Taipei: Financial technology provider AnyTech (????) will be fined NT$2.17 million (US$65,770) for violating rules governing Chinese investment in Taiwan, according to the Ministry of Economic Affairs (MOEA) on Tuesday. The Taiwanese subsidiary of the company was found by an MOEA investigation to be partly funded by the Chinese state, despite the company being based in Singapore.
According to Focus Taiwan, Economics Minister Kuo Jyh-huei (???) explained to lawmakers at the Legislative Yuan that part of AnyTech's financial backing came from Beijing-based Rivere Tech (?????), which is 25 percent owned by China SME Development Fund Co. This fund is a national-level equity fund in which the Ministry of Finance of the People's Republic of China holds significant shares.
Under Article 73 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, Chinese companies are prohibited from engaging in any investment activity in Taiwan unless given explicit permission by the relevant authorities. Kuo highlighted Article 93 of the same act, which allows Taiwanese authorities to impose an administrative fine of up to NT$25 million on entities contravening this rule.
Concerns about AnyTech's Chinese financial backing were amplified due to its collaboration with Cathay United Bank, one of Taiwan's largest commercial banks. AnyTech set up a subsidiary in Taiwan, leveraging its Singaporean credentials, and embarked on a project to upgrade the bank's core credit card system.
Peng Jin-lung (???), chairman of the Financial Supervisory Commission (FSC), informed lawmakers that Cathay United Bank confirmed to the FSC that the bank's new credit card system had not yet been launched. The bank also assured the FSC that a security review found "no backdoor vulnerabilities."
On Tuesday, Cathay United Bank announced that it had informed AnyTech on February 24 of its decision to terminate the contract prematurely. An internal cybersecurity review completed on March 14 revealed "no suspicious backdoors, malicious network connections, encryption, or obfuscation, and no risk of information leakage."
Taiwan's cybersecurity concerns, particularly in relation to China, are escalating as the Chinese Communist Party has frequently expressed its intention to annex the island. President Lai Ching-te (???) emphasized last Thursday, following a national security meeting, that Taiwan "must adopt proactive, effective measures to prevent China from engaging in cognitive warfare against Taiwan or endangering cybersecurity."