Regional Round-Up

CAMBODIA

Factory/Enterprise Owners or Directors to Update Employees' Addresses with Effect from 25 June 2021

On 10 June 2021, the Ministry of Labour and Vocational Training ("MLVT") issued notification No. 029/21 on Updating of Current Employees' Addresses to the Authorities ("Notification"). Pursuant to the Notification, owners/directors of factories/enterprises were to submit the updated addresses of their employees to MLVT via MLVT’s online system prior to 25 June 2021.

The owners/directors of affected factories/enterprises shall advise their workers/employees to prepare three copies of 4x6-sized photos for purposes of complying with the Notification and cooperate with the authorities in providing address details and other necessary information as may be required in the future.

The details required from employees/workers include address details such as house number/room number, village, commune/sangkat, krong/district/khan, and city/province for reporting and submission to the factory/enterprise administration.

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

MOC Issues Notification Requiring Relevant Persons to Apply for E-Commerce Permit or Licence

On 26 May 2021, the Ministry of Commerce ("MOC") issued Notification No. 1143 on the Issuance of Permit or Licence on E-Commerce ("Notification No. 1143"). Notification No. 1143 urges all individuals, sole proprietorships, legal entities and branches of foreign companies which carry out their business activities via electronic platform ("Relevant Persons") to apply for a permit or licence on E-Commerce. 

According to the Law on E-Commerce, the Sub-Decree on the Determination of Type, Formality and Procedure for the Issuance of Permit and Licence on E-Commerce to Intermediaries and E-commerce Service Providers, and Prakas No. 290 on the Issuance of Permit and Licence on E-Commerce dated 9 October 2020, Relevant Persons are required to apply for a permit or licence on E-Commerce with the Business Registration Department of Trade Support Services General Directorate of MOC.

Relevant Persons that fail to apply for a permit or licence on E-Commerce in accordance with Notification No. 1143 will be required to discontinue their operations. They will also face fines, the quantum of which will be determined by the applicable laws and regulations.

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

Legal and Regulatory Requirements on Project Companies Concerning Environmental and Social Contribution

On 12 April 2021, the Ministry of Environment ("MOE") issued notification No. 550 on the Clarification on Payment of Environmental and Social Contribution of Investment Projects ("Notification"). The Notification aims to clarify the legal requirements concerning the payment of environmental and social contribution by companies with investment projects ("Investment Projects") for which environmental and social impact assessment ("ESIA") reports have been approved by MOE. These companies will hereinafter be referred to as "Project Companies". 

The Notification provides a list of legal and regulatory directives and requirements Project Companies need to comply with including submission of ESIA reports, classification of Investment Projects and reports on payment of environmental and social contribution.

MOE has appealed to all Project Companies to strictly comply with the legal requirements, and has requested for the payment of environmental and social contribution to be made on a voluntary basis or depending on the size of environmental damages caused by activities of the Project Companies. In the Notification, MOE also disclosed the names of certain companies which have not fulfilled the obligation to pay environmental and social contribution. These companies often challenge MOE on such payments during public forums despite MOE’s multiple attempts to clarify this issue on many occasions. 

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

Deadline to File Request to Extend Work Permit Postponed to 31 May 2021; Labour Arrangements During Khmer 2021 New Year Holidays

The Ministry of Labour and Vocational Training ("MLVT") has issued two regulations concerning labour law. The first piece of regulation relates to the postponement of the deadline to file a request for extension of work permits for foreign employees for 2021 and the documentary requirements for newly hired foreign employees. The second piece of regulation relates to paid leave during the Khmer 2021 New Year celebration.

March 2021 ("Notification No. 013/21"), postpones the deadline for filing a request for extension of work permit/employment cards of foreign employees from 31 March 2021 to 31 May 2021. 

Notification No. 013/21 exempts foreign employees who have already obtained their work permits/employment cards in 2020 from paying any penalty in the event of failure to apply for extension of such work permits/employment cards for year 2021 by 31 March 2021.

However, the newly hired foreign employees are required to fulfil the existing documentary requirements in accordance with the applicable laws when applying for their work permits.

MLVT has also issued Guideline No. 029/21 on the Implementation of Khmer New Year Holidays for Year 2021 dated 23 March 2021 ("Guideline"). According to the Guideline, the owner/director of a factory/enterprise has the discretion to implement either of the two options below in relation to the Khmer New Year Holidays from 14-16 April 2021 ("Khmer New Year holidays"). 

• Option One: Allow employees to take paid leave for three days during the Khmer New Year holidays. Factories/enterprises which require continuous operations and whose production process will be disrupted when employees are allowed to take leave during the Khmer New Year holidays, may assign their employees to work and take leave on a rotational basis.

• Option Two: Add the number of days allocated for the Khmer New Year holidays to other future declared public holidays.

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

CHINA

China Passes Law on Hainan Free Trade Port

Further to the Master Plan for Construction of Hainan Free Trade Port being rolled out by the Central Committee of the Communist Party of China and the State Council of China on 1 June 2020, the Standing Committee of the National People’s Congress passed the Hainan Free Trade Port Law of the People's Republic of China (中华人民共和国海南自由贸易港法) ("Hainan FTP Law") on 10 June 2021, marking a significant move to upgrade the construction of Hainan free trade port from policy support to legislative guarantee.

The Hainan FTP Law has eight chapters and 57 articles, covering a wide range of high-level opening-up measures, including preferential tax policies of zero tariffs, low tax rates, a simplified tax regime, measures to promote the liberalisation and facilitation of trade, investment and cross-border flow of funds, convenience of entry and exit of personnel and transportation, secure and orderly flow of data,  and environmental protection. The Hainan FTP Law also offers Hainan Island greater autonomy to formulate local regulations on the construction of the free trade port in light of specific circumstances and actual needs. In addition to the negative list for foreign investment access in the Hainan FTP which came into effect from 1 February 2021 and is shorter compared to the negative lists for foreign investment applicable nationwide and in other free-trade zones, it is expected that the negative list for cross-border service trade appliable in the Hainan FTP will be released by the end of 2021. 

The Hainan FTP Law will provide a fundamental legal framework to build a free trade port in an orderly manner in Hainan. It will not only help foster the business environment based on the rule of law; it will also provide new investment opportunities to investors, enable them to benefit from the preferential tax policies, and boost the confidence of market players.

China Enacts Anti-Foreign Sanctions Law

On 10 June 2021, China promogulated the Anti-Foreign Sanctions Law ("AFSL"), which came into effect on the same day. Together with earlier-enacted Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures ("Blocking Rules") (see our previous write-up here) as well as the Regulations on the Unreliable Entity List and various other rules and regulations, China has recently implemented a number of legal and regulatory measures to push back against foreign discriminatory restrictive measures.

According to the AFSL, the State Council of China has the right to formulate the Counter Sanction List to include individuals or organisations that directly or indirectly participated in the formulation, decision-making, or implementation of the discriminatory restrictive measures in such Counter Sanction List. Counter measures may also be taken against the individuals and organisations affiliated with the targeted individuals and organisations on the Counter Sanction List as decided by the State Council of China.

The counter measures will mainly include the following measures, which will have a material adverse effect on the business operations and other activities of the targeted individuals or organisations within China:

1. Refusal to issue visas, denial of entry, visa cancellation, and/or deportation;
2. Sealing, seizing, or freezing of movable property, immovable property, and all other types of property within the territory of China;
3. Prohibition or restriction on organisations and individuals within China's territory to carry out relevant transactions, cooperation, and other activities with them; and
4. Other necessary measures.

With the promulgation of the AFSL, there will be a potential conflict of laws between western countries and Chinese legal regimes. Such potential conflict will increase uncertainty for companies doing business in China. Companies should therefore monitor the ongoing China-US conflicts and developments closely and consider a potential action plan as and when it becomes necessary.

China Passes Data Security Law

On 10 June 2021, the Standing Committee of the National People’s Congress of the People's Republic of China officially passed the Data Security Law (数据安全法, "Data Security Law") which will come into effect on 1 September 2021. The Data Security Law comprises 55 Articles spread across seven Chapters, dealing with important issues such as Data Security and Development, Data Security Systems, Data Protection Obligations, and Security and Openness of Governmental Data. 

Although the provisions of the Data Security Law are broad and expansive, it does address some issues which will have a substantial impact on data operators both within and outside of China. For example, Article 2 gives the Data Security Law extraterritorial powers, providing that legal liability would be pursued against data processing activities that take place outside China, if such activities would harm China's national security or public interests, or the lawful rights of its citizens and organisations; Article 33 delegates the data intermediaries as the frontline gatekeeper and requires them to request the data providers to explain the source of their data, verify the identity of the parties involved in the data trading, and maintain records of the review and transaction process. 

The Data Security Law is just a prelude to the Chinese government's tightening of regulations on data security and protection. The recent investigation on DiDi, the largest ride-hailing company in China, by the Cyberspace Administration of China due to Didi's illegal collection of user data, clearly shows the Chinese government's determination and efforts to safeguard data security. 

Does an Arbitration Agreement Bind the Undisclosed Principal to a Contract?

In June 2020, the Beijing No. 4 Intermediate People's Court ("Court") granted a landmark civil ruling which dismissed the application to set aside an arbitral award issued by the China International Economic and Trade Arbitration Commission (CIETAC). The Court held that in the situation of an undisclosed agency, the arbitration agreement in a contract that is signed by the agent shall bind the undisclosed principal to the contract. It is one of the few cases where a Chinese court has extended the effect of the arbitration agreement to a party who does not sign the underlying contract. It shows that the doctrine of privity of contract can be "overridden" in special circumstances, e.g. undisclosed agency. 

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

INDONESIA

Affidavit of Witnesses and Experts in Indonesian Arbitration Practice

While Indonesian law does not recognise the concept of affidavits, in practice, it is common for arbitrators to request witnesses and experts to submit affidavits before their examination in the hearing. This concept stems from international arbitration practice as reflected in the IBA Rules on the taking of Evidence in International Arbitration (IBA Rules). However, there are some things that the disputing parties need to be aware of to ensure that the submitted affidavits are given the appropriate weight. These include:

1. Format – while there is no legal basis that regulates the format of the affidavit, the most popular format used in an Indonesian arbitration is a Q&A format.


2. Content – the affidavit should address, with specific details, key information, statements, or opinions of the expert or witness.


3. Structure – information should be arranged in a coherent manner, containing background of the expert/witness’ standing, qualifications, experience.

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

LAO PDR

Notification to Shut Down DATA CENTER System

On 9 June 2021, the Customs Department, Ministry of Finance, issued notification No. 02533/CD.MOF informing the public that it would shut down the DATA CENTER System from 23:00 on 11 June 2021 to 6:00 on 14 June 2021 to upgrade the DATA CENTER System – ASYCUDA. This is to ensure that the tax declaration systems are up to date. It is also aimed at achieving a more efficient and effective system of collecting tax revenue and ensuring compliance with other obligations relating to  the national budget.

Below are the points to take note of.

1. From 23:00 on 11 June 2021 to 06:00 on 14 June 2021, the Customs Department updated the database system (DATA CENTER) of the ASYCUDA system. As such, the Customs Administration I-VII, international customs checkpoints was not able to use the system.


2. During the system upgrade, the Chief of management duties I-VII, chief customs international led the tax management unit, goods inspection unit. He would advise individuals, entities, organisations and service tax providers which intended to bring products through the customs border checkpoint to collect tax details in advance or post tax to document verification inspection of the actual goods. When the system had been upgraded and could be used as per normal, the remaining steps could be completed using the ASYCUDA system.


3. During the system upgrade, cash guarantees, Smart Tax vouchers for goods, perishables or degradation, agricultural products, livestock, emergency goods, and goods for national defence and security, diplomatic equipment and privileged persons could not be issued. They could only be issued after the system could be used as per normal to complete the customs declaration process in the ASYCUDA system.

World Telecommunication and Information Society Day and Digital Economic Plan

On 17 May 2021, the Ministry of Technologies and Communications (“MTC”) announced on its website the celebration of the World Telecommunication and Information Society Day ("WTISD"). The event is celebrated every 17th of May since 1969. During the WTISD, MTC also announced that it has a digital economic plan for digital transformation as a response to the COVID-19 pandemic in Lao PDR. Such plan includes the following seven strategies: 

1. Legal framework;
2. ICT infrastructure;
3. Digital platform;
4. HR development;
5. ICT innovation;
6. Cyber security; and
7. Digital divide and other items such as e-government application and MTC activities during COVID-19.

Instruction from MPI on the Promotion of Investment Incentives Concerning the State Land Rental and Concession Fee

On 14 May 2021, the Ministry of Planning and Investment ("MPI") issued Instruction No. 0760/MPI on the Promotion of Investment Incentives concerning the State Land Rental and Concession Fee ("Instruction"). The Instruction supplements the Law on Investment Promotion of 2016 by clarifying (i) the procedural requirements in obtaining an incentive certificate; (ii)  the general investment and activity-specific requirements; and (iii) zone categories for various districts. This Instruction applies to enterprises in Lao PDR that invest in investment promotion activities and are authorized to invest in accordance with the Law on Investment Promotion No. 14/NA dated 17 November 2016 ("Law on Investment Promotion").

Incentive Certificate

Legal entities must submit an application for an incentive certificate to the appropriate section of MPI (which will coordinate internally and with other governmental agencies, including the Ministry of Finance). If the activity of the applicant is deemed eligible and all requirements are met, the authorities will issue the incentive certificate within 30 working days. However, according to the Instruction, large investment projects that have signed a concession agreement with the Lao government, and are subject to a National Assembly resolution on incentives beyond those provided in the Law on Investment Promotion, do not have to apply for an incentive certificate.

The Instruction sets out the obligations that incentive certificate holders must comply with. Failure to rectify any breach within the prescribed time after an initial warning may result in the tax incentives being withdrawn.

Investment Requirements

The Instruction sets out two categories of investment requirements:

1. General investment requirements - All legal entities seeking investment promotion incentives shall fulfil the Horizontal Requirements in the Instructions. This includes the minimum levels of investment in the promoted sectors and minimum quotas for employment of Lao technical staff or workers, as well as the requirement to pay registered capital, fulfil tax obligations and comply with all applicable laws and regulations.


2. Specific investment requirement - There are also specific requirements that apply to 108 activities within the promoted sectors in the Law on Investment Promotion.

Zones

The Law on Investment Promotion offers different promotional incentives based on the location or "zone" of the activity, with zone 1 being remote areas with limited infrastructure, zone 2 for areas with better socio-economic infrastructure to support investment, and zone 3 for special economic zones. The Instruction clarifies the districts that fall into zone 1 and zone 2. With respect to the areas classified as zone 3 (i.e. special economic zones), they shall comply with the specific regulations such as the  Decree on Special Economic Zone.

Presidential Decree on Administrative Case Proceedings Comes into Operation on 21 April 2021

The Presidential Decree on Administrative Case Proceedings No.001/PSD dated 19 March 2021 ("Presidential Decree") was published in the Lao Official Gazette on 6 April 2021 and came into force on 21 April 2021. The Presidential Decree is a comprehensive piece of legislation comprising 71 articles and is based on the Law on Civil Procedure 2012 and Law on People's Court 2012. 

The Presidential Decree is the first piece of legislation which applies to public organisations, civil servants, as well as organisations and local citizens involved in administrative case proceedings in Lao PDR. The Presidential Decree  also sets out the principles, rules, and measures in relation to administrative case proceedings in line with the law of Lao PDR.

The administrative case proceedings are proceedings relating to disputes the cases relating to the conflicts of administrative cases between:

• A Public organisation, civil servants and organisation, and citizens;

• A Public organisation and civil servants;

• Civil servants in the administrative positions and general civil servants;

• Two Public organisations and public organisation.

The Administrative Law Chamber of the People's Court and  Public Prosecutor's Office shall be in charge in adjudicating administrative cases. It shall oversee the proceedings which may involve litigants, third parties, witnesses, experts, interpreters, and attorneys or other legal representation, as the case may be. Events and cases that are currently under the consideration of the Administrative Law Chamber, or events or cases that occurred within the year before the coming into force of the Presidential Decree can be considered as being within the scope of the Presidential Decree.

The Presidential Decree also sets out the categories of cases or issues which the Administrative Law Chamber can adjudicate.

For issues of national secrecy, stability in the areas of defense-security and foreign relations shall not be taken into account.

MALAYSIA

Federal Court in Crystal Crown Hotel Case: Service Charges Cannot be Used to Pay Hotel Workers Salaries to Meet Employers' Statutory Obligation to Pay Minimum Wage

In an effort to alleviate the plight of low-income workers, Parliament has fixed and revised the minimum wage on a national basis vide the National Wages Council Consultative Act 2011 ("NWCCA 2011") and various Minimum Wages Orders ("MWOs") from 2012 to 2020. Under section 23 of the NWCCA 2011, an employer who fails to pay its employees the basic wages as specified in the MWOs commits an offence and shall, on conviction, be liable to a fine of not more than RM10,000 for each employee. 

The case of Crystal Crown Hotel & Resort Sdn Bhd (Crystal Crown Hotel Petaling Jaya) v Kesatuan Kebangsaan Pekerja-pekerja Hotel, Bar & Restoran Semenanjung Malaysia [2021] 3 MLJ 466 (Federal Court) involved a hotelier who utilised the collection from service charges as part of the employees' basic wage to meet its statutory obligation to pay the minimum wage.

The Federal Court ruled that, as "basic wages" under section 23 of the NWCCA 2011 excludes any other kind of cash emolument payable to an employee for work done, including service charges. The hoteliers could not therefore utilise service charges imposed on customer bills to meet the statutory minimum wage of their employees. This decision impacts the hotel industry, particularly since this sector is one of the most significantly affected by the COVID-19 pandemic, in that hoteliers have to continue to pay the statutory minimum wage without being able to rely on income from service charges.

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

Does Delay in Issuing an Arbitral Award Result in Loss of Arbitrator's Jurisdictional Mandate?

In Ken Grouting Sdn Bhd v RKT Nusantara Sdn Bhd and another appeal [2020] MLJU 1901, the facts pertained to a dispute between parties to a building contract that adopted the Persatuan Akitek Malaysia Arbitration Rules 2003 Edition ("PAM Rules"), where an arbitral award was delivered beyond the specified deadline, without any attempt to extend the timeline for the delivery of the award. 

Pursuant to these facts, the Court of Appeal deliberated on the interpretation of Article 21.3 of the PAM Rules, which stipulates that the "Arbitrator shall deliver his award as soon as practical but not later than 3 months from his receipt of last closing statement from the parties".

Whilst the Court of Appeal recognised that the Arbitrator’s mandate and jurisdiction may be resurrected if time was extended pursuant to section 46 of the Arbitration Act 2005, the Arbitrator or the parties would have to make an application to that effect and could not, of its own volition, extend time. The Court of Appeal further ruled that, without such an application for extension, once a specified deadline lapsed (in this case, as set out in Article 21.3 of the PAM Rules), the Arbitrator no longer has the requisite jurisdiction to make a valid award.

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

BNM Issues Exposure Draft of Policy Document on e-Money

On 11 June 2011, Bank Negara Malaysia ("BNM") issued an exposure draft on the new Guidelines for Electronic Money ("e-Money") ("Exposure Draft"). Written feedback on the proposals in the Exposure Draft are to be made by/before 31 July 2021.

The Exposure Draft aims to ensure the safety and reliability of e-Money issued by persons approved under section 11 of the Financial Services Act 2013 or the Islamic Financial Services Act 2013 ("EMI"), and to enhance confidence in using or accepting e-Money for the payment of goods and services.

The Exposure Draft outlines, among others, the following:

1. introduction to two types of EMIs – the ‘standard EMIs’ and the ‘eligible EMIs’, with eligible EMIs being subject to more enhanced requirements;


2. introduction of a new category of ‘limited purpose e-Money’ issuers who will be exempt from the framework and requirements for approval;


3. a framework provisioning for the ‘white labelling’ of EMIs that enter into partnerships with third parties, who offer e-Money under their own brand, whilst the EMIs remain accountable for the issuance and management of e-Money funds and operations;


4. Board of Directors and senior management governance requirements;


5. Shariah governance requirements for EMIs that offer Shariah compliant e-money;


6. operational and risk management requirements;.


7. substantial additional technology and cybersecurity controls and requirements relating to risks and operations management;


8. minimum requirements on outsourcing agreements; and


9. control measures based on various digital delivery channels.

The Exposure Draft, if finalised and issued as a Guideline, will replace and supersede the current Guideline on Electronic Money (e-Money) which was issued by BNM on 31 July 2008.

MYANMAR

CBM Restrictions and Cash Shortage on the Ground

Following the Military Coup that took place on the 1 February 2020 in Myanmar, the Central Bank of Myanmar ("CBM") has issued a number of directives with the aim of controlling cash flow and keeping the country's economy from collapsing.

Reduction of Minimum Reserve Requirement for Banks

CBM issued a notification on the 3.5% minimum reserve requirement for banks in mid-February. This has been further reduced under latest Reserve Requirement Directive on 7 May 2021 to 3% until 30 September 2021 to help free up more funds for the banks to meet the demand of their customers wishing to withdraw funds. The significance of the impact of this reduction remains to be seen as it depends on the customers and the public in general and whether they decide to continue to withdraw funds from their accounts.

Limit cash withdrawals at ATMs and bank branches

A letter urging businesses to use digital payment infrastructures was issued in March with a limit on cash withdrawals at ATMs of MMK 500,000 daily, and a limit at bank branches of MMK 2,000,000 for individuals and MMK 20,000,000 for companies per week. However, since the beginning of June, some banks are experiencing cash shortage, and there have been cases of customers being able to withdraw only MMK 500,000- MMK 1,000,000. Most ATMs also remain out of cash with banks being unable to top up ATMs due to cash shortage. 

The severe cash shortage in Myanmar has caused many businesses and individuals to face financial difficulties. This has also led to a few individuals within the banking industry taking commissions of up to 12% for cash withdrawn by the bank customers. In that regard, CBM issued a warning via a letter dated 15 April 2021 to banking staff and certain individuals hoarding and selling cash to those in need during the ongoing currency shortage. The letter states that such activity violates Section 99(b) of the Central Bank of Myanmar Law, which is punishable, on conviction, with a fine and/or imprisonment for a term not exceeding two years.

Possible Cash Withdrawal Ceiling for Microfinance Institutions

On 19 May 2021, the Financial Regulatory Department ("FRD") under the Central Bank of Myanmar ("CBM") issued a letter requiring licensed Microfinance Institutions ("MFIs") to provide a one-time information report to CBM on the expected cash withdrawal amount over a one-week period. Referring to the CBM Directive 28/2021 setting cash withdrawal restrictions to companies to MMK 20,000,000 per week, the letter states that CBM intends to set a different cash withdrawal limit for MFIs in order to ease their operations. This new limit/ceiling for MFIs has yet to be published by CBM. 

CBM Directive on Non-Banking Financial Institutions on Opening or Closing of Branch Office and Relocation of Head Office

On 15 June 2021, the Central Bank of Myanmar ("CBM") issued a directive to Non-Banking Financial Institutions ("NBFIs") in relation to seeking approval on the (i) opening or closing of a branch office; and (ii) relocation of their head offices.

a.   Opening a new NBFI branch office/ relocating an NBFI head office

CBM requires the NBFI to provide (i) a completed application form for the opening of a new branch office or relocation of its head office; (ii) a Board of Directors ("BOD") resolution approving the opening of a new branch or the relocation of its head office; (iii) a feasibility study; and (iv) photos of the new office/branch office. 

The NBFI is also required to provide evidence that it has made a fee payment of MMK 200,000 in the case of opening a new branch office. Relocating an NBFI head office requires no further fee payment.

b.   Closing a branch office of an NBFI

CBM requires the NBFI to provide (i) a BOD resolution approving the closure of the branch office; (ii) the reasons for the closure; and (iii) its plan of action regarding the payables and receivables of the closing branch.

Updates on New Trademark Registration

On 28 August 2020, the Ministry of Commerce ("MOC") issued Order No. 63/2020 specifying the soft opening of the new online trademark registration system ("Trademark Order"). The soft opening period under the Trademark Order began on 1 October 2020 and will last until the official commencement of online filing for all Trademarks (which is due to be announced by the Government). Although the soft opening period was expected to end after six months, it remains in effect due to the administration changes following the military coup over the past few months. The official date for the commencement of online filing has not been announced.

As of 1 July 2021, existing registered trademarks may still be filed by way of online applications to the Intellectual Property Department (IPD). We are also pleased to notify that the Registration of Deeds Office has resumed its normal operations and is accepting new trademarks to be registered. 

We will keep you updated on any further developments to the Trademark Registration.

For more information on the Trademark Order, click here to read our Legal Update. 

Law Amending Union Tax Law 2020

The State Administration Council has amended the Union Tax Law ("UTL") by virtue of State Administration Council Law No. 20/2021, the Law Amending the Union Tax Law ("amended UTL"). The amended UTL changes the tax rates levied on income that had escaped assessment and is used for purchasing, construction, obtaining fixed assets, or expanding a business. The following table highlights the amended tax rates:

No.	Income (MMK)		Tax Rate
	From	To
1.	1	100,000,000	3%
2.	100,000,001	300,000,000	5%
3.	300,000,001	1,000,000,000	10%
4.	1,000,000,001	3,000,000,000	15%
5.	3,000,000,001 and above		30%

The lower-tier tax rates have been restored to the rates as they were when introduced in the 2019 Union Tax Law. This seeks to relieve tax burdens on lower income groups. 

Please contact us for specific advice concerning changes in the amended UTL.

State Administration Council Carries out Ministerial Changes in Myanmar

The State Administration Council has carried out several changes in the cabinet as ministries were devolved and a new ministry was created. The Ministry of Planning, Finance, and Industry was devolved into two new ministries: (i) the Ministry of Planning and Finance and (ii) the Ministry of Industry by virtue of State Administration Council Order No. 117/2021 on 3 May 2021. Furthermore, the Ministry of Education (Science and Technology) was devolved into separate ministries: (i) the Ministry of Education and (ii) the Ministry of Science and Technology by virtue of State Administration Council Order No. 138/2021 on 17 June 2021. Finally, a new Ministry of Cooperative and Rural Development under State Administration Council Order No. 140/2021 was created on 17 June 2021. We are closely monitoring and adapting to the regulatory ramifications which may occur due to the ministerial changes. 

Please contact us for specific advice concerning changes in the regulatory governance in Myanmar.

Reformation of the National Payment System Governing Committee

The State Administration Council has reformed the National Payment System Governing Committee ("NPSGC") by virtue of State Administration Council Order No. 147/2021 for the purposes of rectifying the economic crisis in Myanmar. The aims of the new NPSGC include but are not limited to the: (i) promotion of digital currency in Myanmar; (ii) reinvigoration of the electronic payment system; (iii) eradication of illegal cash payment systems; and (iv) implementation of the ASEAN Economic Integration program. The newly reformed NPSGC will be chaired by the Central Bank of Myanmar. Numerous other ministries will be members of the NPSGC.

PHILIPPINES

Guidelines on Administration of COVID-19 Vaccine in Workplaces

The Department of Labor and Employment ("DOLE") issued Labor Advisory No. 3-2021 or the Guidelines on the Administration of the COVID-19 Vaccine in Workplaces, and Labor Advisory No. 8-2021 or the Promotion of COVID-19 Vaccination in the Private Sector.

Section 5 of Republic Act No. 11525 ("RA No. 11525") or the COVID-19 Vaccination Program Act of 2021, provides that private entities may procure COVID-19 vaccines by entering into a multi-party agreement with the Department of Health (DOH), National Task Force Against COVID-19 (NTF) and the supplier of the COVID-19 vaccine. The law does not mandate private entities to administer COVID-19 vaccines in the workplace, but if the employers choose to administer COVID-19 vaccines, they should adopt and implement an appropriate vaccination policy in the workplace, in accordance with the law. They may also seek the support of appropriate government agencies in the procurement, storage, transport, deployment and administration of COVID-19 vaccines.

The Implementing Rules and Regulations of RA No. 11525  ("IRR") state that only COVID-19 vaccines which were procured or donated with a valid Emergency Use Authorization issued by the Philippine Food and Drug Administration shall be distributed and administered by the private entities. The IRR also provides that the COVID-19 vaccines that were procured by the private entities shall not be for sale and shall only be for the exclusive use of the private entities and its employees. In case of donated COVID-19 vaccines, the priority in the inoculation shall be their healthcare workers, senior citizens, economic frontliners and essential workers.

Furthermore, under the said labor advisories, all employees in the private sector are highly encouraged to get inoculated with the COVID-19 vaccine, except for those who are ineligible or disqualified for health reasons. However, private entities cannot implement a "no vaccine, no work" policy.  Employers shall shoulder the cost of the vaccinations and no cost of vaccination shall be charged against or passed on, directly or indirectly, to the employees. 

Philippines Joins ASEAN CIS Framework

On 11 May 2021, the Philippines became a signatory to the ASEAN Collective Investment Scheme ("CIS") Framework, joining the original member countries: Malaysia, Singapore and Thailand. With the Philippines now a member of the CIS Framework, qualified investment companies in the country shall be allowed to offer funds, such as unit trust funds or mutual funds, to retail investors in the other signatory countries in the Southeast Asian bloc, and vice versa. 

This initiative is included in the broader regional capital markets integration plan endorsed by the ASEAN Finance Ministers.  First established in 2014, the CIS Framework aims to streamline the facilitation of cross-border investments, fund distribution as well as the domestic approval of the signatory countries by the harmonisation of the rules and criteria for qualified asset management firms, fund managers and mutual funds.  It also provides for better investment protection that intends to encourage new and diverse prospects in product access and border fund distributions among the member countries.

The Securities and Exchange Commission (SEC) of the Philippines has recently issued draft guidelines on the implementation of the CIS Framework. The draft guidelines state that to be authorised as a CIS, the investment company must be duly incorporated under Republic Act ("RA") No. 2629 or the Investment Company Act, and RA No. 8799 or the Securities Regulation Code in order to issue shares to the public.  Investment companies from the Philippines are proscribed from offering units and shall only be allowed to offer shares cross-border.  

Moreover, foreign CIS constituted in any member jurisdiction may be offered in the Philippines once shown that it is a qualifying CIS and permitted to be offered to the public in the jurisdiction where it originates. 

Ultimately, the initiative’s simplified process of cross-border product access and fund distribution targets the cooperation and connectivity of the countries in the ASEAN region. 

IPOPHL and USPTO Renew IP Cooperation and Partnership

On 5 May 2021, the Intellectual Property Office of the Philippines ("IPOPHL") signed a Memorandum of Understanding ("MOU") with the United States Patent and Trademark Office ("USPTO"), renewing their partnership and strengthening cooperation in intellectual property ("IP") protection and enforcement. The MOU covers different areas of cooperation such as: (i) trainings and capacity building for office administration and human resource development; (ii) awareness-initiatives on the importance of IP in innovation and economic growth; and (iii) information-sharing on IP-related, non-confidential matters and best practices.

With the renewal of the accord, USPTO has committed to (i) designate IPOPHL as a competent international searching authority ("ISA") and preliminary searching authority ("IPEA"); and (ii) provide capacity building in other areas to improve IP rights protection and enforcement, such as in IP awareness, education, valuation, commercialisation, and technology transfer arrangements.  An ISA/IPEA prepares examination reports required under the international application process provided by the Patent Cooperation Treaty. The process involves initial assessments to help applicants assess their chances of being granted international patents. The World Intellectual Property Organization has designated only 23 ISAs/IPEAs to date and only three in Southeast Asia, including IPOPHL.

IPOPHL also recently announced that the US Trade Representative has kept the Philippines off  the Special 301 Watchlist for the past eight years. The Special 301 Watchlist  is an annual review of the global situation which identifies countries which do not provide adequate and effective IP protection and enforcement.  According to IPOPHL Director General Rowel Barba, this exclusion would help the country attract foreign business investments.

COVID-19 Declared as a Compensable Disease

On 6 April 2021, the Employees’ Compensation Commission ("ECC") of the Department of Labor and Employment ("DOLE") issued Board Resolution No. 21-04-14 ("Board Resolution") which declared the inclusion of COVID-19 as one of the listed occupational and work-related diseases. As a result, Filipino workers who contract the COVID-19 virus will receive compensation from the government. According to DOLE Secretary Silvestre Belo III, an employee who has been infected by COVID-19 will receive PhP 30,000, which is higher than the PhP 10,000 compensation generally given on work-related illness.

ECC is a government corporation, considered as an attached agency of DOLE, created to implement the Employees' Compensation Program which allows employees, whether public or private, to receive benefits or compensation in cases of work-connected contingencies including sickness, injury, disability or death. 

The Board Resolution provides that a worker is eligible to receive compensation in any of the following conditions:

1. There must be a direct connection between the offending agent or event and the worker based on epidemiologic criteria and occupational risk (e.g. healthcare workers, screening and contact tracing team);
2. The tasks assigned to the worker would require face-to-face and close proximity interactions with the public, or with confirmed cases for health care workers;
3. Transmission occurred in the workplace; or
4. Transmission occurred while commuting to and from the workplace.

Claimants need only submit the following to be eligible to receive the compensation:

1. Certificate of employment from the employer, indicating last day of reporting to work;
2. Reverse transcriptase-polymerase chain reaction (RT-PCR) test result showing positive result for COVID-19 from any Department of Health-accredited testing facility;
3. Medical records as appropriate; and
4. Completed application forms.

Bureau of Immigration Updates International Travel Guidelines

All departing foreign nationals who are issued visas, except holders of tourist visas and Emigration Clearance Certificates from the Bureau of Immigration ("BI"), are required to secure a Travel Pass from the same agency which issued their visas (i.e., BI, Philippine Economic Zone Authority ("PEZA")).

As part of the documentary requirements upon departure, the foreign national shall present his or her Travel Pass, in printed or electronic form, to the immigration counters. A foreign national who fails to present his or her duly issued Travel Pass shall not be permitted to depart, unless confirmed by the focal persons of the visa-issuing agencies.

BI and PEZA have both released their own set of guidelines and requirements involved in applying for a Travel Pass from their office. Both offices require that the documents be submitted at least seven days before the date of departure of the foreign national.

The foregoing guidelines are without prejudice to the exercise of the mandate of BI concerning Arrival and Departure formalities.

SINGAPORE

Guide to Climate-Related Disclosures for Banks, Asset Managers & Insurers

Improving the quality of disclosures is vital to supporting the growth of green finance in Singapore. In this regard, the Green Finance Industry Taskforce ("GFIT") issued an implementation guide for climate-related disclosures by financial institutions ("FIs") on 19 May 2021 ("Guide"). The Guide details the best practices that are aligned with the recommendations of the Financial Stability Board's Task Force on Climate-Related Financial Disclosures ("TCFD").

As background, FIs are expected to make regular and meaningful disclosure of salient environmental risks applicable to their businesses. This is set out, amongst others, in the Monetary Authority of Singapore (MAS) Guidelines on Environmental Risk Management for banks, asset managers, and insurers ("ENRM Guidelines") issued in December 2020. In addition, FIs which are listed on the Singapore Exchange Securities Trading Limited (SGX-ST) are subject to mandatory sustainability reporting, with the primary components prescribed in the SGX Listing Rules to be included in reports on a "comply or explain" basis for listed issuers for their financial year ending on or after 31 December 2017. 

By focusing on climate-related disclosures, the Guide supplements the ENRM Guidelines as well as GFIT's handbook that provides practical implementation guidance and good practices on environmental risk management. The Guide is relevant to FIs which are expected to meet the expectations of the ENRM Guidelines, namely, banks, asset managers, and insurers. 

Presently, there are several standards and frameworks for sustainability reporting for various purposes that FIs may use as appropriate, such as the Global Reporting Initiative, the International Integrated Reporting Council and the TCFD. The Guide serves as a reference for FIs in making disclosures according to their chosen standard or framework.

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

Singapore IP Strategy 2030 – What Does it Mean for Your Business?

Singapore has unveiled its Singapore IP Strategy 2030 ("SIPS 2030") at the World IP Day event on 26 April 2021. SIPS 2030 is a 10-year blueprint to strengthen Singapore's position as a global intangible assets ("IA") and intellectual property ("IP") hub as well as maintain Singapore's position as a top-ranked IP regime.

The full SIPS 2030 report ("Report") (available here) was published in a joint press release from the Ministry of Law, Ministry of Finance, Ministry of Trade and Industry, and the Intellectual Property Office of Singapore ("IPOS"). The Report details the various aspects of SIPS 2030, which consists of three main objectives:

1. Strengthen Singapore's position as a global hub for IA/IP;
2. Attract and grow innovative enterprises using IA/IP; and
3. Develop good jobs and valuable skills in IA/IP.

The Report highlights that, with rapid advancements across diverse technology fields, the global economy is increasingly driven by IA, with global IA value standing at an all-time high of more than US$65 trillion, surpassing the value of tangible assets. It is thus vital for Singapore to remain at the forefront of this movement, and for businesses to fully utilise the opportunities afforded in this thrust of initiatives.

Singapore businesses should be aware of the impending changes to Singapore's IA/IP regime, both in policy and infrastructure. Businesses should also consider how they can benefit from the government's efforts to increase enterprises' access to IA/IP services and to help enterprises unlock potential new sources of capital through IA/IP. 

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

Singapore Ratifies ASEAN Trade in Services Agreement

Singapore has ratified the Association of Southeast Asian Nations ("ASEAN") Trade in Services Agreement ("ATISA"), becoming the first of the ASEAN Member States to do so. In a press release on 5 April 2021 (available here), the Ministry of Trade and Industry ("MTI") announced that Singapore had completed the ratification process, and that its rights and obligations under the ATISA had commenced on the same day. MTI also stated that other ASEAN Member States would be continuing their internal procedures to ratify the ATISA within the year. 

The ATISA reduces "beyond-the-border" barriers, providing a legally binding guarantee of the widest preferential services market access into ASEAN markets to date. The ATISA seeks to benefit businesses and workers by further promoting trade in services in the ASEAN region and improving business confidence for businesses and service suppliers in all sectors. It has a wide coverage of service sectors, including Professional Services, Telecommunications, Financial Services, Computer and Related Services, Distribution and Logistics Services.

The measures under the ATISA include the following:

1. It establishes services liberalisation commitments, including the reduction of discriminatory regulatory barriers and creation of a more transparent regime for ASEAN services suppliers.


2. It establishes a built-in agenda for ASEAN Member States to convert their liberalisation commitments to a negative list approach.

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

SGX Proposes to Permit Listing of SPACs in Singapore

On 31 March 2021, the Singapore Exchange Limited ("SGX") released a consultation paper seeking comments on the proposed regulatory framework for the listing of Special Purpose Acquisition Companies ("SPACs") on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST Mainboard"). The consultation closed on 28 April 2021. SGX is reviewing the feedback received from the consultation exercise.

After weighing the benefits and risks of SPACs, SGX concluded in the consultation paper titled "Proposed Listing Framework for Special Purpose Acquisition Companies" ("Consultation Paper") that it is of the view that SPACs may generate benefits to capital markets participants and may be a viable alternative to traditional initial public offerings ("IPOs")  for fund-raising in Singapore and the region. 

By way of background, SPACs, also known as "blank cheque companies", are companies with no commercial operations or revenue-generating businesses or assets. They are formed to raise capital through an IPO by listing on a securities exchange with the sole objective of acquiring another company for a business combination, also known as a de-SPAC transaction, so that the company emerging from the business combination continues as a listed company on the securities exchange.

The Consultation Paper sets out the key features of the proposed listing framework for SPACs to be listed on the SGX-ST Mainboard ("SGX SPACs") which aim to balance safeguarding investors' interests against certain concerns posed by the unique features of SPACs and the capital raising needs of the market. These include the proposed admission criteria (including minimum market capitalisation), listing requirements and some key safeguards to protect the interests of minority shareholders of the SGX SPACs.

There are proposed requirements for at least 90% of the gross IPO proceeds to be placed in an escrow account pending the completion of a business combination and for an SGX SPAC to complete a business combination within a maximum time frame of 36 months from the date of its listing ("permitted time frame"). It is proposed that the business combination must be approved by: (i) a simple majority of the SGX SPAC's independent directors; and (ii) a simple majority of the SGX SPAC's shareholders (excluding the founding shareholders and the management team of the SPAC, and their respective associates). The SGX SPAC would be liquidated if, among other things, the business combination is not completed within the permitted time frame. 

For more information, click here for our Legal Update.

Singapore Ramps Up Combat against Trade Financing Fraud

On 19 March 2021, the Electronic Transactions (Amendment) Act ("ETAA") came into operation in Singapore, making Singapore the second country to adopt the United Nations Model Law on Electronic Transferable Record (MLETR). The changes that the ETAA effects essentially enable the digitalisation of transferable documents which are often used in cross-border trade. Importantly, the ETAA may feature in Singapore's effort to combat fraud in relation to transferable documents.

Transferable documents refer to documents which entitle the holder to claim performance of the obligations indicated therein, such as bills of lading. Despite advancements in digital technology, a majority of these transferable documents today are still physical — paper-based — documents. This observation is worrying especially since developments in reprography are causing these valuable physical documents to be increasingly susceptible to fraud.

A potential solution to the spate of transferable documents fraud is the adoption of electronic transferable documents. These electronic documents are more difficult to forge because they utilise technologies which have authentication and traceability features at its core. Furthermore, the occurrence of fraud is made even more unlikely with the added involvement of trusted providers of electronic transferable documents who are charged with ensuring the security of these documents.

Legislative support is an essential ingredient to the viability of electronic documents because while electronic transferable documents can serve as a receipt of goods and as evidence of a contract, it might not be recognised as a "document of title" like a physical transferable document is recognised. Legislative intervention is thus needed to assure industry players that electronic transferable documents will be conferred the same status as physical transferable documents in the eyes of the law. Singapore has, through the passing of the ETAA, provided the necessary legislative support for electronic transferable documents to be used. Section 6 of Singapore's ETAA inserts sections 16A to 16S into the Electronic Transactions Act, which collectively ensure that an electronic transferable document is functionally and legally equivalent to a physical transferable document and is capable of being recognised as a "document of title".

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

THAILAND

Reduction of Social Security Fund Contributions Rate to Ease Impact of COVID-19 Outbreak

On 28 May 2021, the Royal Gazette published "Ministerial Regulation Prescribing the Social Security Fund Contribution Rate B.E. 2564 (2021)" to help individuals and businesses cope with the financial challenges that they face during the COVID-19 pandemic.  Under the Regulation, the employers' and the employees' contributions to the Social Security Fund have been reduced from 5% to 2.5% of the employee’s monthly wages from 1 June 2021 until 31 August 2021.  

Draft Amendment to Public Limited Companies Act Approved by Cabinet

On 11 May 2021, the Cabinet passed a resolution approving the draft amendment to the Public Limited Companies Act B.E. 2535 (1992) ("Draft Amendment"). The Draft Amendment introduces the recognition of electronic methods for several undertakings of public limited companies including the following: 

1. Advertising by public limited companies through electronics means instead of newspapers;
2. Submission of documents to directors, shareholders, or creditors via electronic means;
3. Electronic Board of Directors’ meetings and shareholders’ meetings;
4. Reduction of the notice period for calling the Board of Directors’ meeting from seven days to three days; and
5. Appointment of a proxy to attend the shareholders’ meeting via electronic methods.

Further Postponement of Implementation Deadline for Personal Data Protection Act

On 8 May 2021, the Royal Gazette published the "Royal Decree Prescribing an Entity and Business in which the Data Controller is Exempt from the Personal Data Protection Act B.E. 2562 (2019) (No.2) B.E. 2564 (2021)". As a result, the previous one-year long postponement of the effective date of key operative provisions of the Personal Data Protection Act B.E. 2562 (2019) ("PDPA") has been postponed from 1 June 2021 to 1 June 2022. 

The rationale for the further postponement is the severity of the COVID-19 pandemic and its significant impact on entities and businesses in both the private and public sectors across the country, which has delayed the PDPA readiness of many.  When combined with the need to utilise advanced technology to implement the PDPA provisions, it was deemed reasonable to postpone the full implementation of the PDPA until 1 June 2022.

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

Amendments to Civil Commercial Code to Change Statutory Interest Rate

On 10 April 2021, the Emergency Decree Amending the Civil and Commercial Code B.E. 2564 (2021) ("Emergency Decree") was published in the Royal Gazette. The Emergency Decree came into force on 11 April 2021. The Emergency Decree reduces the statutory interest rate from 7.5% to 3% per year. With regard to default interest, it is reduced from 7.5% to 5% per year, unless otherwise agreed in accordance with the law. The Emergency Decree also provides that the default interest rate in the case of installment payments may accrue only on the principal amount of the instalment which becomes overdue. The changes set out in the Emergency Decree only apply to the interest which is due from 11 April 2021 onwards.

VIETNAM

Code of Conduct on Social Networks Attached to Decision No. 874/QĐ-BTTTT

On 17 June 2021, the Minister of Information and Communications issued Decision No. 874/QĐ-BTTTT together with the Code of Conduct on social networks ("Code of Conduct"), which took effect on the same date. The Code of Conduct applies to social networks' users, including individuals, organisations, officials, public employees and workers in government agencies, regulatory authorities and social network service providers. 

The Code of Conduct sets out rules of conduct of organisations and individuals using social networks, including conducting oneself or behaving in an appropriate manner in line with the moral and cultural values and fine traditions of the Vietnamese nation. It provides "rules" which social networks should adhere to, such as (i) having clear terms and conditions (T&Cs); (ii) putting in place measures for the detection and removal of contents that violate the laws; and (iii) providing support to "vulnerable" users.

While the rules set out in the Code of Conduct are numerous, the provisions are only recommendatory and instructive. The Code of Conduct is not a legal instrument and as such, violation of the rules – on its own – is not capable of attracting sanctions. 

Guidance on Security Interests

On 15 May 2021, Decree 21/2021/ND-CP (guiding the Civil Code on security for fulfilment of obligations) "Decree 21") came into force. Decree 21 provides more detailed provisions on the manner in which security interests may be created.

The new decree specifies the requirements parties should meet in describing the collateral of the security transactions, including the specific contents of such descriptions. However, despite such details, Decree 21 allows for general freedom of contract among parties regarding the creation of security interests. Non-compliance with the requirements on descriptions will not be fatal to the validity of the agreement, and the contractual relationship of the parties can still be recognised, provided that they do not contravene the basic principles of civil law or breach the conditions for a valid civil transaction.

Decree 21 also sets out the procedures that parties should follow in enforcing security interests. These include mandatory contents of enforcement notices and the manner of service of the notice.

Decree 31/2021/ND-CP Detailing and Guiding the Implementation of a Number of Articles of the Law on Investment 2020

On 26 March 2021, the Government issued Decree 31/2021/ND-CP ("Decree 31") to detail and guide the implementation of some of the articles of the Law on Investment 2020. It lays down detailed provisions on investment procedures, with salient features as follows:

a.    New Concept of Market Access Restriction

Decree 31 publishes a "negative list" of prohibited or restricted business lines. For those industries and businesses for which Vietnam has not yet given international commitments on market access, and for which no market access restrictions are provided under law, foreign investors will be treated as domestic investors for market access purposes. While it remains to be seen how this will be implemented in practice for unregulated sectors, it potentially opens new doors for foreign investors that invest in areas that are not specifically listed in the "negative list".

b.    Investment incentives

Decree 31 adds more business lines and sectors that can enjoy investment incentives. These include product distribution chains of small and medium enterprises ("SMEs"), (i) of which at least 80% of participating enterprises are SMEs; (ii) with at least 10 locations to distribute goods to consumers; and (iii) at least 50% of the chain's revenue is generated by SME's participating in the chain.

c.    New requirements to submit in-principle agreement in applications for M&A procedure

In addition to the documents required under the former laws to obtain approval for foreign investors to acquire or invest in Vietnamese companies (often called an "M&A approval"), Decree 31 introduces a requirement for investors to submit an in-principle agreement for capital contribution/shares acquisition/ capital transfer. Therefore, parties are required to execute a preliminary agreement for their transactions before seeking M&A Approval.