The issue of “origin laundering” has long persisted in the global trade system. Enterprises frequently alter product origin labels through third-country transshipment, simple processing, or repackaging to circumvent tariffs or trade restrictions. In recent years, whether it is Chinese vegetables allegedly entering Taiwan via transshipment through Vietnam, or Russian products being exported through third countries to evade embargoes following the outbreak of the Russia-Ukraine war, these incidents underscore the critical importance of origin management.
U.S.-China Tech War Escalates: Export Controls Pivot Toward Supply Chain Management
Da-Nien Liu, Director of the Regional Development Study Center at the Chung-Hua Institution for Economic Research (CIER), notes that to plug these loopholes, countries have generally strengthened management through Rules of Origin, enhanced customs inspections, steeper penalties, and the establishment of investigative mechanisms. However, as the division of labor in global supply chains deepens and technological products become highly complex, traditional “origin laundering” has gradually mutated into a more covert “supply chain laundering.” Its impact has also expanded from mere tariff evasion to the realms of national security and technology export controls.
Take the U.S. “Entity List” regime as an example. It was originally designed to restrict companies posing national security risks from acquiring critical U.S. technologies and products. Yet, some restricted enterprises procure equipment through third-country subsidiaries, shell companies, or multi-layered transaction structures, sometimes even transshipping them to China via a third country. This poses significant challenges to entity-based controls and increases the difficulty of tracking end-uses and end-users.
The semiconductor industry has become a primary battleground for “supply chain laundering.” Some companies circumvent export restrictions on fully assembled machines by breaking down equipment modules and procuring components in batches for domestic assembly. Other operators sustain the operation of restricted equipment through maintenance, calibration, software updates, and remote technical support. Furthermore, the circulation of second-hand equipment in the market can extend the operational lifespan of mature-node manufacturing tools in restricted markets, thereby blunting the efficacy of export controls.
The MATCH Act Expands the Scope of Control: Supply Chain Transparency Becomes an International Trend
Director Liu points out that the United States is advancing the MATCH Act in response to this trend. This legislation shifts the regulatory focus from traditional export management to comprehensive supply chain management. In addition to expanding the scope of controls on semiconductor equipment, the act brings services such as maintenance, calibration, software updates, and technical support under regulatory purview. It also strengthens synchronized controls with allied nations to squeeze the operational space for “supply chain laundering.”
As global technology controls grow increasingly stringent, Taiwan must not only comply with international standards and fortify its export management system but also avoid becoming a transit hub for high-risk supply chains. Going forward, the government should further enhance its capacity to monitor third-country transshipments, anomalous transactions, and end-uses, establishing a more forward-looking risk management mechanism. Simultaneously, it must assist enterprises in strengthening their compliance capabilities and supply chain transparency, striking a delicate balance between maintaining international trust and sustaining industrial competitiveness.
Source: Da-Nien Liu (May 14, 2026). From Origin Laundering to Supply Chain Laundering. United Daily News. https://udn.com/news/story/123296/9501367