Rajah & Tann Regional Round-Up

your snapshot of key legal developments in Asia

Issue 1 - Q1 2020 (Special Edition on COVID-19)


Control and Support Measures in Lao PDR Amid the COVID-19 Pandemic

On 29 March 2020, the Prime Minister issued the Order on Reinforcement Measures on Containment, Prevention and Full Response to the COVID-19 Pandemic ("Order"). Pursuant to the Order, restrictions were imposed on movement and gatherings, and employees (other than those in essential services) were required to work from home for the period from 30 March 2020 to 19 April 2020.

Even before the Order was issued, the Bank of Lao PDR ("BOL") had on 26 March 2020 issued the Decision on Policy in Respect of Loans to Provide Relief Measures Due to the Impact of the COVID-19 Pandemic ("BOL Decision").  The BOL Decision requires commercial banks to allow borrowers more time to repay principal and interest and to support parties adversely affected by the pandemic.  Loans re-structured pursuant to the BOL Decision need not be classified as non-performing.

On 31 March 2020, the Ministry of Industry and Commerce issued a Notice to temporarily suspend factories (other than those producing essential goods as stated therein) from operating ("MOIC Notice"). These factories would have to provide accommodation and social welfare benefits to their employees. Factories that were allowed to operate would have to take steps to protect their employees by monitoring employees' temperature, practising social distancing and sanitising the premises.

On 2 April 2020, the Prime Minister issued the Decision on Policies and Measures to Reduce Impact from COVID-19 Pandemic ("PM Decision"). Pursuant to the PM Decision, certain employees and businesses were exempted from making payment of income tax. Personal protection equipment was also exempt from import duty. BOL was authorised to instruct commercial banks to increase their Loan-to-Deposit Ratio. BOL would also be authorised to permit commercial banks to defer repayment by their customers of principal and interest, and to continue to grant loans. Various measures and instructions were also set out in the PM Decision to reduce government expenditure and promote SMEs and the tourism industry.

On 2 April 2020, the National Task Force Committee for Prevention and Control of COVID-19 ("Task Force") issued Guidelines on Implementation of the Order ("Guidelines"). The Task Force acts as co-ordinator to monitor and assess efforts to prevent and control to spread of COVID-19. The Guidelines provide more details on steps to be taken to implement the Order. It also set out the objectives of the Task Force.

On 5 April 2020, the Ministry of Energy and Mines issued a Notice to temporarily suspend mineral processing plants from operating and suspend construction of dam projects ("MEM Notice"). The terms of the MEM Notice are similar to those of the MOIC Notice. 

As at the date hereof, the Order has been extended to 3 May 2020.

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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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Khanti Syackhaphom
Legal Advisor
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Desmond Wee
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