Currently, no AI-related general background laws or regulations have been specifically promulgated.

The draft Basic Act for Developments of Artificial Intelligence was proposed by the Congress to set out fundamental principles for AI developments and for the government to promote the development of AI technologies. However, the draft is still under review by Taiwan's Congress, and whether this draft will be passed is uncertain.

In recent years, the Executive Yuan of Taiwan has announced the Digital Nation and Innovative Economic Development Plan and the Taiwan AI Action Plan to express the stance of the Taiwan government in seeking to develop world-leading AI infrastructure for device solutions and to establish a sound ecosystem that creates a niche market.

As Taiwan is well-known for information and communications technology (ICT) and the semiconductor industry has established a good foundation for intelligent technology development, the government has been encouraging companies to become essential partners in the value chain of global AI technology and intelligence systems and will leverage the advantages in hardware and software techniques to promote AI technology across industries with test fields, regulations, data-sharing environments, etc.

Impact of COVID-19

As COVID-19 infections rapidly rise in Taiwan, outbreak investigations have played a crucial role in pandemic control. In accordance with Article 26 of the Taiwan Communicable Disease Control Act, the central competent authority may formulate methods of epidemiological investigations and establish systems for surveillance, warning and disease control resources for pandemic conditions of communicable diseases. Traditional outbreak investigations methods, including face-to-face or telephone interviews, rely entirely on the statements of the interviewees and it is therefore difficult to verify the authenticity and accuracy due to recall bias. 

In order to facilitate the pandemic investigation, the Taiwan government has adopted AI technology into the pandemic tracking system, which automatically connects the triangulation of mobile phone base stations, police and public monitors with the health authorities at the quarantine site, and activates the electronic fence system accordingly. However, despite the fact that AI technologies are convenient and precise, the legal basis for their use in a healthcare setting is still questionable, as concerns on privacy and personal data protection have not been properly addressed.

The Taiwan government is aware of AI developments and has published multiple guidelines and plans for AI developments in the past few years. In September 2019, the Ministry of Science and Technology under the Executive Yuan of Taiwan announced the AI Technology R&D Guidelines. As AI developments may bring revolutionary changes to various aspects of human existence, the Guidelines have set forth the following three core values to encourage AI technology participants to always be aware of when conducting relevant activities and endeavouring to build an AI-embedded society:

• human-centred values;
• sustainable developments; and
• diversity and inclusion.

From the aforementioned three core values, eight principles were given under the Guidelines to establish a solid AI R&D environment and society that follow the global AI trends, namely:

• common good and well-being;
• fairness and non-discrimination;
• autonomy and control;
• safety;
• privacy and data governance;
• transparency and traceability;
• explainability; and
• accountability and communication.

There have been no laws or regulations in Taiwan specifically promulgated or amended in relation to AI-related national security issues. Such matters are regulated by the relevant competent authorities in accordance with current regulatory regime, such as the National Security Act and the Cyber Security Management Act.

In early 2018, Taiwan's Congress promulgated the Financial Technology Development and Innovative Experimentation Act (“FinTech Sandbox Act”) for the fintech regulatory sandbox to promote fintech services and companies. The Act enables fintech businesses to test their financial technologies in a controlled regulatory environment. Although the FinTech Sandbox Act is not specifically designed for AI, machine learning or big data, the promoters of novel AI-related financial business models or big data technology may prove their theories and applications within the scope of the Act and enjoy exemptions from relevant laws and regulations.

Similar to the spirit of the FinTech Sandbox Act, in late 2018, the Unmanned Vehicle Technology Innovation and Experiment Act (“Unmanned Vehicle Sandbox Act”) was enacted for a regulatory sandbox for autonomous/self-driving vehicles. The Act aims to provide a better environment for AI application testing and IoT technology in transportation. The term “vehicle” under such Act includes not only cars, but also aircraft and ships/boats.

The objectives of the aforementioned two regulatory sandbox laws are to enable the relevant businesses to test their innovative ideas and technologies within a permitted safe harbour or sandbox scope. In general, prior to entering the sandbox, applicants need to obtain approvals from the competent authorities. Once the experiment is executed, the experimental activities may enjoy exemptions from certain licensing requirements and legal liabilities.

After the approved experiments are completed, the relevant competent authorities (the FSC for fintech sandboxes, or the MOEA for unmanned vehicles) will examine the results. If positive, the competent authority will review and amend current rules in order to legalise the tested business models or activities. However, the sandbox applicants might still need to obtain licences or approvals from the relevant competent authorities to conduct the tested business models or activities outside the sandbox.

According to the Taiwan AI Action Plan as unveiled by the Taiwan government, the following issues are still under evaluations to further determine whether related laws and regulations should be enacted or amended to address AI developments:

• the impact on employment and the labour market;
• the rights and obligations derived from the application of AI technologies, such as whether to consider AI as a "person" from a legal perspective, and whether there will be intellectual property rights in an AI-created work;
• AI applications in government;
• open data;
• consumer protection for AI applications;
• restrictions on AI applications;
• the regulatory sandbox framework;
• spectrum resource allocation;
• government procurement (eg, the outsourcing concerning AI issues); and
• industry regulatory challenges and approaches to AI.

In addition (as stated in 1.1 General Legal Background Framework), the draft Basic Act for Developments of Artificial Intelligence was proposed by the Congress to set out fundamental principles for AI developments and for the government to promote the development of AI technologies over the coming years. However, the draft is still under review by Taiwan's Congress.

The Executive Yuan has announced multiple guidelines and plans for AI developments, such as the Digital Nation and Innovative Economic Development Plan, the Taiwan AI Action Plan, the AI Technology R&D Guidelines and the 5+2 Plan (see 3.1 Policies for details).

However, considering AI still has the nature of "technology" and could be applied in various industries, there are no regulatory agencies that play a leading role in the actual enforcement and monitoring of AI technologies. The enforcement and supervisory tasks fall under the jurisdictions of the relevant competent authorities.

For example, the Ministry of Economic Affairs is assigned as the competent authority for the Unmanned Vehicle Sandbox Act, while the Financial Supervisory Commission is the competent authority for the FinTech Sandbox Act.

In addition, for AI-related healthcare matters, the Ministry of Health and Welfare is the competent authority responsible for supervising the related products and industries. The Food and Drug Administration (TFDA) is responsible for regulating the system for the safety and quality of food, drugs, medical devices, and cosmetics. The TFDA grants product registration and clinical trial approvals, monitors manufacturing and importation, and conducts safety surveillance activities on health-related products.

Taiwan is contemplating establishing a Ministry of Digital Developments in 2022. However, it is currently unclear as to how much the new Ministry would be involved in promoting AI developments.

In Taiwan, there is no specific definition of AI under current laws and regulations. AI is still an uncertain legal concept under Taiwan law. For example, Article 2 of the Standards for Defining High-Level Professionals for Naturalization, which is announced by the Ministry of the Interior of Taiwan under the Nationality Act, explicitly recognises AI work as one of the high skill-level professions. Therefore, foreign nationals with unique talents or outstanding R&D capabilities in the area of AI may be exempted from submitting a Certificate of Loss of Original Nationality when applying for naturalisation. However, the definition of AI is not included in the aforementioned Standards. A clear definition of AI is yet to emerge.

Currently, no AI-related laws or regulations have been specifically promulgated by each regulatory authority. For regulatory objectives in Taiwan, please refer to 4.2 Proposed Legislation for details.

The matter is not applicable in this jurisdiction.

The matter is not applicable in this jurisdiction.

Currently, no AI-related standard-setting bodies have been specifically established. For AI-related standards set out by the Ministry of Science and Technology, please refer to 3.1 Policies.

No Taiwan court decisions have addressed the issues of discrimination and bias that may be caused by the use of AI algorithms and big data analytics. In addition, no specific laws or regulations have been promulgated or amended to address such issues. However, as “equality” and “fairness” are important factors with respect to social life and economic activity, we are of the opinion that more and more discussions will emerge in legal fields such as labour/employment law (please refer to 10.1 AI in Corporate Employment and Hiring Practices for details), privacy law, antitrust and other areas.

Personal Data Protection

In Taiwan, personal information is protected by the Taiwan Personal Data Protection Act (PDPA); the collection, processing and use of any personal data are generally subject to notice and consent requirements under the PDPA. Pursuant to the PDPA, the term “personal data” includes characteristics, fingerprints, genetic information and other biometric data and information which may directly or indirectly identify an individual.

Under the PDPA, unless otherwise specified under law, a company is generally required to give notice to and obtain consent from an individual before collecting, processing or using any of the said individual’s personal information, subject to certain exemptions. 

As a result, if a company wishes to collect, process and/or use any personal data for the purpose regarding AI and/or big data, it will be subject to the obligations under the PDPA as advised above. 

Currently, no AI-related laws or regulations have been specifically promulgated in regard to transparency. However, according to the AI Technology R&D Guidelines announced by the Ministry of Science and Technology under the Executive Yuan of Taiwan in 2019 (please refer to 3.1 Policies for details), transparency is a major topic. 

The Guidelines explicitly state that in order to ensure the fairness of the decision-making process, the development and application of AI systems, related software, and algorithms, including the provision and disclosure of information on modules, mechanisms, components, parameters, and calculations, must ensure that the public is informed of the elements of decisions generated by AI systems. In addition, AI development and application shall comply with traceability requirements, keep adequate records of the decision-making process, including data collection, data labelling and algorithms used, and establish record-keeping system to facilitate future remedy and clarification for affected parties of AI technology decisions.

Currently, no AI-related laws or regulations have been specifically promulgated. For automated decision-making AI, please refer to 9. AI in Industry Sectors.

Civil Liability

As AI itself has not yet been recognised as a legal entity, it cannot be responsible for any civil liability under current Taiwan laws. For AI-related tort cases, the injured party would need to prove that the use of AI falls within the scope of tort liability stipulated under the Civil Code and/or the Consumer Protection Act, which includes, without limitation, the following.

• A manufacturer shall be liable for any damage caused by its products, unless it can prove that the products have complied with the applicable technical and professional standards of reasonably expected safety requirements before such products are released on to the market (Article 7 of the Consumer Protection Act).
• If an automobile, motorcycle or other motor vehicle which does not need to be driven on tracks while in use has caused injury to another person, the driver shall be liable for the damages arising therefrom, unless the driver has exercised reasonable care to prevent the damages (Article 191–2 of the Civil Code).
• A person who, intentionally or negligently, has wrongfully infringed the rights of another person, should compensate such person for any damages arising therefrom. The prevailing view among the courts and scholars is that there should also be causation between the tortious conduct and the injury (Article 184 of the Civil Code).

For example, if the AI embedded in the self-driving system, such as an autonomous vehicle, causes an injury, the injured person may wish to prove and convince the judge that the self-driving vehicle falls within the definition of “automobile” and the user should be considered the “driver” under Article 191–2 of the Civil Code. In addition, the injured person would also bear the burden to prove that the “user” was negligent when using the self-driving vehicle when such person wishes to establish a claim under Article 184 of the Civil Code. Further, the manufacturer of the self-driving vehicle may be held liable under Article 7 of the CPA if the court considers the vehicle fails to comply with the contemporary technical and professional standards of reasonably expected safety requirements before such vehicle was released on to the market.

Criminal Issues

In Taiwan, no criminal-related laws have been specifically promulgated or amended to address AI developments. As criminal liability under Taiwan law typically requires a person’s mental state to allow “intention” or “negligence”, AI itself would not be capable of acquiring the aforementioned “mental state” and therefore of committing a criminal offence. In addition, under the current Taiwan legal regime, apart from certain exceptional circumstances where legal persons may be subject to criminal liability, only natural persons are deemed capable of committing crimes. Therefore, similar to the aforementioned civil liability section, in order to determine whether an AI related crime has been committed, the prosecutor would need to prove, among others, the intention/negligence and causation of the person “using” or “behind” the AI.

To take the above self-driving vehicle case as an example, the prosecutor would need to prove the vehicle “user” causing the injury has acted negligently. In the event that the user could prove the accusation was only the “behaviour” or “act” of the AI, the court may consider that there was neither negligence on the user’s part nor causation between any act of the user and the result.

In Taiwan, the Ministry of Science and Technology is leading the AI for Health Plan, which has assisted major medical research institutions in Taiwan in developing AI algorithms to be used for, among others, diagnosing cancer lesions at an early stage, accelerating image recognition, etc. Furthermore, in accordance with the 2021 Medical Device Act, the Taiwan Food and Drug Administration has set up a project office which aims to assist with matters regarding medical devices using AI technology and to review the regulations to explore the possibility of amending existing rules in order to establish a better regulatory environment for AI in healthcare.

Role and Licensing of Machine Learning

The current applications of machine learning include clinical decision support and big data forecasting. The former includes analysing medical images using machine learning to improve the accuracy of diagnosis results; the latter includes analysing large amounts of data, tracking or forecasting the relationships between different medicines and side-effects. However, despite the fact that AI is capable of making decisions by itself, under current Taiwan law, only a licensed physician may practice as a physician, as AI and machine learning are merely recognised as “technologies” or “tools” to assist physicians.

In addition, if any personal data would be collected, used or processed with respect to training data/data licensing, the Personal Data Protection Act regulatory regime (please refer to 8.1 Facial Recognition and Biometrics) would apply. Unless any exemption applies, personal data collections require the data collector to obtain the necessary “informed consent”. If any intellectual property is involved in the licensing, it is suggested that the customary licensing practice, such as an IP licensing agreement to be entered into by the licensor and licensee, should be followed.

In Taiwan, AI applications, such as chatbot and robo-adviser services, in financial services involve correspondence with clients. The Operating Rules for Securities Investment Consulting Enterprises Using Automated Tools to Provide Consulting Service (as promulgated in 2017 and last amended in 2022 by the Securities Investment Trust and Consulting Association of Taiwan, the self-disciplinary organisation of the asset management industry) provide that securities investment consulting enterprises may provide robo-adviser services (ie, online securities investment consulting services using automation tools and algorithms).

Please refer to 4.1 Enacted Legislation for details on the law for the regulatory sandbox for autonomous vehicles/self-driving vehicles.

It is understood that AI recruitment could greatly shorten the hiring process and make it more effective, as AI could quickly select suitable candidates from applicants based on a series of indicators using algorithms, including conditions such as work experience, education and technical skills by analysing the videos, test scores, interview videos and other data submitted by the applicants. In addition, AI recruitment may assist employers in screening applicants by analysing, for example, their facial muscle movement, vocal characteristics and other indicators. 

However, there are several legal issues that need to be considered in terms of AI recruitment, as described below.

Article 7 of the Act of Gender Equality in Employment

Employers shall not discriminate against applicants or employees because of their gender or sexual orientation in the course of recruitment, screening tests, hiring, placement, assignment, evaluation and promotion. Therefore, employers are suggested to avoid using programs that imply discrimination and lead to violations of the law, and provide equal treatment to candidates of all genders and sexual orientations.

Article 5 of the Employment Service Act

Employers are prohibited from discriminating against any job applicant or employee on the basis of race, class, language, thought, religion, political party, place of origin, place of birth, gender, gender orientation, age, marital status, appearance, facial features, disability, horoscope, blood type, or past membership in any labour union; matters stated clearly in other laws shall be followed in priority. In summary, employers should ensure equal employment opportunity for all applicants.

AI and IP protection

In Taiwan, copyright is protected by the law without registration or filing requirements. However, certain features/components should be in place to qualify as a copyright, such as “originality” and “expression”. Despite the fact that a “computer program copyright” is a type of copyright as stipulated in the Copyright Act, whether an AI application is copyrightable would still depend on whether the subject AI application has the statutory components, such as “expression”. In general, an algorithm itself is not recognised as a copyrightable work under the Copyright Act. However, this would still depend on whether the AI application has the required components.

As to patents, an inventor should file an application with the Intellectual Property Office of Taiwan and obtain its approval to obtain the patent right in accordance with the Taiwan Patent Act. The subject of a patent right should be an “invention” such as the “creation of technical ideas, utilising the laws of nature”. As for a software-implemented invention, if it co-ordinates the software and hardware to process the information, and there is a technical effect in its operation, it might become patentable. Given the above, whether an algorithm/AI is patentable would depend on whether it has the required components.

AI-generated Intellectual Property?

As there have been no law amendments in relation to AI-generated intellectual property proposed by the competent authority, the issue of whether AI is able to create an "original expression" under the copyright law or to be an "inventor" under the patent law is still under observation. Such issues would be more important when AI has evolved to have the ability of independent thinking and creating an “expression”. Such issues might not be solved under the current IP regime in Taiwan and are challenging for the government, legislators, representatives of the court system and other legal practitioners in light of ongoing AI developments.

According to reliable news reports, in Taiwan, a substantial amount of court decisions have been uploaded to the public e-platform. The Ministry of Science and Technology of Taiwan has commissioned private sector organisations to conduct research in relation to the use of legal data analysis as a tool for compiling information on court decision patterns, predicting future decision outcomes, and examining the appropriateness of court decisions. In addition, as the use of e-filing has become increasingly common in litigation practice, the Judicial Yuan has recently been contemplating establishing a "technology court" to facilitate the electronic exchange of documents and e-litigation. 

It is also worth noting that the Judicial Yuan has introduced an experimental sentencing system using AI technologies. Recently, the Judicial Yuan has been working with experts to develop an AI sentencing recommendation system. By analysing the court decisions, the system could automatically generate the sentencing recommendation for the user. In addition to identifying sentencing conditions, the system could also provide similar cases for the judges' and lawyers' consideration. The sentencing model is still under development, but it is generally expected that AI technologies can be used to, for example, rapidly identify relevant data from the vast amount of electronic data and significantly improve the accuracy and speed of the litigation process in the near future.

The Taiwan Company Act has stipulated the director’s fiduciary duty and the obligation to act in good faith. A director of a company shall be loyal and exercise the due care of a good administrator in conducting the business operations of the company, or else the director shall be liable for the loss or damage therefore sustained by the company. The standards of the aforementioned “loyalty” and “due care of a good administrator” in conducting the business operations of a company, in general, should be based on the actual circumstances by objective and socially recognised criteria. For instance, the board may consider referencing and relying on experts’ views and opinions before making any decisions at the board level, thereby reducing the risk of potential breach of fiduciary duty claims. 

The same principle applies in AI-related cases. Currently, at the time of writing, there is no explicit court precedent and ruling in this regard. However, in the event that the directors are not experts in AI-related fields, the directors are suggested to engage an AI expert for further advice when making AI-related decisions. Directors may fulfil their fiduciary duty by engaging outside AI experts, and at the same time obtain a solid basis to support the legitimacy of their decisions.

In addition, companies that wish to use AI technologies for business prediction or risk assessment should carefully identify the relationship between the input and output of the AI data processing, such as how the AI processes the data and its underlying logical relationships. Therefore, the board of directors shall be able – with the assistance of external experts – to identify the underlying AI algorithms, and preventive measures shall be taken to avoid the possible failure and inaccuracy of the AI system. 

AI technologies are no doubt changing the traditional sectors. For instance, the sudden outbreak of COVID-19 in 2021 and the first half of 2022 pushed Taiwanese customers to change their shopping behaviour and shift to e-commerce. However, the surge in e-commerce order volume exasperated shipping delays and shortage in stock, and caused website crashes. By using AI technologies, e-commerce platforms may predict hotspots to get orders, and optimise warehouse configurations to speed up the order fulfilment process.

In addition, as the Taiwan government is currently focusing on energy and environmental policy to fulfil its environmental, social and governance (ESG) objectives, it is reported that a Taiwan local bank has established the "Green Energy Power Plant Information Management System" by using AI technologies to analyse plant construction, financing decisions and post-facility management.

On the whole, the Taiwan government is still on the path of seeking the best way to create a better environment for AI innovation and application. We believe AI technology applications will continue to thrive and, as Taiwanese regulatory authorities have not yet specifically promulgated any AI-related laws or regulations, businesses must diligently monitor any AI-specific regulatory guidelines.