France to close military liaison office in Taiwan

Taipei Times ^ | Tuesday, Jun 01, 2010 | Shih Hsiu-chuan and Vincent Y. Chao , WITH AFP

[Tainan]

(excerpt)
France said it would close a low-key military liaison office in Taiwan in retaliation over a ruling in a controversial arms deal, local media said yesterday.

The Chinese-language Liberty Times (the Taipei Times’ sister paper) reported that the office, which arranges visits by military personnel and facilitates Taiwan’s acquisition of French-made weaponry, would be shut down next month.

The office is part of the French Institute in Taiwan, the de facto embassy of France in the absence of formal diplomatic ties.

The report came after a decision by an international court last month ordering French group Thales to pay back a large sum that it overcharged Taiwan in a 1991 frigate sale.

A Paris-based court of ­arbitration said the money was to make up for unauthorized commissions paid to help Thomson-CSF, which later became Thales, win a deal to sell six Lafayette frigates to Taiwan.

Lawyers at the Ministry of National Defense said Thales would pay an estimated US$861 million to Taiwan, including US$591 million in damages and US$270 million in interest and legal expenses.
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In 2001, Taiwan’s highest anti-graft body concluded that as much as US$400 million in kickbacks may have been paid throughout the course of the deal.

In 2008, a French judge ordered the dismissal without trial of one of France’s biggest graft cases involving massive kickbacks in the frigate sale to Taiwan, citing a lack of evidence.

The Liberty Times reported that Taipei and Paris reached a consensus in April to settle the matter out of court, with France providing Taiwan with military equipment, upgraded functions and technological services.

The two sides had decided to go ahead with the new cooperation plan after the international court delivered the ruling, but the plan fell flat following the surprising ruling last month, the report said.

National Security Council Adviser Ke Kuang-yeh (葛光越) indirectly confirmed that the French Institute in Taiwan had decided to close its technical team, saying “a replacement was being worked on.”

The withdrawal of the technical team would not influence future technical and military ties, Ke told Chinese Nationalist Party (KMT) Legislator Chang Hsien-yao (張顯耀) at a question-and-answer session at the legislature
...more at link.

[Tainan]

The scandal involved, "The Lafayette Scandal", was huge. It involved numerous people, at least one murder and still is a major topic on Taiwan.
Quite a few Taiwan politicians and shady 'middle-men' made off with very large sums of money.