Regional Round-Up

CAMBODIA

Mediation in Cambodia

Mediation has been one of the traditional dispute resolution mechanisms that has evolved as part of the Cambodian culture and legal system. Although the use of mediation is permitted and is provided for under various laws, there are no uniform procedures for mediation, and the procedures employed may vary depending on the type of dispute and the individual mediator's locality and method of personal preference.

Currently, there are no standalone regulations and regulated procedures focusing on mediation under Cambodia's legal framework. Relevant provisions relating to mediation can be found in various regulations including the Code of Civil Procedures, Labour Law, Land Law and its related regulations, Investment law, Law on Management and Administration of Commune and Sangkat Council, Law on Insurance 2014, etc.

Moreover, under Cambodia's legal framework, there are two types of mediation:

1. Mandatory Mediation: under certain regulations (such as the Law on Telecommunications, Trade Union Law, and Land Law), parties are required to go through a mediation process to attempt to resolve the dispute first before filing a lawsuit with a court, except in a criminal case.
2. Non-Mandatory Mediation: the regulations provide for the right to refer a dispute to mediation, rather than making it compulsory.

In Cambodia, outside of the statutory context discussed above, mediation has been noticeably promoted under various initiatives undertaken by the Ministry of Justice and relevant institutions including but not limited to the Cambodia Centre for Mediation, the National Commercial Arbitration Centre ("NCAC"), International Finance Corporation, and the Centre for Effective Dispute Resolution.

Cambodia has begun to place increasing attention and endorsement on mediation. In this regard, the General Assembly of NCAC adopted on 18 March 2023 three main documents to allow NCAC to provide mediation services. Those documents are: (i) the Mediation Rules, which set out the procedure and principles for conducting mediation under the auspices of NCAC; (ii) the Code of Conduct for Mediators, which establishes the ethical standards and professional responsibilities for mediators registered with NCAC; and (iii) the Rules on Qualification and Registration of Mediator of National Commercial Arbitration Centre, which specify the criteria and process for becoming a mediator accredited by NCAC.

We can expect that mediation will become even more important as a mode of alternative dispute resolution in the future.

For more information, click here and here to read our Legal Updates.

Implementation of Online System for Domain Name ".kh" Registration

On 31 January 2023, the Ministry of Post and Telecommunications of Cambodia issued Announcement No. 178 on the Implementation of Online System for Domain name ".kh" Registration announcing the setting up of an online system for domain name registration to facilitate a quick, convenient, and effective registration process.

The type of domain name (such as ".kh", ".com.kh", ".net.kh", ".org.kh", and ".edu.kh") is provided according to the category of applicant, including individuals, commercial enterprises, companies, organisations, associations, state, and private educational institutions. 

Sub-Decree No. 52 on the Implementation of Document Verification Platform – verify.gov.kh

Verify.gov.kh is a government platform developed by the Ministry of Post and Telecommunications ("MPTC") for the purpose of, among others, verifying the authenticity of documents that are embedded with Standard QR Codes developed by MPTC using blockchain technology.

Ministries, governmental institutions, state-owned enterprises, and private entities that wish to use Standard QR Codes on their documents can submit an online application form to MPTC by providing the following information: (i) the names and number of documents to be embedded with QR Code, (ii) samples of such documents, and (iii) the name and contact of the applicant. The application fee and cost in relation therewith shall be determined under a separate regulation.

All verification of documents through the verify.gov.kh platform is free of charge, and a copy of the document embedded with the Standard QR Code is not required to be legalised in paper form.

Measures to Mitigate Economic Impact of COVID-19 and Assist Recovery of Tourism Sector

On 30 January 2023, the Royal Government of Cambodia ("RCG") issued press release No. 01 ("Press Release 01") providing the following three key relief measures to mitigate the economic impact of COVID-19 and support the recovery of the tourism sector: 

1. Exemption from Monthly Tax Payments: This exemption applied to hotels, guesthouses and travel agent companies that are registered with the General Department of Taxation and operate in the Siem Reap province. They were exempted from paying their monthly tax, except value added tax (VAT), for three months from January 2023 to March 2023.
2. Freezing of Tax Liabilities and Non-Imposition of Penalties: The RCG will continue to freeze the tax liabilities for the tourism sector up to the end of 2019 and will not impose penalties in 2023.
3. Skills Development Training for Staff: Taxpayers in the tourism sector are encouraged to offer skills development training to their staff.

For more information, click here to read our Legal Update.

CHINA

PRC Accedes to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents

On 8 March 2023, the People’s Republic of China ("PRC") formally acceded to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents ("Convention") (available here). The Convention will come into force in the PRC on 7 November 2023. The accession to the Convention will have the effect of abolishing the traditional requirement of legalisation, replacing the long and costly legalisation process with the issuance of a single Apostille certificate by a competent authority in the place where the document originates. The PRC has designated the Ministry of Foreign Affairs as its competent authority. Authorised by the Ministry of Foreign Affairs of the PRC, the Foreign Affairs Offices of provinces, autonomous regions and municipalities directly under the central government can issue the certificates relating to public documents emanating from within their respective administrative areas.

There are also several issues of note regarding the PRC’s accession to the Convention.

1. The Convention explicitly defines "public documents" in Article 2, which includes:

   
   

   • documents emanating from an authority or an official connected with the courts or tribunals of the State; 
   • administrative documents; 
   • notarial acts; 
   • official certificates which are placed on documents signed by persons in their private capacity. 

   
   

   However, there is no corresponding definition of "public documents" under the PRC laws. One similar concept is "public documentary evidence" (公文书证) under the Rules of Evidence issued by the PRC Supreme Court in 2020, but courts in different provinces still have different interpretations regarding the definition and scope of "public documentary evidence". Therefore, such key issue regarding the scope and definition of "public documents" to which the Convention could apply is still subject to further interpretation by the PRC legislation authority.

2. According to Item 2 of the declarations ("Declarations") issued by the PRC, the Convention will not be applicable between the PRC and those contracting states that the PRC does not recognise as sovereign states. According to Item 4 of the Declarations, Item 2 of the Declarations applies to the Hong Kong Special Administrative Region and the Macao Special Administrative Region (which are part of the PRC but separate jurisdictions), which means the legalisation of foreign public documents between the Chinese Mainland and Hong Kong or Macao will continue to follow the current mechanisms.

China Publishes Final Version of Standard Contract for Cross-border Personal Information Transfers

On 24 February 2023, the Cyberspace Administration of China ("CAC") released the Measures for the Standard Contract for Cross-border Transfers of Personal Information (个人信息出境标准合同办法) ("Measures") and the corresponding Standard Contract for Cross-border Transfers of Personal Information (个人信息出境标准合同) ("Standard Contract"), which will come into force on 1 June 2023. The Measures provide a six-month grace period from its effective date (i.e. before 1 December 2023) for entities/any relevant parties to rectify any non-compliance with the Measures.

Only a Personal Information Processor ("PIP") who satisfies all of the following conditions may use the method of signing a Standard Contract to export personal information:

1. It is not a critical information infrastructure operator.
2. It processes the personal information of less than one million people.
3. It has exported the personal information of fewer than 100,000 people since 1 January of the previous year.
4. It has exported sensitive personal information of fewer than 10,000 people since 1 January of the previous year.

According to the Measures, before transferring the personal information abroad, the PIP must first perform a personal information protection impact assessment, focusing on the legality, risk of the transfer, and the overseas recipient's undertakings and capabilities, etc. The PIP and its recipient shall strictly follow the version of the Standard Contract appended to the Measures but may agree on other terms. The PIP then must file the impact assessment report and executed Standard Contract with the cyberspace administration of the province or equivalent where it is located. 

Compared with the last version of the Standard Contract issued by CAC last year for public comments, there are no substantial changes to the obligations of the parties under the final version of the Standard Contract. Instead, it mainly refines and optimises the content of obligations and the method of coordination between the parties. The PIP is responsible for informing and obtaining consent from the personal information subject, ensuring the overseas recipient's compliance, and responding to regulators' inquiries, etc. The overseas recipient must process personal information as agreed, minimise the impact on individuals, safeguard data security, and inform the PIP and regulators of any raised risks. However, in terms of the personal information subject’s rights, it is noteworthy that the final version further specifies that the personal information subject, as a third-party beneficiary, may initiate legal proceedings in respect of the dispute under this contract to the people's court with jurisdiction in China.

China Establishes the Filing-based Administration of Overseas Securities Offering and Listing by Domestic Companies

On 17 February 2023, the China Securities Regulatory Commission ("CSRC") published new regulations for the filing-based administration of overseas securities offering and listing by domestic companies, effective from 31 March 2023. The regulations comprise six sets of documents, including the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (境内企业境外发行证券和上市管理试行办法) ("Measures") and five supporting guidelines. The new approach replaces the current approval-based system.

Under the Measures, direct and indirect overseas securities offering and listing activities by domestic companies must comply with the filing requirements. In terms of indirect overseas offering and listing, the Measures set out the conditions that, if met on a substance-over-form basis, constitute indirect overseas securities offering and listing activities by domestic companies. After such direct and indirect offering and listing activities, these domestic companies are also required to comply with reporting requirements when certain material events occur, such as change of control. Separately, overseas securities companies acting as sponsors or lead underwriters must file with CSRC and submit annual reports on their business activities, pursuant to the Measures.

Regarding how the new filing-based regime would apply to the domestic companies with a variable interest entity ("VIE") structure, CSRC responded that it would seek the views of the relevant authorities and these companies would be allowed to file if their VIE structures comply with applicable PRC laws and regulations.

The promulgation of the Measures indicates that the regulatory system for overseas offerings and listings by domestic companies has officially stepped into a new era of a comprehensive filing-based system and closed many previous regulatory gaps. Henceforth, in many cases of domestic companies seeking for a listing on the Singapore Exchange ("SGX") – for example, indirect offering and listing on SGX of the shares of entities incorporated outside of the PRC and adopting a "red-chip" structure – filing procedures will have to be carried out with CSRC. For a detailed analysis on the Measures, please click here to read our Legal Update.

INDONESIA

New Capital, New Rules. A Closer Look at Land Regulations for Nusantara

The Indonesian Government has issued Regulation No. 12 of 2023 on Business Licensing, Ease of Doing Business, Investment Facilities for Business Players in the State Capital ("Regulation"), which provides incentives to encourage domestic and foreign investment in the country's new capital city, Nusantara, currently being developed in Kalimantan. The Regulation establishes a simplified process for obtaining land titles for non-governmental activities and grants guaranteed land tenure for one cycle, including initial tenure, extended tenure, and renewed tenure, for investors in Nusantara. Moreover, the tenure for these land titles is significantly longer than the tenure for such land titles outside Nusantara under the 1960 Agrarian Law.

In terms of living in Nusantara, the Government allows Indonesian citizens to own freehold land in Nusantara, while foreign citizens can own landed housing by obtaining a right to use on a land title. However, they cannot buy, own, and/or possess government aid housing in Nusantara. It remains unclear whether a transfer of land title involving a land previously classified as an asset controlled by OIKN (aset dalam penguasaan otorita ibu kota negara or "ADP") (ex-ADP land) still requires the State Capital Authority's approval. The move of the capital aims to attract investors to Nusantara and to relieve the overpopulation, traffic congestion, and environmental degradation faced in Jakarta.

For more information, click here to read our Legal Update.

PPSK Law and the Changing Landscape of Indonesia's Capital Market Sector

The Indonesian Government has introduced the Omnibus Law for the financial sector, or Law No. 4 of 2023 on Financial Sector Development and Reinforcement ("PPSK Law"), to revamp the country's financial sector by amending 16 laws and revoking one law. Under the PPSK Law, there will be an introduction of financial instrument managers, such as a special purpose vehicle (SPV) or a trust fund manager (Trustee), which will carry out securitisation activities and manage a trust fund. It also expands the definition of securities to adapt to technological innovation, including securities-related derivatives and digital financial assets like crypto assets, and is regulated by the Financial Services Authority ("OJK").

The PPSK Law also extends the responsibility of parties that have obtained a licence, approval, or effective statement from OJK to cover their directors, commissioners, principal shareholder, controller, employees, and other parties working for them. Any director, commissioner, shareholder, and/or affiliate of the party is personally liable, whether jointly or severally, for losses suffered by the party, its customers, and/or its investors. Additionally, it mandates that there will be a single presence policy for securities companies, which will be regulated under a government regulation enacted within six months from the PPSK Law's enactment date.

For more information, click here to read our Legal Update.

Does the New Regulation on Pre-Investigation Tax Audit Improve Certainty for Taxpayers?

Indonesia's Minister of Finance issued a new regulation, Minister of Finance Regulation No. 177/PMK.03/2022 ("Regulation"), which provides taxpayers with more certainty during pre-investigation tax audit procedures. The Regulation includes several new provisions, such as a shorter timeline for completing the audit and a mandatory request for clarification from taxpayers on potential state loss due to a tax crime. Additionally, tax auditors must notify taxpayers of the audit results, which can either escalate the process into an investigation or close the case if no evidence of a tax crime is found.

Taxpayers should cooperate with the tax authority during a pre-investigation audit and admit to any mistakes and pay the underpaid tax plus a 100% penalty to prevent the escalation of the case to an investigation. If a mistake is not admitted and the case is escalated to an investigation, any admission by the taxpayer will be subject to a penalty of up to 400% of the underpaid tax.

For more information, click here to read our Legal Update.

Singapore and Indonesia Sign MOUs for Closer Cooperation in Renewable Energy and Digital Economy

On 16 March 2023, it was announced that Singapore and Indonesia will work more closely in the areas of renewable energy and digital economy and both countries have entered Memoranda of Understandings ("MOUs") in this regard.

Renewable Energy

Both countries signed an MOU on Renewable Energy Cooperation, under which both countries will develop a cooperative institutional framework to facilitate investments in the development of renewable energy manufacturing industries in Indonesia and cross-border electricity trading projects between Indonesia and Singapore, including:

1. Facilitating investments to develop upstream and downstream renewable energy manufacturing industries and capabilities in Indonesia, building on investments for electricity export projects to Singapore;
2. Supporting the development of solar farms and Battery Energy Storage Systems (BESS) to supply renewable energy into Indonesia and for energy export;
3. Promoting investments to attract industries using renewable energy into Green Corridors in Indonesia; and
4. Facilitating commercial arrangements and creating frameworks and transmission infrastructure for cross-border electricity trading between both countries, which would create capital inflows into Indonesia.

This MOU builds on the Energy Cooperation between Indonesia and Singapore that was signed last year, and the MOU on Climate Change and Sustainability signed in March 2022.

Digital Economy

Singapore and Indonesia also signed an MOU on Singapore-Indonesia Tech:X Programme, which establishes the Tech: X Programme. This Programme is aimed at, among others, growing young tech talent and developing the tech ecosystems in both countries. More details on the Tech:X Programme will be released in due course. Various partnership documents relating to the digital economy, including healthtech and edtech, were also signed between Singapore and Indonesia companies.

The MOUs represent the strong belief that Indonesia and Singapore have in the deep synergies and strategic and economic value of renewable energy and digital economy initiatives between the two countries. 

OJK Announces Guidelines to Implement Offerings Classified as Non-Public Offerings

The Financial Services Authority ("OJK") has issued Circular Letter No. 33/SEOJK.04/2022 on Guidelines for Implementing Securities Offerings Classified as a Non-Public Offering ("Circular Letter"). The Circular Letter is a follow-up to the OJK Regulation No. 29/POJK.04/2021, which increased the value threshold of a non-public offering to IDR5 billion and stipulated that the offering must be conducted within 12 months to be classified as a non-public offering. The Circular Letter provides guidance on the procedure for a higher value non-public securities offering, and it reiterates that such an offering must be conducted within a maximum of 12 months after (i) the issuance of OJK's decision and in the territory of the Republic of Indonesia or to Indonesian citizens using mass media; or (ii) offered to more than 100 parties or sold to more than 50 parties. The procedures in the Circular Letter apply to various parties offering securities, including Indonesian public companies with a share ownership programme, foreign companies listed in any stock exchange with a share ownership programme, supranational agencies, parties offering securities for market penetration, and parties offering securities to support a government's policy.

The Circular Letter's requirements for parties conducting a non-public offering, notably the preparation of an information memorandum, can be onerous. For example, a public company with a share ownership programme that previously only needed approval from independent shareholders to offer shares to employees must now prepare an information memorandum containing information similar to that required for an initial public offering. Parties conducting a non-public offering must review the Circular Letter's requirements carefully and maintain an open line of communication with OJK to ensure a successful closing.

For more information, click here to read our Legal Update.

Indonesia Expands its Anti-Tax-Avoidance Measures: A Development to be Aware of in Tax Planning and Compliance

The Indonesian Government has introduced new measures under Government Regulation No. 55 of 2022 on Rules Adjustments in Income Tax ("Regulation") to combat tax avoidance practices. The measures include formalising the "substance-over-form" principle into a written provision that allows the tax authority to impose adjustments based on the principle as an anti-avoidance measure if other anti-avoidance measures are ineffective. Furthermore, the Regulation allows the tax authority to recalculate tax payable based on a comparison of a taxpayer's financial performance against comparable companies in related-party transactions and deny deductibility of payments made to non-residents if they create double non-taxation benefits or double deductions.

These new measures demonstrate Indonesia's commitment to fully implement the Base Erosion and Profit Shifting (BEPS) Action Plan No. 2, and taxpayers must comply with the tax legislation. Corporate taxpayers planning to restructure must ensure that their proposed restructuring scheme follows the current tax framework, including the Regulation. The formalisation of the substance-over-form principle gives significant power to the tax authority, and the detailed procedural rules governing its implementation will be crucial to ensure that the tax authority does not abuse its authority and that the taxpayer is treated fairly.

For more information, click here to read our Legal Update.

A New Rule Requires Importers of Software or Other Digital Products via Electronic Transmission to Fulfil Customs Obligations

A new regulation in Indonesia requires importers of intangible goods (such as software or other digital goods via electronic transmission) to fulfil customs obligations, including submitting a customs declaration and paying relevant import taxes and customs duties. The Minister of Finance has enacted Minister of Finance Regulation No. 190/PMK.04/2022 on Release of Imported Goods for Use ("Regulation"), which sets out the relevant procedural rules. The customs duty rate for such goods is 0% if they are not classified as hardware but can reach up to 20% if they are classified as hardware, depending on the classification of the hardware.

However, there are outstanding issues relating to the Regulation that require further analysis, including the applicability of the reverse charge VAT mechanism for parties that buy software or other digital goods from offshore to be used in Indonesia, and whether offshore sellers of digital goods should collect the VAT or buyers should self-pay the VAT via a customs declaration. Companies involved in the technology industry would be the focus of the customs authority, particularly if they have an import identity number and import hardware into Indonesia, and must be aware of the Regulation.

For more information, click here to read our Legal Update.

LAO PDR

Amended Law on Electronic Transactions

On 23 March 2023, the Amended Law on Electronic Transactions No.31/NA, which was issued on 29 December 2022 ("Amended Law"), was published in the Official Gazette of Lao PDR. The Amended Law came into effect on 7 April 2023. It replaces the Law on Electronic Transactions No.20/NA dated 7 December 2012.

Under the Amended Law, "electronic transaction" refers to the provision of services wholly or partially through electronic means such as trading, making payments, and licensing through an online system.  The Amended Law applies to domestic and foreign individuals, legal entities or organisations who are conducting activities relating to electronic transactions in Lao PDR.

Elements of Electronic Contracts

The following are the elements of an electronic contract, which is created through the use of electronic tools: (i) offering and accepting of offer to enter into a contract; (ii) notice of intention or other message by the originator of the communication or the recipient of the communication regarding the informational message or electronic document; and (iii) agreement between electronic transaction partners on the choice of technology tools, electronic communication methods and electronic signature requirements. The details on the recognition and use of electronic signatures are set forth in the Law on Electronic Signatures.

It must be noted that the the creation of each type of electronic contract must also comply with the Civil Code. Electronic contracts can be updated electronically unless otherwise specified in the contract. Changing the format of documents, i.e. paper version to electronic format does not change the rights and obligations of each party.

Electronic Transaction System

The electronic transaction system service provider shall comply with the following requirements: 

1. register for the provision of electronic transaction service system the relevant ministries;
2. operate the system in a regular, safe, and continuous manner;
3. post the necessary information relating to electronic transactions including legal information on its official website;
4. maintain the confidentiality of users of the service;
5. ensure business activities are fair, equal, and non-discriminatory; and
6. comply with the conditions set forth in Articles 28 and 47 of the Amended Law (i.e. creating its own electronic transaction accounts, determining how to create electronic transactions for users, applying for an enterprise, a business operating license) and other relevant laws.

Proof and Authentication of Digital Identity

Individuals, legal entities or organisations that intend to create a digital identity to conduct electronic transactions must register with a service provider.  The service provider will prove the digital identity according to the level of reliability of digital identity verification.

The service provider will register the things (i.e. basic password, on time password, password with tools) that are used to verify identity and connect the digital identity of of individuals, legal entities or organisations that have gone thorugh digital identity verification, to what is being used to verify identity.

Individuals, legal entities or organisations that have passed digital identity verification will change their status to service users with a valid digital identity and receive an identity document to be used for further identity verification.

Businesses of Electronic Transactions

For businesses related to electronic transactions, the requirements in carrying out these businesses are set out below.

1. Electronic transaction system service: (i) Obtain an enterprise registration and business operating license from the relevant sectors; and (ii) apply to pass the technical standards of transaction systems from the Ministry of Technology and Communications ("MTC").
2. Digital identity verification and authentication services: Apply for enterprise registration and business operating license with MTC.
3. Electronic signature certificate issuance service: Obtain business registration and business operating license with MTC.

Decision on Management of Telecommunications and ICT Equipment No.3583/MTC

On 21 February 2023, the Decision on Management of Telecommunications and ICT Equipment No.3583/MTC which was issued on 13 December 2022 by the Ministry of Technology and Communications ("MTC") ("Decision"), was published in the Official Gazette of Lao PDR. The Decision applies to individuals, legal entities or organisations, both domestic and foreign, conducting the production, importation, exportation, use and distribution of telecommunications and information and communications technology ("ICT") equipment (collectively, "Equipment") in Laos. It replaces the Decision on Inspection and Certification of Technical Standards ICT Equipment No.2118/MTC dated 8 August 2018.

The Decision defines the principles, regulations and measures regarding the management of telecommunications and ICT equipment.

Equipment are categorised into two categories: (i) those that must be certified and declared compliant with technical regulations; and (ii) those that only need to be declared compliant with technical regulations.

The technical inspection (which relates to the technical parameters set by the Technical Regulation Inspection Office designated or approved by MTC) of Equipment is the inspection of a sample equipment or a test of a specific model or version (Type Testing) that the applicant has sent to the Technical Regulation Inspection office for inspection. The sample represents the same model or version of equipment that will be produced, imported or exported. The Equipment must be inspected before their production, importation, export, use, and distribution in Lao PDR.

The six main categories of inspection are as follows:

1. Inspection of use of radio frequency (RF);
2. Inspection of electromagnetic compatibility (EMC);
3. Inspection of electromagnetic field (EMF);
4. Safety inspection on specific absorption rate (SAR);
5. Checking the connection; and
6. Electrical safety inspection.

Technical regulation verification will be conducted after the Equipment have passed the technical regulation inspection. Once they are verified to be compliant, the following will take place: 

1. Issuance of a technical regulation certificate (Type Approval Certificate);
2. Declaration of compliance with technical regulations (Declaration of Conformity (DoC)); and
3. Use of a technical regulation label.

Individuals, legal entities or organisations that intend to import Equipment must undergo inspection and have their equipment certified  by MTC first (except for the equipment specified in Article 26 of the Decision) before they can import such equipment. A licence to import the Equipment shall be issued after the inspection and verification under the technical regulations.

Terminating the Currency Exchange Business of the Currency Exchange Shop Representatives of Commercial Banks

On 13 January 2023, Notice on Terminating the Currency Exchange Business of the Currency Exchange Shop Representatives of the Commercial Banks No.01/BOL ("Notice 01") was issued by the Bank of Lao PDR ("BOL") to commercial banks and currency exchange shop representatives ("Representatives"). To implement the amended Law on Foreign Exchange No.15/NA dated 7 July 2022, Notice 01 provides the following:

1. BOL will terminate the currency exchange business of all 113 Representatives which are currently under Lao PDR's six commercial banks.
2. Commercial banks that have Representatives will not renew their currency exchange shop representative contracts ("Contracts"). They will (i) cancel their Contracts with all their Representatives; (ii) proceed to close the deposit accounts issued in the name of the Representatives at the relevant commercial banks; and (iii) send memoranda on the cancellation of the Contracts between the commercial banks and the Representatives. The business licenses of the Representatives belonging to the commercial banks should have been returned to the Department of Currency Policy or relevant branches of BOL by 31 January 2023.
3. Commercial banks intending to establish a currency exchange unit must comply with the Decision on Currency Exchange Service No.1026/BOL dated 28 December 2022.

Ministry of Public Works and Transport Modernises Transport Management System

The Ministry of Public Works and Transport ("MPWT") has changed the management, monitoring and inspection of cargo, cargo containers and cargo vehicles passing through international crossings by land, water, rail and air with the use of the cross border transport management ("CBTM") system.  This is to facilitate the transport of goods in a convenient and efficient manner, and be compliant with laws and regulations by recording, storing and reporting transport information electronically or printing documents from the system.

The CBTM system refers to the web-based application system of the Lao International Truckers And Freight Forwarders Association ("LITFA") with a centralised database, which is used for recording entry-exit information and maintaining goods, cargo containers and cargo documents through an electronic system. The CBTM system can be accessed through mobile phones (Smart Phones), computers, tablets and other electronic devices.

According to the Instruction on Cross Border Transport Management, No. 2525/MPWT, dated 30 January 2023, for foreign cargo vehicles that temporarily enter the customs territory of Laos, cargo carriers must comply with the following requirements and conditions:

1. Be members of LITFA and have paid the association maintenance fee in full within one quarter (for old members). New ordinary members must have paid the registration fee and association maintenance fee in full after the approval of their membership;
2. They are a contracting party with a foreign shipping company that (i) has been authorised to operate the shipping business properly and (ii) has a document certifying that it is a guarantor for the contracting party in accordance with the LITFA agreement form in the CBTM system;
3. Pay the costs, system usage fees and other obligations issued by LITFA;
4. Attend the CBTM system training, pass the exam and have their own access code;
5. Issue shipping documents on behalf of the foreign carriers, and be responsible for ensuring transportation as well as insurance for each trip; and
6. No criminal record issued by the court indicating that they have been prosecuted or sentenced in relation to violations in transporting goods.

Users of the User ID system in the CBTM system are classified into three categories: (i) User ID of the Trade and Transportation Facilitation Committee Secretariat; (ii) User ID of the international checkpoint; and (iii) User ID of the operator.

MALAYSIA

Amendments to the LEAP Market Transfer and Recognised Approved Adviser Framework

The LEAP Market Transfer Framework, which facilitates the graduation of eligible Leading Entrepreneur Accelerator Platform ("LEAP") Market-listed corporations to the ACE Market of Bursa Malaysia Securities Bhd, came into effect on 1 April 2023.

Key amendments were introduced in the Access, Certainty, Efficiency ("ACE") Market Listing Requirements ("ACE LR"), including the introduction of a Recognised Approved Adviser Framework; and the expansion the pool of Sponsors/Advisers in the ACE Market on transfer listings and permitted corporate exercises.

Under the LEAP Transfer Framework, the transfer applicant must fulfil the following conditions:

1. have been listed for at least two years on the LEAP Market at the time of application for the transfer of listing;
2. be considered as suitable for listing on the ACE Market by a Sponsor, or both Sponsor and Recognised Approved Advisers as Joint Transfer Sponsors;
3. comply with the admission criteria and transfer of listing requirements set out in the ACE Market Listing Requirements, including the moratorium requirements;
4. undertake an issue of shares to the general public as part of its transfer of listing; and
5. comply with the relevant admission procedures and requirements as may be prescribed by the Exchange.

A transfer applicant must first obtain its shareholders' approval for delisting. This resolution must be approved by a majority of its shareholders in number – representing 75% of the total number of issued shares held by its shareholders, present and voting in person or by proxy at the meeting; and the number of votes cast against the resolution should not be more than 10% of the total number of issued shares held by the shareholders, present and voting in person or by proxy at the meeting.

The amendments also require the Sponsor (together with the transfer applicant and other key advisers) to consult the Exchange before submitting the transfer listing application.

The United Kingdom Joins the CPTPP: Enhancing Trade and Investment Relationship with Malaysia

On 31 March 2023, just slightly over two years since applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP"), the United Kingdom ("UK") announced that it had concluded negotiations on its accession to the CPTPP.

This free trade agreement ("FTA") between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam ("CPTPP Parties"), which was signed by these parties in March 2018, was ratified in Malaysia on 29 November 2022.

Before the UK can become CPTPP's 12th member, each existing Party must complete its own domestic ratification procedures to approve the UK's accession. The UK will also need to complete its own processes, such as conducting pre-ratification scrutiny and passing legislation to implement the FTA.

The result will be extensive tariff liberalisation between the UK and Malaysia – the first time the two nations will form a trade deal. As a consequence, it is anticipated, for example, that export tariffs for whiskey to Malaysia will be reduced from 80% to 0% within 10 years, while UK exporters of chocolate and sugar confectioneries will benefit from 0% tariffs on exports to Malaysia (current tariffs are between 10% and 50%). There will also be a side letter between the UK and Malaysia allowing more liberal rules of origin on automotive exports, giving UK car manufacturers better opportunities to export finished vehicles to Malaysia.

As part of negotiations leading up to its accession, the UK has agreed to eliminate import tariffs on Malaysian palm oil (currently ranging up to 12%). Both countries will issue a joint statement setting out their commitments on sustainable production and to protect forests in Malaysia.

The UK's accession to the CPTPP is expected to boost its trade and investment relationship with Malaysia, offering further opportunities for deepening the economic relationship.

New General Code of Practice of Personal Data Protection Issued under the Personal Data Protection Act 2010

Under the Personal Data Protection Act 2010 ("PDPA"), there are 13 specified classes of data users ("Specified Classes") that are subject to additional requirements under the PDPA, including the requirement to draw up binding Codes of Practice to set out data protection requirements that are tailored to their particular industries (e.g., banking, insurance, education, etc).

For the Specified Classes that have yet to establish Data User Forums and have yet to register their respective Codes of Practice with the Commissioner, the Personal Data Protection Commissioner ("Commissioner") has since issued the General Code of Practice of Personal Data Protection ("General COP"), which came into effect on 15 December 2022.

The General COP clarifies certain PDPA provisions and introduces several new requirements for the Specified Classes. Key provisions include: (i) additional information to be included in privacy notices; (ii) minimum clauses for agreements with data processors; and (iii) guidance on using personal data for direct marketing.

Failure to comply with the General COP can result in a fine of up to RM100,000 or imprisonment of up to one year, or both, for representatives of organisations that belong to Specified Classes that must comply with the General COP.

While the General COP is not binding upon other data users, the provisions outlined in the General COP are instructive about the Commissioner’s latest expectations in relation to the minimum measures required to be implemented by data users under the PDPA.

For more information, click here to read our Legal Update.

Introduction of Sales Tax on Low Value Goods on Online Marketplaces

In the Malaysian Budget 2022, the Ministry of Finance announced its intention to ensure a level playing field and fair treatment between taxable goods manufactured in Malaysia and imported goods. In line with this, changes are being made to the Sales Tax Act 2018 ("STA") pursuant to the Sales Tax (Amendment) Act 2022. This is being done in phases, to impose sales tax on low value goods ("LVG"), i.e. goods from outside Malaysia which have a sale value of not more than RM500 and which are brought into Malaysia by land, sea or air.

Amongst the key amendments introduced by the STA in respect of the LVG tax include the following:

(a) registration requirements on both foreign and local sellers of LVG which exceed RM500,000 in total sales value within 12 months;

(b) the rate of LVG sales tax is fixed at 10%; and

(c) LVG sales tax becomes payable when the LVG is sold by the registered seller who is required to issue an invoice or such document containing the prescribed particulars under the STA to the consumer.

The imposition of the LVG sales tax was originally scheduled to take effect on 1 April 2023; however, the Royal Malaysian Customs Department ("RMCD") has recently announced the postponement of the effective date. As at the date of this write-up, RMCD has yet to provide a further update on the new effective date for the imposition of the LVG sales tax.

For more information, click here to read our Legal update.

Personal Data Protection Act 2010 under the New Government: Updates to the Proposed Amendments in 2023

Since 2018, the Malaysian Government has endeavoured to continuously review and update the Personal Data Protection Act 2010 ("PDPA"). However, the tabling of the draft amendments ("Draft Bill") has been delayed for a variety of reasons.

The current Minister of Communications and Digital ("New Minister") has now been tasked with overseeing the proposed amendments to the PDPA. Based on the information obtained from the Department of Personal Data Protection ("JPDP"), it is understood that the confirmed proposed amendments in the Draft Bill will most likely be retained, with the possibility of expanding the scope of the Draft Bill to include additional amendments on other aspects of the PDPA.

At this juncture, the New Minister and JPDP have not provided confirmation about the additional amendments; however, the New Minister has highlighted two areas that are being considered, namely (i) increased penalties for misuse of data or breach of the PDPA in general, and (ii) increased enforcement powers and the elevation of JPDP into a statutory commission.

The new Draft Bill is currently scheduled to be tabled at the end of 2023.

For more information, click here to read our Legal update.

Winding Up Court Directions Given to Liquidator that Affect Substantive Rights of Parties are Now Appealable

The role of the liquidator is to realise the assets of the company and to pay off creditors of the company from the proceeds of sale. If difficulty arises in the course of his administration of the winding up process, the liquidator may apply to the court for directions.

A decade ago, the Malaysian Federal Court (being the apex Court) held in Ooi Woon Chee & Anor v. Dato’ See Teow Chuan & Ors [2012] 2 MLJ 713 that such directions to the liquidator were non-appealable on the grounds that those directions were in the nature of advice only and were not a judgment or order.

Recently, the same issue (on the appealability of such directions) came up before the Federal Court in Tan Kim Chuan v. Tan Kim Tian & Ors and another appeal [2022] 6 MLJ 888. The Federal Court clarified and qualified its earlier decision and held that such directions given to the liquidator are appealable only if those directions affect the substantive rights of the parties involved in the liquidation, which was a question of fact.

With this Federal Court decision, the decade-long doubt about whether directions given to the liquidator pursuant to the liquidator’s application under section 487(3) of the Companies Act (section 237(3) of the repealed Companies Act 1965) are non-appealable – which was once thought to be a blanket ban on challenges to such directions – has now been finally and conclusively removed.

For more information, click here to read our Legal update.

Recent Developments on Competition Law in Malaysia

We set our below the key developments on Competition Law in Malaysia in the past months.

Tabling of Amendments to the Competition Act; Enforcement Action by MyCC

In January 2023, the Minister of Domestic Trade and Cost of Living ("Minister") indicated that the proposed amendments to the Competition Act 2010 ("Competition Act"), which would incorporate a general merger control regime, would be tabled in Parliament by mid-2023. The Minister also indicated that the Malaysia Competition Commission ("MyCC") would focus on investigating cartel activities in the food and agriculture sector, in line with MyCC’s recent enforcement action against five feed millers for alleged cartel activities.

MyCC Determines TnG's Conduct did not Raise Competition Concerns

Separately, in response to allegations by the Federation of Malaysian Consumers Association ("FOMCA") that MyCC failed to put an end to the monopolistic behaviour of Touch 'n Go and its affiliate TNG Digital ("TnG"), MyCC stated in a press statement on 28 January 2023 that TnG's conduct did not raise any competition concerns.

It is important to note that under MyCC's guidelines on abuse of dominance, it is not illegal for enterprises to occupy a dominant position in their relevant markets. MyCC stated that it did not have jurisdiction over consumer issues between TnG and its users, and it had concluded that the issues that were raised by FOMCA were only related to consumerism.

MyCC Issues Executive Summary on Investigations into Terms of AMH Circular

MyCC had also conducted investigations into the terms of a circular issued by the Association of Malaysian Hauliers ("AMH") to its members dated 7 November 2016. The aim of the investigation was to determine if the circular amounted to an anti-competitive agreement resulting in price-fixing and/or the fixing of a trading condition among the AMH members. On 31 January 2023, MyCC closed its investigation and reported that it found insufficient evidence to indicate the existence of an agreement and/or concerted practice between the hauliers. MyCC issued an executive summary stating the reasons for its decision.

Singapore and Malaysia Sign Frameworks on Cooperation in Digital Economy and Green Economy

On 30 January 2023, Singapore and Malaysia signed two Frameworks on Cooperation ("FoCs") in Digital Economy and Green Economy. The FoCs, which were substantially concluded in August 2022, will lay the foundation for future bilateral initiatives relating to the digital and green economies.

Digital Economy

The FoC in digital economy seeks to promote greater inter-operability and collaboration on digital economy issues and improve coordination between Singapore and Malaysia beyond what the E-Commerce Chapters of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) Agreement provide.

The FoC covers various areas, including the following:

1. Trade Facilitation: To speed up the entire trade process, allowing seamless transactions online and across borders;
2. Cross-border Data Flows: To support the movement or transfer of information between the two countries;
3. Electronic Payments: To intensify cooperation in developing safe and secure cross-border E-payment systems;
4. Digital Identities: To encourage knowledge sharing for the development of the country's respective identity regimes, including the development of the ASEAN Unique Business Identification Number (UBIN); and
5. Business/Consumer Trust: To explore partnership in new and emerging areas to build trust in the digital systems.

Green Economy

Under the FoC on green economy, both countries agreed to cooperate in the following areas:

1. Next generation mobility: To explore collaboration on EV and AV standards and the adoption of technical references;
2. Environments, social and governance; capacity development programme for exporters: To promote knowledge sharing and business networking on sustainable business practices;
3. Low carbon solutions: To explore joint studies and projects on low-carbon solutions such as hydrogen and carbon capture, utilisation and storage;
4. Carbon credits industry collaboration: To explore collaboration voluntary carbon credits projects; and
5. Development of new and renewable energy related technology standards to support domestic and regional decarbonisation: This includes developing common policies and standards for new and renewable energy technologies.

MYANMAR

Key Highlights from the Union Taxation Law 2023

The 2020 Union Taxation Law ("UTL 2023") was enacted on 30 March 2023, which includes updates on tax rates and procedures relating to income tax, commercial tax and specific goods tax. The UTL 2023 took effect starting 1 April 2023 at the new financial year of 2023-2024. Some of the key highlights of the UTL 2023 include the increase in specific goods tax rates for liquor, the commercial tax exemption on Battery Electric Vehicles ("BEVs") and photovoltaic/solar-related equipment, and the increase in income tax threshold for small and medium-sized companies.

1. Specific Goods Tax ("SGT"). Specifically, the UTL 2023 increased the SGT tiers and rates for liquor. Starting 1 April 2023, the lowest tier ranges from MMK200 to MMK 1,400 with SGT of MMK209 per liter, and the highest tier is now at MMK 19,851 with SGT of 60% per liter value.
2. Commercial Tax ("CT"). CT rates remain at 5% except for the following: (i) internet services and hotel and tourism services increase to 15%; (ii) sales of SIM card and related services increase to MMK 20,000 per SIM card; (iii) sale of buildings constructed in Myanmar increase to 3%; (iv) sale of gold jewelry increase to 1%; and (v) export sale of electric power increasing to 8%. The UTL 2023 also enumerated 46 exempt goods and 34 exempt services. Included in the exemption list are BEVs (including batteries, accessories, and related services) and photovoltaic/solar-related equipment.
3. Corporate Income Tax ("CIT"). The CIT rate generally remains at 22%, but the CIT rate for companies engaged in oil and gas exploration and production is now 25%. The UTL 2023 increased the income tax exemption threshold for new small or medium-sized enterprise, depending on the industry, from MMK10 million to MMK15 million (approx. US$ 7,100) per year for three consecutive years, including the year of commencement of the business. The capital gains tax (CGT) is still at 10%, except for companies in the oil and gas exploration and production sector, which now ranges from 40 to 50%.
4. Gemstone Tax ("GT"). Under the UTL 2023, the tax exemption for diamonds and emeralds has been removed, but the royalty/gemstone tax remains at 5-11%.

Enactment of the Trademark Law

On 10 March 2023, the Department of Intellectual Property of Myanmar ("DIPM") issued Notification 82/2023 that the new Trademark Law (2019) will come into effect starting 1 April 2023.

DIPM has also announced that the new online trademark filing system will be officially open on 26 April 2023. New trademarks, transfers and licences must be registered under the new system, as unregistered transfers and licences are void. Mark owners who (i) registered a paper-based declaration of ownership with the Registration of Deeds Office or (ii) can otherwise prove use of their mark in the country prior to 1 April 2023, may apply for (re-) registration under the newly created online filing system before 1 April 2023. Owners of existing marks who have not yet applied for (re-) registration under the newly created online filing system may still be able to do so within six months from the grand opening date (rule 12 of the Mark Registration Rules), i.e., until 26 October 2023. Owners of new marks will be able to apply for their registration from the grand opening date on 26 April 2023.

Compared to the old paper-based mark protection system, the new online trademark registration system is compulsory.  The registered trademarks are protected for 10 years and can be renewable.  Transfers and licensing of the trademarks shall only be valid if registered, with at least 60 days required for registration. Further, cautionary notices will no longer be needed.

In addition to the above, there is also an avenue for an opposing party to file  a form called "Opposition for Registration of the Mark (TM-8)" in the following instances: (i) in case of a dispute where the mark does not meet the definition of a mark; (ii) there is a ground for rejection which was overlooked during the initial examination by the Trademark Office; or (iii) there is a relative ground for rejection such as identity or similarity with an earlier mark, mark causing reputational damage or a mark which violates a person's intellectual property rights. The applicant who filed the trademark is given the opportunity to file a defence against the opposition.

In this regard, the Union Supreme Court issued various notifications to confer jurisdiction over intellectual property ("IP") disputes to various courts.

1. Yangon Region High Court has jurisdiction over civil miscellaneous applications made by a person who is not satisfied with the decisions of IP Agency and Customs Department.
2. Kyauktada District Court in Yangon Region is a special IP Court for Myanmar to decide TM infringement cases.
3. Other Districts-level Courts have jurisdiction over criminal complaints for offences under the IP laws.

The Union Supreme Court also issued a notification setting out the procedure to be followed in IP disputes before the Courts.

Myanmar's State Administrative Council Extends State of Emergency

On 2 February 2023, the State Administrative Council extended its nationwide state of emergency for another six months, until 1 August 2023. This occurs two years after the February 2021 military coup and effectively delays the general elections initially required to be held by August 2023 in accordance with the Constitution. The National Defense and Security Council, which consists of senior members of the military, agreed to prolong the state of emergency and stated that it will be working towards holding the elections in the following year.

Foreign Companies Exempted from Mandatory Conversion of Foreign Currency

The Central Bank of Myanmar has issued Letter No. FE-1/2861 (Ka) ("Letter") on the application of mandatory foreign currency conversion rules. The Letter, released on 30 December 2022, provides that foreign companies holding shares of more than 35% are exempted from complying with the requirement of mandatory currency conversion. These foreign companies can use and sell the currency to authorised dealing banks (or AD Banks). However, if they intend to carry out outward bound remittance, they should seek the consent of the Foreign Exchange Supervisory Committee.

PHILIPPINES

BSP Mandates Full Adoption of QR Ph Codes for all QR-code Enabled Payments

The Bangko Sentral ng Pilipinas ("BSP") has approved guidelines that will facilitate the transition to the use of the National Quick Response ("QR") Code Standard ("QR Ph") for all QR code-enabled payment services. QR Ph was developed by the Philippine Payments Management, Inc., the payment system management body accredited by BSP in accordance with BSP Circular No. 1055.

Under the BSP’s guidelines, all BSP-supervised financial institutions acting as payment service providers ("PSPs") and which offer QR-enabled payment services, as well as PSPs that participate in the InstaPay automated clearing house, are required to use and display their QR Ph on their internet and mobile channels starting 1 July 2023. Following this date, non-QR Ph codes or proprietary QR codes shall be disabled and shall not be made available to the public. These covered institutions are required to submit the status of their compliance within 30 days from 23 February 2023 or the date of the memorandum and are reminded to provide appropriate training and guidance on the QR code system to their employees, including store cashiers and managers.

By adopting QR Ph, BSP aims to encourage greater use of digital payments by eliminating the need for merchants and customers to maintain several accounts, each with its own QR code. The use of QR Ph is intended to provide a solitary and more consistent payment mode for electronic transactions.

Philippines Seeks to Adopt ASEAN Sustainable and Responsible Fund Standards, Establish Rules on Related Investment Companies and Schemes

The Securities and Exchange Commission ("SEC") has completed the draft memorandum circular on:

1. the Adoption of the ASEAN Sustainable and Responsible Fund Standards ("ASEAN SRFS"); and
2. establishment of rules on (i) Qualification of a Local Investment Company under the ASEAN SRFS; and (ii) Recognition of a Foreign Collective Investment Scheme ("CIS") qualified under the ASEAN SRFS that seeks to offer in the Philippines under the ASEAN CIS Framework.

The draft memorandum circular was open for comments from the public from 7 to 17 March 2023.

Under the draft memorandum circular, SEC will adopt the ASEAN SRFS to apply to investment companies, including sub-funds of umbrella funds, that seek to offer locally or on a cross-border basis as an ASEAN Sustainable and Responsible Fund ("ASEAN SRF"). For an investment company to qualify as an ASEAN SRF, the investment company must: (i) be registered in the Philippines in accordance with the Investment Company Act and the Securities Regulation Code; (ii) comply with SEC Memorandum Circular No. 11 series of 2022 on the Sustainable and Responsible Investment Funds and any amendment thereto;  and (iii) comply with the ASEAN SRFS. An application may be filed with SEC by submitting the SEC ASEAN SRF Form which must be signed by a majority of the board of directors of the investment company and the fund manager, together with the application fee of Php10,000 plus a 1% legal research fee.

A local investment company qualified under the ASEAN SRFS, or one which is applying to qualify as such, may also offer its shares under the ASEAN CIS Framework by additionally complying with SEC Memorandum Circular No. 9, series of 2021 ("Memorandum Circular No. 9") on the Rules on Authorisation of an Investment Company as a Qualifying CIS and Recognition of a Foreign CIS under the ASEAN CIS Framework.

On the other hand, foreign SRFs may be offered in the Philippines after it has shown: (i) compliance with Memorandum Circular No. 9; (ii) proof of qualification as an ASEAN SRF; (iii) submission of a duly accomplished SEC ASEAN SRF Form; and (iv) payment of the application fee. In addition, the name of the foreign SRF must accurately and fairly reflect the sustainability of the environmental, social and governance (ESG) factors set out in its investment objective and/or strategy. The foreign SRF must also incorporate in its prospectus (i) a notification to the public of its qualification as an ASEAN SRF, (ii) the asset allocation, (iii) a sustainable investment strategy, (iv) risks associated with its sustainable investment objectives, and (v) policies and procedures to divest existing investments that were initially compliant but subsequently became ineligible.

PCC Sets New Compulsory Merger Notification Thresholds

The Philippine Competition Commission ("PCC") issued Commission Resolution No. 04-2023 ("Resolution") adjusting the compulsory notification threshold for mergers and acquisitions effective 1 March 2023. Pursuant to the Resolution, the adjusted thresholds are as follows:

1. Size of Party ("SoP"), namely the aggregate value of assets or revenues in the Philippines of the ultimate parent entity of one of the parties to a transaction – from Php6.1 billion starting 16 September 2022 to Php7 billion; and

2. Size of Transaction ("SoT"), namely the value of assets or revenues of the acquired entity and the entities it controls – from Php2.5 billion starting 16 September 2022 to Php2.9 billion.

To trigger the compulsory notification of a merger or acquisition with the PCC, both thresholds must be satisfied. For transactions with high public interest which do not meet the thresholds, however, the PCC may nonetheless launch a motu proprio review in the interest of consumers.

The PCC adjusts its thresholds annually based on the official estimate of the nominal Gross Domestic Product ("GDP") growth of the previous year. According to the official estimates of the Philippine Statistics Authority, the nominal GDP growth in 2022 was 13.5%.

From September 2020 to September 2022, the PCC notification threshold was set by the Bayanihan to Recover as One Act at Php50 Billion. PCC has since resumed its annual threshold adjustment since it started with a baseline threshold of Php1 billion under the Philippine Competition Act.

The set thresholds will remain effective until PCC approves a new set of thresholds for compulsory notification.

Green Lanes for Strategic Investments Established to Facilitate Ease of Doing Business in the Philippines

On 23 February 2023, Executive Secretary Lucas P. Bersamin, on behalf of the President, signed Executive Order No. 18 ("EO No. 18"), titled "Constituting Green Lanes for Strategic Investments". EO No. 18 aims to expedite the process of securing necessary licences and permits for Strategic Investments through the creation of Green Lanes.

Under EO No. 18, Strategic Investments are defined as those which are aligned with the Philippine Development Plan or any similar national development plan, and can be characterised by (i) significant capital or investment to the country; (ii) consequential economic impact; (iii) positive impact on the environment; (iv) significant contribution to the country’s balance of payments; (v) with complex technical processes and engineering designs; and (vi) will bring about improvement in the country’s infrastructure capabilities. These Strategic Investments are classified into three categories:

1. Highly Desirable Projects;
2. Foreign Direct Investments; and
3. Projects or Activities under the Strategic Investment Priority Plan (SIPP).

EO 18 mandates all national government agencies and their regional and provincial offices, government-owned-or-controlled corporations, government instrumentalities, and local government units involved in the issuance of permits, licences, certifications, or authorisations covering Strategic Investments to establish Green Lanes to expedite the processes and streamline the requirements for the issuance of permits and licences. It also mandates the establishment of a One-Stop-Action-Center for Strategic Investments ("OSAC-SI"), which shall serve as the single point of entry for all projects qualified as strategic investments. OSAC-SI shall identify and endorse Strategic Investments to the appropriate Green Lanes, and shall include aftercare or post-investment assistance as part of its services.

Should a government agency fail to process an application within the prescribed periods, the application shall be deemed approved under Section 10 of the Anti-Red Tape Act of 2007. The Department of Trade and Industry or the Board of Investments may likewise endorse unresolved applications for permits and licences to the Anti-Red Tape Authority upon the lapse of the original or extended period for processing.

IPOPHL Promulgates New Trademark Rules for Non-traditional Marks

The Intellectual Property Office of the Philippines ("IPOPHL") issued Memorandum Circular No. 2023-001 ("MC 2023-001") or the Revised Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, which took effect on 14 February 2023. MC 2023-001 replaced the Revised Trademark Regulations of 2017 and institutionalised protection for non-traditional visual works.

MC 2023-001 lists down acceptable representations of non-traditional marks. It also clarifies that colour marks, motion marks, position marks, and hologram marks are acceptable subjects of trademark registration as long as the marks portray an acquired distinctiveness as defined under the Intellectual Property Code.

Under MC 2023-001, the Bureau of Trademarks ("Bureau") is also able to formally process fully digitalised transactions. Although mandatory online filing has been in place since September 2020, the Bureau still accepted — and in certain situations, required — the submission of physical, original documents to the office while also providing physical copies of official activities and correspondence. Under MC 2023-001, all communications shall now be transmitted via online platforms.

NPC Launches Online Registration Database

On 3 February 2023, the National Privacy Commission ("NPC") launched the NPC Registration System ("NPCRS"). The NPCRS is an online portal for registration with NPC of the data processing systems ("DPS") of both the government and the private sector.

The NPCRS is intended to ease compliance with Republic Act No. 10173 or the Data Privacy Act ("DPA") by allowing both the government and private organisations, considered as Personal Information Controllers ("PIC") and Personal Information Processors ("PIP") under the DPA, to register their respective DPS digitally.

A PIC or PIP that employs at least 250 persons, processes sensitive information of at least 1,000 individuals, or processes data likely to pose a risk to the rights and freedoms of data subjects shall register its newly implemented DPS or inaugural Data Protection Officer ("DPO") through the NPCRS within 20 days from the commencement of such DPS or from the effective date of the appointment of its inaugural DPO. 

A PIC or a PIP that processes personal or sensitive personal information involving automated decision-making or profiling must also register its DPS. Other entities may register their DPS voluntarily.

Upon registration, NPC shall issue a Seal of Registration simultaneously with the Certificate of Registration. The Seal of Registration and the Certificate of Registration shall be valid for one year from its issuance. The Seal of Registration must be displayed at the main entrance of the place of business, office, or at the most conspicuous place to ensure visibility to all data subjects.

SINGAPORE

Consultation on Bill to Enhance Oversight of Goods Passing through Free Trade Zones

On 20 March 2023, the Ministry of Finance ("MOF") announced proposed legislative amendments to the Free Trade Zones Act 1966. The amendments will update and strengthen the free trade zone ("FTZ") regime and thereby support Singapore's position as a trusted global trade hub by:

1. enabling the better detection, deterrence and prevention of money laundering, associated predicate offences and terrorism financing; and
2. protecting Singapore's financial system against illegal activities and illicit fund flows.

The key changes proposed in the draft Free Trade Zones (Amendment) Bill ("Bill") include:

1. the requirements for licensed FTZ operators, licensed FTZ cargo handlers, shipping agents and air cargo agents; and
2. the regulatory and enforcement regime.

MOF was seeking comments on the draft Bill and released the draft Bill only for the purpose of the public consultation. The draft Bill does not represent the final legislation. The public consultation ended on 9 April 2023. MOF will publish the consultation response on its website in April 2023.

For more information, click here to read our Legal Update which provides a summary of the key changes proposed in the draft Bill.

How Courts are Dealing with Crypto Disputes – Recent Developments in Crypto Asset Litigation across Jurisdictions

The crypto market has been through a tumultuous year, leading to an uptick in crypto litigation. Here, we explore the notable crypto litigation developments in the past year.

Jurisdictional gateways

Victims seeking their local courts' assistance must first demonstrate a good arguable case for invoking the court's jurisdiction over foreign parties.

1. In the UK, the recent decision of Osbourne v Persons Unknown [2023] EWHC 39 ("Osbourne") has cast doubt on the previously accepted position that jurisdiction follows the location of intangible crypto asset.
2. The Singapore courts have typically assumed jurisdiction on other bases, such as the defendants carrying on business or having assets in Singapore (CLM v CLN [2022] SGHC 46, Janesh s/o Rajkumar v Unknown Person [2022] SGHC 264).

Service of court documents

In court proceedings to recover 'stolen' crypto assets, courts have recently adopted an innovative solution to address this problem – Service of court documents via non-fungible token (NFT) airdrop:

1. LCX AG v John Doe Nos. 1-25 (Docket No. 154644/2022)
2. D'Aloia v Persons Unknown [2022] EWHC 1723
3. Jones v Persons Unknown [2022] EWCH 2543
4. Benjamin Arthur Bowen v Xingzhao Li (Case No. 23-cv-20399)

Fiduciary and tortious duties

In the preliminary decision of the English Court of Appeal in Tulip Trading Ltd v Van der Laan [2023] EWCA Civ 83, it was held there was a "realistic argument" that network developers are fiduciaries and owed fiduciary duties to cryptocurrency owners, including a duty of single-minded loyalty to the users of the Bitcoin software.

Crypto exchange found to be constructive trustee of stolen crypto assets

In Jones v Persons Unknown [2022] EWHC 2543, the English Court imposed a constructive trust on a third party to the fraud (in this case, a crypto exchange) and ordering the third party to deliver up the stolen crypto assets to the victim.

Doctrine of illegality

The case of Rio Christofle v Malcolm Tan Chun Chuen [2023] SGHC 66 is the first reported decision in Singapore where crypto actors have sought to have a sale and purchase agreement for crypto assets voided for illegality and made unenforceable by claiming the agreement breaches legislation.

For more information, click here to read our Legal Update.

Singapore and Indonesia Sign MOUs for Closer Cooperation in Renewable Energy and Digital Economy

On 16 March 2023, it was announced that Singapore and Indonesia will work more closely in the areas of renewable energy and digital economy and both countries have entered Memoranda of Understandings ("MOUs") in this regard.

Renewable Energy

Both countries signed an MOU on Renewable Energy Cooperation, under which both countries will develop a cooperative institutional framework to facilitate investments in the development of renewable energy manufacturing industries in Indonesia and cross-border electricity trading projects between Indonesia and Singapore, including:

1. Facilitating investments to develop upstream and downstream renewable energy manufacturing industries and capabilities in Indonesia, building on investments for electricity export projects to Singapore;
2. Supporting the development of solar farms and Battery Energy Storage Systems (BESS) to supply renewable energy into Indonesia and for energy export;
3. Promoting investments to attract industries using renewable energy into Green Corridors in Indonesia; and
4. Facilitating commercial arrangements and creating frameworks and transmission infrastructure for cross-border electricity trading between both countries, which would create capital inflows into Indonesia.

This MOU builds on the Energy Cooperation between Indonesia and Singapore that was signed last year, and the MOU on Climate Change and Sustainability signed in March 2022.

Digital Economy

Singapore and Indonesia also signed an MOU on Singapore-Indonesia Tech:X Programme, which establishes the Tech:X Programme. This Programme is aimed at, among others, growing young tech talent and developing the tech ecosystems. More details on the Tech:X Programme will be released in due course. Various partnership documents relating to the digital economy, including healthtech and edtech, were also signed between Singapore and Indonesia companies.

The MOUs represent the strong belief that Indonesia and Singapore have in the deep synergies and strategic and economic value of renewable energy and digital economy initiatives between the two countries.

Reciprocal Enforcement of Foreign Judgments Regime in Singapore to be Consolidated from 1 March 2023

Singapore, as a regional hub for dispute resolution, has been developing its framework for the enforcement of foreign judgments, with arrangements in place with a number of countries for the reciprocal enforcement of judgments.

The reciprocal enforcement of foreign judgments regime in Singapore has now been consolidated under the Reciprocal Enforcement of Foreign Judgments Act ("REFJA"). The Commonwealth countries with which Singapore has reciprocal enforcement arrangements have been duly transferred to the REFJA from 1 March 2023.

Previously, the countries which fell within the reciprocal enforcement of foreign judgments regime were split between the REFJA and the Reciprocal Enforcement of Commonwealth Judgments Act ("RECJA"), with the RECJA governing prescribed Commonwealth countries. To consolidate the reciprocal enforcement regime, the reciprocating Commonwealth countries under the RECJA have been transferred to the REFJA pursuant to the Reciprocal Enforcement of Foreign Judgments (United Kingdom and the Commonwealth) Order 2023 ("UK and Commonwealth Order"), and the RECJA has been repealed from 1 March 2023.

Previously, the RECJA only allowed for the registration of money judgments given by superior courts in civil proceedings. After the transfer, the scope of registrable judgments from the countries listed in the UK and Commonwealth Order has been expanded to include:

1. Money judgments from lower courts (in as far as such courts are listed as recognised courts in the UK and Commonwealth Order);
2. Interlocutory money judgments (in as far as they are final and conclusive as between the parties to it); and
3. Judicial settlements, consent judgments and consent orders (in as far as they are final and conclusive and a sum of money is payable under them).

For more information, click here to read our Legal Update.

GFIT Issues Third Consultation Paper on Taxonomy for Green and Transition Activities for Singapore-Based FIs

On 15 February 2023, the Green Finance Industry Taskforce ("GFIT") issued the third consultation paper ("2023 Consultation Paper") on the taxonomy it has been developing for Singapore-based financial institutions (FIs) ("Singapore Taxonomy") to identify and classify green and transition activities.

The 2023 Consultation Paper follows two earlier consultation papers issued in 2021 and 2022.

The key proposals in the 2023 Consultation Paper include: (i) the thresholds and technical screening criteria to classify economic activities as green, amber or red categories under the traffic light approach for five sectors; and (ii) the Do No Significant Harm ("DNSH") criteria.

Thresholds and Technical Screening Criteria for Activities in Five Sectors

The Singapore Taxonomy covers activities in eight focus sectors, namely: (i) Energy; (ii) Transport; (iii) Building; (iv) Industry; (v) Information and Communications Technology ("ICT"); (vi) Waste and Water; (vii) Agriculture and Forestry; and (viii) Carbon Capture and Storage/Sequestration ("CCS").

The 2022 Consultation Paper consulted on the thresholds and technical screening criteria for activities in the first three sectors: (i) Energy, (ii) Transport and (iii) Building.

In the 2023 Consultation Paper, GFIT sets out the proposed thresholds and technical screening criteria to classify economic activities under either green, amber or red categories for the other five focus sectors: (i) Industry; (ii) ICT; (iii) Waste and Water; (iv) Agriculture and Forestry; and (v) CCS.

Do No Significant Harm (DNSH) Criteria

GFIT proposed a DNSH assessment based on a set of DNSH criteria to ensure that when an activity makes a substantial contribution to climate change mitigation, the activity does not cause significant harm to all the other environmental objectives of the Singapore Taxonomy (i.e. climate change adaptation; protection of healthy ecosystems and biodiversity; promotion of resource resilience and circular economy; and pollution prevention and control).

The details of the DNSH criteria are contained in the document "Proposed DNSH Criteria" (15 February 2023). GFIT indicated that the application of the DNSH criteria has not been decided at this stage.

The consultation period for the 2023 Consultation Period ran from 15 February 2023 to 15 March 2023. GFIT intends to issue the final taxonomy by the first half of 2023.

For more information, click here to read our Legal Update.

Singapore and Vietnam Sign MOUs to Enhance Economic Cooperation

On 9 February 2023, Singapore and Vietnam signed two Memoranda of Understanding ("MOUs") to deepen economic ties between the two countries.

Green-Digital Economic Partnership

The MOU on the Green-Digital Economic Partnership is a broad framework which seeks to promote collaboration in the green and digital economy between Singapore and Vietnam. The MOU builds on four earlier MOUs between Singapore and Vietnam on digital economy, energy, carbon credits and innovation that were signed in 2022. It aims to strengthen their economic ties through collaboration in the following areas:

1. Energy connectivity;
2. Sustainability;
3. Infrastructure;
4. Digital and innovation; and
5. Connectivity, including in education, finance, information technology and telecommunications, tourism, trade and services, and transport.

Economic and Trade Cooperation Workplan

The MOU on the Economic and Trade Cooperation Workplan is an implementation MOU that builds on the MOU on Economic and Trade Cooperation that was signed in February 2022. As an implementation MOU, it sets out activities and goals for 2023 to improve the bilateral economic and trade cooperation of the two countries, including:

1. Encouraging collaboration in the digital economy;
2. Enhancing agri-trade cooperation through business matching; and
3. Facilitating Singapore investment in the agriculture and logistics sectors in Vietnam.

For the energy and industrial sectors, the MOU will enhance cooperation in these sectors through (i) the development of projects in renewable energy, electricity, liquified natural gas, and low-carbon solutions; and (ii) enhancing collaboration in capacity building.

Singapore and Malaysia Sign Frameworks on Cooperation in Digital Economy and Green Economy

On 30 January 2023, Singapore and Malaysia signed two Frameworks on Cooperation ("FoCs") in Digital Economy and Green Economy. The FoCs, which were substantially concluded in August 2022, will lay the foundation for future bilateral initiatives relating to the digital and green economies.

Digital Economy

The FoC in digital economy seeks to promote greater inter-operability and collaboration on digital economy issues and improve coordination between Singapore and Malaysia beyond what the E-Commerce Chapters of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) Agreement provide. 

The FoC covers various areas, including the following:

1. Trade Facilitation: To speed up the entire trade process, allowing seamless transactions online and across borders;
2. Cross-border Data Flows: To support the movement or transfer of information between the two countries;
3. Electronic Payments: To intensify cooperation in developing safe and secure cross-border E-payment systems;
4. Digital Identities: To encourage knowledge sharing for the development of each country's respective identity regimes, including the development of the ASEAN Unique Business Identification Number (UBIN); and
5. Business/Consumer Trust: To explore partnership in new and emerging areas to build trust in the digital systems.

Green Economy

Under the FoC on green economy, both countries agreed to cooperate in the following areas:

1. Next generation mobility: To explore collaboration on EV and AV standards and the adoption of technical references;
2. Environmental, social and governance; capacity development programme for exporters: To promote knowledge sharing and business networking on sustainable business practices;
3. Low carbon solutions: To explore joint studies and projects on low-carbon solutions such as hydrogen and carbon capture, utilisation and storage;
4. Carbon credits industry collaboration: To explore collaboration voluntary carbon credits projects; and
5. Development of New and Renewable Energy Related Technology Standards to Support Domestic and Regional Decarbonisation: This includes developing common policies and standards for new and renewable energy technologies.

Public Consultation on Proposed Intangibles Disclosure Framework

Intangible assets such as intellectual property and goodwill are important sources of competitive advantage and economic value for any business. However, companies may face challenges in the valuation and reporting of intangible assets, particularly in this digital economy. This is exacerbated by a lack of standardised reporting principles.

To address this issue, the Accounting and Corporate Regulatory Authority ("ACRA") and the Intellectual Property Office of Singapore ("IPOS") jointly issued a public consultation paper on 14 December 2022 proposing an Intangibles Disclosure Framework ("Framework") to help businesses disclose and communicate their intangibles.

The Framework is an initiative under the Singapore IP Strategy 2030 ("SIPS 2030"), a 10-year blueprint to strengthen Singapore's position as a global intangible assets and intellectual property hub. One long-term goal of SIPS 2030 is to build a credible and trusted intangible asset valuation and reporting ecosystem to support enterprises in managing and commercialising their intangible assets. In this regard, through the development of the Framework, SIPS 2030 seeks to establish Singapore's position as a frontrunner in the global community, as no jurisdiction has developed an intangible-specific disclosure or valuation framework.

The Framework outlines the four pillars that an enterprise should observe when disclosing their intangibles in a report and provides guidance for disclosure under these principles:

1. Strategy. Disclose how intangibles contribute to business, strategy, and financial planning where such information is material.
2. Identification. Disclose the nature and characteristics of the intangibles that fit into the definition provided, and categorise them.
3. Measurement. Disclose the performance metrics and drivers used to assess an enterprise's intangibles where such information is material.
4. Management. Disclose how an enterprise identifies, assesses, and manages the risks and opportunities of its intangibles.

The Framework will help businesses communicate the value of their intangibles and maximise their economic potential, which will also serve to enhance information transparency and facilitate the commercialisation of intangibles. The public consultation ended on 28 February 2023.

For more information, click here to read our Legal Update.

THAILAND

Amendment to Thailand’s Labour Protection Law to Ensure Remote Working Arrangements

On 19 March 2023, the Labour Protection Act (No. 8) B.E. 2566 (2023) ("Amended LPA") was published in the Government Gazette with the goal of updating the existing labour protection law to reflect the modern trend of working from home in response to the COVID-19 pandemic. The purpose of the Amended LPA is to establish a legal framework for remote working arrangements, improve employee productivity and the quality of life, and benefit employers' business operations. The Amended LPA came into effect 30 days after its publication in the Government Gazette, or on 18 April 2023. 

Pursuant to the Amended LPA, the employer and the employee may agree to permit the employee to work remotely outside the place of business or the employer's office. The employee may work at home or the residence of the employee, or work via the use of information technology at any place. Most importantly, such employee shall be entitled to the same rights as those employees working at the place of business or the office of the employer.

The agreement must be made in writing or in accessible electronic forms, which may include necessary details such as (i) the duration of the agreement; (ii) regular working hours, rest periods and overtime work; (iii) the criteria for working overtime and on holiday; (iv) the types of leave which may be taken; (v) the scope of work of the employee and the employer’s control or supervision of that work; (vi) the obligations and duties relating to the provisions of tools or equipment for the work; and (vii) relevant expenses incurred from work. 

In addition, the Amended LPA provides that the employee has the right to refuse communications by whatever means from the employer or supervisor after regular working hours or after completing the assigned work, except where the employee has given a written consent in advance.

New Technological Crime Law on Obligations of Commercial Bank and Online Payment Platform Providers to Proceed with Questionable Transactions

Due to the increasing number of telephone and online scams, the Government has issued a new law to combat such crimes as well as related money-laundering activities, namely, the Emergency Decree on Measures for Prevention and Suppression of Technological Crimes B.E. 2566 (2023) ("Technological Crime Decree"), which became effective on 17 March 2023. 

The key legal implications under the Technological Crime Decree may be summarised as follows:

1. Information Sharing. Banks, payment providers, telecommunications companies, and other service providers must share information about accounts and transactions that may be connected to the commission of a technological crime through the information sharing system approved by relevant authorities. Such operators are also required to share the information with the Royal Thai Police, the Department of Special Investigation (DSI), and the Anti-Money Laundering Office ("AMLO").


2. Transaction Freezing. Upon request of the victim (who is the account holder), banks and payment providers are required to temporarily freeze illicit transactions, where the victim shall file a complaint to the police within 72 hours. Once the complaint is filed, the police will notify the bank/payment provider to continue freezing the account, and the police will complete the initial investigation within seven days.
   
   If the bank/payment provider finds that there is suspicious illicit activity, whether by their own effort or from the information sharing system, the bank/payment provider shall notify the police/Secretary of AMLO immediately, and temporarily freeze illicit transactions for a maximum period of seven days. The authority will complete the initial investigation within seven days.


3. Reporting Channels. Illicit transactions may be reported to the bank/payment provider via telephone or electronic means.
   
   Complaints involving a technological crime may be filed with any police station in Thailand without a need to identify the place in which the crime is committed, or filed via electronic means.


4. Mule Accounts. Allowing someone else to use your bank account, electronic card, e-money account, or phone number for a criminal activity is punishable with an offence of up to three years’ imprisonment and/or a fine of up to THB 300,000 fine.
   
   Facilitating or advertising for the creation of a mule account involves penalties ranging from two to five years’ imprisonment and a fine of THB 200,000 to 500,00.

Proposed Changes to Permit Issuance of Sustainability-themed Bonds by SMEs via Private Placement and Crowdfunding Portals

In an effort to advance national policies on environmental, social, and governance ("ESG") issues in accordance with the 20-year National Strategy (2018-2037), Thailand's Securities and Exchange Commission ("SEC") published public hearing documents to seek stakeholders’ feedback from 15 March 2023 to 17 April 2023 ("Public Hearing") on proposed changes that would permit small and medium-sized enterprises ("SMEs") and startups to issue and offer for sale sustainability-themed bonds, which include green bonds, social bonds, sustainability bonds, and sustainability-linked bonds ("Sustainability-themed Bonds"), via PP10-private placement and crowdfunding portals. The Public Hearing also addresses amendments to allow private limited companies to issue Sustainability-themed Bonds in the form of convertible debentures (PP-SME).

Currently, Sustainability-themed Bonds are permitted through certain types of fundraising methods, for example, public offerings (PO), private placements to institutional investors (PP-II), and private placements to high-net-worth investors (PP-HNW). According to SEC, although a total of THB 542,669.78 million was fundraised through the sale of Sustainability-themed Bonds between 2018 and 2023, these bonds were minuscule compared to the entire bond market, and the major issuers were large corporations in certain industries. With these proposed changes, companies of all sizes would have access to more funding opportunities, while integrating ESG considerations into their operations.

The Public Hearing also proposes changes to the rules that require issuers to disclose information prior to and after an offering for sale of Sustainability-themed Bonds. This includes (i) the recognised standards at the applicable international or national level, (ii) the purposes of use of bond proceeds, (iii) the evaluation and selection procedure for eligible projects, (iv) the management of bond proceeds, and (v) the reporting of project progress and reports of external review providers (if applicable). Consequently, bond issuers can promote the sustainability of their products more effectively, and investors can make more informed decisions.

TRUE-DTAC Merger Completed

True Corporation ("True") and Total Access Communication ("DTAC") have completed their merger, which is Southeast Asia's largest telecoms merger.  The merged entity, called True Corporation, debuted on the Stock Exchange of Thailand on 3 March 2023. 

The merger is a three-to-two transaction - True and DTAC reportedly hold 34% and 21% market shares respectively (based on mobile subscribers), and the merged entity will become the largest player, overtaking the present market leader Advanced Info Service Pcl with 44% market share. The telecoms regulator, the National Broadcasting and Telecommunications Commission ("NBTC"), acknowledged the US$8.6 billion merger between True and DTAC on 20 October 2022 and stipulated conditions for the merger, including pricing conditions, capacity allotment requirements for mobile virtual network operators’ use, and hold-separate requirements.  The new entity is required to continue using the DTAC and TRUE brand names for a period of three years. 

The merger has been subject to challenges. Lawsuits against NBTC have been brought to the Central Administrative Court, notably, by the Thailand Consumers Council ("TCC"), to repeal the NBTC's decision on the True-DTAC merger. On 9 December 2022, the Central Administrative Court rejected the TCC's plea for an injunction as the court found 'no ground which would suggest that the NBTC's decision was unlawful'. This decision to reject the injunction request paved the way for the completion of the merger; however, the case itself is pending the court's decision.

For more information, click here to read our Competition Bites 1Q 2023 (page 12).

Amendments to the Trade Competition Act

On 22 February 2023, the outgoing chairman of the Trade Competition Commission of Thailand ("TCCT") Sakon Varanyuwatana stated that the proposed amendments to the Trade Competition Act ("TCA") would likely be ready for submission to the government in the third quarter of 2023. Possible areas of amendments include merger filing procedures and the definitions of market dominance and state-owned enterprises, among others. TCCT is also considering introducing leniency into the TCA, as Thailand is one of the only jurisdictions in the Asia-Pacific region where a leniency program has yet to be introduced.

For more information, click here to read our Competition Bites 1Q 2023 (page 11).

Amended Law Applicable to Private Companies

Wide-ranging amendments have been made to the Thai Civil and Commercial Code ("CCC"), which are intended to ease the administrative burden on private limited companies and provide more practical solutions to business issues. The amendments, which took effect on 7 February 2023, were set out in the Act amending the Civil and Commercial Code (No. 23) B.E. 2565 (2022), which was published in the Royal Gazette on 8 November 2022. It is worth noting that if any provisions in the existing articles of association are inconsistent with the amended CCC, such provisions would prevail provided they are not contrary to public order or good morals. Therefore, it is recommended that the articles of association be amended where necessary so as to enhance the ease of doing business. 

For more information, click here to read our Legal Update.

Update on Public Hearing Regarding Thailand's New Regulation Framework for Utility Digital Tokens

On 25 January 2023, the Securities and Exchange Commission of Thailand ("SEC") issued a public hearing document No. AorNorDor. 4/2566 ("Public Hearing") focusing on the regulatory scope of ready-to-use utility tokens. These have not been heavily regulated compared to other types of digital tokens, namely, not-ready-to-use utility tokens and investment tokens – both of which requires SEC's approval in order to be issued and offered to the public. The hearing period ended on 24 February 2023.

According to the Public Hearing, SEC proposed that ready-to-use utility tokens be divided into two groups as follows:

1. Group 1 Ready-To-Use Utility Tokens ("Group 1 Tokens")
   
   This includes:
   
   
   • ready-to-use utility tokens issued for consumption purposes, such as digital vouchers, loyalty points, tokens which can be redeemed for movie tickets; and 
   • ready-to-use utility tokens issued as a digital certificate or representation of rights, such as carbon credits, renewable energy certificates, transcripts, medical certificates, tax certificates, title deeds, medical certificates.
   
   Group 1 Tokens must be non-financial products and have a specific channel to be traded (such as a marketplace). SEC's proposal includes, among others, that Group 1 Tokens will be exempted from public offering requirements, and any provision of service relating to Group 1 Tokens shall not be considered as conducting a digital asset business.
   
   Digital asset exchanges will not be allowed to list Group 1 Tokens for trading in their platform. However, this will not apply to Group 1 Tokens which are already listed in digital asset exchanges.


2. Group 2 Ready-To-Use Utility Tokens ("Group 2 Tokens")
   
   This includes ready-to-use utility tokens which do not fall into Group 1 Tokens category, such as:
   
   
   • ready-to-use utility tokens which have a characteristic similar to that of financial products, such as governance tokens of Decentralized Finance (DeFi), Centralized Finance (CeFi), or Gaming Finance (GameFi) projects and exchange tokens; and 
   • ready-to-use utility tokens which specify the right of the holder to acquire the products or services provided through a distributed-ledger technology (DLT). As opposed to Group 1 Tokens, Group 2 Tokens can be listed on digital asset exchanges. However, in doing so, they will be subject to the public offering requirements similar to investment tokens and not-ready-to-use utility tokens.

As opposed to Group 1 Tokens, Group 2 Tokens can be listed on digital asset exchanges. However, in doing so, they will be subject to the public offering requirements similar to investment tokens and not-ready-to-use utility tokens.

Licence Required for Provision of Digital Identity Proofing and Authentication Service

On 23 December 2022, Thailand issued the Royal Decree on Supervising Service Businesses Regarding Digital Identity Proofing and Authentication System Which Shall be Licensed B.E. 2565 (2022) ("Royal Decree") by virtue of the Electronic Transaction Act B.E. 2544 (2001). The Royal Decree will take effect on 21 June 2023. The provision of the following services shall be regulated and licensed:

1. Identity Proofing Service – the service of compiling and verifying information relating to the identity of a person and verification on the connection between the person and the information on identity;
2. Authenticator Management Service – the service relating to the connection between the identity of a person whose identity has been verified and the authenticator, including the management of such authenticator;
3. Authentication Service – the service of authenticating the identity of a person by verifying the authenticator of such person; and
4. Digital Identity Platform Service – the service of information exchange for digital identity proofing and authentication, which are networks or systems that enable connection and information exchange in relation to digital identity authentication and verification, but not including a provision of service by an intermediary.

The Royal Decree provides a licensing exemption to the following services:

1. Identity proofing and authentication services provided by a certificate authority to support the use of electronic signatures under the law on electronic transactions;
2. Identity proofing and authentication services provided for internal business benefit without being provided to any third party; and
3. Services relating to digital identity proofing and authentication systems, as prescribed by the Electronic Transaction Commission.

Penalty for unlicensed businesses

Any person who operates a business providing services relating to digital identity proofing and authentication systems without obtaining a licence shall be liable to imprisonment for a term of not more than three years, or to a fine of not more than THB 300,000, or to both.

VIETNAM

Decree on Personal Data Protection Issued

On 7 March 2023, the Government issued Resolution No. 27/NQ-CP to approve certain key contents of the draft decree on personal data protection ("PDP Decree").  The PDP Decree was issued on 17 April 2023, and it will come into effect from 1 July 2023.

The PDP Decree represents the first consolidated data protection regulation in Vietnam, and introduces significant changes to the existing (fragmented) regulatory environment for data protection in the country. Many of the provisions and concepts introduced by the PDP Decree were influenced by the European General Data Protection Regulation (GDPR).

The PDP Decree will have extraterritorial application. It regulates both Vietnamese and foreign agencies, organisations and individuals. For the latter, foreign agencies, organisations or individuals that directly participate in or otherwise involved in processing personal data in Vietnam will be regulated by the PDP Decree.

The PDP Decree regulates personal data as information in the form of symbols, letters, numbers, images, sounds or the like on an electronic medium that is associated with a particular person, or helps to identify a particular person. Similar to data protection laws of other jurisdictions, the PDP Decree now categorises personal data into basic personal data and sensitive personal data. 

Processing of sensitive personal data attracts additional regulatory obligations. For example, prior to processing, it would require data subjects to be informed that the data being processed comprises sensitive personal data.

Key provisions of the PDP Decree relate to, among others:

1. the rights for data subjects;
2. general bases for processing personal data;
3. consent requirements;
4. notification prior to processing personal data;
5. breach notification requirements;
6. impact assessment for processing personal data;
7. cross-border transfer of personal data;
8. data protection officer and data protection department.

For more information, click here to read our Legal Update.

Effectiveness of Law on Anti-Money Laundering No. 14/2022/QH15

On 1 March 2023, the Law on Anti-Money Laundering No. 14/2022/QH15 ("AML Law"), which was passed on 15 November 2022, came into effect. The recommendations from the Financial Action Task Force (FATF) drove much of the changes introduced by the AML Law.

The AML Law expands the list of reporting subjects that are required to comply with the Know-Your-Customer ("KYC") requirements, including identify verification and transaction reporting. It now includes payment intermediary service providers and certain categories of securities companies. The AML Law also includes revisions to the scope of customers for which KYC must be conducted, as well as KYC information.

The AML Law requires reporting subjects to develop procedures for managing money laundering risks, including customer classification by risk levels, and risk management methods in response to such customer risk levels. 

The AML Law also enables reporting subjects to collect information from national databases and undertake KYC procedures through "third parties". These third parties would need to meet certain operational conditions.

Establishment of Vietnam Competition Commission

On 10 February 2023, by Decree 03/2023/ND-CP, the Government established the long-awaited Vietnam Competition Commission ("VCC"). This comes nearly five years after the Law on Competition No. 23/2018/QH14 was passed, which envisaged the establishment of this body. 

VCC is an agency under the Ministry of Industry and Trade. It will be primarily responsible for, among others, overseeing economic concentrations (merger filings), handling competition proceedings, and handling and settling competition cases.

The establishment of VCC is a major milestone towards the Government's efforts to enforce competition laws. To date, the absence of VCC has resulted in very limited enforcement actions being taken against competition law violations. 

Decree 03/2023/ND-CP came into effect from 1 April 2023.

Singapore and Vietnam Sign MOUs to Enhance Economic Cooperation

On 9 February 2023, Singapore and Vietnam signed two Memoranda of Understanding ("MOUs") to deepen economic ties between the two countries. 

Green-Digital Economic Partnership 

The MOU on the Green-Digital Economic Partnership is a broad framework which seeks to promote collaboration in the green and digital economy between Singapore and Vietnam. The MOU builds on four earlier MOUs between Singapore and Vietnam on digital economy, energy, carbon credits and innovation that were signed in 2022. It aims to strengthen their economic ties through collaboration in the following areas:

1. Energy connectivity;
2. Sustainability;
3. Infrastructure;
4. Digital and innovation; and
5. Connectivity, including in education, finance, information technology and telecommunications, tourism, trade and services, and transport.

Economic and Trade Cooperation Workplan

The MOU on the Economic and Trade Cooperation Workplan is an implementation MOU that builds on the MOU on Economic and Trade Cooperation that was signed in February 2022. As an implementation MOU, it sets outs activities and goals for 2023 to improve the bilateral economic and trade cooperation of the two countries, including:

1. Encouraging collaboration in the digital economy;
2. Enhancing agri-trade cooperation through business matching; and
3. Facilitating Singapore investment in the agriculture and logistics sectors in Vietnam.

For the energy and industrial sectors, the MOU will enhance cooperation in these sectors through (i) the development of projects in renewable energy, electricity, liquified natural gas, and low-carbon solutions, and (ii) enhancing collaboration in capacity building.

Enactment of Law on Medical Examination and Treatment No. 15/2023/QH15

On 9 January 2023, the National Assembly passed the Law on Medical Examination and Treatment No. 15/2023/QH15, replacing the existing 2009 law on the same subject. The new law introduces certain significant changes to the provision of healthcare services, including the following:

1. The new law now explicitly requires the Vietnamese language to be used in medical examinations and treatments, save that foreign medical practitioners can use a foreign language in limited circumstances (e.g. providing services to other foreigners). This would impact the long-standing (and prevalent) practice of foreign medical practitioners providing services to Vietnamese individuals with the use of interpreters.
2. The new law also introduces general provisions on telemedicine conducted between medical practitioners and patients or between medical establishments. It envisages, however, that the Government will pass further detailed regulations on the provision of such telemedicine services in the future.

Most provisions of the law will come into effect from 1 January 2024. However, there are grandfather provisions that apply for certain key changes (e.g. the language requirement above).

Feed-in-tariffs for Transitional Solar and Wind Energy Projects

On 7 January 2023, the Ministry of Industry and Trade issued Decision No. 21/QD-BCT ("Decision 21") to set the feed-in-tariffs ("FiTs") for transitional solar and wind projects under Circular 15/2022/TT-BCT.

In particular, the FiT rates in Decision 21 apply to certain projects that were unable to achieve the cut-off commercial operation date, i.e. 31 December 2020 for solar and 31 October 2021 for wind, thus becoming ineligible to enjoy FiT rates according to the Government's renewable energy policies at the time. Under Decision 21, the following FiTs apply:

1. Ground-mounted solar: 1,184.9 VND/kWh (4.94 US cents/kWh)
2. Floating solar: 1,508.27 VND/kWh (6.28 US cents/kWh)
3. Onshore wind: 1,587.12 VND/kWh (6.61 US cents/kWh)
4. Offshore wind: 1,815.95 VND/kWh (7.57 US cents/kWh)