Directions for Foreign Currency Funds Reaccommodations by the Central Bank of the Republic of China

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Title：

Directions for Foreign Currency Funds Reaccommodations by the Central Bank of the Republic of China

Inactive Regulations

Announced Date： February 18, 1992

Amended Date： June 27, 1997

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1.

1. Scope of Use:

Enterprises established under Republic of China law, operating within the territory of the Republic of China, and engaged in the following investments or mergers/acquisitions that have a close connection to domestic economic development need authorized banks to accommodate them with foreign currency funds:

i.Foreign investment or merger/acquisition cases：

(i) Those involving development of natural resources.

(ii) Those involving acquisition of high technology, industrial technology, and management knowledge of assistance in upgrading domestic industry.

(iii) Those facilitating deployment of international production and sales networks.

(iv) Those facilitating upstream, midstream, and downstream vertical integration of industry or expansion of horizontal linkage.

(v) Those involving acquisition of technology related to environmental protection, ecological balance and public hazards prevention, etc.

(vi) Others facilitating domestic economic and financial development.

ii.Domestic investment:

(i) Public construction investment.

(ii) Investment in the ten major emerging industries and eight major key technologies.

(iii) Major investment projects that have received government approval.

Enterprises organized under foreign law, operating in foreign countries, engaged in directly assisting investment projects for domestic acquisition of natural resources or agricultural or industrial materials, and that have domestic authorized banks handling their international syndicated loans.

2.

2. Total Amount of Funds： Temporarily fixed at US$10 billion.

3.

3. Authorized Banks： Banks and other financial institutions authorized by the Central Bank of the Republic of China(Taiwan).

4.

4. Accommodation Method:

(1)Taking individual investment project as the base (project-base), authorized banks are responsible for estimating the feasibility of the individual investment project and bear the credit risk on their own.

(2)After a authorized bank has made a foreign currency credit extension, if necessary, the Bank may apply to the Central Bank of the Republic of China (Taiwan) for foreign currency funds reaccommodation.

(3)Foreign currency funds that the Central Bank of the Republic of China (Taiwan) has agreed to reaccommodatemay be appropriated in periodic installments as necessary. The funds can not be converted into New Taiwan Dollar for use.

5.

5. Reaccommodation Limits:

Individual investment project reaccommodation limits should be set with consideration to the level of risk of the individual investment project, the level of connection of the domestic economy, and the amount of the investment, provided that the reaccommodation limits should not exceed 80% of the authorized bank's foreign currency credit extension amount for investment project..

The maximum reaccommodation limits for each authorized bank and actual reaccommodation amount may be set based on reference to the authorized bank's operational condition, operational risk, and its rating assessments by domestic or foreign credit rating institutions.

6.

6. Accommodation Conditions:

Currency: Temporarily fixed at U.S. Dollars..

Interest Rate: Interest calculated quarterly or semiannually based on the same term U.S. Dollars offered rate of then-current domestic or foreign interbank foreign currency offered rate market.

Time Limit: Not more than five years. However, if there are special requirements , the period may be extended by an appropriate amount of time.

Borrowers that are domestic private enterprises shall have their base of operations within the territory of the Republic of China.

7.

7. Follow-up and Evaluation: Authorized banks shall be responsible for investigating borrowing enterprises' fund flow and developments to prevent borrowing enterprises form improperly using accommodated funds.