行政院金融重建基金設置及管理條例

For the sake of disposing of distressed financial institutions to maintain an orderly credit system, improve the constitution of the financial industry, create a sound financial environment, and establish an administration and operation mechanism, this Act is enacted for the establishment of Executive Yuan Financial Restructuring Fund (referred to as the "Fund" hereunder).

The competent authority under the Act shall be the Financial Supervisory Commission.

1The funding sources of the Fund include the following:

2(1) Business tax revenues collected from businesses as provided in paragraph 1 of Article 11 of the Value-added and Non-value-added Business Tax Act during a period of nine years from January 2002 to the end of December 2010.

3(2) Increased deposit insurance premium income covering a ten-year period from January 2002 onwards that is derived from an increase in the deposit insurance assessment rate, which took effect on January 1, 2000.

4(3) Proceeds from the disposal of non-performing loans under the Fund.

5(4) Other income of the Fund.

6(5) Any amounts that are allocated following the government budget procedures.

7In the event the revenues from the tax and insurance premium income described in subparagraphs (1) and (2) of the preceding paragraph are not fully realized to cover the pay-offs stipulated in paragraph 3 of Article 4 and paragraph 1 of Article 10 herein, the Fund may entrust the Central Deposit Insurance Cooperation (referred to as the "CDIC" hereunder) to acquire special financing from financial institutions; or else issue bank debentures in the name of CDIC pursuant to Paragraph 1, Article 72 of the Banking Act using funds generated from sources provided in subparagraphs (1) to (3) of the preceding paragraph as collateral. CDIC shall repay the principals, interests, and related expenses of the aforementioned financing and debentures with funds generated from sources specified in the preceding paragraph.

1The term "distressed financial institutions" depicted in the Act herein shall mean a financial institution having one of the following situations:

2(1) The adjusted net worth is negative after an examination by the competent authority or the central competent authority for agriculture finance or an audit by an accountant.

3(2) Unable to repay its debts.

4(3) Significant deterioration in businesses or financial status as stipulated in Paragraph 1, Article 62 of the Banking Act that the financial institution becomes unable to repay its debts when due or the depositors' interests might be damaged, or sustaining losses exceeding one-third of its capital and failing to improve within a prescribed time period as provided in Article 64 of the Banking Act, determined by the competent authority and the Management Committee of the Fund to be incapable of continuing operations.

5The Fund will give precedence to handling distressed community financial institutions while maintaining the principle of equal treatment, whether in form or in substance. The Fund shall set aside 20% of increased funds generated subsequent to the promulgation of the amended Act on June 22, 2005, for pay-offs of farmers' and fishermen's associations without being subjected to the operating period of the Fund. The aforesaid fund shall be deposited in a special account; regulations governing the utilization and administration of said account shall be set forth by the Executive Yuan.

6The benefits of members of the distressed credit cooperatives that have been placed under superintendence or conservatorship by the competent authority pursuant to the Credit Cooperatives Act and are included under the Fund prior to the promulgation of the amended Act on June 22, 2005, shall be safeguarded by blank guarantee in accordance with the principle of equal treatment in the preceding paragraph. Their claims shall be paid off in full by financial institutions that assume the assets of the aforesaid credit cooperatives. In the event that the assuming financial institution defaults on pay-off, the Fund will pay the claims of the members in full.

1The Fund has the capacity of a litigant and shall set up a Management Committee of the Financial Restructuring Fund (referred to as the "Management Committee" hereunder) and a Valuation Panel of the Financial Restructuring Fund (referred to as the Valuation Panel hereunder).

2The Management Committee is in charge of the following:

3(1) Reviewing the utilization of the Fund, and giving approval to items as provided in the preceding article, Article 10 and Article 12 herein.

4(2) Approving the Fund's receipts and expenditures custody plans.

5(3) Reviewing the Fund's financial reports and fund allocation.

6(4) Giving approval to other matters concerning the management, implementation, and public disclosure of the Fund.

7(5) Employing international credit rating agencies or professional appraisal institutions to assist the Valuation Panel in exercising its duties.

8The Fund may entrust CDIC with the execution of decisions made in the preceding paragraph and the drafting of related matters.

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1The Fund shall determine how to handle a distressed financial institution based on the following principles:

2(1) The distressed financial institution has closed businesses or has deposit runoff that may trigger systemic risk in the financial system.

3(2) The financial status of the distressed financial institution seriously deteriorates.

4(3) The distressed financial institutions will incur less disposal cost.

5The determination of distressed financial institutions and the priority of handling by the Fund shall first be established by the Valuation Panel and then approved by the Management Committee. In the event that the Management Committee disagrees with the decision of the Valuation Panel, it shall provide concrete reasons for disagreement in writing.

1The Management Committee consists of nine to thirteen members, including a convener who is undertaken by the chief of the competent authority and represents the Committee and a vice-convener who is undertaken by the deputy chief of the competent authority. The remaining Committee members by appointment shall be taken up by a deputy governor of the Central Bank of China, a vice chairman of the Council of Agriculture, a deputy director of the Directorate-General for Budget, Accounting, and Statistics, and the chairman of CDIC, who will be appointed in that capacity and excused from office on the same basis. In addition, the remaining Committee members by selection shall be undertaken by people with professional knowledge and experience in the fields of law, economics, finance, and other fields that are relevant to the business of the Management Committee. Management Committee members who belong to the same party shall not exceed half of the total number of Committee members.

2The Valuation Panel consists of seven to nine members, who are selected by the Management Committee on the basis of their professional knowledge and experience in international finance, banking management, or asset valuation. The convener of the Valuation Panel is elected by and among the members of the Valuation Panel, who also serves as a natural member of the Management Committee by selection. The Valuation Panel members shall excuse themselves from a meeting in case of conflicts of interest.

3Members who are selected pursuant to paragraph 1 hereof shall serve three years. Should a Committee member be substituted before the term expires, the term of the successor will expire on the original expiration date.

4Members of the Valuation Panel who are selected pursuant to paragraph 2 hereof shall serve the same term as members of the Management Committee.

The Management Committee will install an executive secretary, who shall be a Grade 12 officer or above appointed by the Committee convener. The competent authority and its subordinate departments shall dispatch several currently employed staff to assist in the Committee affairs and may employ one to five persons as required by the business.

1The Management Committee meeting shall be called and chaired by the Committee Convener. When the convener is unable to perform their duties, the vice-convener shall act on their behalf. When the vice-convener is unable to perform his/her duties, the convener shall designate a Committee member to act on his/her behalf.

2The Management Committee may notify the Valuation Panel to designate members to participate in the meeting called by the Committee. The resolutions made by the Committee in relation to Article 4, Article 10, and Article 12 shall be submitted in five days to the Legislative Yuan regarding reasons for the resolutions, basis of computing, decisions of the Valuation Panel, along with relevant assessment reports.

3When handling distressed financial institutions, the Fund shall submit to the Legislative Yuan a report on the financial status, problems, loss estimation, and principles of disposal. The Fund shall also inform the Legislative Yuan in writing before drawing on its budget.

1The Fund may entrust CDIC to handle a distressed financial institution in accordance with the following methods:

2(1) Paying off the debts of the financial institution and assuming its assets.

3(2) Paying off the debts that exceed the value of assets.

4The Fund is regarded as a financial institution and asset management company referred to in the Financial Institution Merger Act, to which Article 15, Article 17, and Article 18 of the Merger Act apply.

1The Fund shall make public the names of customers of a distressed financial institution with a bad debt exceeding 1 million NT dollars for a transaction before taking actions pursuant to the preceding paragraph.

2The competent authority should make the public information in the preceding paragraph widely known on the Internet or by other appropriate means.

1Except for funds drawn pursuant to Article 4 herein, the Management Committee shall preserve the Fund's funds in the name of the Fund by the following means

2(1) Cash.

3(2) Deposits in financial institutions with good credit standing.

4(3) Purchase of government bonds, bank debentures, and negotiable certificates of deposit issued by banks.

5(4) Other means in accordance with regulations prescribed by the competent authority.

1The proceeds from disposing of the assets of distressed financial institutions taken over by the Fund by tender offer, auction, or other means shall be deposited into the Fund.

2For the management and disposal of assets assumed by the Fund, the Fund may entrust CDIC to collect, value, consolidate, offer public tender, and handle securitization. Article 15-1 of the Deposit Insurance Act may apply mutatis mutandis when CDIC is entrusted to carry out the aforesaid affairs.

3The Fund shall bear the cost that CDIC may incur in handling the affairs provided in the preceding paragraph and Article 10 herein.

4Article 25 to Article 27 and Article 88 of the Budget Act do not apply when the Fund takes action pursuant to paragraph 1 of Article 10 and the preceding three paragraphs.

The accounting and audit of the Fund shall be based on systems established according to the generally accepted accounting and auditing principles.

1The Fund may start including distressed financial institutions for handling from the promulgation of the Act until July 10, 2005.

2The Fund may proceed with the following after July 10, 2005:

3(1) Paying off the debts of included distressed financial institutions, assuming and selling their assets.

4(2) Collecting taxes and insurance premiums set forth in subparagraph (1) and subparagraph (2), paragraph 1 of Article 3 herein.

5(3) Disposing of outstanding assets and debts.

6(4) Handling lawsuits associated with the Fund and matters in relation to the Fund.

7The Fund shall be terminated when the taxes and insurance premium set forth in subparagraph (1) and subparagraph (2), paragraph 1 of Article 3 cease to be included.

8When the Fund is terminated, the remaining assets and debts shall be assumed by the National Treasury after the principals, interests, and expenses of the debts arising from the Fund's disposal of distressed financial institutions have been paid with the Fund's funds from tax revenues and premium income set forth in subparagraph (1) and subparagraph (2), paragraph 1 of Article 3.

1The responsible person or any employee of a CDIC-insured financial institution who engages in unbecoming conduct with the intent to benefit self or a third party, or damage the interests of said financial institution or the Fund that results in damages to the financial institution, or the assets or other interests of the Fund shall be subject to a prison term of more than three years and less than ten years, or in addition thereto a fine up to NT $100 million.

2Where the offense described in the preceding paragraph is an act of collaboration between the responsible person of the financial institution and other employees or between two or more employees, the punishment of prison term imposed shall be increased by one-half, and the perpetrators shall be held jointly liable for damages.

3A person guilty of a criminal attempt, as provided in paragraph 1 hereof, shall also be subject to punishment.

1After making pay-offs pursuant to the provisions of the Act herein, the Fund shall, up to the extent of pay-offs, acquire the right of claim for damages against the responsible person or employee of the financial institution for non-performance of debt or act of tort arising the appointment of position or employment contract as well as the right of claim for damages against the guarantor of employment, insurer, and persons in the joint act of tort.

2CDIC may, after being authorized by the Fund to take legal actions, may in its own name file civil action against the persons liable for damages as set forth in the preceding paragraph or request to succeed a party concerned in a lawsuit.

3When taking legal actions pursuant to the preceding paragraph, CDIC shall be exempt temporarily from paying any judgment fee thereof or from providing security when filing for provisional seizure, provisional disposition, or provisional execution.

The Act herein is in force on the date of promulgation.