Legal Borderlands and Security Unbalance: Supply Chain Diversion and End-User Obfuscation in Taiwan's Drone Exports

Amidst global supply chain restructuring, Taiwan's commercial drone exports have grown rapidly. However, this growth is accompanied by end-user obfuscation and irregular transshipments. Based on qualitative interviews with 18 supply chain stakeholders and triangulating with international trade data, this study examines the specific trajectories of Taiwan's drone exports. These include circuitous trade routes from Czechia and Poland to Hong Kong, alongside decentralized and opaque procurements by actors in Ukraine and Saudi Arabia. Framed by international political economy and border studies, the analysis shows how sanctions evasion networks exploit overlapping and conflicting jurisdictions within “legal borderlands” to conduct regulatory arbitrage. This highlights a structural “trade and security unbalance”, where states prioritize market integration and export expansion but lack the capacity to monitor cross-border material flows. Using specific empirical data, including coding frequencies and direct stakeholder accounts, this study demonstrates how the performance elasticity of commercial-off-the-shelf (COTS) components challenges traditional, specification-based strategic trade controls (STC). To address this gap, this study proposes operationalizing “digital borderlands”) – utilizing technologies such as geofencing to mediate state power beyond physical territories – and establishing multilateral intelligence-sharing frameworks to balance economic expansion with international non-proliferation obligations.