Legal Updates

Legal Updates for Apr - 2019

TRADE BITES 2019 - Issue 1
Welcome to our revamped Trade Bites! In this first issue of the year, we discuss various developments, including the potential retaliation by the Indonesian government against the European Union if it curbs the use of palm oil in its biofuels, and the unusual trend of increasing volumes of shipments of US ethanol into Malaysia. The palm oil issue is also big in Malaysia. We also note developments in several of the South East Asian countries, relating to the anti-circumvention laws, tweaks in anti-dumping issues, managing of rules of origin given the new CPTPP and on sanctions, amongst others.
15 Apr 2019 | Singapore

Digital Tax on Foreign Digital Service Providers to be Enforced from 1 January 2020

The Government of Malaysia will impose a digital service tax of 6% on foreign digital service providers with effect from 1 January 2020, with the annual threshold being set at RM500,000, according to the Malaysian Deputy Finance Minister after the tabling of the Service Tax (Amendment) Bill 2019 (the "Amendment Bill") on 8 April 2019. The Amendment Bill was subsequently amended and passed by the lower house of the Malaysian Parliament. Upon the Amendment Bill being passed by the upper house of Parliament and receiving the royal assent, foreign digital service providers such as Spotify and Netflix will be taxed commencing 1 January 2020.

11 Apr 2019 | Malaysia

Enhancing the Competitiveness of the Indonesian Export Service

For almost 10 years, it is known by many that the Indonesian export service does not encourage competition due to the fact that zero Value Added Tax rate ("0% VAT") is only applicable to limited types of export service, i.e. toll manufacturing service, repair and maintenance service connected to or engaged for movable goods utilized outside of the Indonesian Customs Area, and construction service connected to or for immovable goods located outside of the Indonesian Customs Area. As a result, an export of service outside of Indonesia may be subject to double taxation whenever the service is utilized in other jurisdictions that imposed VAT or GST under their taxation laws.

To improve the Indonesian economic condition by enhancing the export service and improving the competitiveness of the national services industry, the Minister of Finance ("MOF") on 29 March 2019 issued MoF Regulation No. 32/PMK.010/2019 on Limitation of Activities and Types of VAT-able Services whose Export is Subject to Value-Added Tax ("New Regulation"), which expands the types of export service that is subject to 0% VAT.

The New Regulation entered into effect on 29 March 2019 and revokes the previous MoF Reg. No. 70/PMK.03/2010, as amended by MoF Reg. No. 30/PMK.03/2011 which was became effective since 1 April 2010.

10 Apr 2019 | Indonesia

The Tripartite Guidelines on Wrongful Dismissal – What They Mean for Employers
On 1 April 2019, the latest round of amendments to the Employment Act came into force. The Ministry of Manpower has also published the Tripartite Guidelines on Wrongful Dismissal, which aim to provide guidance to employers and employees alike as to what constitutes wrongful dismissal. This Update will explain what these Guidelines mean for employers and how employers can protect themselves against wrongful dismissal claims.
10 Apr 2019 | Singapore

Singapore Court Examines Implications of Retention of Title Clauses
Retention of title clauses have become an essential feature in contracts for the credit sale of goods. In Mitsubishi Corp RTM International Pte Ltd v Kyen Resources Pte Ltd [2019] SGHCR 6, the Singapore High Court was faced with novel questions regarding how retention of title clauses may impact a seller’s claim for price. In particular, this was the first case in Singapore to consider the controversial decision by the UK Supreme Court in The Res Cogitans [2016] AC 1034, which has had wide-ranging implications affecting the law on sale of goods in the UK. The Plaintiff here was successfully represented by Ting Yong Hong of Rajah & Tann Singapore LLP.
05 Apr 2019 | Singapore

Malaysian High Court Applies Doctrine of Equivalents in Patent Infringement Suit

The Improver questions were once the bedrock of patent infringement principles. Such foundations have been shaken by the seismic shift in approach taken by the UK Courts in recognising the Doctrine of Equivalents. Closer to home, the effects of these have begun to take root, starting with the High Court’s decision in Kingtime International Limited & Anor v Petrofac E&C Sdn Bhd. This client update explores the merits of this eyebrow raising decision and what may lie in store for the future of Malaysian patent litigation.

03 Apr 2019 | Malaysia

Have you Earned the TRUST of MACC? – Practical Measures to Defend Against Corporate Liability Charges

The Malaysian Anti-Corruption Commission issued guidelines on adequate procedures (“Guidelines”) earlier this year. Under the Malaysian Anti-Corruption Commission Act 2009, adequate procedures are a defence against a corporate liability charge. Given the heightened efforts by the authorities to combat corrupt activities in the public and private sector, it is timely for commercial organisations to look inwards and do a stock take of their best practices against the Guidelines. This client update explores the types of adequate procedures a commercial organisation can weave into its existing compliance program.

03 Apr 2019 | Malaysia

SGX RegCo Directs Former Independent Directors of ListCo to Explain Reasons for Resignation
In an unprecedented move, Singapore Exchange Regulation ("SGX RegCo") has directed the former independent directors of a listed company to give detailed explanations as to why they consider it proper and appropriate to resign when there are outstanding audit matters which raise serious concerns about the state of the company, that have yet to be resolved.

Independent directors should take note of this move by SGX RegCo, which sends a strong signal that SGX RegCo will not take resignations from independent directors lightly, and will take steps to ensure that their resignation from the Board can be supported by good reasons and do not jeopardise the interests of shareholders.
03 Apr 2019 | Singapore

Non-garment, Textile and Footwear Enterprises and Establishments: The Back Pay of Seniority Payment for Services Rendered Prior to 2019

The Ministry of Labour and Vocational Training has announced the postponement of the implementation of the back pay of seniority payment for any non-garment enterprises and establishments to December 2021 via its Guideline No.042/19 dated 22 March 2019.

01 Apr 2019 | Cambodia

Payment Services Bill Passed in Parliament
On 14 January 2019, the Payment Services Bill (“PSB”) was passed in Parliament. The PSB will thus come into force on such date as appointed by notification in the Government Gazette. The PSB aims to streamline regulation of payment services under a single legislation, and to expand the scope of regulated payment services to keep up with new technological developments in payment services and the various risks they pose. This Update takes a look at the key features of the PSB.
01 Apr 2019 | Singapore