Regional Round-Up

CAMBODIA

Notification on the Implementation of Labour Self Inspection Regime Via Automated System

On 27 May 2022, the Ministry of Labour and Vocational Training ("MLVT") issued Notification No. 022/22 MLVT/NOTIF.DLI on the Implementation of Labour Self Inspection Regime via Automated System ("Notification"). Following the issuance of the Notification, MLVT would like to draw the attention of the owners or directors of all companies which are duly registered under the laws of the Kingdom of Cambodia and covered by the Labour Law to the following obligations:

1. conduct labour self-inspection (LSI) via the automated system (link here) twice a year, before (i) end of June, and (ii) end of December, starting from June 2022;
2. comply with the 31 priority points provided in the Constraint Letters (please refer to Annex A of our Legal Update titled "The Notification on the Implementation of Labour Self Inspection Regime Via Automated System"), as failure to comply with any of such priority points will immediately subject the errant owner or director to fines; and
3. encourage employees to be fully vaccinated against COVID-19 to enable companies to carry out their businesses, and fill in the vaccination information relating to their employees in the system.

Non-compliance with the above obligations will subject the errant owners or directors of companies to fines or other forms of punishment as may be prescribed by law. MLVT may also institute legal action against them for non-compliance with the said obligations.

New Draft Law on Technology Transfer

The Ministry of Industry, Science, Technology, and Innovation ("MISTI") has been discussing the draft Law on Technology Transfer ("Draft Law") with other relevant institutions and authorities. The Draft Law aims to manage, stimulate, and promote the transfer, export, and import of technology among public and private institutions and non-governmental organisations.

If the Draft Law is adopted, MISTI will be the regulatory authority leading, managing, facilitating, and promoting the transfer of technology in Cambodia.

Under the Draft Law, any person who performs technology transfer activities is obliged to obtain a license, permit, or certificate of technology transfer from MISTI and to annually contribute 1% of gross revenue to the technology research and development and innovation fund.

Consumers to Have Right to Withdraw from Contract During Cooling-Off Period under New Prakas

On 11 April 2022, the Ministry of Commerce ("MOC") issued Prakas No. 0113 on the Cooling-off Period ("Prakas"), which sets out the legal framework that offers consumers the unilateral right to withdraw from a contract for the sale of goods or supply of services during the cooling-off period.

The Prakas applies to all distance and door-to-door sales of goods and/or services in Cambodia. Distance sales refer to indirect sale-purchase transactions conducted without the physical presence of the parties, where the consumer does not have an opportunity to inspect the goods and/or services. Door-to-door sales refer to sales-purchase transactions where the businessperson sells the goods and/or services at the consumers' location or at public places that are not the location of the businessperson. 

This Prakas will be implemented within six months after the date of its issuance by the National Commission for Consumer Protection with the Consumer Protection Competition and Fraud Repression Directorate-General as its arm.

The Prakas also provides for (i) the right to withdraw during the cooling-off period, (ii) the exceptions to the right of withdrawal, (iii) the consequences of withdrawal, and (iv) the penalties for non-compliance with the Prakas.

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

Guidelines on Registration and Additional Approval for Trustee in CIS and Custodian in Securities Sector

On 30 March 2022, the Securities and Exchange Regulator of Cambodia ("SERC") and the Trust Regulator jointly issued a new set of Guidelines on Registration and Additional Approval for Trustee in Collective Investment Scheme ("CIS") and Custodian in the Securities Sector ("Guideline").

The Guidelines provides that a trustee in CIS must be registered as a 'trust operator’ in the securities sector with the Trust Regulator. A custodian in the securities sector who has obtained an approval-in-principle or final approval from SERC must apply for registration as a custodian of a trust fund in the securities sector with the Trust Regulator. 

The Guidelines also set out, among other things: (i) the application costs and expenses as well as annual registration fees; (ii) the grounds for suspension or cancellation of registration; (iii) the Trustees and Custodians' obligation to notify the Trust Regulator of any change or modification to information previously provided; and (iv) various obligations concerning business operations such as maintaining financial solvency ratios, reporting, notifications, requesting for approval and compliance with code of conduct.

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

New Prakas on Unfair Contract Clause for Consumer Protection and Fair Competition

On 1 March 2022, the Ministry of Commerce issued Prakas No.0067 P.N.A.KBB.PRK on Unfair Contract Clause ("Prakas"). The Prakas will be implemented within six months after the date of its issuance.

The Prakas defines "Unfair Contract Clause" as any clause that: (i) allows business operators to gain excessive consumer benefit; and (ii) creates an extreme disadvantage to the consumer. The term "unfair" under this Prakas will be determined based on certain factors. In assessing whether a clause allows business operators to gain "excessive benefit" from the consumer, the following will be considered: (i) the circumstances of the parties or either party to the Standard Form Contract such as economic or social dominance, ignorance of either party, or similar circumstances; and (ii) the criteria imposed under sectoral regulations of the relevant ministries, institutions, or regulators.

A "Standard Form Contract" refers to a contract or material clause which is pre-formulated by a business operator for the provision of goods and/or services to the consumer, the terms of which do not allow the consumer to negotiate or revise the contract or influence the business operator in whatever form to amend the contract. The Standard Form Contracts issued by business operator must comply with the requirements set out by the Prakas. 

The Prakas also stipulates that consumers have certain rights under the Standard Form Contracts including (i) the right to access necessary information relating to the goods and/or services provided by the business operator, as well as the clauses of the Standard Form Contract; (ii) the right to ask for clarification before entering into the contract; and (iii) the right to rescind or ratify any clause that is unfair and give excessive benefit to business operators. 

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

CHINA

China Publishes Draft Regulation on Standard Contract for Exporting Personal Information

On 30 June 2022, the Cyberspace Administration of China ("CAC") released for public comments the draft Regulations on Standard Contract for the Export of Personal Information ("Draft Regulation"), which incorporates a template for the Standard Contract for the Export of Personal Information ("Standard Contract"). The public consultation closes on 29 July 2022.

The Draft Regulation supplements Clause 38 of the Personal Information Protection Law ("PIPL") which requires a personal information processor ("PI Processor") to meet one of the three conditions before exporting personal information outside China which, includes the "signing [of] the standard contract formulated by the CAC with the overseas recipient".

Only a PI Processor who satisfies all of the following conditions may use the method of signing Standard Contract to export personal information:

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

If the above provision is read together with Clause 4 of the Data Export Security Assessment Measures issued by CAC on 7 July 2022, it can be construed that if a PI Processor does not satisfy any one of the above conditions, he shall go through the CAC security assessment procedures. 

The Draft Regulation mandates PI Processors to conduct a Personal Information Protection Impact Assessment ("PIPIA") before exporting the personal information, consistent with the requirements set out in Clauses 55 and 56 of the PIPL. In addition, PI Processors are required to assess the personal information protection policy and legislation of the country of the overseas recipients, and their impact on the enforceability of the Standard Contract. The PI Processors must file the signed Standard Contract and its corresponding PIPIA report with the local department of CAC within 10 working days from the effective date of the Standard Contract.

The Draft Regulation, together with the PIPL and its recent implementing rules, shows China's determination to enhance the protection of personal information. Notably, the newly-introduced filing requirement may significantly increase the burden on PI Processors, especially for multinational companies with globally-centralised systems.

China Issues Specification for Security Certification of Cross-Border Processing of Personal Information

On 24 June 2022, China's National Information Security Standardization Technical Committee (TC260) released the Practice Guide for Cybersecurity Standards – Security Certification Specification for Cross-Border Processing Activities of Personal Information (网络安全标准实践指南—个人信息跨境处理活动安全认证规范, "Certification Specification"), which took effect immediately. The Certification Specification provides a basis for the implementation of personal information protection certification, which is one of the four cross-border transfer mechanisms permitted under Article 38 of China's Personal Information Protection Law ("PIPL"). 

Scope of Application. The security certification will not be applicable for all types of cross-border transfer of personal information. Instead, it is only applicable to (i) intra-group personal information processing activities within one multinational company, between subsidiaries of one business entity, or between affiliates; and (ii) offshore processing activities subject to extra-territorial jurisdiction of the PIPL (paragraph 2 of Article 3 of the PIPL). 

Applicant for Certification. The Chinese entity involved in intra-group cross-border processing, or the domestic institution or the representative established or appointed by the offshore personal information processor as required by the PIPL, may apply for the certification and will be liable for the relevant cross-border transfer activities. 

Criteria of Certification. The Certification Specification sets out the basic requirements for the following criteria for granting the certification:

1. Binding agreements between the exporters and importers of personal information;
2. Appointment of a data protection officer, establishment of a data protection organisation and compliance with the rules for cross-border processing of personal information;
3. Data protection impact assessments; and
4. Data subject rights and responsibilities of data exporters and data importers.

China Eases Restrictions on Foreign Investment in Telecom Sector

The State Council of the PRC has issued the Decision of the State Council on Revising and Repealing Certain Administrative Regulations (国务院关于修改和废止部分行政法规的决定) ("Decision"), which came into effect on 1 May 2022.  The Decision revised the Administrative Provisions on Foreign-Invested Telecommunications Enterprises (2016 Revision) (外商投资电信企业管理规定) ("Provisions on FITE 2016") to lift relevant requirements imposed on foreign investment in the telecom sector in China. Some of the key amendments are set out below. 

1. The Provisions on FITE 2016 required that the main foreign investor should have "good track record and operational experience", meaning that holding companies or financial investors which have not participated in the operation of telecom businesses might not be eligible to invest in such industry. The Decision has since removed this track record requirement, reducing barriers for foreign investment and further expanding the opening of China's telecom sector.
2. The cap of foreign ownership ratio in an FITE operating basic telecom services ("BTS") (except radio paging services) remains at 49% and the cap of foreign ownership ratio in an FITE operating value-added services (including the radio paging business in BTS) remains at 50%. However, the Decision adds an exception to allow the State to adjust these ratios, providing a legal basis for the Government to further relax and lift the foreign ownership ratio cap.
3. The Decision has simplified the procedure for obtaining a licence for telecom business and shortened the Government's processing time for granting a license for telecom business.

Draft Law Makes Substantive Amendments to the Rules in Connection with Interim Measures in Arbitration

Under the current law in China, the power to grant interim measures (known as "preservation measures") is vested in the courts. A party seeking preservation measures must submit an application to the arbitral institution, not the tribunal, and if the institution is of the view that the application should be allowed, it shall then forward the application to the appropriate court for final decision. A party seeking pre-arbitration preservation measures must submit an application to the appropriate court directly.

On 30 July 2021, the Arbitration Law of the People’s Republic of China (Amended Version) (Draft for Comments) (“Draft Arbitration Law”) was published for public consultation. The Draft Arbitration Law proposes substantive amendments to the current regime concerning interim measures in arbitration and introduces, for the first time, the regime of “emergency arbitrators”.

Under the Draft Arbitration Law, for arbitrations seated in China, arbitral tribunals for both institutional and ad hoc arbitrations are, for the first time, given the power to order interim measures upon application by a party to the arbitration. However, this new rule does not affect a party’s right to apply to the court for preservation measures.

The Draft Arbitration Law also provides that prior to the constitution of the tribunal, the parties may appoint an emergency arbitrator "in accordance with the arbitration rules" to grant interim measures.

In addition, the Draft Arbitration Law provides that a tribunal may issue "behaviour preservation measures" as a form of interim measure. In practice, the Chinese courts have rarely issued such orders to prohibit parties from continuing with foreign actions. It remains to be seen whether tribunals will show a more positive attitude towards issuing the equivalent of an anti-suit injunction order.

We look forward to seeing the final version of the Draft Arbitration Law.

Click here to read the full article on Arbitration Asia, Rajah & Tann Asia's website covering 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. 

INDONESIA

Deadline for Electronic System Operators is Set: 20 July 2022

In its new circular letter, the Ministry of Communications and Information Technology ("Ministry") clarified the deadline for the mandatory registration requirement for electronic system operators, which was first introduced last year. The circular letter made it clear that all electronic system operators must register (or re-register, as applicable) themselves with the Ministry before 20 July 2022.

Besides the foregoing deadline, the circular letter also emphasised the administrative sanctions that may apply for failing to register, which include administrative sanctions and access blocking.

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

Overview of the Procurement Guidelines for Indonesia's New Capital City

Officially kicking-off the procurement process for Indonesia's new capital city, the National Public Procurement Agency ("LKPP") issued a regulation containing a guideline for the provision of infrastructure and procurement of goods and services for the preparation, construction, and relocation of the nation's capital city.

In the regulation, LKPP requires any party wishing to participate in the procurement for the new capital city to collaborate with small local businesses, including on the use of local manpower and materials. Small local businesses in this case are those that are domiciled in Kalimantan or owned by an individual or community in Kalimantan, and satisfy the requirements set out in the regulation.

In addition, the regulation sets out guidelines for additional methods of provider selection, including e-purchasing of consultation services and beauty contests.

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

IDX Enacts Regulation on Free Float for Companies with Multi-Voting Shares

To follow-up two regulations issued by the Financial Services Authority (OJK) and the Indonesia Stock Exchange ("IDX") on multiple voting rights shares, IDX issued a decree to complement the implementation of multiple voting rights shares.

Before the new decree was issued, lock-up shares, which are common shares or non-multiple voting rights shares that are subject to the eight-month lock-up period, in scrip form cannot be categorised as free float shares. Through the new decree, IDX allows scrip shares to be counted as part of the free float shares if the escrow account to deposit the scripless shares is not yet available and the scrip shares fulfil the criteria stated in the decree.  

However, once the eight-month lock-up period expires, the free float shares must fulfil the criteria under IDX's new listing regulation, including the condition for the shares to be kept in scripless form.

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

Back to Business as Usual as KPPU Reverts to Original Notification Deadline and Reaffirms Competition Compliance Program

Signalling that it is back to business as usual, starting from 1 May 2022, the deadline for businesses to submit their mandatory post-closing notification returned to the original deadline of 30 business days from the effective date. Previously, the Indonesia Competition Commission ("KPPU") had extended this deadline to 60 business days at the height of the pandemic to alleviate businesses from the difficulties encountered in preparing their notification.

At the same time, KPPU also published a regulation on the Competition Compliance Program, which was first introduced under the Omnibus Law (Law No. 11 of 2020). In this Regulation, KPPU encourages businesses to prepare and implement a competition compliance program containing at least: (i) a code of ethics; (ii) a competition and antitrust handbook; and (iii) general or specific training. While businesses are free to decide whether to register their competition compliance program, if they do so, they may enjoy a reduced fine in the event of a violation.

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

LAO PDR

Decision on the Exchange Services of Commercial Banks and Representative Exchange Shops

On 14 June 2022, the Bank of Lao PDR ("BOL") issued the Decision on the Exchange Services of Commercial Banks and Representative Exchange Shops No.449/BOL ("Decision"). The Decision was officially announced to the public on 20 June 2022 by the Monetary Policy Department of BOL, and replaces the Decision on the Trading of Currency with the Public of the Commercial Bank and Currency Exchange Shops No.109/BOL dated 1 February 2019.

The Decision states that Commercial Banks and Representative Exchange Shops can sell foreign currency to individuals capped at LAK15 million per person per day, and the customer must clearly state the purpose of such foreign exchange. He must present a copy of his ID card or passport as proof of his identity when buying foreign currency. The Decision also states that representative exchange shops can only sell foreign currencies to individuals, not legal entities. The maximum amount that can be sold per day must not exceed the registered capital of the representative exchange shop.

Based on the Decision, only commercial banks can sell foreign currencies to legal entities and organisations (both domestic and foreign) for purposes of making foreign payments. In such instances, they must prioritise entities and organisations making payments for priority products such as fuel, medicine, essential consumer goods, and targets as defined in Article 10 of the Law on Foreign Exchange Management: 

1. Payment for imported goods;
2. Payment for services related to the import and export of goods directly to foreign countries such as transit, insurance, and other services;
3. Repayment of loans and trade credits with foreign countries;
4. Provision of foreign aid;
5. Transfer of profits, money, costs, interest, other service fees of foreign investors and wages of foreigners back to the country of origin or a third country;
6. Transfer of money for investment abroad;
7. Payment for study, travel and visiting overseas, and receiving of medical treatment abroad; and
8. Implementation of other targets in accordance with the regulations set by BOL.

Notice on Modifying the Country's Minimum Monthly Wage

On 13 June 2022, Laos' Prime Minister’s Office ("PMO") issued Notice No. 829/PMO modifying the country's minimum monthly wage ("Notice"). This is pursuant to the instruction of the Prime Minister of Lao PDR to the Minister of Labour and Social Welfare and the President of the Lao Federation of Trade Unions (LFTU) in relation to the proposal of the Ministry of Labour and Social Welfare.

The increase in the minimum monthly wage will take place in two phases: 

1. First phase – the minimum wage will be increased to LAK1.2 million with effect from 1 August 2022
2. Implementation of other targets regulations set by BOL.

The Notice mandates government authorities, employers and other stakeholders, including trade unions, to work collectively to ensure that the prescribed minimum wage structure is implemented effectively. PMO has notified all employers to ensure strict compliance with the employee welfare requirements set out in the Labour Law No. 43/NA dated 24 December 2013 and the Law on Social Security No. 54/NA dated 27 June 2018.

Decree on Technology Account Comes into Operation on 3 June 2022

On 19 May 2022, the Decree on Technology Account No.540/GOV dated 16 August 2021 ("Decree") was published on the Electronic Official Gazette ("e-Gazette"). The Decree took effect 15 days from the date of its publication in the e-Gazette, namely on 3 June 2022. The Decree has been issued to implement the Law on Technology Transfer which reflects the government policy on technology transfer. The law aims to promote technology transfer that is accurate, clear and appropriate for use in Lao PDR. 

"Technology Account" refers to the type of technology, the transfer of which may be promoted, regulated or prohibited. 

1. Technology account promoted transfer – This refers to the transfer of clean technologies, high technologies, or appropriate technologies that are advanced, modern, consistent and responsive to the conditions of national socio-economic development. These include: (i) Nanotechnology, and technology for the production of Micro-Electro-Mechanical Systems (MEMS), nanoelectromechanical systems (NEMS), and devices that use MEMS or NEMS; (ii) technologies for the production of LCD (Liquid Crystal Display), LED (Light-emitting diode), and plasma; (iii) technologies for the production of sensor and transducer devices; (iv) wireless communication technology; (v) technologies for the production of Robots; and (vi) space technology.


2. Technology account regulated transfer – This refers to the transfer of technologies that may have a negative impact on or cause damage to the socio-economic, environmental and national interests of the country, and is therefore regulated. Examples of this type of technology include: (i) technologies for the production of incandescent bulbs, vacuum electronic components, half-layer and double-layer electronic circuit boards, and explosives used in industries; and (ii) technologies for printing banknotes and valuable documents.


3. Technology account prohibited transfer – This refers to the transfer of technologies that have adverse effects on the country or are unable to meet the needs of the country regarding socio-economic development. This type of technology includes: (i) technologies for the production of drugs, products containing explosive chemicals, and paints combined with mercury; (ii) technologies for the use of mercury in the mining process; and (iii) human genetic technology to create human embryos.

Development of Tax Payment System through M-Money Mobile Phone System

On 14 March 2022, the Ministry of Finance ("MOF") held a meeting featuring a presentation on the development of a tax payment system through the M-Money mobile phone system ("M-Money").

The Department of Tax and MOF, in collaboration with the Department of Financial Information Technology, the Department of Customs and the National Treasury, are working with Lao Mobile Money Sole Company Limited ("LMM") (as the developer company) to monitor the development of M-Money so that M-Money is able to connect to MOF's Easy Tax, Tax Revenue Information System ("TaxRIS") and Real Time Information System (RTIS). Currently, LMM has completed the development of the connection to Easy Tax, TaxRIS, and the reports and display dashboard according to the requirements of the Department of Tax. 

The development of a system for the payment of taxes, fees, services, and the disbursement of the state budget through M-Money is another step in digitising the payment services in the government sector. This will strengthen the country's digital economy, reducing the use of cash in the collection of tax revenues and expenditures of MOF. This will also enhance the transparency of the state budget revenue-expenditure management system, and ensure that the collection of revenue into the state budget is in line with the country's fiscal plan and the disbursement of state budgets is carried out in a  timely and auditable manner.

The project is spearheaded by the Minister of Finance, Mr. Bounchoum Ubonpaseuth, and the General Director of Lao Telecommunication Public Company Limited, Mr. Suphon Chanthavixay, along with LMM and representatives from the Department of Financial Information Technology, the Department of Customs, the Department of Tax, and the National Treasury.

MALAYSIA

Content Code 2022 | Part 1: The Content Forum Publishes the Revamped Communications and Multimedia Content Code

On 30 May 2022, the Third Edition of the Communications and Multimedia Content Code ("New Content Code") was released and registered with the Malaysian Communications and Multimedia Commission ("MCMC"). 

Following a public inquiry held in 2021, as well as close consultation with various stakeholders in the media industry, the New Content Code revamps the Second Edition of the Communications and Multimedia Content Code which was released and registered with MCMC on 14 February 2020 ("Previous Content Code"). It addresses a variety of issues including gaps caused by the advancement of technology, the internet and social media. It also facilitates self-regulation by consumers and industry players. 

In particular, the key changes identified under the New Content Code are:

1. the expansion of the application of the Previous Content Code to include online service providers;
2. the introduction of new provisions about the advancement of technology, such as those relating to online abuse, gender-based violence, protection of persons with disabilities, etc.;
3. Repayment of loans countries;
4. the enhancement of the scope, standards and guidelines of the regulation of advertisements and consumer protection; and
5. the refinement of various provisions in the Previous Content Code, such as (i) the meaning of indecent content; (ii) the use of women, children, religion, cosmetic, financial products and intoxicating liquor in advertisements; and (iii) specifying the complaints procedure for complaints about content disseminated over electronic networked mediums.

All media industry players are strongly encouraged to review their existing practices and procedures in light of the extensive amendments introduced, as the New Content Code will continue to be a reference for the interpretation of offences under section 211 and section 233 of the Communications and Multimedia Act 1998. 

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

Malaysian Franchise (Amendment) Act 2020: Key Changes

The franchise industry in Malaysia is governed by the Franchise Act 1998 (1998 Act). The Franchise (Amendment) Act 2020 ("Amendment Act") came into force on 28 April 2022 with the goal to impose more stringent requirements of registration for both franchisors and franchisees, and in relation to the provisions of franchise agreements. 

The Amendment Act largely clarifies specific aspects of the franchise registration regime and will hopefully promote the growth of the Malaysian franchise industry. 

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

Public Consultation on Proposed Amendments to Competition Act 2010 – Introduction of Merger Controls in Malaysia

On 25 April 2022, the Malaysia Competition Commission ("MyCC") issued, for public consultation, the salient terms of its proposed amendments to the Competition Act 2010 (“Salient Terms”). 

The Salient Terms indicate that the proposed amendments will include the introduction of an economy-wide merger control regime which makes mandatory the notification of anticipated mergers which meet prescribed thresholds to MyCC for competition assessment. Mergers or anticipated mergers which do not satisfy the prescribed thresholds may be voluntarily notified to MyCC as well. 

Parties to anticipated mergers who are mandated to notify MyCC of the anticipated merger in question will also be subject to the suspensory provisions mentioned in the Salient Terms. Such suspensory provisions prevent the said anticipated merger from being implemented before MyCC officially clears it after carrying out the relevant assessments. Failure to adhere to these rules may result in a financial penalty of up to 10% of the value of the anticipated merger transaction. Such a heavy sanction incentivises affected parties to avoid deviating from such rules. 

MyCC has also decided, according to the Salient Terms, that the new merger control regime will exclude (i) mergers involving commercial or economic activities regulated under certain legislation, and (ii) mergers between enterprises licensed, registered, or approved by specified authorities. MyCC has, however, indicated that, should one merging entity out of the merging parties fall under the purview of the merger control regime, the entire merger or anticipated merger will then fall under its purview and jurisdiction. These proposed amendments are subject to change given that they have not been approved in Parliament and are only in draft form based on public consultation. MyCC has indicated that the proposed introduction of merger control is expected to take place in Q4 of 2023.

Finally, together with a new proposed merger control regime, the Salient Terms have also revealed that a new settlements procedure and whistle-blower rewards system and a new and improved leniency programme will be proposed. These proposals will strengthen the investigative powers of MyCC and ensure efficient use of its various resources.

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

The New Geographical Indications Act 2022: Key Changes

A geographical indication ("GI") is a sign or geographical term used on products to indicate the place of origin and corresponding qualities and characteristics of the product arising due to the place of origin, e.g.,  Sarawak Pepper, Sabah Tea, Scotch Whisky etc. 

Malaysia’s new Geographical Indications Act 2022 ("new GI Act") came into operation on 18 March 2022 and repeals the previous Act. The new GI Act provides wider protection to GI proprietors and greater clarity about the examination procedures for the registration of GIs. 

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

Insider Trading – What Directors of Public Listed Companies Need to Know

Insider trading has been subject to increased regulatory scrutiny in the Malaysian market over the past decade, posing several important questions for those who are privy to confidential information.

Some of the most common issues facing Directors of public listed companies (PLCs) include:

1. What are the specific rules that govern their share trading?
2. When can Directors buy or sell shares of companies on whose boards they sit?
3. Can a Director be in breach of insider trading laws even if he individually does not trade but instead shares confidential information with others?
4. Are Directors the only ones at risk of being in breach of insider trading prohibitions?

These are issues that often face those who deal with inside information, particularly Directors and company advisers such as lawyers and investment bankers. The two-part article provides an insight into the law governing insider trading under the Capital Markets and Services Act 2007 ("CMSA") which will enable Directors and other corporate insiders to stay on the right side of the law.

The article describes how the Malaysian courts have dealt with materiality of information for purposes of the CMSA, when information is regarded as generally available, and how tipping is regarded in law even when the tipper himself does not trade. An analysis has also been provided on the interface between the CMSA and Bursa Malaysia’s rules on closed period trading. Given that both civil and criminal actions can be taken for breaches of the law, this article includes case updates on how the law has been applied by the courts.

For more information, click here (for Part 1) and here (for Part 2) to read our Legal Updates.

MYANMAR

Enactment of the New Anti-Trafficking Law

On 16 June 2022, the State Administrative Council enacted a new Anti-Trafficking Law, which repeals the previous Anti-Trafficking Law (2005). The new law, which was drafted in consultation with relevant government departments and local and international experts, amends and updates the previous Anti-Trafficking Law in line with the modern system and international standards. It includes more effective ways to prosecute child trafficking.

The new law highlights the importance of international cooperation and lays down more detailed Standard Operating Procedures (SOPs) in the prevention and abolition of human trafficking activities. It also provides clearer details of criminal procedures. 

Reconstitution of Ministry of Electricity and Energy

On 2 May 2022, the State Administrative Council has reconstituted the Ministry of Electricity and Energy into two separate ministries, the Ministry of Electric and Power ("MOEP") and the Ministry of Energy ("MOE"), pursuant to Order 32/2022. It is expected that the Ministries will comprise the following departments and/or entities:

1. MOEP:

• the Electric Power Generation Enterprise;

• the Electricity Supply Enterprise;

• the Department of Hydropower Implementation;

• the Department of Electric Power and Planning; and

• the Department of Power Transmission and System Control.

   b. MOE:

• the Department of Oil and Gas Planning;
• the Petroleum Products Regulatory Department;
• the Myanmar Oil and Gas Enterprise; and
• the Myanmar Petrochemical Enterprise will be under the control of MOE.

U Thaung Han has been appointed as the new minister of both MOEP and MOE.

Ministry of Planning and Finance Introduces Taxpayer Identification Number

On 29 April 2022, the Ministry of Planning and Finance issued Notification No. 20/2022 requiring all companies and organisations in Myanmar including non-profit organisations to obtain a Taxpayer Identification Number ("TIN") with the Internal Revenue Department (IRD) within the specified deadlines. 

Companies and organisations, as well as non-profit organisations that have been registered with the Directorate of Investment and Company Administration (DICA) and the relevant Myanmar government agency, respectively, before 1 April 2022, must have applied for TIN before 30 June 2022. Failure to comply with this requirement will subject the errant company or organisation to a fine equivalent to 10% percent of the additional tax payable in the relevant assessment year. Companies, organisations and non-profit organisations that are incorporated or registered on or after 1 April 2022 must apply for a TIN within 90 days from the date of their incorporation or registration. The Notification does not specify any penalties for non-compliance and companies which have not yet applied after 30 June 2022 can still apply without any additional cost. 

Central Bank of Myanmar Updates

Central Bank of Myanmar's Foreign Currency Conversion Requirements

On 4 April 2022, the Central Bank of Myanmar ("CBM") issued Notification No. 12/2022 ("Notification") dated 3 April 2022 stating that foreign currency account holders can no longer hold their foreign currency for more than one day. According to the announcement via Directive No. 4/2022, such foreign currency must be converted into Myanmar Kyat ("MMK") within one working day through any of the domestic and foreign banks holding an Authorised Dealer Licence ("AD Licence") – called "Authorised Dealer Banks" ("AD Banks") – at a fixed rate of 1,850 MMK for US$1 with the AD Banks receiving MMK 3 per US$1 as a service fee. The Notification also stipulates that each foreign exchange transfer must be transacted through an AD-licensed domestic bank and requires the approval of CBM. 

Meanwhile, the Foreign Exchange Supervisory Committee ("FESC") was also established under Order 28/2022. FESC is a regulatory body that scrutinises and approves the use of foreign currency primarily for the purposes of supervising the flow of foreign currencies for domestic and foreign investment, manufacturing, exports and imports, and service businesses. The members of FESC include the Union Government Ministers, a member of the State Administrative Council, the Union Auditor-General and the Chairperson of CBM. 

Procedures for AD Banks in Converting Foreign Currency 

On 5 April 2022, CBM issued Directive No. 6/2022 setting out the procedure for AD Banks in relation to the conversion of foreign currency income based on the type of transfer of payments outside of the country. The types of transfers include payments of export income, other services income, funds for investment, offshore loans for investment and one-side transfers. International remittances also require FESC's approval. 

The Directive also instructs AD Banks to sell US Dollars to customers carrying out the following payments: 

1. Import payments;
2. Services and other expenses payments;
3. Payments of dividends and repatriation of invested capitals;
4. Transfers of investments abroad;
5. Principal and interest repayments for offshore loans; and
6. Payments related to the transfer of expenses as specified under Section 27 of the Foreign Exchange Management Regulations.

Exemption of Currency Conversion on Certain Foreign Direct Investments and Businesses 

Acknowledging the significance of foreign investments in the country, CBM has stepped up on its approach in relation to foreign direct investments ("FDIs") by exempting certain FDI businesses and individuals from the foreign currency conversion requirements as set out in the Notification. This was announced on 20 April 2022 and 16 June 2022 through Letter FE-1/69 and Letter FE-1/540, respectively. The exempted entities and individuals are as follows:

1. FDI businesses holding a permit issued by the Myanmar Investment Commission (MIC);
2. Companies which are more than 10% foreign owned and registered with the Directorate of Investment ad Company Administration (DICA);
3. Direct investment businesses operating in the Special Economic Zones (SEZs);
4. Foreign diplomats, family members of foreign embassy personnel, members of diplomatic missions of foreign embassies in Myanmar, foreign staff with ranks similar to diplomats and personnel of countries with established diplomatic relations with the Union of Myanmar;
5. Staff of the United Nations (UN) and its specialised agencies established in the Union of Myanmar, and Myanmar nationals holding a laissez-passers who are employed at missions of the UN and its specialised agencies in Myanmar;
6. Foreign staff of development agencies involved in aid projects;
7. Foreign staff of diplomatic rank from international organisations, international non-governmental organisations and development agencies; and
8. Myanmar state-owned or citizen-owned international airlines.

In addition, CBM issued Directive No. 7/2022 which extends the exemption to exporters and importers conducting trade at the China-Myanmar and Thailand-Myanmar borders. Instead of requiring foreign currency to be converted to MMK within one day, these exporters and importers are given a timeframe of one month from the date of receipt of the foreign currency to carry out the currency conversion. Foreign currency transactions under the border trade programs are to receive approvals from FESC and report the same to the Foreign Exchange Management Department (FEMD). 

Domestic Payments to be Made in MMK

The CBM also issued Notification No. 195/2022 to Union Ministers, Regional or State Governments, City Development Committees requesting them to direct their subordinate departments, organisations and related government and private enterprises to use only MMK in making payments for sales or purchases of goods and services, and to use MMK in describing the contract prices of such good and services. This is aimed at controlling (i) the increase in demand for foreign currency, (ii) the widespread use of foreign currency in Myanmar, and (iii) the instability of the exchange rate. 

This notification is directed at hotels, restaurants, and schools which were established in the country with foreign investment, as well as local accommodations, souvenir shops and similar entities that cater to foreigners and which are still transacting in foreign currency.

Relaxation on Application of Notification No. 12/2022 in the Logistics Sector 

In June 2022, the Ministry of Transport and Communication, together with FESC, issued a letter permitting certain caps on the reserved amount of foreign currency for several logistics services organisations. Set out below are the allowable monthly limits of foreign currency reserves for these organisations.

1. Members of Myanmar International Freight Forwarders' Association – US$300,000;
2. Shipping lines under the Myanmar Mercantile Marine Development Association – US$2 million; and
3. International air freight forwarding and ground handling services for international airlines – US$100,000.

PHILIPPINES

Amendments to IP Rules and Regulations Result in Streamlined Procedure for Inter Partes Proceedings

The Intellectual Property Office of the Philippines (IPOPHL) issued Memorandum Circular No. 2022-013 on the Amendments to the Rules and Regulations on Inter Partes Proceedings ("Amended Rules"), which took effect on 30 June 2022. The Amended Rules aim to modernise the procedure for the adjudication of intellectual property ("IP") cases by using information and communication technology, and to streamline the procedure in Inter Partes cases to improve the accessibility, resiliency, and cost efficiency of IPO's services. Inter Partes proceedings include oppositions to applications for trademark registration, petitions to cancel registration, and petitions for compulsory licensing.

Under the Amended Rules, the filing and service of pleadings, motions, manifestations, interlocutory orders, notices, summons, and other processes shall be done through electronic mail ("e-mail"). Copies of decisions, final orders, and entries of judgements shall also be served via e-mail.

The filing of a single pleading (such as an opposition, petition, or answer) involving more than one application or registration is also now allowed, provided that the same parties are involved.

To expedite proceedings, the extension period that may be granted for the filing of oppositions and answers has been shortened. Under the Amended Rules, only a single extension of 45 calendar days to file the opposition or answer is allowed upon a motion founded on meritorious grounds. Moreover, adjudication officers are now mandated to issue their decisions within a shorter period of 20 calendar days from the date the case is deemed submitted for decision, extendable for another 20 calendar days for justifiable reasons.

On the other hand, the period to file an appeal to the Director of the Bureau of Legal Affairs was increased from 10 calendar days to 15 calendar days from receipt of the decision or final order of adjudication officer. This period may be extended for another 15 calendar days on meritorious grounds. 

IPOPHL Drafts Rules on Geographical Indications

On 12 May 2022, the Intellectual Property Office of the Philippines ("IPOPHL") announced that the Bureau of Trademarks has drafted the Implementing Rules and Regulations ("IRR") on Geographical Indications ("GI"). The draft IRR aims to strengthen the protection of GI and GI products and fulfill the obligations of the Philippines as a member of the World Trade Organization by providing rights and protection to GIs of other member countries. 

The draft IRR defines GIs as "any indication which identifies a good as originating in a territory, region or locality, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin and/or human factors."

The draft IRR also provides for: 

   a.  the right to prevent others the use of GI products in the following instances:

• misleading the public as to the geographical origin of the goods;
• falsely representing to the public that the goods originate in another territory;
• for wines or spirits – using in translation or accompanied by expressions such as "kind", "type", "style", "imitation", "method", "as produced in" or other similar qualifying terms, if such use would be misleading to the public;
• for agricultural products, foodstuff and any product of handicraft or industry – using in translation or accompanied by expressions such as "kind", "type", "style", "imitation", "method", "as produced in" or other similar qualifying terms, if such use would be misleading to the public;
• constituting an act of unfair competition as defined by the Paris Convention; and 
• any other use similar or analogous to the above.

   b. The requirements and registration process; and

   c. The grounds to revoke a registration which includes the following:

• the conditions for protection have not been fulfilled;
• there has been a change in the geographical origin of the goods including the natural and human factor;
• a court or tribunal rules that the identified producer has no effective control over the use of the GI, standards of production of the goods and other product specifications; 
• the registration of the GI was obtained through false statements and documents during the course of the application; and
• the registered or protected GI has been proven to be generic for, or a common or customary name of the goods covered in the Philippines.

According to IPOPHL, the protection granted to a GI will remain valid until the registration is cancelled.

Participation in International Certification System and Support for Interoperability of Data Protection Frameworks

As a member of the Asia-Pacific Economic Cooperation ("APEC") Cross-Border Privacy Rules ("CBPR") System since March 2020, the Philippines expressed its support for the creation of the Global CBPR Forum ("Forum"), which seeks to promote interoperability of different regulatory approaches to data protection and privacy.  This is in furtherance of the National Privacy Commission’s vision of upholding the right to privacy in the age of accelerated digitalisation.

Among the objectives of the Forum is to establish an international certification system based on the CBPR and Privacy Recognition for Processors ("PRP"), albeit separate and independently administered from other APEC systems.

The APEC CBPR System is a voluntary, accountability-based, government-backed data privacy certification, endorsed by economies like Canada, Japan, South Korea, Singapore, Taiwan, and USA.  It enjoins economies and certified companies to demonstrate compliance with internationally-recognised data privacy standards for cross-border data transfers. Participants of the CBPR System agreed to the implementation of 50 CBPR program requirements as baseline protections across different legal regimes. The CBPR System then grants certifications to companies that are able to demonstrate its compliance to an "Accountability Agent" (an independent CBPR-recognised entity with investigative/adjudicatory powers).  Subject to monitoring, certified companies must show that they can provide security safeguards for personal data that are proportional to the probability and severity of threatened harm as well as the confidential or sensitive nature of the information.  Meanwhile, the APEC PRP System is a certification designed for data processors.

APEC CBPR and PRP certifications will continue to be provided through APEC-approved Accountability Agents until further notice.  The founding members of the Global CBPR Forum that are currently participants of these APEC systems which plan to transition into the Forum must provide at least 30 days' notice to their Accountability Agents. All approved Accountability Agents and certified companies under the APEC systems will automatically be recognised in the new Forum. The Forum is also open to other jurisdictions that accept its principles.

Electric Vehicle Industry Development Act to Develop Electric Vehicle Industry

On 15 April 2022, Republic Act No. 11697, or the "Electric Vehicle Industry Development Act" ("EVIDA"), lapsed into law. Against the backdrop of rising fuel prices, the EVIDA promises energy security and independence by reducing reliance on imported fuel for the transportation sector and an enabling environment for the development of electric vehicles. 

The EVIDA mandates the creation of a Comprehensive Roadmap for the Electric Vehicle ("EV") Industry ("CREVI"), which refers to a national development plan for the EV industry with an annual work plan to accelerate the development, commercialisation, and utilisation of EVs. The CREVI has the following four components: (i) EVs and charging stations; (ii) manufacturing; (iii) research and development; and (iv) human resource development.

Further, the EVIDA seeks to generate demand and develop the EV industry by requiring at least 5% of the fleet of industrial and commercial companies, public transport operators, local government units, national government agencies, and government-owned and controlled corporations to be EVs. The EVIDA seeks to eventually convert the entire fleet of the foregoing entities to be EVs through a gradual increase of the percentage. The EVIDA also requires the allotting of parking slots for EVs in both private and public buildings and the construction or installation of charging stations in select gasoline stations.

The EVIDA provides for fiscal incentives, such as:

1. the possible inclusion of the manufacture and assembly of EVs, charging stations, batteries, and other parts and components, and the establishment and operations of charging stations and other related support infrastructure in the strategic investment priority plan (IPP) of the Bureau of Investments (BOI);
2. the exemption of importers for importation of completely built units of EVs from the payment of duties for eight years from the effectivity of EVIDA; and
3. the entitlement to a discount from the payment of motor vehicle user’s charge imposed under Republic Act No. 8794, otherwise known as "Motor Vehicle User's Charge Act", and vehicle registration and inspection fees.

There are likewise non-fiscal incentives, such as priority registration and expeditious processing in certain government agencies.

Supreme Court Upholds its March 2020 Decision Allowing Foreign Construction Firms to Obtain Regular Licenses to Engage in Construction in the Philippines

On 10 March 2020, in Philippine Contractors Accreditation Board v. Manila Water Company, Inc., G.R. No. 217590 ("Decision"), the Supreme Court sitting En Banc invalidated Section 3.1, Rule 3 of the Implementing Rules and Regulations of Republic Act No. 4566 or the Contractor’s License Law ("IRR of RA 4566") promulgated by the Philippine Contractors Accreditation Board ("PCAB"). Section 3.1, Rule 3 limited the issuance of a contractor’s regular license only to those contractor-firms that are at least 60% Filipino-owned. The Supreme Court found that Section 3.1, Rule 3 is void because (i) RA 4566 did not itself provide for such restriction or discriminate against foreign contractors; (ii) there is also no constitutional prohibition against foreign entities engaging in the business of contracting/construction; and (iii) the construction industry is not among the investment areas or activities specifically reserved to Philippine nationals by executive policy as contained in the foreign investment negative list.

PCAB filed a Motion for Reconsideration on the ground that PCAB has amended Section 3.1(a), Rule 3 of the IRR of RA 4566 that made the regular license available to foreign contractors. In a Notice published on 3 March 2022, the Supreme Court nonetheless affirmed the Decision. The Supreme Court found that PCAB had not alleged or shown that the amendments to IRR of RA 4566 were published as required by law, or that they have taken effect. 

In any case, the Supreme Court observed that the amendments still suffered from the same defect since the amendment still provides for different licenses for local contractors (Quadruple A Platinum) and foreign contractors (Quadruple A Gold, under which foreign contractors are only authorised to engage in certain types of projects). The Supreme Court reiterated that RA 4566 did not sanction PCAB to impose a nationality-based license classification. 

SINGAPORE

Singapore's Regulatory Framework for Sovereign Green Bond Issuance – Key Features of Singapore Green Bond Framework

Financing is critical to propel sustainable investments and projects. The Monetary Authority of Singapore ("MAS") has developed the Green Finance Action Plan to promote financing for sustainable development. 

In the coming months, MAS (on behalf of the Singapore Government) will be issuing the first sovereign green bond under the Significant Infrastructure Government Loan Act 2021 ("SINGA"). Ahead of this, the Singapore Ministry of Finance published the Singapore Green Bond Framework ("Framework") on 9 June 2022 that sets out a regulatory and governance framework for green bond issuances under SINGA. 

Green bonds issued under the Framework should conform with the following four core components: 

1. How proceeds are used. Proceeds from Singapore sovereign green bonds will be used to finance specified eligible expenditures ("Eligible Green Expenditures") that are set out in eight categories: (i) Renewable Energy; (ii) Energy Efficiency; (iii) Green Buildings; (iv) Clean Transportation; (v) Sustainable Water and Wastewater Management; (vi) Pollution Prevention, Control and Circular Economy; (vii) Climate Change Adaptation; and (viii) Biodiversity Conservation and Sustainable Management of Natural Resources and Land Use.
2. How projects are evaluated and selected. The Green Bond Steering Committee ("GBSC") has the overall responsibility for overseeing and approving key decisions related to the green bonds issued under the Framework. (c)How proceeds will be managed. The Singapore Government will apply the net proceeds from the green bonds to projects approved by GBSC.
3. How proceeds will be managed. The Singapore Government will apply the net proceeds from the green bonds to projects approved by GBSC.
4. Post-issuance allocation reporting and impact reporting. To ensure transparency, accountability and to keep investors and stakeholders informed, the Singapore Government intends to report on how the proceeds from green bond issuances are allocated and the associated environmental benefits and social co-benefits (where possible) of the Eligible Green Expenditures.

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

Framework for Conditional Fee Agreements in Singapore Comes into Operation

Conditional fee agreements ("CFAs"), which were previously prohibited under Singapore law, are now allowed for specific contentious proceedings. On 4 May 2022, the framework for CFAs in Singapore came into operation, opening the door for lawyers and clients to enter into a wider range of permitted fee arrangements. 

This development has been keenly anticipated in the legal industry, serving to enhance litigation funding in Singapore and support the dispute resolution needs of businesses and individuals. The costs of traversing a commercial dispute can be potentially prohibitive. With the introduction of CFAs, disputants with strong claims will have greater access to justice, being able to pursue their claims without being hindered by cash flow issues.

What is a CFA? – Traditionally, in lawyer-client fee agreements for dispute resolution, lawyers were prohibited from having fees contingent on the outcome of a contentious matter. The new CFA framework allows for lawyers and clients to enter into CFAs, in which lawyers may receive payment of all or part of their legal fees only in specified circumstances (for example, where the claim is successful).

In what situations are CFAs allowed? – The CFA framework applies to Singapore lawyers and law practices, as well as certain registered foreign lawyers and foreign law practices. CFAs are only applicable to certain disputes, including international and domestic arbitration proceedings and proceedings in the Singapore International Commercial Court, as well as related proceedings. 

What are the requirements of a CFA? – The CFA framework sets out certain requirements for a valid CFA. This includes requirements on the form of the CFA, the information that must be provided to the client, and the inclusion of certain prescribed terms.

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

Licensing Framework for Cybersecurity Service Providers Comes into Operation

The Cybersecurity Agency of Singapore ("CSA") has announced the launch of the licensing framework for cybersecurity providers ("Framework"), which has taken effect from 11 April 2022. The Framework imposes a licensing requirement for the provision of prescribed cybersecurity services. 

The Framework aims to better safeguard consumers' interests and address the information asymmetry between consumers and cybersecurity service providers. It also seeks to improve service providers' standards and standing over time.

The Framework has been enacted via Part 5 and the Second Schedule of the Cybersecurity Act 2018, which came into operation on 11 April 2022. Subsidiary legislation such as the Cybersecurity (Cybersecurity Service Providers) Regulations 2022 has also been enacted as part of the Framework.

CSA has set out the timeline for the relevant cybersecurity service providers to comply with the licensing requirements of the Framework:

1. 11 April 2022: No person may provide a licensable cybersecurity service without a cybersecurity service provider's licence from 11 April 2022.


2. 11 October 2022: Existing cybersecurity service providers who are already engaged in the business of providing licensable cybersecurity services must apply for a licence by 11 October 2022. If the licence application is made by 11 October 2022, the service provider may continue to provide its service until a decision on its application has been made.


3. The licence is valid for a period of two years, and an application for renewal should be made no later than two months before the expiry of the licence.

For a start, CSA will license two types of cybersecurity service providers: (i) managed security operations centre monitoring services; and (ii) penetration testing services.

The Framework contains certain key conditions, such as those relating to: 

1. Procedural and information requirements for licence applications;
2. Keeping of records;
3. Notification on changes to information about the licencee;
4. Professional conduct of licensees;
5. Provision to the licensing officer of information relating to the cybersecurity service.

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

Providing Digital Payment Tokens in Singapore: Regulatory Issues to Consider

Broadly, a digital token is a digital representation of the value or rights of the holders of the token to receive a benefit or perform specified functions. The most prominent type of digital tokens is digital payment tokens ("DPTs") (commonly referred to as "cryptocurrency") that can be used to facilitate payment for goods and services. 

Depending on the regulatory characterisation of digital tokens, some digital tokens are regulated in Singapore. It is important to note that the Monetary Authority of Singapore ("MAS") has expressed and cautioned that the regulatory characterisation of digital tokens goes beyond the labels.

Definition: DPTs vs. E-money

The provision of DPT services and e-money issuance services in Singapore are regulated under the Payment Services Act 2019 ("PS Act"). 

DPTs and e-money are, are by their statutory definitions, differentiated given the different nature and features of these products. Under the PS Act, e-money issuance service providers are subject to a wider ambit of requirements as compared to DPT service providers. 

Both e-money issuance and DPT services licensees are regulated for money laundering/terrorism financing risks as well as technology and cyber security risks. However, while e-money issuance services providers are also regulated for user protection risks, DPT services providers are not. 

Regulatory Characterisation: Is Stablecoin a DPT or E-money?

It would be useful at this juncture to highlight recent regulatory developments and clarifications from MAS regarding stablecoins. Stablecoins is a type of cryptocurrency that is backed by fiat currency, a commodity or a basket of assets, rendering its value to be less volatile than traditional cryptocurrencies. MAS recently clarified that stablecoins are not the same as e-money in the sense that e-money is a digital representation of a currency. Certain stablecoins may fall within the definition of DPTs.

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

Impending Changes to Tax Incentive Schemes for Family Offices

There is a growing need amongst high-net-worth families for institutional management of their private wealth. Family offices address this need, being investment vehicles for structuring the way families invest and transfer their wealth to future generations.

Riding this wave, Singapore has positioned itself as the jurisdiction of choice for family offices in Asia thanks to its position as an international financial hub, a reputation for political and operational stability, and a clear tax and regulatory regime, among other factors.

There are two tax incentive schemes available under the Income Tax Act for family offices in Singapore, where exemption of income applies to:

1. income of a company incorporated and resident in Singapore that arises from funds managed by a fund manager in Singapore (previously known as the Section 13R scheme); and
2. income arising from funds managed by a fund manager in Singapore (previously known as the Section 13X scheme).

To improve the professionalism of family office professionals in Singapore, and to enhance the positive spill overs to the Singapore economy, the Monetary Authority of Singapore ("MAS") has updated the conditions for the above schemes (now known as the "S13O Scheme" and "S13U Scheme", respectively). These are set out in the "S13O & S13U Application Process for Family Offices – Guidelines for Advisors" ("Guidelines"), which came into effect on 18 April 2022 and incorporate the following changes:

1. Updated conditions for eligibility;
2. Changes to Annex A, which sets out the information required for preliminary submissions for the Schemes;
3. Changes to Annex B, which sets out the supporting documents required; and
4. Closing of the interim arrangement in lieu of employment passes ("Interim Arrangement"). In light of the relaxing of travel restrictions, the Interim Arrangement for the S13U Scheme has been closed.

The Guidelines will apply to applications submitted on or after 18 April 2022, with some exceptions.

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

THAILAND

Personal Data Protection Act Effective 1 June 2022 and New Notifications Issued

On 1 June 2022, the Personal Data Protection Act B.E. 2562 (2019) ("PDPA") became fully effective after a two-year long postponement of the effective date of key operative provisions.

On 20 June 2022, the following four Notifications of the Personal Data Protection Committee ("Notifications") were published in the Government Gazette, clarifying the rules for the implementation of the relevant provisions of the PDPA:

1. The Notification of the Personal Data Protection Committee Re: An Exemption from the Records of Processing Activities of the Data Controller which is a Small Business B.E. 2565 (2022);
2. The Notification of the Personal Data Protection Committee Re: Criteria and Procedures in Preparing and Maintaining Records of Personal Data Processing Activities for the Data Processor B.E. 2565 (2022);
3. The Notification of the Personal Data Protection Committee Re: Security Measures of the Data Controller B.E. 2565 (2022); and
4. The Notification of the Personal Data Protection Committee Re: Criteria on Determining an Order to Impose an Administrative Fine of the Expert Committee B.E. 2565 (2022).

For more information, click here to read our Legal Update which highlights some of the key elements of the new PDPA Notifications issued. 

Amendments to the Copyright Act Take Effect 23 August 2022

Amendments to the Copyright Act will take effect on 23 August 2022 after key changes were enacted in Copyright Act No. 5 B.E. 2565 (2022), which was published in the Government Gazette on 24 February 2022. In brief, the aim of the amendments is to standardise Thai copyright laws so that they are consistent with the WIPO Copyright Treaty 1996 and to support the emergence of many new media such as digital content, gaming, and animation. The Thai Department of Intellectual Property expressed confidence that the new copyright law will enhance the opportunity for Thailand to promote Thai "Soft Power" globally.

The major changes made to the copyright law by the amendments focus on the three areas described further in our Legal Update titled "Amendment to Copyright Act": (i) Notice & Take Down Procedures; (ii) the Technology Protection Measure; and (iii) Extension of the Protection Period for Copyright Work.

Amended Public Limited Companies Act – Holding Meetings by Electronic Methods

With effect from 24 May 2022, the Public Limited Companies Act (No. 4) B.E. 2565 (2022) has added and amended provisions relating to director and shareholding meetings. 

The new amendments will make it easier to send notices and conduct meetings by electronic means, and will also streamline other processes for the conduct of meetings.

Stock Exchange of Thailand Issues Sustainability Reporting Guide for Listed Companies

The Stock Exchange of Thailand ("SET") has issued a Sustainability Reporting Guide for listed companies which includes metrics for environmental, social and governance ("ESG") topics covering different industry groups. The reporting guideline also conforms with the 56-1 One Report.

According to SET President Pakorn Peetathawatchai, "…SET supports the use of ESG information to develop business and investment-related products and services in a sustainable manner, starting from disclosure of the quality ESG information which will be plugged into the ESG Data Platform currently in development process to be data center of ESG-related information."

The Sustainability Reporting Guide and other information on sustainability can be found at www.setsustainability.com. 

Bank of Thailand – Relaxation of Rules for Foreign Exchange Transactions

On 18 April 2022, the Bank of Thailand ("BOT") announced that, as part of the development of Thailand's new foreign exchange ecosystem to bring about more balanced rules in support of capital movement and flexibility in conducting foreign exchange transactions and risk management, it would relax certain exchange regulations. These changes include the following examples: 

1. removing the amount thresholds for Thai residents lending to unaffiliated companies and the purchase of immovable properties abroad (previously US$50 million per year), and allowing additional purposes for outward transfers which will not require prior approval from BOT, such as depositing funds into the resident's own accounts abroad for payment of obligations; and
2. allowing Thai companies to purchase foreign currencies for transfer domestically as necessary, such as for payment for goods whose price is linked to the global market. Previously, transfers were allowed only through foreign currency deposit accounts.

BOT's exchange relaxations also promise to lessen the burden for Thai residents in providing supporting documents when conducting foreign exchange transactions. Customers of commercial banks who have undergone the banks' Know-Your-Business process will not be required to submit underlying documents when undertaking regular foreign exchange transactions.

Thai Arbitration Institute Introduces New Expedited Procedure

The Thai Arbitration Institute (TAI) is one of the most prominent arbitral institutions in Thailand. On 1 October 2021, amendments to its arbitration rules came into effect, providing for an expedited arbitration procedure ("expedited procedure") in circumstances where: 

1. the parties to the dispute mutually agree to use the expedited procedure; or
2. if the relevant arbitration agreement has been entered into after 30 September 2021 – the amount in dispute does not exceed Baht 5 million, and one of the parties to the dispute files a request to use the expedited procedure.

The key features of the expedited procedure are: (i) the appointment of a sole arbitrator; (ii) allowing for documents-only arbitrations; and (iii) shortened timeframes for the close of proceedings and the issuing of the award.

Click here to read the full article on Arbitration Asia, Rajah & Tann Asia's website covering 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.

VIETNAM

Enactment of the New Law on Intellectual Property (Amendment)

On 16 June 2022, the National Assembly passed the Amended Law on Intellectual Property, which will introduce significant changes to the existing 2005 law. Save for some limited provisions, the amended law will come into effect on 1 January 2023.

In the field of copyright and related rights, the amending law expands the scope of permitted use of such rights. It also provides clarity on the extent of an intermediary's liability for infringement, as well as applicable safe harbour principles.

In the field of trademarks, the amending law now enables the protection of sound marks. This provision was introduced in line with Vietnam's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The amending law also introduces further regulations that facilitate the enforcement of IP rights by aggrieved parties. These include regulations relating to the express right of the authorities to levy administration sanctions for violations of the amended law.

Enactment of the Law on Cinema

On 15 June 2022, the National Assembly passed the Law on Cinema, to replace the existing (and arguably outdated) 2006 law. The new law will come into effect from 1 January 2023.

One of the more significant changes introduced by the law is that it now regulates – with greater clarity – companies that engage in distributing films in cyberspace (i.e. online). These include, in particular, digital media platforms that may be involved in the dissemination of films. It requires such companies to comply with Vietnam's content regulations and generally coordinate with the state agencies to remove infringing materials.

Minimum Wage Increase

On 12 June 2022, the Government passed Decree 38/2022/ND-CP prescribing the following new region-based minimum wages, which came into effect on 1 July 2022:

1. Region I (which includes cities such as Ho Chi Minh City and Hanoi): the minimum wage will be increased to VND 4.68 million per month (previously VND 4.42 million);
2. Region II, the minimum wage will be VND 4.16 million per month (previously VND 3.92 million);
3. Region III, the minimum wage will be VND 3.64 million per month (previously VND 3.43 million); and
4. Region IV, the minimum wage will be VND 3.25 million per month (previously VND 3.07 million).

Second Draft Decree of the Regulatory Sandbox on FinTech

On 5 April 2022, the State Bank of Vietnam (SBV) released its second draft of the decree on the FinTech regulatory sandbox for public consultation – nearly two years after the first draft was released. The draft is more comprehensive in terms of the eligibility criteria and licensing requirements for prospective sandbox participants.

Under the draft, the following six product categories are eligible for inclusion in the sandbox: (i) providing credit on a technology platform; (ii) credit scoring; (iii) data sharing via Application Programming Interfaces (APIs); (iv) peer-to-peer (P2P) lending; (v) blockchain or distributed ledger technology in banking activities; and (vi) other technologies in banking operations that implement innovative business cooperation models.

The draft makes it clear that only Vietnam-established organisations can participate in the sandbox. It also makes it clear that only products that are not regulated by Vietnamese law will be subject to the sandbox. This means certain FinTech products for which the Government has developed (or is developing) specific regulations will not be subject to the sandbox (e.g. electronic Know Your Customer (eKYC)).

It remains to be seen when the decree will be enacted, and whether further amendments will be made to this current draft.

Tightened Supervision Over Foreign Investments Under Circular 02/2022/TT-BKHDHT

On 1 April 2022, Circular 02/2022/TT-BKHDHT (guiding the supervision and assessment of foreign investments) came into force.

In this circular, the Ministry of Planning and Investment directs investment authorities to tightly monitor foreign-funded projects and investments of foreign-invested entities. This includes periodically inspecting, among others, the progress of capital contribution, progress of project implementation, and the financial position of foreign-invested enterprises.

In practice, this has seen a significant, increased scrutiny of the performance of investment projects by investors. For example, investment authorities have now taken to closely monitoring and expecting investors to comply with their periodic reporting obligations.