TAIPEI (Taiwan News) -- As the U.S.-China trade war heats up and Chinese companies seek refuge from Trump's tariffs, Taiwan's Cabinet on Thursday (May 16) has put forward an amendment that would increase the fine for intentionally mislabeling products as "Made in Taiwan" (MIT) to NT$3 million (US$96,000).

The Cabinet on Thursday put forth a draft amendment to the Foreign Trade Act (貿易法) that will increase the maximum fine for companies falsely labeling products as being made in Taiwan by 10 fold to NT$3 million, reported CNA. The bill has been sent to the Legislative Yuan for consideration.

Nick Ni (倪克浩) Executive Secretary of the Bureau of Foreign Trade, said at a press conference after a Cabinet meeting that some unscrupulous merchants had recently transported goods from China to Taiwan under the name "Made in Taiwan" in an attempt to circumvent the additional tariffs imposed by the U.S. on goods from China, according to the report. Ni said that some unscrupulous merchants also placed certificate of origin labels from Taiwan on products manufactured in China, leading to an EU investigation of Taiwanese manufacturers and a number of goods.

Ni said that a number of goods were investigated, which affected the international trade order and damaged the good reputation of Taiwanese-made goods.

CNA cited Deputy Economic Affairs Minister Tseng Wen-sheng (曾文生) as saying that according to data, five products with false origin labels were seized from September of last year to April of this year. Currently, more than 10 cases of forgery of production certificates have been transferred to prosecutors for investigation.

Ni said that in order to effectively curb "laundering of origin," the draft amendment to the Foreign Trade Act will be hiked significantly. If a manufacturer is caught mislabeling the country of origin, uses false trade certificates, illegally exports strategic high-tech goods to uncontrolled areas, or a work unit does not issue the production certificate in accordance with the prescribed procedures, the original range of fines of between NT$30,000 and NT$300,000 will be increased to between NT$60,000 to NT$3 million.

Ni stated that the draft also stipulates a "whistleblower clause" to add incentives for people to report products which have a false country of origin sticker. He added that another provision of the amendment will increase the penalty for the illegal export of strategic high-tech goods to restricted areas, such as Iran, North Korea, and China from a maximum fine of NT$1.5 million to NT$3 million.