Legal Updates for Oct - 2023
Contractual Clauses that Seek to Mitigate the Costs, Expenses or Liabilities of COVID-19 and Other Contagious Outbreaks: A Matter to Pay Heed to
Since the outbreak of COVID-19, commercial parties in the shipping industry have increasingly incorporated clauses dealing with infectious diseases into their contracts. In the chartering context where such clauses are commonplace, they are primarily designed to deal with and allocate the risks (as between owner and charterer) of the vessel calling at a place where there is a risk of infection to the crew and vessel. However, parties have been known to incorporate modified versions and, in certain cases, wholly bespoke infectious diseases clauses. Unsurprisingly, infectious diseases clauses have given rise to a trend of disputes surrounding the application and interpretation of such clauses.It will thus be prudent for parties to conscientiously review the ambit and scope of such clauses prior to contract, to mitigate against the risk of unwittingly bearing responsibility for infectious diseases related costs, expenses or liabilities. In this Update, we look at the scope of infectious diseases clauses and the key considerations when negotiating such clauses. 31 Oct 2023 | Singapore
MAS Consults on Proposed Transition Planning Guidelines for Banks, Insurers, Asset Managers
To facilitate transition planning processes, the Monetary Authority of Singapore ("MAS") issued a set of three Consultation Papers proposing guidelines on transition planning ("TP Guidelines") respectively for banks, insurers and asset managers as they build climate resilience and enable robust climate mitigation and adaptation by customers and (where relevant) asset managers and investee companies. Transition planning refers to the internal strategic planning and risk management processes undertaken to prepare for both risks and potential changes in business models associated with the transition.Key aspects of the respective TP Guidelines follow similar broad themes under MAS' Guidelines on Environmental Risk Management, which include governance and strategy, risk and portfolio management, the use of data and metrics (including the setting of decarbonisation targets), implementation strategy, as well as disclosure. The TP Guidelines for insurers also address underwriting and investment aspects. The TP Guidelines for asset managers also address engagement and stewardship. In terms of implementation, MAS proposes a transition period of 12 months after the relevant TP Guidelines are issued for the FIs to assess and implement the TP Guidelines as appropriate. Comments to the Consultation Papers must be submitted to MAS by 18 December 2023.
This Update outlines the salient aspects of the proposed TP Guidelines for banks, insurers, and asset managers, along with our comments. 31 Oct 2023 | Singapore
Regional Competition Bites Q3 2023
In this issue of the 3rd Regional Competition Bites for 2023, we see mergers continue to take centre stage in Southeast Asia. Southeast Asia is no longer a nascent region insofar as competition laws and merger control is concerned. It is active with regulators making their mark. As merger control activity and regulatory scrutiny in the region increases, businesses must keep abreast of developments here to avoid violating competition laws when engaging in business activities or undertaking mergers and acquisitions. At a ground level, competition law concerns are also focussed on tackling rising inflation and cost of living. The common denominator amongst regulators in the region is ensuring that anti-competitive conduct and unfair practices that could result in detriment to consumers are prevented. Also, regulators remain active in monitoring the market for competition law violations.The Rajah & Tann Asia Competition & Antitrust team remains engaged and up to date with the ever-evolving landscape of competition law in the region. Please reach out to us if you wish to further discuss these developments. 31 Oct 2023 | Singapore
With Law No. 17 of 2023, Indonesia's Healthcare Sector is Finally Getting the Attention that it Deserves
The second semester of 2023 continued to be an active year in the Indonesian legal landscape. After revamping the financial landscape, the Indonesian government moved on to tackle issues in the nation’s healthcare sector by issuing the so-called "Omnibus Health Law" (Law No. 17 of 2023 on Health) in August 2023.
The urgency for the transformation of Indonesia's healthcare system was underscored by the impact of the COVID-19 pandemic, which unveiled the vulnerabilities and inadequacies of the healthcare systems globally, including in Indonesia. With healthcare often being overlooked in favour of other, more pressing reforms, the pandemic highlighted the weakness in Indonesia’s healthcare system, for example, the lack of public health facilities, shortage of health workforce, and overlapping of laws and regulations.
30 Oct 2023 | IndonesiaBill Passed to Enhance Oversight of Goods Passing through Free Trade Zones
On 4 October 2023, the Free Trade Zones (Amendment) Bill 2023 ("Bill") was passed in Parliament. The Bill amends the Free Trade Zones Act 1966 and makes consequential amendments to the Customs Act 1960.The Bill seeks to update and strengthen the free trade zone ("FTZ") regime by enabling better oversight of goods flowing through FTZs while still ensuring the efficient movement of goods, and incorporates relevant feedback received during the public consultation exercise conducted by the Ministry of Finance ("MOF") on the draft Free Trade Zones (Amendment) Bill.
This Update provides a summary of the key feedback received during the public consultation and MOF’s response. It also briefly highlights the key changes that the Bill will introduce. 30 Oct 2023 | Singapore
New CMFAS Examination Requirements for Appointed Representatives under SFA and FAA Commence on 1 April 2024
Representatives appointed by capital markets intermediaries and financial advisers to conduct regulated activities under the Securities and Futures Act and Financial Advisers Act ("Appointed Representatives") are required to meet minimum academic qualifications and pass the relevant modules under the Capital Markets and Financial Advisory Services Examination ("CMFAS Examination").On 1 April 2024, the CMFAS Examination requirements will be revised to:
- raise the competency of and build a culture of high ethical standards among Appointed Representatives; and
- provide more flexibility to Appointed Representatives to customise the modules under the CMFAS Examination to suit their roles.
The Institute of Banking and Finance and the Singapore College of Insurance, which administer the CMFAS Examination, will start registrations for the new CMFAS Examination and make available the new study guides at least two months before the new CMFAS Examinations commence on 1 April 2024. Grandfathering arrangements will be put in place for certain existing Appointed Representatives as of 1 April 2024.
This Update discusses some key features of the new CMFAS Examination regime and the grandfathering arrangements for existing Appointed Representatives.
New Law on Electronic Transactions
On 22 June 2023, the National Assembly passed the new Law on Electronic Transactions No. 20/2023/QH15 dated 22 June 2023 ("LOET"). The LOET will replace the currently effective Law on Electronic Transactions that was enacted in 2005. It will take effect from 1 July 2024.
27 Oct 2023 | VietnamNew Law on the Protection of Consumer Rights
On 20 June 2023, the National Assembly of Vietnam passed the new Law on the Protection of Consumer Rights ("LPCR"). The LPCR will replace the currently effective Law on the Protection of Consumer Rights that was enacted in 2010. It will take effect from 1 July 2024.
27 Oct 2023 | VietnamPrescribed Criteria for International Carbon Credits under Singapore's Carbon Tax Regime
On 4 October 2023, the Ministry of Sustainability and the Environment and the National Environment Agency shared a set of criteria for international carbon credits ("ICCs") under the ICC Framework. The ICC Framework will allow carbon tax-liable companies to use eligible ICCs to offset up to 5% of their taxable emissions commencing 1 January 2024. The criteria detailed in the Carbon Pricing Act 2018 – Carbon Pricing (Carbon Tax and Carbon Credits Registry) (Amendment) Regulations 2023 (which amends the Carbon Pricing (Carbon Tax and Carbon Credits Registry) Regulations 2020) ("Prescribed Criteria") takes effect on 1 January 2024. The Prescribed Criteria aims to ensure that ICCs are of "high environmental integrity" that companies may use to offset taxable emissions.This Update outlines key aspects regarding the use of eligible ICCs to pay carbon tax as well as the Prescribed Criteria under Singapore's legislation and ICC Framework, along with our comments. 24 Oct 2023 | Singapore
CaseTrust Accreditation Scheme for E-businesses
On 13 October 2023, the Consumers Association of Singapore ("CASE") launched the CaseTrust Accreditation Scheme for E-businesses ("e-CaseTrust scheme") to address common issues and complaints of consumers when they shop online. The e-CaseTrust scheme incorporates CaseTrust’s general accreditation requirements (such as ethical advertising, price transparency, good sales and after-sales service and business integrity), as well as relevant industry guidelines for retail consumer-facing e-businesses. This Update outlines salient aspects of the accreditation assessment criteria for e-businesses as well as the application and assessment process, along with our comments. 24 Oct 2023 | SingaporeUnited Nations Convention on the International Effects of Judicial Sales of Ships and What It Means for Singapore
An owner who has purchased a ship through commercial channels at arm's length does not typically face challenges to its title when calling at different ports. However, the same cannot be said about a purchaser who obtains clean title to a ship through a judicial sale process. Much will depend on where the ship was judicially sold, and which jurisdictions are called upon to recognise the sale. In this Update, we take a look at the issues that arise from the failure to recognise clean titles conferred by foreign judicial sales and their effect on purchasers and the maritime industry as a whole. We also examine the United Nations Convention on the International Effects of Judicial Sales of Ships, which Singapore signed in September 2023, and how far it may go in addressing these issues. 20 Oct 2023 | SingaporeTowards Regional Digital Integration – Exploring the ASEAN Digital Economy Framework Agreement
The core principle of the digital economy is connectivity, finding its form in the digital links between people, organisations and countries. While the framework of legislation and operational structures surrounding the digital economy is still in a developmental stage, the harmonisation of such frameworks and how they interact is now the focus of international attention.In this regard, ASEAN has made a major step forward in regional digital integration in the form of the ASEAN Digital Economy Framework Agreement ("DEFA"). At the 23rd ASEAN Economic Community Council Meeting, the ASEAN Economic Ministers launched the negotiations on the ASEAN DEFA. Targeted for conclusion by 2025, it is estimated that a high-quality ASEAN DEFA is projected to double the regional digital economy from US$1 trillion to US$2 trillion by 2030. In this Update, we look at the scope of the ASEAN DEFA and the opportunities it presents. 20 Oct 2023 | Singapore
Launch of New Global Innovation Alliance Node in New York to Assist Singapore Tech Startups in Expanding to US
Over the years, Singapore's investments in startups, research and innovation have transformed it into a technology and startup hub not just for Singapore, but for the entire Southeast Asian region. In 2022, Singapore tech startups raised close to US$11 billion, representing about 64% of the deal value across Southeast Asia.A pillar of this transformation is the Global Innovation Alliance ("GIA"), a technology- and innovation-focused network of Singapore and overseas partners in key demand markets and major innovation hubs. Led by Enterprise Singapore, the GIA helps Singapore companies venture beyond the domestic market to access global markets. Since 2019, nearly 500 Singapore companies have been supported to tap into market opportunities in key innovation hubs and scale globally.
On 10 October 2023, Deputy Prime Minister and Minister for Finance Lawrence Wong launched a new GIA node in New York City ("NYC") as part of his working trip to the US. The new NYC node will offer Singapore tech startups opportunities for innovation collaboration and to connect with business partners to co-develop, testbed and commercialise their solutions in the US. With the addition of the NYC node, the GIA network now operates across 18 cities globally, extending beyond the US to China, Indonesia, Japan, Philippines, Thailand and Vietnam, among others.
In this Update, we provide an overview of the GIA and the support it provides Singapore-based tech startups and small-medium enterprises (SMEs). The leading partners of Rajah & Tann Singapore are well-placed to assist your business in its journey from incorporation to overseas expansion, with our own Rajah & Tann Asia network across the ten jurisdictions of Singapore, Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Thailand, and Vietnam, as well as regional desks in Brunei, Japan and South Asia. The Rajah & Tann Asia network is also geared towards providing integrated solutions with expertise across various practices so as to address the multi-disciplinary issues you may encounter throughout your expansion journey. 19 Oct 2023 | Singapore
Countdown to Mandatory Halal Certification: One Year to Go
Law No. 33 of 2014 on Halal Product Assurance ("Law") requires products entering, circulating, and being traded in Indonesia to be accompanied by a halal certificate. Despite the introduction of this requirement in 2014, the Law allows for a gradual implementation starting next year. Generally, there are two equally important implications that arise from the halal certificate obligation:
- The requirement for a party to obtain a halal certificate for its products; and
- The requirement that products containing ingredients classified as prohibited (haram) contain a non-halal remark. These products include items such as pork and its derivatives, alcoholic drinks, products containing blood or blood products, and animal products that were not slaughtered based on syariah principles.
Because the obligation to obtain a halal certificate is implemented in stages, business can still sell products without a halal certificate or a non-halal remark. Government Regulation No. 39 of 2021 on the Implementation of the Halal Product Assurance ("Government Regulation") sets out various deadlines to obtain the halal certificate, which depend on the categories of the goods and services. The earliest deadline of 17 October 2024 applies to food and beverage products, as well as their related products or services. This means that starting from 17 October 2024, the following goods and services must either have a halal certificate or be marked as non-halal:
- Food and beverage products;
- Raw materials, food additives and auxiliary materials for food and beverage products;
- Slaughtered products and their related services; and
- Related services, such as those pertaining to the processing, storage, packaging, distribution, sales and serving of the goods.
Failure to comply with the obligation for halal certification will result in administrative sanctions, ranging from written warning, fine, to a recall of the products.
Since the enactment of the Government Regulation, the government has actively endorsed the halal certification program through various methods. In March 2022, the Halal Product Assurance Administering Agency or Badan Penyelenggara Jaminan Produk Halal ("BPJPH"), initiated the 10 Million Halal Certified Products Program. According to the BPJPH’s data, as of 2023, approximately 2.7 million halal-certified products have been registered with the BPJPH. About 450 thousand products are in the process of obtaining halal certificates, and nearly 1.5 million are in the registration bay for the halal certificate. In light of the halal certificate becoming mandatory starting 2024, the BPJPH has inaugurated 55 Halal Inspection Bodies or Lembaga Pemeriksa Halal (LPH for short), and received approximately 100 requests for cooperation from foreign halal agencies.
18 Oct 2023 | IndonesiaCan Confirming Banks Rely on a Sanctions Clause in a Confirmation to Refuse to Honour a Complying Presentation?
The commercial purpose of a confirmed documentary letter of credit is to provide assurance to the beneficiary that it will receive payment against presentation of complying documents. The addition of the confirming bank in the letter of credit transaction is often due to the beneficiary's discomfort with the issuing bank, whether for reasons of creditworthiness or otherwise. Where a confirming bank seeks to rely on a sanctions clause to refuse to honour a complying presentation, what is the standard of proof it must meet in order to discharge its burden to invoke such a clause? The recent Singapore Court of Appeal ("CA") in Kuvera Resources Pte Ltd v JPMorgan Chase Bank, N.A. [2023] SGCA 28 ("Kuvera") sheds light on this important issue.In Kuvera, the confirming bank relied on a sanctions clause in its confirmations to refuse to honour an otherwise complying presentation on the basis that the goods had been shipped onboard a vessel which was allegedly subject to US sanctions laws. Before the High Court, the bank successfully argued that it was entitled to rely on the sanctions clause by applying a risk-based approach, which on the facts of Kuvera meant that it would suffice for the confirming bank to establish inter alia that the relevant authority (in this instance, the US Office of Foreign Assets Control "OFAC")) would have found the bank to be in breach of the relevant US sanctions had it made payment to the beneficiary under the letters of credit.
On appeal, however, the CA found that the confirming bank could not bring itself within the operation of the sanctions clause. The CA emphasised that the issue of whether the vessel was subject to sanctions was to be determined objectively, rather than by reference to speculative elements under the bank's risk-based approach, for instance a determination by a third party such as OFAC.
Below, we cover the background of the dispute, the key points made by the High Court and the CA, and the implications Kuvera has for banks and beneficiaries of confirmed letters of credit. 17 Oct 2023 | Singapore
From Arbitration to Court - Protecting Parties' Identities
Court proceedings are subject to the principle of open justice. This principle allows the public to not only observe hearings and trials in court, but also to access court filings and obtain information such as the identities of parties. In contrast, confidentiality stands as a key advantage of arbitration over litigation. For some parties, confidentiality is crucial to avoid affecting their market standing, their business relationships, or public confidence in their business (see CSR v CSS [2022] 5 SLR 675).
On the face of it, the confidentiality of an arbitration appears to be a certainty. However, parties to an arbitration can commence arbitration-related court proceedings to, for instance, enforce or set aside the arbitral award. If so, some aspects of the arbitration (e.g. factual statements, circumstances or documentary evidence) will inevitably be disclosed in light of the principle of open justice. In these instances, would the "private and confidential" aspect of arbitration be rendered futile?
In this article, we consider the position of Malaysia and other Commonwealth jurisdictions with regard to maintaining confidentiality in arbitration-related court proceedings, and how parties to an arbitration may protect their identities.
Visit Arbitration Asia for insights from our thought leaders across Asia concerning arbitration and other alternative dispute resolution mechanisms, ranging from legal and case law developments to market updates and many more.
13 Oct 2023 | MalaysiaNew Rate of Public Lighting Tax
On 20 September 2023, the Royal Government of Cambodia adopted Sub-Decree No. 286 ANKr.BK on Public Lighting Tax ("Sub-Decree"). This Sub-Decree serves to establish a new rate of public lighting tax at 5% (up from the previous 3%) for the supply of alcohol and tobacco products in Cambodia, which is to be effective from 1 January 2024.
11 Oct 2023 | CambodiaPostponing Limitation Periods for Fraud: Singapore High Court Clarifies Contours of Fraud Exceptions in Sections 29(1)(a) and (b) of the Limitation Act 1959
Under Singapore law, claimants are required to bring certain types of actions within six years of the accrual of their cause of action, failing which they are time-barred from doing so. To mitigate the potential harshness of this rule, the Limitation Act 1959 ("LA") allows time to be postponed in some exceptional circumstances.Of particular note are the fraud exceptions in section 29(1)(a) and (b) of the LA, the precise contours of which have been the subject of recent debate. In SW Trustees Pte Ltd v Teodros Ashenafi Tesemma and others [2023] SGHC 273, the Singapore High Court clarifies two thorny questions on how the fraud exceptions apply in Singapore where conspiracy is alleged. In particular:
- For section 29(1)(a), the High Court has clarified for the first time that limitation periods can be postponed only if fraud is an essential element of the cause of action; and
- For section 29(1)(b), any fraudulent concealment must have been committed by the specific defendant against whom time is sought to be postponed.
Wilson Zhu, Lye Yu Min and Naomi Lim of Rajah & Tann Singapore LLP's Restructuring & Insolvency Practice acted for the successful Appellant in this case.
06 Oct 2023 | Singapore