Taiwan Legal Survey: A Year of Continuity and Change

Law Firms in Taiwan

Taiwan's legal market is small by international standards. In addition, the market for international legal services is much smaller than it is in other leading cities in Asia. Although the legal profession is seen as an attractive career for young people, a strenuous bar exam has kept the pass rate very low and limited the numbers of new lawyers.

A handful of law firms continue to dominate the Taiwan commercial law market. A tough economy and a broader trend of investor focus shifting to other investment centres means that any new international law firms setting up in Taiwan will face an extremely tough challenge. The leading law firms in Taipei that originated overseas, including Baker & McKenzie, Jones Day and Russin & Vecchi are to all intents and purposes local firms with established roots in Taipei. The main advantage they have, which the purely local firms do not, is their network of international offices.

Baker & McKenzie has been in Taipei since 1977, and opened an office in Hsinchu in 1998. The other foreign law firms in Taiwan are a fraction of Baker & McKenzie's size.

Jones Day has been in Taiwan since 1990, at which time most of its clients were local companies. Today the firm has about a 50:50 split between local and international clients, and it is especially strong in three main areas: M&A; banking and finance; and disputes.

Russin & Vecchi maintains a fairly low profile in its offices throughout Asia, but is one of the most well respected international law firms in many of its jurisdictions. In Taiwan, Russin & Vecchi's banking and finance practice is regarded as among the best.

The frontrunners among domestic firms remain Lee and Li and Tsar & Tsai. Lee and Li is the largest Taiwanese law firm, with over 400 lawyers and a dedicated patent division that is larger than most other law firms (with 150 staff and 60 patent engineers). Tsar & Tsai has a 35-year history in Taiwan, and has its roots in Shanghai.

Several other local firms have established positions in Taipei. Among these are: Formosa Transnational; Huang & Partners; J&J Attorneys; LCS & Partners; Lee, Tsai & Partners; Shay & Partners; and Taiwan Commercial Law Offices.

In June 2003, Chen Shyuu & Pun merged with Tu & Amida Trust to form Tu, Amida Trust, Chen, Shyuu & Pun. Chen Shyuu & Pun Law Offices started out in Taiwan as Wurzel & Root Law Office and was founded in 1980. The original firm specialized in legal research, and civil and administrative litigation. Today Tu, Amida Trust, Chen, Shyuu & Pun practices in admiralty and maritime, antitrust and unfair competition, banking and finance, contracts, environmental law, foreign investment, international trade, insurance, litigation, labour law, intellectual property, public works, real estate, securities and taxation.

Alliance International Law Offices operates in association with Deacons, and is a full service local firm.

In intellectual property practice, several local firms are specialists. Chien Yeh & Associates, Saint Island International Patent & Law Offices, Tai E International Patent & Law Office, and Taiwan International Patent & Law Office (TIPLO) are all well regarded.

Puhua & Associates is the correspondent law firm for PricewaterhouseCoopers in Taiwan, and was set up in 2000.

In 2000, Diwan Ernst & Young was established as the Taiwan correspondent firm of Ernst & Young. It has a leading tax practice, and also advises on banking and finance issues, China work, and insolvency and restructuring.

As part of Taiwan's WTO accession, the country's Lawyers' Law was revised in keeping with required liberalization of legal services in the GATS agreement. Among other changes, partnerships between foreign and domestic law firms are allowed with the approval of the Ministry of Justice. Winkler Partners is so far the only law firm to take advantage of these changes to the law, but the firm is not new, as name partner Robin Winkler has been in Taiwan for decades. Winkler is one of the small number of AFLAs, or attorneys of foreign legal affairs, in Taiwan. AFLA is a legal position, meaning a foreign attorney who is recognized by the Ministry of Justice and who is a member of the local bar working for a Taiwanese law firm.

Winkler Partners came from the former Qi Lin, which was restructured in March 2002 resulting in two separate firms, Winkler Partners and Yangming Partners. Mark Ohlson at Yangming is from Qi Lin, and the firm also has the services of Paul Cassingham, who was formerly at US firm Perkins Coie, which left Taiwan in 2001.

Winkler Partners plays a prominent public role in Taiwan. As with lawyers at some of the other prominent Taipei law offices, the firm's partners and lawyers are involved with numerous government legal reform programmes and sit on many advisory bodies that are involved in legislative issues.

Joseph Tan Jude Benny was one of the few international law firms to set up in Taiwan recently amid a generally difficult climate for law firms. The Singapore-headquartered firm set up a Taipei office in 2002 and took on lawyers from the former Qi Lin.

Another recent arrival in Taipei is Wenger Vieli Belser, a Swiss law firm that also has offices in Beijing and Shanghai. In Taipei it works in association with MCI International Law Offices.

Squire Sanders & Dempsey has been in Taiwan for many years and has operated in close association on regional deals with its Beijing and Hong Kong offices. But in a sign of the times, the firm looks set to give up its Taiwan business and concentrate regional work on Beijing and Hong Kong. The Taiwan practice under Nick Chen will set up its own operation in a planned merger with Shay & Partners. The new venture will be named Pamir Law Group. The Pamir mountain range spans the frontier between China, Afghanistan and Central Asia and is bounded by China's Tien Shan range to the northeast, the Hindu Kush mountains to the northwest and the Karakoram and Himalayas in the southeast. Nick Chen and Arthur Shay see the name as an apt description of the new firm's international orientation and progressive outlook.

Events in Taiwan

The Election Drama

Taiwan's tumultuous political scene saw its third presidential election on March 20 2004. In the first in 1996, the PRC fired missiles into the Taiwan Straits to show displeasure with the election of Lee Teng-hui. In 2000, the election of Chen Shui-bian broke the KMT's half-century stranglehold on Taiwan's national politics. His Democratic People's Party has had a tricky relationship with the PRC, with its public posturing and tough talk about Taiwan's independence largely seen as attempts to impress a domestic audience and DPP constituents. There is a distinctive "local" Taiwanese identity component to the DPP's self-image, with senior members representing the generations of Taiwanese born in the island and divorced of a sense of identity with the mainland. At the same time, the KMT is trying to re-present itself to the public. KMT Chairman Lien Chan has tried to distance the KMT from criticisms of the party as a throwback to a time of dictatorship and corruption and show that it is fully in step with a modern era of democratic politics.

The 2004 election surpassed the previous two elections in drama, political theatre and international attention. Just hours before the country was to go to the polls, President Chen Shui-bian and Vice-President Annette Lu were shot on March 19 in an apparent assassination attempt as they were riding in an open car to a political rally in the southern city of Tainan. The wounds they sustained were only superficial, and Chen and Lu were released from hospital after only a brief stay.

The opposition cried foul on the timing, circumstances and outcome of the assassination attempt, and many in politics and among the general public voiced the opinion that the event was not a genuine threat to Chen and Lu, but was somehow staged to garner support for the pair on the eve of the election. To date, the perpetrators of the attack have not been found.

Chen won the election the following day by fewer than 30,000 votes out of an estimated 13 million cast in total, and won 50.1% of the vote. The opposition immediately called for a recount of the balloting and widespread street protests engulfed Taipei and other major Taiwanese cities. As of the end of March 2004, the re-elected government agreed to a recount of the votes, and the final decision on how to proceed rests with the Taiwan High Court and the Central Election Commission.

At the same time as winning the election, Chen lost on one of his key policy platforms, a public referendum on Taiwan-China relations. The referendum will not be held, as fewer than 50% of the public voted in favour of holding the referendum. The referendum focused on two main issues: whether Taiwan should boost defence spending and whether negotiations with China should be re-invigorated.

Lee and Li and the Embezzlement Imbroglio

Undoubtedly the biggest event in Taiwanese legal circles in 2003 was the embezzlement of client funds by an employee of Lee and Li. Eddie Liu, an employee at Lee and Li for 14 years, disappeared with nearly NT$3 billion in cash he obtained from selling about 128 million shares in United Microelectronics Corp., a Taiwanese chip maker. The shares were owned by SanDisk Corp., a California-based company that makes flash memory cards for cameras and other consumer devices. Lee and Li held the shares for SanDisk and the sale occurred without authorization. The sale was apparently concluded between the first week of August and the middle of September 2003. As compensation, Lee and Li paid SanDisk about US$20 million in cash in November 2003, and will pay a further US$45 million over four years in 16 quarterly instalments to be secured with letters of credit. The law firm has also extended about US$18.3 million in credit for legal services to SanDisk.

Liu applied for an unpaid leave of absence from Lee and Li in August 2003 to prepare for the bar examination. The leave coincided with the period during which the share sale was executed. In October 2003, police armed with a prosecutor's warrant for Liu's arrest found his home empty, with neighbours saying he hadn't been seen for a month. Liu's current whereabouts are unknown.

Paul Hsu, one of Lee and Li's three senior partners, left the firm as a result of the scandal.

The case is one of Taiwan's largest ever cases of corporate fraud, and has caused law firms to rethink the management of client's funds and the supervision of their employees. Perhaps surprisingly, it doesn't seem that the case has resulted in a serious challenge to Lee and Li's pre-eminent position among local law firms. The terms of the settlement with SanDisk are not terribly onerous for the law firm, and the scandal hasn't led other junior staff to leave Lee and Li and try their luck elsewhere. Reportedly one of the factors contributing to Liu's actions was frustration at the slow pace of career progression at the firm for experienced lower-level employees. The firm's management and organization system puts the (formerly) three senior partners at the top of a highly elongated pyramid, with a very high partner: employee ratio. To the firm's credit, they have created arguably the island's best law firm in a highly unusual structure; it would seem astounding that a firm of such size would only have two senior partners commanding the firm's workload. Aside from the fact that many junior lawyers or consultants would find their career path blocked in such a system, an added source of frustration might stem from the fact that local qualification in Taiwan wasn't really a bonus or worked in an employee's favour: one of the two senior partners at the firm is not locally qualified.

Conducting client asset management services in such a system would seem ripe for exploitation by a dishonest but experienced staff member like Liu. Liu's dealings in the share sale were complicated and the structure of obtaining the funds was well planned; with a veteran employee of dubious ethics conducting sizeable transactions for a major client largely unsupervised, the scandal seemed only a matter of time.

Practice Area Developments

Banking and Finance

Jones Day's Taipei office leads a strong team that has played a leading role in the major non-performing loan deals that have originated in both Taiwan and the mainland in the past couple of years. These include the landmark Morgan Stanley Real Estate funds' acquisition of a US$1.3 billion portfolio of NPLs from Huarong Asset Management Corporation via the set up of a joint venture, which gained considerable press in 2003.

The firm assisted its client Colony Capital in several NPL portfolio purchases in 2003, and also represented Shinsei Bank in a large NPL portfolio purchase from Hua Nan Commercial Bank. Altogether, Jones Day estimates that in 2003 it represented the purchasers in 80% of Taiwan's NPL auctions.

Baker & McKenzie is also a leader in handling NPL transactions.

Freshfields Bruckhaus Deringer from its Hong Kong office advised the lead arrangers to Eastern Multimedia Co. Ltd's NT$13.8 billion syndicated secured loan, which Eastern Multimedia signed in February 2004. Eastern Multimedia provides basic and premium cable television services, content distribution, and broadband internet services in Taiwan. The financing is the largest syndicated loan extended to date to a cable operator in Asia. The arrangers are a mixture of Taiwanese and overseas finance firms, including ABN Amro Bank, ANZ Investment Bank, Chinatrust Commercial Bank, First Commercial Bank, Societe Generale Asia Ltd and WestLB AG. Altogether the loan involved 23 Taiwanese and foreign banks. The proceeds from the loan will be used to pay off short- and long-term debts of EMC and its subsidiaries.

Taiwan's passage of its Financial Asset Securitization Law in the summer of 2002 paved the way for the conclusion of some domestic deals in this area, and lawyers are optimistic for the future development of securitization in Taiwan. At the end of 2003, the first international securitization from Taiwan was concluded with the US$230 million secured floating rate notes issue of Cosmos Bank's George and Mary cash cards. It was the first consumer assets securitization in Taiwan, and was in the works for more than a year. Lee and Li advised Cosmos Bank, and Clifford Chance and Russin & Vecchi advised UBS, HVB Singapore (joint lead managers) and Deutsche Bank (trustee). Jones Day advised rating agency Standard & Poor's, and Maples and Calder advised GM Finance Ltd.

Of six completed securitizations to date in Taiwan, Lee and Li has acted as local counsel on four of them.

Tu, Amida Trust, Chen Shyuu & Pun has considerable experience in distressed asset re-financing and in the set up of trusts to use as leverage for financing in Taiwan.

Tu, Amida Trust, Chen Shyuu & Pun is also active in assisting a banking client that has two credit guarantor licences in the mainland. The PRC is keen on promoting credit guarantee companies to help boost funding especially for small and medium-sized enterprises. The growth of the SME business sector is seen as crucial for the development of the market economy and as a guarantor of social stability as state-owned enterprises are broken up and sold off to private interests. Further, it is hoped that a credit guarantee system will become part of a broader movement to make more accurate, market-based lending decisions a bigger part of China's credit culture.

Russin & Vecchi reports being active in advising on the set up of structured notes and other alternative investment structures, and is confident that the market for these products will grow in Taiwan.

Tsar & Tsai has a strong insurance practice. The firm acts as a representative for the American Chamber of Commerce Insurance Committee in Taipei and undertakes lobbying for the committee to further liberalization of insurance regulations. Recent issues in insurance law that Tsar & Tsai has petitioned the government on are pension law reform, the status of insurance agents and simplifying the product approval process for insurance companies.

Formosa Transnational framed a trust structure for a foreign client to secure a loan and security interest in Taiwan, which was the first case in which a trust was set up for such a purpose in Taiwan.

Capital Markets

In July 2003, Chunghwa Telecom became the first Taiwanese government-owned entity to list on the New York Stock Exchange. The 111 million American Depositary Share-offering raised about US$1.6 billion. The privatization of Chunghwa Telecom has proceeded by fits and starts over the past three years since privatization was first seriously considered. Lee and Li and Sullivan & Cromwell represented the coordinators Goldman Sachs, Merrill Lynch and UBS. Baker & McKenzie and Simpson Thacher & Bartlett represented Chunghwa Telecom and the Ministry of Transportation and Communications.

Lee and Li also has abundant experience representing issuers in bond and depositary receipt transactions. Lee and Li represented its client Cathay Financial Holdings in its US$4 billion global depositary receipt issue in 2003.

Jones Day advised Standard & Poor's Taiwan subsidiary, Taiwan Rating Corporation, as the rating agency on the domestic issue of NT$4.28 million in residential mortgage-backed securities. The transaction was completed in March 2004, and was the first mortgaged-backed securitization in Taiwan.

LCS & Partners advised Taiwan Cement Corp. on its US$280 million euro convertible bond issue, which was scheduled to close in March 2004. The five-year zero-coupon bond issue can be converted into shares in Taiwan Cement Corp. at a 25% premium over the company's reference share price of NT$18.14.

Jones Day represented HannStar Display Corporation on two separate euro convertible bond issues (US$250 million and US$175 million, respectively), and a US$175 million global depositary receipt issue in 2003. In January 2004, Jones Day assisted HannStar in its US$301.6 million offering of global deposit receipts in the US under Rule 144A, and in Asia and Europe under Regulation S. UBS Investment Bank lead managed the transaction.

Also in January 2004, Jones Day acted for Microlife Corporation on a Regulation S-governed US$30 million convertible bond offering that was lead managed by President Securities (Hong Kong), and a separate offering also under Regulation S for Ya Hsin Industrial Co., which totalled US$120 million and was lead managed by Chinatrust Commercial Bank.

Corporate & Commercial (including M&A)

Taiwan's Company Law was last revised in 2001, but more revisions are planned by the government in a further attempt to create more uniform corporate structures for Taiwanese companies regardless of business type. Although immediate shortcomings of the 2001 law have been spelled out, it will likely take several years before any proposed amendments are passed into law. The 2001 revisions marked a milestone in modernizing Taiwanese company law. More than half of the articles of the Company Law were revised. Specific provisions, such as the ability to set up one-person companies and establishment of a company limited by shares by as few as two individuals, have been hailed as among the most important recent legislative developments in Taiwanese commercial law.

Formosa Transnational was entrusted by the Executive Yuan's Planning Council to submit proposed changes to the Company Law, which it completed in 2003. The thrust of the proposed changes aims at reducing the welter of industry-specific laws and simplifying company structures in Taiwan.

An example is the structure of new companies resulting from M&A activity. Currently legal acquisitions procedures and requirements depend on the industry in which the target operates, with a separate law governing, for example, financial institutions' M&A activity. Another example is the number of company formations. Currently there are four permissible company structures, but nearly all companies currently registered are of two main types: limited companies and companies limited by shares.

Other proposed changes include specific guidelines and requirements on corporate governance and the fiduciary duties of a company's board of directors. Conflicts of interest and other areas are only covered in general terms in the 2001 amendments.

For law firms' practice, complicated cross-border acquisition deals involving the PRC, Hong Kong and Taiwan are increasingly prevalent as regional clients try to maximize the efficiency of their operations in a broadly based regional strategy.

Jones Day has one of the most active M&A practices in Taiwan. The firm represented Yulon Motor Co. in its US$530 million restructuring and in the set up of a new joint venture that it will be undertaking with Nissan. Yulon Motor Co. will be divided into two separate companies. The original Yulon Motor Co. will continue as a multi-purpose auto manufacturer, while the joint venture (to be 60% owned by Yulon and 40% by Nissan) will focus on the development of Nissan-brand cars in Taiwan and the region. The deal was closed in October 2003.

Jones Day represented General Mills of the US in 2003 to acquire the balance 50% of the equity of Haagen-Dazs Taiwan Ltd, which had been held by Namchow Chemical, General Mills' local partner in the company. Haagen-Dazs Taiwan is now wholly owned by General Mills.

Jones Day also represented General Electric Co. in its purchase of substantially all of the assets of Kampro Technology Inc., a manufacturer of image sensing products. In another deal, Jones Day assisted Diebold from both Taipei and Paris in the purchase of ATM-related businesses from its Taiwan distributor.

In July 2003, FarEasTone Telecommunications made public that it would spend about NT$30 billion to take over KG Telecommunications. The merger created the second largest mobile phone services company in Taiwan, after Taiwan Cellular Corporation. LCS & Partners advised KG Telecom on the deal. The acquisition of KG Telecom boosted FarEasTone's subscriber base to about 7.7 million users, which ranks it ahead of state-run operator Chunghwa Telecom's mobile business but behind mobile services leader Taiwan Cellular.

Shay & Partners has been active advising on investment issues, including Taiwanese investments in China and PRC-backed investments in Taiwan. The firm has recently advised a Taiwan client on its entry strategy for the PRC value-added telecommunications market, and it has also advised on the establishment of a regional telecommunications network encompassing Hong Kong, Taiwan and the PRC. Also within telecommunications, Shay & Partners has assisted an international satellite television client to obtain broadcasting and telecommunications licences in Taiwan.

By and large, there hasn't been much large-scale telecommunications investment, and the industry in Asia Pacific hasn't really recovered yet from the slump of the past several years. Shay & Partners reports, however, that there has been more interest in understanding the intellectual property and transactional aspects of setting up electronic commerce businesses.

Shay & Partners in 2003 assisted Prince Sports, Inc. on the establishment of its Asia-Pacific regional headquarters in Taipei. Prince formerly had its regional headquarters in Hong Kong.

Joseph Tan Jude Benny assisted a Singaporean military systems company in a US$60 million investment in Taiwan for facility installation.

Joseph Tan Jude Benny also assisted a major UK-based commodities trader in set up of a joint venture to work in Taiwan in association with a Taiwanese listed company.

Disputes

Practitioners in Taiwan report that complex corporate litigation cases have grown considerably in the past year. The travails of Pacific Electric Wire & Cable Co. and the Yuanta Core Pacific Securities case are examples. Another growth area is PRC-involved disputes that have highlighted the keen competition in the high-technology area. The chief example here is the Taiwan Semiconductor Manufacturing Co. dispute with Semiconductor Manufacturing Industry Corp. (SMIC) over patent infringement, trade secret theft and unfair competition.

Baker & McKenzie defended Central Insurance Co. and Fubon Fire & Marine Insurance Co. in a lawsuit brought by American International Underwriters (AIU) against the two firms in an insurance case. The case had been pending for four years in Taiwan courts, and judgment was finally rendered by the Taipei District Court on February 20 2004. AIU's NT$4.2 billion claim was dismissed after two weeks of oral debates on technical issues.

Shay & Partners has assisted in international arbitrations that involve Taiwan businesses or interests of their clients. In one case before the London Court of International Arbitration, the firm assisted a foreign client that had been involved in failed negotiations regarding the launch of a satellite broadcasting business in Taiwan.

Joseph Tan Jude Benny represented a major international bunker supplier and ship owner in a US$5 million claim against Kien Hung, a Taiwanese ship owner that has been embroiled in numerous disputes with foreign parties in recent years. The case resulted in the seizure of a Kien Hung vessel in Kaohsiung and sale of the vessel.

Tu, Amida Trust, Chen, Shyuu & Pun has been assisting its client Core Pacific Yamaichi Securities in its ongoing shareholding and ownership dispute with Yuanta Core Pacific Securities. The long running dispute has involved the services of six other Taiwan law firms and four Hong Kong law firms.

Intellectual Property

Taiwanese laws covering trademarks, patents and copyrights have all been revised over the past year. Taiwan has enacted major revisions to the Copyright Act with effect from July 11 2003. Among the most significant changes are tougher penalties for copyright infringement, including raising the civil damages in non-aggravated infringement cases to NT$5 million from NT$1 million. Criminal penalties for "pernicious grave professional infringement" have been raised to NT$8 million from NT$450,000. Public prosecution will now be undertaken in cases of the manufacture or sale of pirated optical media. Using pirated versions of copyrighted software in the workplace can now result in civil or criminal prosecutions. The law has also introduced rights of transmission and rights of distribution. The former requires consent from a copyright holder for any public dissemination of their work via the internet. The distribution rights clause empowers copyright holders to prohibit unauthorized distribution of their work. Also, any unauthorized deletion or alteration of electronic information that is under copyright is prohibited, unless undertaken by the rights holders themselves.

The island's Trademark Act has also been revised. Beginning November 28 2003, substantial changes have been in force for protection of trademarks. Among the major developments, the revisions now allow sound marks, three-dimensional marks and single colours to be registered as trademarks. A type of protection against dilution has been introduced, with provisions that any mark that is similar to an existing well-known mark and likely to damage the reputation of the well-known mark cannot be registered. Similarly, geographic indicators relating to wines and spirits cannot be registered if they are similar to existing indications for such types of alcohol. The definition of use of a trademark has been expanded to include use in many different media forms (including sounds, two-dimensional images and electronic media) that would lead consumers to regard these forms as constituting the trademark. Also, oppositions to a trademark registration can be filed within three months of a registration being published in the Trademark Gazette.

Per amendments to the trademark and copyright acts, the Customs department has a mandate to search and seize any shipments exiting or entering Taiwan that it suspects of intellectual property violation. In the past, the Customs department hasn't been as aggressive and pro-active as practitioners and brand owners would perhaps like. Although to date only very famous brands have been targeted by Customs, the recent changes to the laws are a step in the right direction.

Legislative changes have also been made in the area of patents. Among the changes are the deletion of criminal liability for infringement of a new utility model patent or a new design patent, and criminal liability for false or misleading patent markings. These changes have been in force since March 31 2003. Another change covers qualifications for individuals to act as patent agents or attorneys; this clause took effect February 6 2003.

The decriminalization of the abovementioned infringing activities brings Taiwan's patent law into line with Article 61 of the Trade-related Aspects of Intellectual Property Rights Agreement, and also makes the Taiwanese law more internally coherent, as infringement of a new invention patent is not open to criminal liability under Taiwanese law.

The change on qualifications for patent agents appears to be a temporary administrative measure while the legislature finishes work on a more comprehensive law governing patent attorneys and agents. The new law will for the first time make it a requirement for new patent agents to pass a patent-specific bar examination.

Other major changes to the Patent Act (which are likely to take effect in mid 2004) cover areas including: electronic filing of patent applications; changes to the requirements for obtaining an invention patent, a new utility model patent, and a new design patent; and extending to WTO member states more explicitly the patent reciprocity basis for claims on invention, new utility model and new design patent applications.

Lee and Li's intellectual property division is larger than most other Taiwanese law firms. A significant component of Lee and Li's intellectual property anti-infringement practice coordinates work across jurisdictions in tackling the increasingly sophisticated network of IP infringers. Rampant IP fraud has been a negative aspect of the booming cross-straits trade that Taiwan and the mainland are experiencing. Brand owners with significant regional operations inevitably have to come to terms with sophisticated regional counterfeit manufacturing operations and distribution networks. Lee and Li has represented Philips, Intel and other international firms on patent infringement cases around the region. Other law firms active in IP enforcement issues report a similar regional focus for clients' IP protection strategies.

In 2003, Shay & Partners continued its role advising and coordinating the Greater China anti-counterfeiting strategies for a leading international manufacturer of video game consoles.

Projects

Chinese Petroleum Corporation (CPC) awarded Baker & McKenzie a contract for the provision of legal services in regard to the Tatan Power Plant LNG project in February 2004. CPC is the contractor for the NT$400 billion project, which was awarded by Taiwan Power. Taiwan Power is the procuring agent for the project, and the awardee will supply LNG to the power plant for 25 years, beginning January 1 2008.

Taiwan Commercial has been assisting Taiwan Power on the 4,000 MW combined cycle power plant. The project has often been in the news in recent years for a range of issues that have been brought to the public's attention by the media, including allegations of corruption in the procurement of machinery for the plant and for fitful rounds of LNG-supply bidding over the past few years.

The Kaohsiung "smart city" project is the vanguard of the government's ambitious plans for advanced physical and communications infrastructure to be introduced in all major cities. Baker & McKenzie is representing Kaohsiung Intelligent City System Co., the overseer of this project, on the bid process and in drafting the investment agreement for an NT$1.6 billion BOT project to develop Kaohsiung's urban transportation network.

Development of a new container terminal in Taipei is being done by the Taipei Port Consortium, which is comprised of the three largest shipping operators in Taiwan. Baker & McKenzie is advising the consortium on the draft consortium agreement, the shareholders agreement and the bid process, and is negotiating with the government for the concession agreement for the NT$25 billion project.

Public Sector

Several Taiwan law firms regularly offer advice to the government on pending legislation, industry oversight issues and general regulatory developments that affect economic growth.

Shay & Partners was retained by the government's Council for Economic Planning and Development to prepare a report on strategies to tackle the e-mail spam problem in Taiwan. In January 2004, the CEPD submitted the report to the Executive Yuan for its review. Now comes the tough part of drafting a law that will effectively combat spam. The Directorate General of Telecommunications has announced it is formulating an outline of the law.