These Regulations were promulgated in accordance with Article 8 and 29 of the “Administrative Law of State-Run Enterprise” to evaluate the performance and supervise the business development of state-run enterprises.

Matters regarding the performance evaluation of state-run enterprises that are not stipulated in these Regulations shall be conducted in accordance with other relevant laws and regulations.

The emphasis of the performance evaluation of state-run enterprises shall be placed on the annual profit and achievement of national policies. The competent authority may select the evaluation criteria from the following, according to the nature of the enterprise:
1. Business operations
2. Financial management
3. Production management
4. Human resources management
5. Planning management
6. Environmental protection and industrial safety
7. Other matters
The Operation Directions for Evaluating Annual Performances of State-Run Enterprises shall be prescribed by the National Development Council (hereinafter referred to as the “NDC”).

The performance evaluation of state-run enterprises shall be conducted in accordance with the annual final accounts.

The evaluation of state-run enterprises shall be conducted in three steps including self-evaluation, preliminary evaluation, and final evaluation; procedures and deadlines shall be as follows:
1. State-run enterprises shall conduct self-evaluation at the end of the fiscal year in accordance with matters stipulated in Paragraph 1 of Article 3. A self-evaluation report shall be submitted to the competent authority with the final accounts report for the same fiscal year prior to February 25th of the following year, and hard copies shall be sent to relevant offices of the Executive Yuan; the Directorate-General of Budget, Accounting and Statistics; the Directorate-General of Personnel Administration; NDC. The only exception is the Central Bank of the Republic of China (Taiwan), which shall submit the self-evaluation report directly to the Executive Yuan.
2. When conducting the performance evaluation of state-run enterprises, the competent authority shall include evaluation comments and complete the preliminary evaluation based on the self-evaluation report stipulated in the preceding subparagraph and other relevant information; the competent authority shall then submit the preliminary evaluation report, including the performance grade stipulated in Article 9, to the Executive Yuan before March 31 of the following year for final evaluation.
3. After receiving the preliminary evaluation results from the competent authority as stipulated in the preceding subparagraph, the Executive Yuan shall complete the final evaluation within 3 months, taking into consideration other evaluation information, and submit the final evaluation report to the President.

The competent authority may adopt the following methods when conducting the performance evaluation of state-run enterprises as stipulated in Subparagraph 2 of the preceding article:
1. Send personnel to conduct on-site inspections at state-run enterprises;
2. Send personnel to participate in annual work review meetings of state-run enterprises;
3. Invite relevant personnel from state-run enterprises to participate in performance evaluation sessions; or
4. Invite personnel in charge of performance evaluation at state-run enterprises to attend performance evaluation seminars.

The Executive Yuan shall conduct the final evaluation using the written evaluation, based on preliminary evaluation results submitted by the competent authority in accordance with Subparagraph 3 of Article 5. On-site inspections may be conducted as necessary, and procedures shall be as follows:
1.The NDC shall invite relevant offices of the Executive Yuan; the Directorate-General of Budget, Accounting and Statistics; and the Directorate-General of Personnel Administration to form a final evaluation team and conduct final evaluation in accordance with the Operation Directions for Evaluating Annual Performances of State-Run Enterprises, as stipulated in Paragraph 2 of Article 3.
2.The NDC shall discuss and consult with relevant offices of the Executive Yuan; the Directorate-General of Budget, Accounting and Statistics; the Directorate-General of Personnel Administration; and the competent authority before submitting the final evaluation results to the Premier for approval.

The competent authority may form an inspection team to conduct on-site inspections at affiliated state-run enterprises during the fiscal year in accordance with the implementation status of evaluation matters stipulated in Paragraph 1 of Article 3. The on-site inspection findings shall serve as reference for the final evaluation.
The competent authority may invite relevant offices of the Executive Yuan; the Directorate-General of Budget, Accounting and Statistics; Directorate-General of Personnel Administration; NDC; and domain experts to take part in the on-site inspections.

The competent authority shall assign grade “A,” “B,” “C”, or “D” to state-run enterprises based on the performance evaluation results and submit the grades to the Executive Yuan for final evaluation.
State-run enterprises with any of the following conditions may not receive grade A:
1. State-run enterprises that fail to meet the budget after the annual profit has been adjusted in compliance with policy factors, with the exception of those which achieve better results than the previous fiscal year;
2. State-run enterprises that fail to generate profit after adjustments have been made in compliance with policy factors, with the exception of those which achieve the target budget and improve losses significantly in comparison to the previous year; or
3. State-run enterprises that made severe errors when implementing policies or operations.

The competent authority shall prescribe and submit to the Executive Yuan for approval, the proportion and number of state-run enterprise personnel to receive grade A and the proportion and number of different job position levels to receive grade A, based on the performance evaluation grade of each state-run enterprise.
The competent authority shall take into consideration the performance evaluation grade of each state-run enterprise when evaluating, appointing, and dismissing key personnel of subordinate state-run enterprises.

The competent authority shall draft the operation directions for evaluating annual performances and the evaluation criteria that include evaluation details, evaluation criteria, and weighting of each criterion as stipulated in Paragraph 1 of Article 3 before the start of each fiscal year. These evaluation details shall be submitted to the Executive Yuan for reference. However, in order to cope with sudden organizational adjustments, a resolution adopted by the Legislative Yuan, privatization, or other material events that have occurred during the year, the competent authority may, upon its authority or the application of state-run enterprises, make adjustments to the evaluation criteria two months before the end of the year.
A state-run enterprise that intends to apply for adjustment of evaluation criteria, as mentioned in the preceding paragraph, shall do so at least three months before the end of the fiscal year. Applications submitted after the deadlines will not be accepted.

The evaluation procedures and processes of state-run enterprises shall remain confidential and be released automatically after the performance evaluation grade has been approved by the Executive Yuan.

These Regulations shall come into force on the date of promulgation.