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ARBITRATION ASIA

Regional Round-Up

Your Snapshot of Key Legal Developments in Asia

Issue 1 - Jan/Feb/Mar 2016

COVER STORY

    CAMBODIA
    CHINA
    INDONESIA
    LAO PDR
    MALAYSIA
    MYANMAR
      SINGAPORE

          CAMBODIA

          Sub-Decree No.01 on Creation of Social Security for Health Care dated 6 January 2016
          This Sub-Decree is for the purpose of providing all members of the National Social Security Fund ("NSSF") disease prevention services, health treatment and medical care services as well as a daily allowance during sick leave for disease treatment or any accident other than work-related accidents and maternity leave.

          This Sub-Decree is applicable to all persons subject to the Labor Law including NSSF members suffering from permanent disability, the spouse and children of NSSF members, and survivors of NSSF members who have passed away from occupational risks.

          Employers and workers, being subject to this Sub-decree, are obliged to contribute payments for the social security health care scheme to NSSF.
          Notification No.036GDCE on Implementation of Reduction and/or Elimination of Custom Duties Schedule in accordance with ASEAN Harmonized Tariff Nomenclature ("AHTN") 2012 dated 06 January 2016
          In accordance with the Sub-Decree No.171SD.P dated 11 December 2015 on the Implementation of the Schedule on Reduction and/or Elimination of Custom Duties in Cambodia, the General Department of Customs and Excise of Cambodia has announced that such Schedule must be implemented from 10 January 2016, and that it will be a non-retroactive implementation. Such implementation will apply only to the importation of goods which originate from any member State of ASEAN.
          Decision No.04D on Exemption of Stamp Duty Tax on the Transfer of Ownership of Immovable Property dated 10 January 2016
          The Stamp Duty Tax or Registration Tax, which is 4% of the value of the immovable property or the agreed price of the immovable property, on the transfer of ownership right or possessory right over immovable property between father/mother and child, husband and wife, and grandmother/grandfather and grandchild is exempted. However, the implementation of this exemption is not retroactive to any stamp duty tax payment made before the issuance of this Decision.
          Sub-Decree No.35SD.P on Adjustment of Export Tariff Rate of Rubber Products dated 4 March 2016
          Under this Sub-Decree, the tariff rate for exportation of rubber products is calculated based on the method of "Unilateral Tax", which means a relief rate agreed or granted by parties regardless of other provisions of law or treaty, as follows:

          • Non-taxable if the taxable value export is less than US$1,000 per ton;
          • Taxable for US$50 per ton if the taxable value export is from US$2,000 but lower than US$3,000 per ton;
          • Taxable for US$150 per ton if the taxable value export is from US$3,000 but lower than US$4,000 per ton;
          • Taxable for US$300 per ton if the taxable value export is from US$4,000 per ton.
          This Sub-Decree must be implemented from 1 March 2016.
          Notification No.0915MOC.IP on Prohibition of the Use of Emblem and Name of Olympic Committee dated 15 March 2016
          In order to prevent the infringement of the intellectual property rights, the Ministry of Commerce issued this notification to prohibit all enterprises and companies from using the emblem as well as the "Olympic" name of the International Olympic Committee and National Olympic Committee of Cambodia without any authorization.

          In accordance with article 6ter (3)(a) of the Paris Convention for the Protection of Industrial Property and article 4(d) of the Cambodian Law on Mark, Trade Name and Unfair Competition, the owner of the protected mark can bring actions to the competent court or relevant ministry against any person who uses or copies the protected mark without any authorization and such person can be sentenced to a fine and/or imprisonment.
          Patent Tax and Reclassification of Taxpayers
          The Cambodian system of taxation has seen a major overhaul in a concerted push towards modernization over the past two years. The government's recently launched taxation strategy aims to increase revenues "by improving transparency, efficiency and equity of the tax system, and monitoring tax collection more closely". With a view to further these objectives, the National Assembly and the Senate adopted the Law on Financial Management for 2016, which was promulgated by Royal Kram No.NS/RK/1215/016 on 17 December 2015.

          The most conspicuous and salient feature of this piece of legislative reform has been the discontinuance of the Estimated Regime of Taxpayers, and the mandate for reclassification of all eligible taxpayers under the Self-Assessed Regime (or the Real Regime of Taxpayers). Pursuant to this, the Ministry of Economy and Finance issued Prakas No.1819MEF.P on the Classification of Taxpayers in the Self-Assessment Regime, and Prakas No.1821MEF.P on the Procedure for Management of Patent Tax Collection. The proclamations categorize the taxpayers for Cambodian Tax purposes, and determine the new amounts of Patent Tax applicable on such categories, respectively.
          Registered Commercial Entities Required to Re-register Online
          On 29 December 2015, the Ministry of Commerce ("MOC") issued a Prakas requiring all companies, enterprises, branches, representative offices and subsidiaries, which are registered in Cambodia before 4 January 2016, to re-register through the MOC's recently launched website.

          The online re-registration process requires each company or entity to fill-in information and to upload necessary documents to the business registration website of the MOC, which is           www.businessregistration.moc.gov.kh. The application and documents uploaded to the website will be carefully reviewed and examined by the MOC officials. All communications will be made via emails to the applicants. The Prakas requires all companies/entities to complete their online re-registration from 4 January 2016 until 31 March 2016. Within this period, the online re-registration will be free of charge.

          Once the re-registration is complete, the company will be provided with its new commercial registration number and an electronic Certificate of Incorporation. The new Certificate of Incorporation will be valid in perpetuity.
          Third Extension for Tax Update
          It has been 16 months after the Ministry of Economy and Finance ("MEF") issued Prakas No.1139 dated 9 October 2014, which requires all entities registered with the General Department of Taxation ("GDT") or any relevant tax authority before 1 November 2014 to update their information at the National Tax School ("NTS") or the relevant tax branch office.

          Since there are some entities that have not completed this update, the GDT on 26 February 2016 extended for the third time the deadline for the completion of tax update to 31 May 2016. Along with this extension, the GDT also indicated the place or tax authority for the entities to conduct this update with. For entities registered with the Department of Large-Taxpayer of the GDT, the tax update must be completed at the sixth floor of the NTS. For entities governed by any provincial or district tax branch office, the entities must complete the tax update at their relevant provincial or district tax branch office or the NTS.

          Any enterprise or company that fails to conduct its tax update within this new deadline will be subjected to one or more of the measures that may be taken up by the GDT for this purpose.

          CHINA

          China's New Anti-Terrorism Law
          On 27 December 2015, China's National People's Congress Standing Committee passed a new anti-terrorism law (the "Law") that creates a legal framework providing Chinese authorities with wide-ranging powers to compel the cooperation and assistance of technology firms in the country's war against terrorism. The Law came into effect on 1 January 2016.

          The term "terrorism" has been defined in the Law to mean "propositions and actions that create social panic, endanger public safety, violate person and property, or coerce national organs or international organizations, through methods such violence, destruction, intimidation, so as to achieve their political, ideological, or other objectives".

          While most of the Law deals with broad national security and counter-terrorism initiatives, it also imposes certain statutory restrictions and obligations on technology companies. Article 18 imposes a general obligation upon telecommunications operators and internet service providers to provide technical support and assistance to national security agencies engaged in the prevention and investigation of terrorist activities. Article 19 expands on this by requiring telecommunications operators and internet service providers to implement technical security systems to monitor and prevent the dissemination of any information with terrorist content, with any discovery of such information with terrorist content to be reported to the relevant government departments. Article 21 further requires all businesses to conduct identity verification checks on their clients before any services can be provided. Furthermore, the Law has provided punishment measures for failing to do so.

          In response to the passing of this law, it would be prudent for technology firms who operate in the PRC to review their data security and encryption measures, and to consider how they might want to respond to any demands made of them by Chinese authorities in the exercise of their powers under the Law. While the true overall impact of the Law remains to be seen, the passing of this new law serves as a clear signal of the Chinese government’s desire to exercise greater oversight and control over the technological and informational networks within its territory, and is a signal that foreign businesses would do well to heed.

          Click           here to read our client update on the new Anti-Terrorism Law.

          INDONESIA

          Revision of Negative Investment List
          The Indonesian government announced that it will revise the current Negative Investment List (Dafter Investasi Negatif / "DNI") to permit foreign direct investment ("FDI") in a number of sectors and increase FDI limits in others.  The proposed changes are influenced by the need to attract greater FDI inflows to counter the current economic slowdown and to boost the country's competitiveness in the ASEAN Economic Community ("AEC"). According to the ministerial release, several sectors that are conditionally open under the current DNI will be completely removed from the list, including crumb rubber, cold storage, tourism (restaurants, cafes, recreation, arts, entertainment, sports facilities), film industry, e-commerce, telecommunications equipment testing, tolled expressways, processing and disposal of hazardous wastes and pharmaceutical raw materials.

          Click           here to read our client update on this.
          OJK Issues Series of New Rules on Rights Issues, Disclosure of Information, Utilization of Public Offering Proceeds, and Other Matters
          The Indonesian Financial Services Authority (Otoritas Jasa Keuangan / "OJK")  issued several regulations in December 2015 on rights issues, disclosure of material information, utilisation of public offerings proceeds, issuers and public companies exempted from reposting requirements, and code of conduct for investment managers. These regulations come into operation on various dates in 2016.

          Click           here to read our client update on this.
          New Regulation Clarifies Rules on Property Ownership by Non-Indonesians
          After a widespread discussion in the media and property circles last year, the Indonesian government issued Government Regulation No. 103 of 2015 on the Ownership of Residential Homes or Housing by Foreign Citizens Resident in Indonesia, superseding the previous regulation governing this matter ("Old Regulation").

          The Regulation, which came into operation on 28 December 2015, clarifies the property rights extended to foreign citizens, as well as inheritance and property rights in transnational marriages where one of the parties is an Indonesian national.

          Click           here to read our client update on the new regulation.
          Agency Established to Prevent Recurrence of 2016 Peat Fires
          After intense debate following last year's devastating land and peat fires in various parts of Indonesia, a new body, the Peatland Restoration Agency, has been established by Presidential Regulation No. 1 of 2016 to coordinate and promote peatland restoration measures in seven of the worst-hit provinces, including Riau, Jambi, and South Sumatra. Haze from out-of-control fires in these provinces often adversely affects neighbouring countries. The Regulation came into effect on 6 January 2016.
          Government Moves Once Again to Speed Up Infrastructure Development in Power Sector
          Presidential Regulation No. 4 of 2016 on the Acceleration of Power Infrastructure Development strives to set in place a framework that is capable of speeding up infrastructure development in the power sector so as to overcome the country's yawning electricity-supply deficit. The chief responsibility for accelerating the pace of development is placed on the shoulders of cash-strapped state power monopoly Perusahaan Listrik Negara ("PLN"). Given the manifold constraints facing PLN, whether or not this regulation will prove to be any more successful than many similar regulations issued in the past remains to be seen.
          New Regulation to Expedite Strategic Construction Projects
          Presidential Regulation No. 3 of 2016, which entered into effect on 12 January 2016, simplifies the procedures for the construction of strategic infrastructure projects.  These include tolled expressways and other strategic highways; intercity railways; airports and oil rigs.  The procedures that are simplified concern: (i) licensing and other related procedures; (ii) spatial planning; (iii) land-procurement; (iv) mandatory local content; (v) government guarantees; (vi) the role of state enterprises; (vii) procurement of goods and services; and (viii) dispute resolution.
          Water Sector Breaths Sigh of Relief after Being Left 'High and Dry' by Constitutional Court Decision
          The Indonesia Government has issued Government Regulation No. 121 of 2015 (which came into effect on 28 December 2015) to restore order to the water sector in the aftermath of a 2015 Constitutional Court decision that struck down the 2014 Water Resources Law as being repugnant to the Constitution, and reinstated the previous legislation on water resources (the 1974 Water Resources Law). The decision cast a question mark over the status of the water exploitation / extraction licenses issued to private companies operating in a wide range of sectors, ranging from water bottlers and food and beverage producers to textile manufacturers.

          Government Regulation No. 121 essentially adopts the same scheme of water-sector regulation as that applied by the 2014 Water Resources Law, but changes the terminology used and incorporates various new safeguards to take into account the Constitutional Court's concerns. Given the lack of substantive change, it will be interesting to see whether those who challenged the 2014 legislation will now also take aim at the 1974 Water Resources Law.

          LAO PDR

          Government takes steps to regulate signs, advertisements

          The Lao Government recently issued a Prime Ministerial decree which is called, "Signboard" ("Decree"). The Decree stipulates the criteria for standardized signs and advertising boards, as well as measures to regulate the sector, including sign writing businesses. Signs or advertising boards that fail to meet the set criteria must be rectified to comply with the Decree. Under the new criteria, Laotian language must be used as the main language in signs and advertisement boards, and it must have the largest font size. Foreign languages are allowed to be used in signs and advertisement boards, but the letters of these foreign languages must be smaller, i.e. not exceeding two thirds the size of the Lao letters. These criteria are waived for official signs displayed by international organisations such as foreign embassies or representative offices in Laos.

          The owners of businesses wishing to install signs and advertising boards are required to obtain approval of the Information, Culture and Tourism sector for the contents of the signs and advertisement boards. They must also seek the approval of the Public Works and Transport sector, the government sector responsible for approving the location of signs and advertisements, and for ensuring that the signs and advertisements meet safety standards. 

          The Decree came into operation on 29 January 2016.

          MALAYSIA

          Malaysian Parliament Assents to Transpacific Trade Partnership
          Malaysia became the first country to ratify the Trans Pacific Partnership ("TPP") on 28 January 2016.  The TPP is a regional trade agreement entered into between 12 countries, namely, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The TPP is different from a conventional free trade agreement ("FTA") in the sense that it does not only increase the flow of trade and investment in the Asia Pacific region, but also addresses important concerns like regulatory coherence and the participation of small and medium enterprises ("SME") in the TPP, as well as cover emerging markets like the digital economy and green technologies.

          Click           here to read our client update providing an overview of the stages of ratification which the TPP countries are at, as well as a discussion on the potential implications of Malaysia’s ratification of the TPP.
          AirAsia and MAS Succeed in Their Appeal against the MyCC Decision
          The Malaysian Competition Appeal Tribunal ("CAT") has recently set aside the landmark Malaysia Competition Commission’s ("MyCC") decision where Malaysian Airline System Berhad ("MAS") and AirAsia Berhad ("AirAsia") were fined RM10 million, respectively, for infringing the Competition Act 2010 in respect of market sharing.

          The CAT panel composed of five members, former Chief judge of Malaya, Tan Sri Haidar Mohamed Noor, Tan Sri Datuk Dr Sulaiman Mahbob, Tan Sri Dr Lin See-Yan and Dr Wan Liza Md Amin and chaired by the High Court Justice Hasnah Mohamed Hashim. The CAT unanimously determined that MAS and AirAsia did not infringe Section 4(2) of the Competition Act 2010 (which prohibits cartel activities including market sharing) by entering into an arrangement with the expressed objective of cost savings, an agreement which had actually been voluntarily terminated by the parties by early May 2012. The Malaysian Aviation Commission Act 2015 has since come into force and will take over the regulation of all economic matters relating to the Malaysian civil aviation industry including competition law matters.

          We issued a client update discussing the decision of CAT on 5 February 2016. To view the Update, click           here.
          Allied Health Professions Act 2016
          The Allied Health Professions Act 2016 (the "Act") has been passed by Parliament and gazetted on 18 February 2016. Although the Act has not yet come into force, it will establish the Allied Health Professions Council (the "Council") to regulate the allied health profession in Malaysia. The Act would impact the profession specified in the Second Schedule of the Act such as nutritionist, dieticians, physiotherapists, clinical psychologists, environmental health officers, occupational therapist, speech-language therapist and etc. The Council shall be responsible for the registration of those intending to practise in the Allied Health Profession as well as the issuance of practising certificates to registered practitioners. The Act also provides that the Council will determine the appropriate qualifications for Allied Health Professions, regulate their practices, ethics and professionalism.

          Upon the Act coming into force in Malaysia, those intending to practise in Allied Health Professions in Malaysia will have to register and obtain a practising certificate and it will be an offence for any registered practitioner to practise without a practising certificate. The Act also allows for the appointment of authorised officers to exercise powers of enforcement and investigation equivalent to that of a police officer. 

          MYANMAR

          New Negative List Issued
          On 24 March 2016, the Myanmar Investment Commission ("MIC") issued Notification No.26/2016 governing the types of business activities which are restricted to foreign investment under the Myanmar Foreign Investment Law. Notification No.26/2016 is intended to supersede Notification No.49/2014 issued on 14 August 2014, providing a new "negative list" of restricted sectors.

          Click here to read our client update outlining the key changes introduced by Notification No.26/2016. 
          Four Additional Foreign Bank Licences Awarded
          The Central Bank of Myanmar ("CBM") granted 4 new bank licences to foreign banks – Vietnam's Bank for Investment and Development of Vietnam, Taiwan's E.SUN Commercial Bank, South Korea's Shinhan Bank and India's State Bank of India, on 4 March 2016 as part of its second round of foreign bank licences. The 4 banks join 9 other licensed foreign banks including OCBC, UOB and SMBC, which have already opened their foreign bank branches in Myanmar as part of the first round of licences awarded in 2015. The CBM's recent decision demonstrates a further relaxation of the country's banking sector to foreign participation. However, it remains to be seen whether the CBM would be willing to further liberalise this sector by expanding the current limited scope of banking activities allowed to foreign bank branches in Myanmar.
          Special Goods Tax Came into Effect on 1 April 2016
          From 1 April 2016, special commodities such as cigarettes, alcohol, teak, petrol and most vehicles above 1,800cc will be subject to special goods tax in accordance with the rates stipulated by the Internal Revenue Department ("IRD"). For imported special commodities, the special goods tax will be levied based on the landed costs. On the other hand, for special commodities manufactured within Myanmar, the special goods tax is levied on the higher of the factory selling price or the selling price as estimated by the IRD. This new special goods tax regime in Myanmar serves to clarify the specific tax rates applicable to special commodities and is comparable to the special dutiable goods or excise tax regimes in neighbouring ASEAN countries.

          PHILIPPINES

          SINGAPORE

          SGX Consults on Proposals to Align Listing Rules with Changes to the Companies Act
          The Companies (Amendment) Act 2014 was passed in October 2014 to amend the Companies Act.  In January 2015, the Singapore Exchange ("SGX") proposed changes to the SGX-ST Listing Rules ("Rules") to align the Rules with the amended Companies Act.  The proposed amendments to the rules relate to three key areas – directors, shareholders and shares.

          Click           here to read our client update on the proposed changes. 
          Merger of Singapore Infocomm and Media Regulators
          On 18 January 2016, it was announced that the Info-communications Development Authority ("IDA") and the Media Development Authority ("MDA") will be restructured to form the Info-communications Media Development Authority ("IMDA") and the Government Technology Organisation ("GTO").  The new IMDA will combine the regulatory and industry promotion functions of both the IDA and MDA, and will include the Personal Data Protection Commission ("PDPC").

          Click           here to read our client update on this.
          Revised Singapore Code on Take-overs and Mergers
          The Singapore Code on Take-overs and Mergers ("Code") was introduced in 2012.  On 25 February 2016, the Monetary Authority of Singapore ("MAS") issued a revised Code, incorporating feedback received from a public consultation held in July 2015.   The revised Code took effect on 25 March 2016.

          Click           here to read our client update on this.
          Mental Capacity (Amendment) Bill 2016 Passed
          The Mental Capacity (Amendment) Bill 2016 was passed in Parliament on 14 March 2016 to better protect the mentally incapacitated. The current Mental Capacity Act ("MCA") enables individuals, through a Lasting Power of Attorney ("LPA"), to appoint "donees" who could make decisions on their behalf should they lose mental capacity. For those who have lost mental capacity but have no LPA, the MCA allows someone, such as a family member, to apply to Court to be their deputy to make decisions on their behalf.

          The changes to the MCA include: (i) the introduction of professional donees and deputies; (ii) providing measures to better protect donors from abuses by donees and deputies; and (iii) improving commercial certainty in the use of LPAs.

          Click           here to read our client update on the amendments to the MCA.
          Proposed Employment Claims Tribunal
          The Ministry of Manpower ("MOM") has announced details of the proposed Employment Claims Tribunal ("ECT"), which is intended to address salary-related employment claims for all workers. Currently, MOM's labour court (the "Labour Court") provides adjudication services to resolve salary-related claims between employers and employees covered under the Employment Act. However, those who are not covered by the Employment Act (including professionals, managers and executives ("PMEs") earning more than S$4,500 per month) would have to file their claims with the civil courts, which can involve a lengthy and costly process. To provide a more accessible system to resolve salary-related claims more quickly for all employees, MOM announced plans in 2014 to set up an ECT to take over the work of the Labour Court in adjudicating salary-related claims. The public consultation exercise on the proposed ECT closed on 23 March 2016.

          Click           here to read our client update on the key features of the ECT.
          Derivative Actions by Shareholders not Available for Companies in Liquidation
          The Singapore Court of Appeal has decided on an important and novel point of law regarding derivative actions. In Petroships Investment Pte Ltd v Wealthplus Pte Ltd and others [2016] SGCA 17, the Court of Appeal held for the first time that derivative actions are not available where the company in question is in liquidation.  In the landmark judgment, the Court of Appeal also made a number of important observations in relation to the continued applicability of the common law derivative action.

          Click           here to read our client update on this case. 

          THAILAND

          VIETNAM





          Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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