision and abolition of laws, and the establishment of inter-departmental committees. For the several laws and regulations that were in violation of the essence of the Law, the Commission, in accordance with the "project on the promotion of the liberalization of laws and regulations,"had conducted follow-up actions efforts and undertaken some responses in modifying or abolishing laws that were unfavorable to market competition. The details of the actions taken were as follows:

1. Concrete Actions

(1) Service Industry

(i) Case-by-case Implementation

Four specific issues were to be resolved in the three markets waiting for deregulation: (1) For the consumers' cooperative for government employees and teachers, it included the failure to thoroughly inspect membership cards, most favorable provisions, and the regulation requiring that products in the cooperatives be sold at the lowers prices; (2) In the cable television industry, it included the integration of cable TV operators' operation; (3) In the basic telecommunications services industry, it included the Chunghwa Telecom's abuse of the residual monopoly power.

(ii) Policy Review Measures in Coordination with Other Government Departments

Nine specific issues were to be resolved in the five markets waiting for deregulation. Issues for these five markets were: (1) For the consumers 'cooperative for government employees and teachers, it included the abolition of tax exemption; (2) For the cable television industry, it included suggestions to the Government Information Office to as much as possible maintain two or more cable operators within one given region, so as to prevent monopolies within the region, as well as suggesting the Government Information Office to review the reasonableness in dividing the island into 51 regions for cable TV operations; (3) For information providers to the securities trading market, to collaborate with the Securities and Futures Commission to provide easy access to more open information at lower expenses; (4) To maintain a collection of reasonable management fee on the first whole-sale trade on deep-sea fishing; and (5) The customs networking market.

(iii) Revision and Abolition of Laws and Regulations

Eleven laws and regulations were to be revised in five markets waiting for deregulation: They included (1) the Cooperative Law for the consumers' cooperative for government employees and teachers; (2) the Enforcement Rules of the Cable TV Law; (3) six laws and regulations relating to the basic telecommunications services market; (4) two relating to the bidding market for the import shipping of bulk commodities of government agencies and state enterprises; and (5) the Enforcement Rules on the Management of Export Processing Zones.

(2) Manufacturing Industry

(i) Policy Review Measures in Coordination with Other Government Departments

Three issues were to be resolved in two markets for further deregulation: For the salt products market, it included the free import of dried and washed salt as well as their import volume and standards; for the digital switchboard market, it included the determination of purchase specifications.

(ii) Revision and Abolition of Laws and Regulations

Two laws and regulations relating to the liquefied petroleum gas import market were included.

(iii) Establishment of inter-departmental Committees

Issues relating to the oil products market were to be dealt with.

(3) Laws and Regulations

(i) Follow-up Actions on the " Project on the Liberalization of Laws and Regulations"