China weaves its insidious web

How would the US and European countries react if the heads of the American and European business associations in this country were appointed by Taiwan's government? Incredulity, unhappiness, objection and utter condemnation would be the expected reactions. This is exactly Taiwan's response to the fact that many senior executives at Taiwanese business associations in China are appointed by the Taiwan Affairs Office of China's State Council.

According to intelligence obtained by the government, there are 74 Taiwanese business associations in China. Each has at least one official from the Taiwan Affairs Office doubling as a vice chairperson. The secretaries-general of more than 90 percent of the associations also hail from the same office -- an indication that the organizations are under close surveillance by the Beijing authorities. They are Beijing's tools for controlling Taiwanese businesses.

The associations should have been a channel through which Taiwanese businesses cooperate with and take care of each other. They should reflect the interests and needs of those businesses. When a conflict arises between a Taiwanese business and the local government, the association should defend the business interests by appropriate means.

This is exactly the same rationale behind the annual white papers published by the American and European chambers of commerce in Taipei to criticize some of Taiwan's policies. Both the ruling and opposition parties accept such criticism with a tolerant attitude.

Taiwanese business associations in China not only could never publish such white papers, they are losing what little independence they had. Not only are they unable to reflect the opinions of their members, but they are becoming institutions for controlling what the Taiwanese companies say and do in China. This is about the same as planting the People's Liberation Army's political warfare units inside the associations. This is a unique situation not seen in other foreign business groups in China, or anywhere else.

Interference by Chinese officials is not something Taiwanese businesses want to see. But what can they do except kowtow? Even if many Taiwanese businesses want to express goodwill toward this country's government, they will refrain from doing so after considering China's possible response.

By controlling the business associations, Beijing can influence the opinions of the groups' members and push them to vote for its favorite candidates in next year's presidential election. Recently, the Liberty Times, our sister paper, reported that Taiwanese businesspeople attending an official function in China were handed invitations to a banquet hosted by Chinese Nationalist Party (KMT) Chairman Lien Chan and People First Party Chairman James Soong back in Taiwan.

In the long run, Beijing may use the associations to pressure Taiwan to accept direct links under the "one China" principle. The next step will be to squeeze all capital and technology out of Taiwan, thereby weakening the economy and leaving the country powerless to resist unification with China.

Unhappy as it is to see its businesspeople invest in a hostile neighboring country, Taiwan at best can only use the "no haste, be patient" policy and try to warn the businesses about the risks of investing in China. Beijing has crossed the line separating politics from business and is controlling Taiwanese business associations. The political and economic threat posed to Taiwan should not be underestimated. The government needs to lodge a strong complaint via the WTO. If China refuses to take its hands off the associations, the government should consider halting the planned indirect cargo flights as well as measures allowing China-based Taiwanese businesses to get listed in this country.

Cowardice rules China

Cowardice is the greatest indication of failure in government. It is evidenced by fear of freedom, fear of information, fear of dissent and fear of knowledge. It is evidenced by a pattern of ritual prevarication, bluster, extreme (and often forced) chauvinism, an internally omnipotent (and often ruthless) military or police and hidden or secret oppression.

These governments and tyrants are easy to recognize. Adolf Hitler was a coward. So were Benito Mussolini, Idi Amin, Saddam Hussein and Pol Pot.

No governments in history have been more cowardly than communist governments.

From the Josef Stalin, Fidel Castro and Kim Il-sung regimes to the regimes of Mao Zedong, Deng Xiaoping, Jiang Zemin and Hu Jintao, communists have struggled almost from the outset to forcibly extract loyalty from their subjects through coercion (a sure sign of cowardice and failure) and to restrict the free flow of ideas and information, and even travel (strange how almost no one ever defects to a communist country).

In China, public discussion and debate is strictly limited to subjects chosen by the government, to extents strictly limited by the government.

In order to see what the government is afraid of most, one need only see what the government bans the most. In China, free speech is banned. Talk of democracy is banned. Democracy itself is banned. Free knowledge of the outside world is largely banned. A free press is banned. Anything relating to Taiwan's independence is banned.

Even the picture of the Dalai Lama is banned -- and acknowledging the existence of the chosen Panchen Lama is banned too. Acknowledgement of the gradual ethnic cleansing of Tibet through "sinification" is banned. How frail this ideology must be to have so much to fear.

The sign of a truly courageous and powerful government is one which opens itself up to democracy, scrutiny, dissent, debate and change, and survives. Talk of Beijing's frailty and cowardice is, of course, banned too. Naturally.

Lee Long-hwa

Pasadena, California

Lien lacks substance

In recent speech, Chinese Nationalist Party (KMT) Chair-man Lien Chan said Taiwan must "Use China's dynamism to power Taiwan's transition." Despite his doctorate in political science (or perhaps because of it), Lien has never really paid much attention to reality.

I can never figure out why Lien has this fixation on China. Sure, China is a big market, but as any good businessperson, or rather, as any good investor knows, you never bet your entire fortune on one stock. Despite Lien's doctorate, I don't think he's ever heard of the concept of diversification. What Lien has failed to realize is that by depending too much on China, Taiwan will become a part of China to the extent that the national security issue that Lien is supposedly keenly aware of will become threatened.

Lien has stressed that Tai-wan can become a high-tech and services center, while using China as a manufacturing hub. My question for Lien is simple -- what makes him think that China will stand idly by as Taiwan takes the high-margin services business while it is relegated to the low-margin manufacturing business? Does he have an agreement with Beijing? Is there a deal that we don't know about?

It seems like most of Lien's speeches, they sound good in a speech but lack substance when examined with an ounce of practicality.

Lien stressed that Taiwan-ese businessmen in China have contributed greatly to cross-straits relations. Let's not kid ourselves here. Businesspeople are in the business of making money -- to attribute any altruistic motives to them is pure fantasy. If anything, Taiwanese businesspeople in China have hampered cross-strait relations by imposing a special interest view into legislative affairs. Again, Lien didn't pay much attention to his doctoral classes.

Lien is a man who holds all the credentials, but his remarks are generally tainted by a lack of vision and practicality. As the elections draw near, is this the type of person we want running a nation at its crossroads? Whether the Chen administration has been effective is another issue ... but a Lien administration is clearly not the answer.

Ryan Shih

Hong Kong

A voice for Taiwan in the wilderness

Hermann Otto Solms joined the German parliament in 1980 and has served as its deputy speaker since 1998. Solms is a consultant of Taiwan's top non-governmental lobby group in Germany, as well as deputy chairman of the parliament's sub-group, the Berlin-Taipei Parliament Friendship Group. In an exclusive interview with `Liberty Times' correspondent Lin Yu-li, Solms says Taiwan is a sovereign state and that there is no reason for European countries to shun normal relations with Taiwan

Liberty Times: You led a delegation to visit Taiwan two years ago. What's your impression of the country?

Hermann Otto Solms: That visit deeply touched me. The cornerstone of Western democratic systems -- the principle of rule of law, separation of administration and legislation, and direct elections -- has become the consensus among the Taiwanese people, attesting to a successful transfer from totalitarian rule to democracy. This visit proved that my original impression of Taiwan was correct.

LT: When first lady Wu Shu-chen visited Berlin in July, hundreds of people went to meet her. You also had a long conversation with Wu. What impact did her visit have on Germany?

Solms: First of all, this was a very successful visit. Her charisma, in particular, made a strong impression here. The National Palace Museum's exhibition and other cultural performances and activities featuring Taiwan not only projected a positive and active image for Taiwan, but also called Germans' attention to the problem of Taiwan's international status.

Germans further came to realize the fundamental difference between independent Taiwan, and Hong Kong and Macau, which are under "one country, two systems." This should be a very special experience for the German press and the public.

LT: Your party's parliamentary caucus put forth a proposal in May last year demanding that the government and EU member countries adopt more active and pragmatic attitudes to promote relations with Taiwan. Would you elaborate on this proposal?

Solms: This proposal was mainly advocated by me, with the aim of requiring that the government and EU member countries normalize their relations with Taiwan. For Western countries, Taiwan is already a democracy. There is absolutely no reason for maintaining abnormal relations with Taiwan.

Perhaps this proposal will still face opposition from China. But we must make it clear and with confidence -- Taiwan is already a democratic, independent sovereign state and Europe must deal with Taiwan in an open and aboveboard manner.

Furthermore, any decision to change the status of the relationship between Taiwan and China must be based on a democratic and autonomous foundation. We will review the wording used in the proposal and wait for the right time to bring it to this session.

LT: Whenever Taiwan affairs come up, the German government brings up "one China." Has any decision on the EU's `one China' policy ever been put in writing following a meeting between EU member countries?

Solms: I have never seen any written agreement on the EU's "one China" policy, but I cannot rule out the existence of such an agreement. Although "one China" always has been the point of departure for Germany's and the other EU members' China policies, we still believe that Germany and other EU member countries should coordinate their foreign affairs dealings with Taiwan and develop a normal and substantive relationship with Taiwan. This will not in fact harm our relationship with China. This is the main spirit of our proposal.

LT: The German parliament's Taiwan caucus will visit Taiwan again next month. What are your thoughts on this kind of exchange between German and Taiwanese parliamentarians?

Solms: Many important contact channels are established through this kind of exchange. Old friends also get a chance to chat about past matters. More important, I hope that parliamentarians who have visited Taiwan also will have a chance to visit China. Apart from reporting on Taiwan's actual development, they will also be able to try to convince China that war is not the solution, but that peace and dialogue is the way to go.

A unified cross-strait policy for candidates

By Chen Sung-shan

Both the ruling and opposition parties tried to sell their cross-strait policies to China-based Taiwanese businesspeople during their stay in Taiwan over the Mid-Autumn Festival. Politicians attempted to attract these businesspeople's votes in next year's presidential election by promising to start cross-strait talks on direct links.

Chinese Nationalist Party (KMT) Chairman Lien Chan promised to kick off negotiations immediately if he and People First Party (PFP) Chairman James Soong win the election. Mainland Affairs Council Chairwoman Tsai Ing-wen unveiled the Cabinet's plan to assess the possibility of turning Kinmen into either an export processing zone or an offshore transshipment zone.

Chinese Foreign Minister Tang Jiaxian stressed that Beijing always has been positive toward direct links but he would not like to see Taiwan-ese politicians manipulate the issue for electoral gain.

In fact, Taiwanese business-people in China's only interests are purely financial. They do not have a strong interest in politics; they just want to make money. But they often find themselves bombarded with news about favorable cross-strait policies during election campaigns. Again and again, they feel nothing but deceived after elections, because no matter which party wins the election, promises to open up direct links fail to come true.

These China-based business-people of course know that the years of political deadlock across the Taiwan Strait are not all the fault of the Taiwanese authorities. Beijing's ideological insistence on a unified China with Taiwan in it also has to share the blame. However, what really bewilders them is the question of why Taiwan's political parties are unable to work out a common plan to deal with China since their cross-strait policies are not that different from one another?

None of the presidential candidates are really thinking of the best interests of China-based Taiwanese businessmen or trying to build a political consensus before negotiating with Beijing. They merely exploit the issue to attack their rivals and win votes.

The rights of these business-people have been trampled time and again in the struggle between politicians. They can't help but wonder if they really can trust their mother country to be their political base, or if it is time for them to consider China their ultimate destination. A mixed feeling of love and hatred thus starts to grow and as a result, they become indifferent to the next presidential election.

Regardless of Beijing's future response to Taiwan's cross-strait policies, the presidential candidates should consider how to bring back these businesspeople. Favorable cross-strait policies announced during the presidential election are not enough. They should utilize available political and financial forces and mechanisms to help make China-based Taiwanese businesses more competitive. Then the businesspeople would no longer feel that they are political victims who are forsaken after elections.

President Chen Shui-bian, Lien and Soong should discard electoral concerns and appropriately deal with cross-strait policies and the issue of investing in China. Continued denunciation or distortion of their rivals' cross-strait policies do not help. A cross-party conference should be held before the end of this year to work out a solution to the cross-strait standoff, which would then be used as a common policy during the election campaign. Then no matter who takes the office, Beijing will be able to negotiate direct links with the government.

I believe this is what a responsible political leader should do. It is essential to peaceful coexistence and common prosperity across the Taiwan Strait.

Chen Sung-shan is a member of the Civil Service Protection and Training Commission.

Cracking down on money laundering

By Lawrence Lee

Illicit funds allow criminals to finance a range of additional criminal activities. According to one recent estimate, worldwide money laundering activity amounts to roughly US$1 trillion a year. The huge quantities of money laundering linked with organ-ized crime threaten not only the stability of financial institutions but also the democratic system and the rule of law.

The process of money laundering often includes the following illegal practices: securities forgery, human smuggling, the manufacture and trafficking of firearms, ammunition or drugs, the artificial manipulation of share prices, insider trading and underground banking.

In order to block money laundering furnishing the fuel for expanding criminal activities and launderers' use of financial institutions to erode the sectors, Taiwan has emerged as one of the world's most aggressive countries in the fight against international and domestic money laundering. After the Sept. 11, 2001 attacks on the US, made possible by terrorist financing, the establishment of legal and regulatory standards and policies to deny terrorists access to the world financial system has become an essential function of anti-money laundering efforts.

Money laundering abets corruption, aggravates social ills, distorts economic decision-making and threatens the integrity of financial institutions. The government fully appreciates that the prevention of money laundering is a weapon not only against criminals, but also to terrorists.

Money laundering is defined as the conversion of funds that proceed from illegal activities, such as drug trafficking, prostitution, kidnapping, gambling and skimming, into legal instruments in financial institutions that involve legal instruments (such as bank deposits, stocks, bonds, real estate, etc). The nature of money laundering is a synthesis of criminal activities that completes the illegal offense and produces substantial illicit profits. Money laundering plays a fundamental role in facilitating the ambitions of various illegal activities and is potentially devastating to social and economic ideals.

To address this problem, the legislature enacted The Money Laundering Control Act (MLCA) on Oct. 3, 1996, which was signed by the president on Oct. 23. In accordance with Article 15 of the act, which required a six-month preparation period, the authorities began enforcement of the act on April 23, 1997. The preparation period allowed the government to create the Money Laundering Prevention Center (MLPC) to prepare financial institutions for the implementation of the act and to educate the public.

The act substantially complies with international anti-money-laundering guidelines, such as those put forth by the 1988 UN Convention Against Illicit Traffic in Narcotic Drug and Psychotropic Substances, the Financial Action Task Force on Money Laundering formed by the G7 and the Basle Committee on Banking Supervisory (Basle Committee).

The act attempts to prevent money-laundering by making it a crime punishable by a minimum of five years in prison, fines, reimbursement of laundered proceeds, or forfeiture and seizure of the launderers' assets. The government expects that harsh criminal punishments are likely to block those who plan money-laundering activities in advance.

By 2001, the MLPC had investigated 791 cases of suspicious financial transactions and charges were filed in 13 instances at the Taipei District Court while 172 cases were referred to appropriate authorities for further investigation. The center's efforts traverse the continual perversion of money laundering in the country.

The government's push against money laundering has gone international in a major way. For the past six years, in addition to combating domestic money launder-ing, the government has worked to facilitate progress in international cooperation to combat global money-laundering schemes. Taiwan became a member of the Egmont Group in June 1998 and an initial member of the Asia/Pacific Group on Money Laundering in February 1997. Through international cooperation, Taiwan is therefore striving to optimize the struggle against these cross-border offenses.

In reply to terrorist financing, major countries, regional trade organizations and international organizations have moved to ensure that the international community incorporates anti-terrorism into its anti-money laundering regimes. In addition to the US, the UN, the EU finance and economics ministers, and the G-7 finance ministers have all advocated extending the framework of measures already taken by the international community to com-bat money-laundering to oppose terror.

Last October, the Ministry of Justice drafted anti-terrorist legislation that would simplify the process of freezing financial accounts and enhancing the use of compulsory measures such as prosecutors' powers to search, detain and summon suspects and witnesses. On Jan. 13, the legislature passed the amendment to the money-laundering law, which was signed by the president on Feb. 6.

The revised money-laundering law, which took effect on Aug. 6, expands the scope of financial institutions to include pawnshops, travel agents, car dealers and real estate brokers.

Since freezing identifiable assets is a first step in fighting the financial war, the revised law allows authorities to freeze assets related to money-laundering and terrorism. The revised law also toughens reporting requirements and penalties and authorizes the government to freeze suspicious bank accounts.

The revised law treats financial institutions as semi-agencies by requiring them to "know your customer." In light of the six-year implementation experience of the MCLA, the government has amended the act to extend the applicable crimes subject to the act and to adopt the American "suspicious report" model while still applying the British "keeping record" model.

In response to terrorist financing, Taiwan must provide across-the-board cooperation with international organizations and other countries to stop money laundering from damaging the nation's financial and social fabric.

Lawrence Lee is an assistant professor of law at Ming Chuan University and department visiting scholar at the New York University of Law.