The expanded export controls, reported by Bloomberg, will subject violators to criminal charges under Taiwan's Foreign Trade Act, carrying a penalty of up to five years in prison and/or a fine of approximately $92,500. The measures follow a trade agreement signed earlier this year between Taiwan and the United States, under which the US cut tariffs on Taiwanese goods to 15% in exchange for direct Taiwanese investments in the US tech industry.
"Going forward, some of our measures on controlled items will correspond to American ones because we have made quite some commitments in the Agreement on Reciprocal Trade," Taiwan's Minister of Economic Affairs, Kung Ming-hsin, said.
The new rules respond to ongoing efforts by US authorities to prevent the smuggling of advanced Nvidia chips into China. In a high-profile case, three Super Micro employees, including co-founder Yih-Shyan "Wally" Liaw, were accused of smuggling $2.5 billion worth of AI servers to China. Taiwanese authorities later raided Super Micro's Taipei offices in connection with the probe, leading to the indictment of nine individuals related to the illegal export of Nvidia B300 GPUs.
Previously, Taiwan did not treat the export of AI chips to China as a crime, forcing authorities to rely on other laws. Singapore took a similar approach last year when it arrested suspected Nvidia AI GPU smugglers, charging them with fraud and money laundering rather than export violations.
The expansion of the Foreign Trade Act is among the strictest measures Taiwan has imposed on exports to China. While the move is likely to please Washington as it pressures allies to tighten controls, it is expected to provoke Beijing, which has already vowed to retaliate against Taiwan for blacklisting certain goods.