TAIPEI – Taiwan as a major manufacturer of, and go-between for highly sophisticated industrial components has for decades been suspected by the United States and its allies of handling strategic export controls rather laxly.
In recent years, various Taiwanese small and medium-sized enterprises have been alleged to have supplied dual-use goods to weapons of mass destruction (WMD) programs banned by the United Nations. What was declared as car parts turned out to be turbo propeller components for Libyan Scud missiles, and
ostensibly harmless hermetic connectors and glass to metal seals were on their way to equip Iranian nuclear reactors.
Western fears are therefore by no means far-fetched; Taiwan, for the sake of economic growth, is willing to turn a blind eye to the activities of its private enterprises even when these could critically undermine the technological edge the US and its allies have on the battlefield.
Landstar Tech is a Taiwanese company listed by Iran Watch, an NGO seeking to track the Iranian weapons of mass destruction program, as a supplier of dual-use goods to Iran. Last August, Chen Yi-Lan of Landstar was sentenced in the US to three-and-a-half years in prison after being found guilty of conspiring to illegally export 120 US-made circular hermetic connectors and 8,500 glass to metal seals to Iran. Chen planned to transport what could function as missile components via Taiwan on to his customers in Iran. However, Chen was caught when dealing with an undercover US agent.
In 2009, the Taiwanese producer of and agent for vacuum components Heli-Ocean Technology Co sold 108 Swiss-made nuclear-related transducers to Iran via China. The Chinese company Roc-Master reportedly initially ordered the pressure transducers for delivery to its Shanghai base from the Taiwanese agent Heli-Ocean, but then revised the purchase order, changing the delivery destination to Tehran and increasing the payment to Heli-Ocean.
The extent of US concern and the indifference of Taiwanese officials to such sales and allegations of sales is made apparent by a diplomatic cable disclosed by WikiLeaks. According to the cable, in mid-2009, the the American Institute in Taiwan (AIT) – the de facto US embassy on the island – consulted with then-vice minister of economic affairs Lin Sheng-chung. The American side pressured the Taiwanese to at long last prioritize the importance of export controls, and bluntly confronted Lin by warning that “Taiwan lags far behind places likes Hong Kong, Singapore and South Korea in the way export control is managed.”
At another meeting shortly after, Chang Chih-yu, then-director of the Executive Yuan’s Office of Homeland Security, made it unambiguously clear that Taipei’s officials generally place little to no importance on strategic export controls. According to the cable, Chang flat out stated that export control is not Taiwan’s top priority and that few high-level officials truly understand what export controls are and how the management of them affects Taiwan’s international standing.
Asia Times Online approached members of international think tanks dedicated to the nonproliferation of WMD for comment. Perhaps the most intriguing question is why Taiwan seems to be a likely choice for those on the lookout for dual-use goods to supply a nation like Iran, whose president openly calls for another – Israel – to be “wiped off the map”.
Oliver Brauner of the China and Global Security Programme at the Stockholm International Peace Research Institute believes that part of the reason is Taiwan’s diplomatic isolation.
“As a high-tech exporting economy that is not recognized by the vast majority of UN member states, Taiwan faces the unique challenge of implementing international export control agreements without being an official member [of the body concerned,” Brauner said.
Because Beijing is not helpful in this regard, Brauner doesn’t expect the situation to change soon. “It seems implausible that Beijing will let ‘Chinese Taipei’ participate in the activities of non-proliferation groupings such as the Wassenaar Arrangement or the Nuclear Suppliers Group (NSG) while China itself is not a member of most of these groupings,” he said.
Stephanie Lieggi, an expert on both Asia and export controls at the Monterey Institute’s Center for Nonproliferation Studies, the largest US NGO working in the field, said that in the cases of Hong Kong and Singapore, “strategic trade controls and supply chain security issues are important from an economic perspective. Since these two locations rely heavily on their place in the global supply chain, they need to be seen by major exporting countries like the US or Japan as ‘safe’ ports.”
According to Lieggi, South Korea likewise has economic concerns that drive some of its export control decisions, but it is in addition more invested in the international nonproliferation system, being members of all the major export control regimes like the NSG, MTCR, Australia Group and Wassenaar Arrangement.
“Besides, the South Koreans also have real security concerns with regard to allowing their technology to get into North Korea,” she said.
Lieggi agreed that Taiwan’s progress on export controls has been hindered by its inability to participate actively in multilateral export control regimes. She also argues that Taipei has all along been setting its priorities. “Taiwan is placing an emphasis on Beijing, which Taipei sees more as a direct threat than Pyongyang or Tehran,” so Lieggi.
A few days after WikiLeaks published the cable, the Taiwanese on January 29 reshuffled a government panel that monitors Taiwan’s strategic high-tech exports. According to Vice Minister of Economic Affairs Francis Liang, the 10-member panel which he chairs will hold weekly cross-agency meetings to address individual cases.
So is this an indicator that the situation that has considerably worried the US in mid-2009 has since been undergoing significant changes? Although she sees some positive signs, Lieggi isn’t sure.
She said that US government has been undertaking much more training with the Taiwanese in the past few years, and she has been told by relevant officials that the Taiwanese government has begun to be more concerned over the matter.
Even so, “I don’t have a clear sense of whether Taipei is really taking this seriously, or if they are just trying to smooth over US concerns about the issue without making meaningful changes,” Lieggi said.