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On 12 September 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No. 012/17 on the Dispute Resolution in Securities Sector to regulate the conciliation and dispute resolution proceedings in the sector that are administered by the SECC in accordance with the Law on Issuance and Trading of Non-Government Securities. The Prakas is effective from its issuing date.
According to the Prakas, any party to a dispute (or its lawful representatives) in the securities sector may file a complaint requesting for conciliation by the SECC. The SECC may dismiss the application on several grounds such as lack of standing in the dispute, or pending status in arbitration or court. The claimant may also, at any time, request to withdraw the complaint. Once initiated, the SECC will appoint not more than three conciliators. The disputing parties must notify whether they agree or disagree with the decisions of the conciliators within 10 working days of the issuance of such decisions. If the conciliation fails, any party must file another complaint to the SECC to initiate a dispute resolution procedure, initiate their own arbitration, or file a complaint to court within 90 days after such failure. The deposit and administrative and service fees charged by the SECC will be borne equally by the disputing parties.
The Prakas also requires securities firms (as defined by the Law on Issuance and Trading of Non-Government Securities) and all persons authorized to conduct activities in the securities sector by the SECC, to include a dispute resolution clause in all contracts and agreements concerning matters in the securities sector.
On 5 September 2017, the Ministry of Commerce ("MOC") released Announcement No. 4114 to inform the public as well as all domestic producers and exporters of the modification of the procedure for requesting and issuance of certificate of origin ("CO") of products.
Previously, the MOC had also issued Prakas No. 3168 on the Procedures for Requesting and Issuance of All Types of CO through the Online Automation System dated 26 August 2016, to facilitate trade and to be in compliance with the Rules of Origin of the importing countries. This Prakas provided that producers or exporters who wish to obtain a CO shall go to the www.co.moc.gov.kh platform to register for the online application to obtain a CO.
Upon approval of the MOC through the Automation System, the producers and exporters are required to publish such CO and submit to the Export-Import Department of MOC for the signature of the competent authority. Starting from 6 September 2017, however, the Export-Import Department and General Directorate of Trade Support Services is delegated the right to inspect and approve the request of all forms of CO through the Automation System.
On 26 August 2017, the Royal Government of Cambodia issued Sub-Decree No. 140 on the Amendment of Article 7 of the Sub-Decree No. 01 dated 6 January 2016 on Creation of Social Security Schemes on Health Care Scheme for Persons governed by the Provisions of the Labour Law.
Under the provisions of the Law on Social Security Schemes and Labour Law, both employees and employers shall contribute to the health care scheme to the National Social Security Fund ("NSSF") until 31 December 2017. Starting from next year, according to the Sub-Decree, employees will no longer be required to pay the contribution for health care scheme to the NSSF. Such obligation shall be transferred from the employees to the employers.
Hence, from 1 January 2018 onward, all employers employing at least eight employees shall contribute on health care scheme to the NSSF on behalf of their employees.
On 17 August 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No. 011/17 on the Recognition of Credit Rating Agencies to set out the requirements and procedure for the SECC to recognize credit rating agencies, as well as the restrictions on and obligations of the credit rating agencies in Cambodia. The Prakas is effective from 17 August 2017 and is applicable to all persons providing credit rating services in Cambodia.
Any persons wishing to become credit rating agencies in Cambodia must apply for recognition from the SECC and are required to pay a non-refundable fee of KHR 2,000,000 (approx. USD 500) for the application. They are also required to pay to the SECC another KHR 2,000,000 (approx. USD 500) upon receiving the recognition, and continue to pay an annual fee of KHR 2,000,000 (approx. USD 500).
The Prakas also requires all credit rating agencies to report to the SECC the service fees for credit rating and any changes of their directors, senior managers, credit rating analysts, share structures, addresses, and other information that are deemed necessary. In addition, the agencies will have to publish the detailed processes in their rating, their methodology, criteria, and modernization on the rating methods, and the outcomes of the rating through their websites or any medium recognized by the SECC.
On 17 August 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No. 009/17 on Public Offerings of Debt Securities to prescribe the requirements, mechanisms, processes, and approval for public offerings of debt securities.
The Prakas mainly recognizes three types of debt securities for public offerings: plain bonds, secured bonds, and guaranteed bonds. The governance of other types of debt securities will be covered by separate regulations. To issue debt securities as public offerings, the prospective issuers must meet certain general criteria stated in Article 6 of the Prakas while the issuance of any specific type of debt securities requires the prospective issuers to meet additional specific criteria accordingly.
Cambodia's listed companies having issued equity securities in public before, subject to similar requirements, may also apply for the public offering of debt securities.
On 17 August 2017, the Securities and Exchange Commission of Cambodia ("SECC") issued Prakas No. 010/17 on Accreditation of Bondholders' Representatives, which is effective from 17 August 2017 and is applicable to all persons representing bondholders in Cambodia. The Prakas sets out the requirement and procedure for the SECC to recognize bondholders' representatives, the bondholder representative agreements, the restrictions on and obligations of bondholders' representatives in Cambodia.
Any person wishing to be a bondholder representative must apply for accreditation from the SECC. Eligible persons for such recognition are commercial banks, securities firms, securities registrar agencies, securities transfer agents, paying agents, and custodian banks.
A prospective bondholder's representative is required to pay a non-refundable fee of KHR 1,000,000 to KHR 2,000,000 (approx. USD 250 to USD 500) for the application for accreditation. They are also required to pay the SECC another KHR 1,000,000 to KHR 2,000,000 (approx. USD 250 to USD 500) upon receiving the accreditation, and continue to pay the amount for each following year they operate. The SECC may issue guidelines to facilitate the implementation of this Prakas.
On 21 July 2017, the Royal Government of Cambodia issued Sub-Decree 112 ANKR.BK on the Establishment of Mechanisms for the Management Plans of Capacity Building and Research & Development on Telecommunication and Communication and Information Technology, establishing an institutional and procedural framework with regard to a "Fund for Capacity Building and Research and Development on Telecommunication and Communication and Information Technology".
The Sub-Decree addresses certain important aspects of the Fund, including (i) mechanisms for implementing the Fund; (ii) collection and use of the Fund; (iii) conditions and procedures of the grant of the Fund; (iv) conditions and procedures of settlement of the contribution against implementation of projects of the Fund; and (v) monitoring, follow-up and assessment of the use of the Fund.
The Governing Board of the Fund ("Board") and a secretariat shall be established for the governance and operation of the Fund. Essentially, the Fund will be used to support entrepreneurship and scholarships in the sector, to create events and competitions as well as to support the Board's administrative expenses. A primary source for the Fund comes from financial contributions from telecommunication operators.
On 21 July 2017, the Royal Government of Cambodia issued Sub-Decree 111 ANKR.BK on the Establishment of Mechanisms for the Implementation of the Universal Telecommunication Service Obligation Programs, aiming to ensure effective, efficient, transparent, and accountable management and implementation of the universal telecommunication service obligation programs.
The Sub-Decree provides for the establishment of a "Fund for Universal Telecommunication Service Obligation Programs" ("Fund") with relevant important provisions including without limitation: (i) mechanisms for implementing the Fund; (ii) collection and use of the Fund; (iii) conditions and procedures of the grant of the Fund; (iv) conditions and procedures of settlement of the contribution against implementation of projects of the Fund; and (v) monitoring, follow-up and assessment of the use of the Fund.
The Fund will essentially be used to reduce digital gaps (of access to service and use of telecommunication and information technology in cities, urban areas and rural area) through the construction and expansion of telecommunication infrastructure and networks for high speed Internet for the sub-national administrative, rural or low-income areas, public educational or research institutions, public libraries, public hospitals or health centres, and some non-profit institutions. A primary source for the Fund comes from financial contributions from telecommunication operators.
On 6 July 2017, the General Department of Taxation ("GDT") of the Ministry of Economy and Finance issued Announcement No. 11278 on Suspension of the Implementation of Non-Taxable Supplies on Primary Financial Services as defined in Paragraph 2 of Article 4 of Prakas No. 559 dated 25 May 2017 on the Implementation of Value-Added Tax for Non-Taxable Supplies.
According to the Announcement, the implementation of value-added tax ("VAT") for non-taxable supplies on primary financial services as defined in paragraph 2 of Article 4 of the Prakas shall be temporarily suspended until further announcement.
The GDT will continue to cooperate with the private sector in order to review and discuss in detail the definition of "primary financial services" and the implementation of VAT on "non-primary financial services".
On 4 July 2017, the Ministry of Interior ("MOI") issued Notice on the Fulfilment of Obligations of Local Associations and Non-Governmental Organizations ("Notice"), aiming to ensure participation of the local associations and Non-Governmental Organizations ("NGOs") in implementing and focusing on the obligations imposed in Article 10 and Article 25 of the Law on the Associations and Non-Governmental Organizations ("LANGO"), as some of the local associations and NGOs have yet to fulfil their obligations and have acted in contrary to their statutes.
The Notice urges the local associations and NGOs to act in conformity with Article 10 of the LANGO by notifying the MOI and the Ministry of Economy and Finance ("MEF") in writing of all of their bank accounts, to be opened or opened for their operations in any bank in the Kingdom of Cambodia no later than the end of September 2017. The Notice also urges the local associations and NGOs to submit their annual financial report and annual report of activities to the MOI and MEF as stated in Article 25 of the LANGO, no later than the end of September 2017 and by the end of February of the following year, respectively. Failure to comply with the conditions stated above will subject the local associations and NGOs to the measures set forth in the LANGO.
On 14 June 2017, the National Bank of Cambodia ("NBC") issued Prakas No. B14-107-161 on the Management of Payment Service Provider to manage and set out legal procedures on licensing applications for legal entities that provide payment services in Cambodia.
The Prakas is applicable to all banks and financial institutions under the supervision of the NBC, as well as legal entities that provide payment services. This Prakas is effective from 14 June 2017.
According to Article 8 of the Prakas, any legal entity that wishes to provide payment services shall obtain licenses from the NBC, whereas banks and financial institutions that wish to provide payment services shall seek prior permission from the NBC. The Prakas also sets out general requirements applicable to the operation of payment services, including topics such as fund management, usage of service agents, customer protection, confidentiality obligation, issuance of electronic money, etc.
The Ministry of Commerce ("MOC") issued Prakas No. 172 to revise Prakas No. 047 MOC/ SM 2013 dated 23 January 2013 on Putting Price Label on all kind of Goods and Services to strengthen the mechanism of the development of free market and fair competition, as well as to promote the use of Cambodia's national currency.
Under the Prakas, all traders, merchants and service providers are obligated to label price tags on their goods and services in Khmer currency. Price tags in foreign currency are permitted if the owner of the products or services holds permission issued by the Department of Trade Promotion, which is valid for one year and renewable at the request of the interested applicant.
For duty-free businesses and service providers, if it is necessary to put price tags in foreign currency, they must request for a letter of permission from the Phnom Penh Municipal Commerce Department or Provincial Commerce Department. They are liable to pay for the request under the Joint Prakas between MOC and MEF on public services. The letter of permission is valid for only 1 year. The renewal of the letter must be permitted by the Phnom Penh Municipal Commerce Department or Provincial Commerce Department.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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