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On 14 November 2017, the National Bank of Cambodia ("NBC") issued Prakas No. B7-017-335 on Audit on Banking and Financial Institutions ("Institutions") to determine the accreditation requirements and obligations of external auditing companies ("Auditing Firms") and the Institutions. The Prakas is applicable to all Auditing Firms accredited by the NBC and Institutions under supervision of the NBC.
According to the Prakas, the Auditing Firms shall submit applications for accreditation and provide supporting documents to the NBC. In the event that the Auditing Firms have already obtained permits from the NBC, the Auditing Firms shall submit applications for re-accreditation in accordance with this Prakas within 6 months from the effective date of the Prakas.
On 10 November 2017, the Ministry of Labour and Vocational Training issued Prakas No. 448 on the Register of Enterprises, Establishments, and Workers in the National Social Security Fund ("NSSF") for Persons Falling under the Scope of the Labour Law. The Prakas aims to amend the registration requirements with the NSSF for enterprises, establishments, and workers who are under the Law on National Social Security Scheme for Persons under the Scope of Labour Law in the NSSF for work-related accident and healthcare schemes.
Going forward, all employers or owners of enterprises / establishments covered by the Prakas, employing at least one employee, must register with the NSSF and pay a monthly contribution to the NSSF on behalf of their employees. Employers or owners of enterprises / establishments must also register their workers / employees with the NSSF, and submit to the NSSF a monthly report on the total number of all their workers/employees.
The Ministry of Economy and Finance issued on 27 October 2017 Prakas No. 1129 concerning the implementation of withholding tax ("WHT") on interest for loans from abroad. The Prakas aims to reduce charges on interest expense for loans that micro-finance institutions borrow from overseas lenders.
As stipulated in Article 26 (new) of the Law on Taxation, interest payments for loans borrowed from non-resident taxpayers are subject to 14% WHT. According to Article 4 of the Prakas, the 14% WHT must be implemented as follows: (i) micro-finance institutions shall withhold 10% of the interest amount paid to non-resident taxpayers; and (ii) the remaining 4% is considered as state charge in the form of subsidy to the micro-finance industry.
On 25 October 2017, the Ministry of Tourism issued Prakas No. 160 on the Taking of Effect of the Code of Profession and Code of Conduct for Tour Operators and Travel Agents in Cambodia. The Prakas implements the Code of Profession and the Code of Conduct for tour operators and travel agents in order to enhance the service quality, client's trust, and social moral values of the tourism sector in Cambodia.
The Code of Profession for Tour Operators and Travel Agents lays out many duties and obligations, including the duty not to unnecessarily charge tourists, not to hold tourists' passports, to provide services as advertised, and to provide good quality facilities and services to tourists. Also, tour operators and travel agents must not offer "zero package tours" or tours below the minimum price required by law. Failure to comply will subject tour operators and travel agents to revocation of tour/travel agent licenses or denial of renewal of licenses.
On 25 October 2017, the National Bank of Cambodia ("NBC") issued Prakas No. B7-017-326 on Granting Certification for Rural Credit Institution. In order to operate as rural credit institution in Cambodia, an institution shall submit an application with supporting documents to the NBC and comply with the conditions as set out in this Prakas such as the minimum registered capital of 200,000,000 Khmer Riels, the deposit security of 5% of the registered capital in the account at the NBC, reporting obligations, etc.
On 12 October 2017, the National Assembly of Cambodia adopted the Draft Law on Trade Remedies, which aims to shield domestic producers from the impact of dumped products. Comprising 45 Articles, the Law sets out principles, mechanisms, procedures, and related rules regarding trade remedies; and is applicable to trade-related activities in the Kingdom of Cambodia such as dumping. It also provides for subsidies and countervailing measures (tax credits) and safeguard measures including, but not limited to, the increase of import tax and import restriction.
The National Committee of Trade Remedies has been created and will be led by the Minister of Commerce, with the involvement of related institutions to fulfil the tasks related to trade remedies. The organization and functioning of the Committee will be determined by a Sub-Decree.
On 5 October 2017, the Ministry of Labour and Vocational Training issued Prakas No. 369 on the Increase in the Minimum Wage for Year 2018. Starting from 1 January 2018, the minimum wage for workers/employees in textile, garment and footwear industries will be increased by US$17, from US$153 per month in 2017 to US$170 per month in 2018.
For workers / employees on the probationary period, the minimum wage is US$165 per month. Piece-rate workers / employees shall receive their monthly wage according to the actual piece produced if the amount is greater than the minimum wage stated in the above Prakas. However, in case that it is lower, the employers shall to add the remaining amount to make it equivalent to the minimum wage.
On 27 September 2017, the National Bank of Cambodia ("NBC") issued Prakas No. B7-017-299 on Settlement of Complaint for Consumer of Banks and Financial Institutions ("Institutions") to promote the protection of rights and benefits of consumers in relation to the use of products and services of the Institutions.
The Prakas is applicable to the Institutions under the supervision of the NBC. The Prakas requires the Institutions to receive and resolve complaints by consumers directly and / or through representatives of the consumers, including complaints received by the NBC and forwarded to the Institutions. Furthermore, the Prakas also provides provisions in relation to the resolution of complaints, reporting obligations, protection on complaints to NBC as well as penalties.
On 27 September 2017, the National Bank of Cambodia ("NBC") issued a Prakas No. B7.017.300 P to set out the conditions for banks and financial institutions to register with the NBC in order to sell securities on the Cambodia Securities Exchange ("CSX"). This Prakas helps boost the Cambodian economy by collecting and increasing the funds to expand businesses.
Any bank or financial institution which wishes to register with the NBC to sell securities on the CSX shall meet the following criteria:
- Obtain prior approval from the NBC;
- Have a minimum net worth of KHR 60,000,000,000 (sixty billion Khmer Riels), approximately US$15,000,000 (fifteen million Khmer Riels);
- Have good financial health and governance determined by the NBC as "safe" for at least 2 years; and
- Fully comply with other provisions of the NBC.
After obtaining the approval from the NBC, the banks and financial institutions shall not sell securities on the CSX exceeding 20% of the voting rights of the banks and micro-finance institutions and shall not issue bonds exceeding 20% of their total assets.
On 27 September 2017, the National Bank of Cambodia ("NBC") issued Prakas No.B7.017.301 P covering the legal framework for the liquidity risk management for banks and financial institutions under the supervision of the NBC ("Institutions"). This Prakas aims to mitigate the severe liquidity risk and impacts on the banking system of the Cambodia and to protect the consumers – especially the depositors and the borrowers.
In order to achieve the above, the Prakas also sets out the minimum requirements and points out the methods that the Institutions shall take into consideration and comply with i.e. good corporate governance, liquidity risk management, stress test and scenario analysis, risk indicator and capital strategy plan.
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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