A portion of funds for the procurement of US arms totaling approximately NT$24.4 billion is being held up in the US, a report by the National Audit Office said.
The total amount for the procurement included a certain percentage that US authorities would set aside in case Taiwan terminated the contract midway, which was in line with regulations stipulated in section C9.9.1.5.4 of the US Department of Defense Security Assistance Management Manual, the office said.
“We have switched to providing that percentage through a letter of guarantee from a bank. However, if the issuing bank is not a US bank, it must obtain a license from the US Federal Reserve, according to US regulations,” it said. “Since the US branches of Taiwan’s banks have failed to secure that license, the funds are being held up.”
Photo courtesy of the Taiwan Military News Agency via AP
The National Audit Office asked the ministry at the end of 2022 to have the contract-termination funds provided to the US contractor through a letter of guarantee issued by a bank that complies with US regulations, rather than transferring the funds from the ministry’s budget.
In response, the Ministry of National Defense said that its representatives to the US were communicating with the US department’s Defense Security Cooperation Agency (DSCA) on getting the US Federal Reserve to provide a Taiwanese bank with a license.
The ministry in February last year formed a task force to look at how to issue letters of guarantee that comply with US regulations, and had aimed to meet the requirements by the end of this year, the audit office said.
However the banks the ministry had been working with failed to receive licenses by the end of last year as planned, it said.
“The Ministry of National Defense contacted the DSCA twice last year to evaluate relaxing the eligibility criteria for banks to issue credit,” it said. “However, the DSCA said this was not possible since it involved policy adjustments which could harm the rights and interests of the US.”
The US Department of State, the US Department of the Treasury and other US agencies are evaluating rules for arms procurement from US contractors, and hope to find a consistent solution for all global purchasers, it said.
However, it is unknown when this can be completed, it added.
Taipei, New Taipei City, Keelung and Taoyuan would issue a decision at 8pm on whether to cancel work and school tomorrow due to forecasted heavy rain, Keelung Mayor Hsieh Kuo-liang (謝國樑) said today. Hsieh told reporters that absent some pressing reason, the four northern cities would announce the decision jointly at 8pm. Keelung is expected to receive between 300mm and 490mm of rain in the period from 2pm today through 2pm tomorrow, Central Weather Administration data showed. Keelung City Government regulations stipulate that school and work can be canceled if rain totals in mountainous or low-elevation areas are forecast to exceed 350mm in
EVA Airways president Sun Chia-ming (孫嘉明) and other senior executives yesterday bowed in apology over the death of a flight attendant, saying the company has begun improving its health-reporting, review and work coordination mechanisms. “We promise to handle this matter with the utmost responsibility to ensure safer and healthier working conditions for all EVA Air employees,” Sun said. The flight attendant, a woman surnamed Sun (孫), died on Friday last week of undisclosed causes shortly after returning from a work assignment in Milan, Italy, the airline said. Chinese-language media reported that the woman fell ill working on a Taipei-to-Milan flight on Sept. 22
COUNTERMEASURE: Taiwan was to implement controls for 47 tech products bound for South Africa after the latter downgraded and renamed Taipei’s ‘de facto’ offices The Ministry of Foreign Affairs is still reviewing a new agreement proposed by the South African government last month to regulate the status of reciprocal representative offices, Minister of Foreign Affairs Lin Chia-lung (林佳龍) said yesterday. Asked about the latest developments in a year-long controversy over Taiwan’s de facto representative office in South Africa, Lin during a legislative session said that the ministry was consulting with legal experts on the proposed new agreement. While the new proposal offers Taiwan greater flexibility, the ministry does not find it acceptable, Lin said without elaborating. The ministry is still open to resuming retaliatory measures against South
1.4nm WAFERS: While TSMC is gearing up to expand its overseas production, it would also continue to invest in Taiwan, company chairman and CEO C.C. Wei said Taiwan Semiconductor Manufacturing Co (TSMC) has applied for permission to construct a new plant in the Central Taiwan Science Park (中部科學園區), which it would use for the production of new high-speed wafers, the National Science and Technology Council said yesterday. The council, which supervises three major science parks in Taiwan, confirmed that the Central Taiwan Science Park Bureau had received an application on Friday from TSMC, the world’s largest contract chipmaker, to commence work on the new A14 fab. A14 technology, a 1.4 nanometer (nm) process, is designed to drive artificial intelligence transformation by enabling faster computing and greater power
RSS