Regional Round-Up

CAMBODIA

New Law on Taxation

On 16 May 2023, the new Law on Taxation ("Law on Taxation") was promulgated on an urgent basis and came into force on 17 May 2023. The Law on Taxation consists of 20 chapters and 255 articles and abrogates the old law on taxation dated 24 February 1997 and its amendment dated 31 March 2003.

The amendments made to the Law on Taxation relate to, among others, (i) the updated definition of "permanent establishment" (PE); (ii) the revised definition of "related parties"; (iii) the updated of Cambodian sourced income; (iv) the timing of payment of public lighting tax and how the tax rate is determined; and (v) the enhanced penalties on obstruction of tax implementation. 

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

Singapore and Cambodia Sign Memorandum of Understanding for Carbon Credits Cooperation

In a press release, the Ministry of Trade and Industry Singapore announced that Singapore and Cambodia had signed on 26 April 2023 a Memorandum of Understanding ("MOU") to collaborate on carbon credits aligned with Article 6 of the Paris Agreement ("Article 6"). Article 6 allows countries to voluntarily cooperate to achieve emission reduction targets set out in their respective nationally determined contributions ("NDCs").

It is the intention of Singapore to achieve net zero emissions by 2050 and advance global climate action through collaborations with like-minded partners. Establishing partnerships with like-minded countries like Cambodia to work together on carbon credits is one way to attain this. 

Under the MOU, both countries have agreed to:

1. work towards crafting a legally binding agreement that provides a framework for the transfer of correspondingly adjusted carbon credits by end-2023;
2. identify Article 6 compliant carbon credit projects to enable them to achieve their respective NDCs; and
3. exchange information on best practices and capacity building relating to carbon credits collaboration.

Government's Support Measures for the Development of Construction and Borey

On 12 April 2023, the General Secretariat of Economic and Financial Policy Committee of the Royal Government of Cambodia issued Press Release No. 001 MEF on the Guidelines Regarding Support Measures for the Development of Construction and Borey ("Press Release"). The Press Release announces the introduction of a "support package" for Cambodia's construction and real estate sector, one of the priority sectors of economic growth in the country, to maintain the stability and sustainability of the sector.  The support package comprises support measures including the following:

1. A continued deferral of the implementation of the phased taxation ("Tax Package"), which is to be paid in instalments, until the end of 2024 for Borey developers ("Developers") that are operating developmental projects with a valid property development licence ("Licence") issued by the Real Estate and Pawnshop Regulator ("Regulator");
2. Extension of the payment deadline for the Tax Package for Developers paying a prescribed amount of taxes;
3. Exemption of Borey housing development projects from any penalties provided the Developers to comply with their obligations under Prakas No. 089 on the Management of Real Estate Development Business; and
4. Deferral of implementation of Prakas No. 563 dated 10 July 2020 on the Auditing of Financial Statements by Independent Auditor issued by the Ministry of Economy and Finance until the end of 2023.

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

National Commercial Arbitration Centre Adopts Mediation Rules

On 18 March 2023, the General Assembly of the National Commercial Arbitration Centre ("NCAC") adopted three main documents which allows NCAC to provide mediation services. These documents are:

1. the Mediation Rules, which set out the procedure and principles for conducting mediation under the auspices of NCAC;
2. the Code of Conduct for Mediators, which establishes the ethical standards and professional responsibilities for mediators registered with NCAC; and
3. the Rules on Qualification and Registration of Mediator of NCAC, which specify the criteria and process for becoming a mediator accredited by NCAC.

The adoption of the above documents reflects NCAC's commitment to promoting alternative dispute resolution mechanisms in Cambodia and enhancing its services to meet the needs and expectations of its users. NCAC hopes that by offering mediation services, it will help parties resolve their disputes amicably, efficiently and cost-effectively.

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

Sub-Decree on Telecommunications Equipment Identity Registration

On 3 February 2023, the Royal Government of Cambodia issued Sub-Decree No. 41 on the Registration of Identity of Telecommunications Equipment using SIM Modules ("Sub-Decree"). The Sub-Decree, which contains 15 chapters and 43 articles, requires telecommunications equipment with SIM modules to be registered with the Equipment Identity Registration System which is governed by the Ministry of Post and Telecommunications. This registration requirement is mandatory with an exception for the Telecoms Equipment of tourists or travellers residing in Cambodia for no more than 60 days.

The Sub-Decree aims to: (i) prevent and restrain the use of equipment using fake SIM modules, stolen goods, and illegally imported equipment; (ii) protect the health, safety and rights of consumers; (iii) improve the quality of telecommunication services; (iv) encourage honest and transparent competition in the market; and (v) enhance national revenues collection.

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

New Regulations on Investigation and Recall of Unsafe or Non-compliant Foods

On 6 January 2023, the Royal Government of Cambodia adopted Sub-Decree No. 13 ANKr.BK on Conditions, Formalities, and Procedures of the Investigation and Foods Recall aiming to protect and prevent negative impact on consumers' health and benefits ("Sub-Decree"). The Sub-Decree sets out (i) the obligations of food business operators; (ii) the classifications of unsafe foods or foods that are non-compliant with Technical Foods Regulations, and the procedures for food recall; and (iii) the penalties for non-compliance with the Sub-Decree.

To implement the Sub-Decree, the Ministry of Commerce issued Prakas No. 080 on Form and Formalities to Recall Unsafe Foods or Foods Non-compliant with Technical Foods Regulations ("Prakas No. 080"), which came into force on 22 February 2023.

Under the Sub-Decree and the Prakas, "Unsafe Foods" refer to foods that cause harm to the consumers' health when it is used or consumed in accordance with its directions of use. Prakas No. 080 defines "Foods Non-compliant with Technical Foods Regulations" as foods that are not compliant with (i) the documents stipulating the characteristics of the foods, and (ii) administrative regulations regarding the relevant procedures of food production, packaging, or labeling that are applicable to such foods, their operation or production.

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

CHINA

China Issues Foreign Relations Law

On 28 June 2023, the 14th National People's Congress of the People's Republic of China ("PRC") passed the Foreign Relations Law of the PRC (中华人民共和国对外关系法) ("FRL"), which took effect on 1 July 2023. This law provides a comprehensive framework for the development of China's foreign relations and serves as a guideline for maintaining national sovereignty, security, and development interests. It is China's first fundamental, guiding, and comprehensive law on foreign relations since the establishment of the PRC.

The FRL stipulates that the PRC shall enhance the system of rule of law in foreign affairs in relation to the following:

1. Treaty obligations;
2. Protection of national interests;
3. Countermeasures and restrictions;
4. Diplomatic relations;
5. Implementation of sanctions;
6. Foreign immunity;
7. Protection of overseas interests;
8. Protection of foreign individuals and organisations; and
9. International cooperation.

Overall, aside from Articles 32 and 33 of the FRL, which state that China will seek to impose countermeasures if other countries or trade blocs impose arbitrary tariffs and, in particular, sanctions upon China "without reference to international laws", the FRL essentially outlines China's rules of engagement, the majority of which are clarifications of widely accepted conventions. In addition, this is the first time that a Chinese legislation makes clear that treaties and agreements concluded or participated in by China shall not contravene the Constitution of China.

As this law mainly sets out the basic principles of China's foreign relations, how it may be implemented or enforced has yet to be further observed. 

China Issues First Edition of Guidelines for the Filing of Standard Contracts for Cross-border Transfer of Personal Information

On 30 May 2023, the Cyberspace Administration of China ("CAC") issued the Guidelines for the Filing of Standard Contracts for Cross-border Transfer of Personal Information (First Edition) (个人信息出境标准合同备案指南(第一版)) ("Guidelines"). The purpose of these Guidelines is to guide personal information processors ("PIPs") to file a Standard Contract for Cross-border Transfers of Personal Information (个人信息出境标准合同) ("Standard Contract") in a standardised and orderly manner. Please click here to read our article on the release of the Measures for the Standard Contract for Cross-border Transfers of Personal Information (个人信息出境标准合同办法), together with the corresponding Standard Contract, which came into effect on 1 June 2023.

To file a Standard Contract, the Guidelines stipulate a list of documents to be submitted, including the following:

1. A Photocopy of the Unified Social Credit Code Certificate (stamped with the company's seal);
2. A Photocopy of the ID card of the legal representative (stamped with the company's seal);
3. A Photocopy of the ID card of the person in charge of the filing process (stamped with the company'’s seal);
4. The original copy of the signed power of attorney for the person in charge of the filing process;
5. The original copy of the signed letter of commitment;
6. The original copy of the executed Standard Contract; and
7. The original copy of the Personal Information Protection Impact Assessment Report ("PIPIA Report").

The Guidelines also provide templates for items (d) to (g) above. In particular, the template for PIPIA Reports gives effective guidance on how to carry out PIPIA work in practice, which was previously ambiguous. In addition, the Guidelines stipulate that a PIPIA Report shall be completed within three months prior to the date of filing, and no material changes should occur by the date of filing.

Furthermore, the Guidelines set out the timeline for the filing process. After the receipt of the required documents, the competent cyberspace administration shall, within 15 working days, complete the examination of the documents and notify the PIP of the filing results.

China Amends its Counter-Espionage Law

On 26 April 2023, the Standing Committee of the 14th National People's Congress passed the amended PRC Counter-Espionage Law ("Amended Counter-Espionage Law"), which took effect on 1 July 2023.  The Amended Counter-Espionage Law introduces changes to the Counter-Espionage Law that was issued in 2014 ("2014 Counter-Espionage Law"). According to the official interpretation, the Amended Counter-Espionage Law is a response to the proliferation of non-traditional espionage activities in recent times, to better safeguard the national security of the PRC. A summary of the key highlights in the Amended Counter-Espionage Law is set out below.

1. Expanding the scope of application of the Counter-Espionage Law
   
   The Amended Counter-Espionage Law refines the definition of espionage activities. Compared to the 2014 Counter-Espionage Law, Clause 4 of the Amended Counter-Espionage Law explicitly provides that "collaborating with spy organizations and their agents" and "conducting cyber-attacks, intrusions, interferences, controls, destructions against governmental authorities, confidential-related organizations, or critical information infrastructure" will be categorised as espionage activities. The Amended Counter-Espionage Law also includes "documents, data, materials, and items related to national security and interests" in the scope of protection, which are comparable and in addition to "national secrets and information" which have already been included in the 2014 Counter-Espionage Law.
   
   In addition, the Amended Counter-Espionage Law introduces a new provision in Clause 4 which includes espionage activities against a third country within the territory of the PRC or making use of the PRC’s citizens, organisations or other conditions, which may endanger the national security of the PRC, in the scope of the Amended PRC Counter-Espionage Law.


2. Clarifying and detailing the authority and power of Law Enforcement Agencies
   
   The Amended Counter-Espionage Law further clarifies and details the authority and power of relevant law enforcement agencies when investigating and dealing with espionage activities, such as inspecting personal belongings, retrieving necessary electronic data, summoning relevant persons, inquiring into property information, etc., provided that necessary legal procedures such as obtaining approval from the officials in charge of national security authority at the municipal level, etc., are followed.
   
   The Amended Counter-Espionage Law also broadens the scope of application of administrative penalties for minor offenses.


3. Strengthening the support for the counter-espionage work
   
   The Amended Counter-Espionage Law provides support for the counter-espionage work by establishing a counter-espionage coordination working mechanism and implementing security precautions. It also provides that any citizens and originations shall support and assist in the counter-espionage work and keep any national secret in relation to counter-espionage work confidential.
   
   As the media have reported several cases of enforcement carried out by the Government and investigations at the offices of some foreign consulting firms in China, the Amended Counter-Espionage Law has aroused special concerns and discussions among foreign-invested companies (especially consulting firms) in the PRC. Generally speaking, it is advisable for foreign investors to act prudently in handling data-related matters and pay special attention to the legality of the collection, storage, use, processing and export of data originating from China. For foreign investors in certain sensitive industries such as consulting and financing, regular compliance training and review of the PRC Counter-Espionage Law is recommended.

Singapore and Shanghai Reaffirm Strong Ties and Broader Cooperation with 14 MOUs

Enterprise Singapore has announced that the 4th Singapore-Shanghai Comprehensive Cooperation Council ("SSCCC") meeting took place in Singapore on 24 April 2023.

Established in 2019, SSCCC serves as a pivotal platform in developing deeper ties between Singapore and Shanghai, as well as between Singapore and the broader Yangtze River Delta region.

At the meeting attended by Singapore and Chinese officials and business representatives, the participants agreed to enhance bilateral cooperation in digital and green economies and deepen strong partnerships in financial services and innovation. The leaders also reaffirmed their commitments to the global climate change agenda and agreed to explore more substantive partnerships in sustainability. For example, Singapore intends to work with Shanghai to facilitate greater cross-border green and transition finance to support the region's transition, and to pilot green and digital solutions in improving global maritime supply chains. 

A total of 15 agreements, comprising 14 Memoranda of Agreement ("MOUs") and one Letter of Intent ("LOI"), were signed at the meeting, covering areas such as people-to-people exchanges, financial services, technology and innovation, as well as emerging areas such as digital economy. These MOUs and LOI include, amongst others, the following:

Partners	Purpose
Singapore Business Federation (SBF) – China International Import Expo Bureau (CIIEB)	Collaboration on Singapore's participation in the 6th China International Import Expo
Maritime and Port Authority (MPA) - Shanghai Maritime University	Collaboration on maritime talent and knowledge exchange
OCBC Bank - UnionPay International	Collaboration on digital payments
Singapore Exchange (SGX) – Shenwan Hongyuan Securities	Collaboration in equities derivatives, FICC and equities-related business
Ministry of Health (MOH) – Shanghai Municipal Health Commission	Cooperation in healthcare
Singapore Tourism Board (STB) – Shanghai Municipal Administration of Culture and Tourism	Promotion of tourism exchanges and cooperation
Infocomm Media Development Authority (IMDA) and Shanghai Municipal Commission of Economy and Informatization	Collaboration in digital economy
CrimsonLogic – Shanghai Data Group	Cooperation to enhance cross-border flow of goods through digitalisation

Green Finance Taskforce Established to Strengthen Collaboration in Green and Transition Finance between China and Singapore

On 21 April 2023, the Monetary Authority of Singapore (MAS) and the People's Bank of China ("PBC") announced the establishment of the China-Singapore Green Finance Taskforce ("GFTF").

The GFTF is co-chaired by MAS' Assistant Managing Director (Development and International) and Chief Sustainability Officer, Ms Gillian Tan, and Chair of the China Green Finance Committee, Dr Ma Jun. The members of GFTF comprise senior representatives and sustainable finance experts from Singapore and China's financial institutions, and green FinTech companies.

To better meet the region's needs as it transitions to a low carbon future, the GFTF seeks to:

1. provide a platform for knowledge exchange;
2. enhance bilateral cooperation between China and Singapore in green and transition finance; and
3. facilitate greater public-private sector collaboration.

At the inaugural meeting held in Chongqing on 21 April 2023, the GFTF discussed joint initiatives that aim to scale up green and transition financing flows between China, Singapore, and the region. Initially, the GFTF will establish three workstreams focusing on the following priority areas:

1. Taxonomies and Definitions. Under the International Platform on Sustainable Finance ("IPSF"), MAS and PBC will collaborate to: (i) achieve interoperability between the China and Singapore taxonomies; (ii) enhance the use of the IPSF's Common Ground Taxonomy; and (iii) deepen the understanding of transition activities defined by China and Singapore.

The IPSF's Common Ground Taxonomy provides an in-depth comparison of the existing taxonomies for environmentally sustainable investments and puts forward areas of commonality and differences between the European Union's and China's green taxonomies.


2. Products and Instruments. China International Capital Corporation and the Singapore Exchange will establish a workstream to strengthen sustainability bond market connectivity between China and Singapore. This includes the issuances of, and mutual access to, green and transition bond products in China and Singapore.


3. Technology. A workstream will be established by Beijing Green Exchange and Metaverse Green Exchange that leverages technology to facilitate sustainable finance adoption. This will include the piloting of digital green bonds with carbon credits.

China Issues Draft Administrative Measures for Generative Artificial Intelligence Services

Global interest in Generative Artificial Intelligences ("AI") AI technologies has increased tremendously in recent months, given the emergence of ChatGPT (followed by similar technologies). While these technologies will no doubt continue to develop and become more sophisticated over time, they have already demonstrated the potential to greatly enhance our efficiency and productivity. However, as with any new technology, there are also concerns about their impact on society and the need for responsible use and regulation.

The proliferation of such Generative AI technologies has therefore attracted the attention of Chinese regulators. On 11 April 2023, the Cyberspace Administration of China (CAC) issued the Administrative Measures for Generative Artificial Intelligence Services (Draft for Comment) (生成式人工智能服务管理办法(征求意见稿) ("Draft Measures") for public comments. 

For more information, click here to read our Legal Update which provides an overview of these Draft Measures and their potential impact on Service Providers providing Generative AI services in China.

Supreme Court of Singapore and Supreme People's Court of the People's Republic of China Sign MOU on the Management of International Commercial Disputes in Context of Belt and Road Initiative

On 1 April 2023, the Singapore International Commercial Court ("SICC") announced that the Supreme Court of Singapore and the Supreme People's Court of the People's Republic of China had signed a Memorandum of Understanding ("MOU") on Cooperation on the management of international commercial disputes in the context of the Belt and Road Initiative ("BRI") through a Litigation-Mediation-Litigation ("LML") framework.

The two courts concluded the MOU in view of the increasing complexity of international commercial disputes particularly in the context of the BRI ("BRI disputes"). The development of an LML framework to resolve BRI disputes is in recognition of the flexibility and efficiency afforded by mediation, which not only saves the parties' time and costs but also preserves business relationships in the course of the dispute resolution process.

Key features of the MOU include the following:

1. SICC and the China International Commercial Court ("CICC") will each develop and implement the LML framework for the management of BRI disputes.
2. The LML framework in each court may be developed in collaboration with any domestic or foreign mediation expert and any domestic, foreign or international mediation institution in accordance with their respective procedural laws and rules of court.
3. Both courts will share information on their LML framework and other dispute management practices, including information on procedural rules, case management protocols, and enforcement processes relating to SICC and CICC.
4. Both courts agree to promote the LML framework by recommending to the parties to disputes the adoption of the prescribed LML Model Clauses in appropriate circumstances.

The signing of the MOU demonstrates the strong commitment of the two countries to collaborate to enhance the resolution of BRI disputes.

INDONESIA

Resolving Construction Disputes through Dispute Adjudication Boards under Indonesia Law

The Indonesian Minister of Public Works and Housing ("MOPWH") has issued MOPWH Regulation No. 11 of 2021 regarding the Procedure and Technical Guidelines for Construction Dispute Adjudication Board ("Regulation 11/2021"), which provides a comprehensive framework for the use of Dispute Adjudication Boards ("DAB") in the construction industry. The regulation applies to ministries, regional governments, and construction service providers. It establishes the obligation to use DAB in certain contracts involving construction services funded by domestic or foreign loans or grants. It also sets out mandatory qualifications for DAB members and outlines the procedure for dispute resolution through adjudication. However, the regulation does not address the issue of enforcement, and parties may need to resort to arbitration to enforce DAB decisions.

While Regulation No. 11 of 2021 provides clear guidelines for the use of DABs in Indonesia's construction industry, the lack of a direct enforcement mechanism for DAB decisions poses challenges. Parties may need to include specific contractual provisions regarding the consequences of non-compliance with final and binding DAB decisions. Overall, stakeholders in the construction industry should be aware of and comply with the regulations when drafting construction contracts or DAB agreements to ensure effective dispute resolution and adherence to prescribed procedures.

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

BUMN Omnibus Regulations Highlight Special Assignment and Environmental Social Responsibility Programmes

The Minister of State-Owned Enterprises in Indonesia has issued the BUMN Omnibus Regulations, consolidating and integrating over 45 ministry-level regulations to synchronise the regulations pertaining to state-owned enterprises. The regulations aim to support the integrated and sustainable management of these enterprises. The BUMN Omnibus Regulations consist of three ministry-level regulations, covering special assignments and environmental social responsibility programmes of state-owned enterprises ("Regulation 1/2023"), guidelines for governance and significant corporate activities of state-owned enterprises, and state-owned enterprise organisation and human resources.

The first regulation, Regulation 1/2023, focuses on special assignments of state-owned enterprises and introduces new provisions. It outlines the planning, government's determination, implementation, and reporting aspects of special assignments. It also addresses the environmental and social responsibility programmes, including micro and small business financing. The regulations provide clarity on the legal form of special assignments and introduce reporting obligations for state-owned enterprises.

These regulations aim to enhance the management and accountability of state-owned enterprises and promote their role in supporting economic development and social welfare. They provide guidance for state-owned enterprises and their subsidiaries, helping them navigate their special assignments and fulfil their environmental and social responsibilities.

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

How KPPU's New Guidelines Use Data and Quantitative Approach to Enforce Antitrust Measures

The Indonesia Competition Commission ("KPPU") has recently issued three new guidelines aimed at improving competition enforcement in the country. These guidelines cover various aspects of competition cases, including the definition of relevant markets in the digital economy, the measurement of negative impacts and corresponding fines for antitrust violations, and bid-rigging practices. The guidelines provide valuable insights into KPPU's views and methods, assisting both KPPU and the public in understanding competition issues more effectively.

The first guideline, the Relevant Market Guideline, introduces updated rules for defining relevant markets, especially in the context of the digital economy. It recognises multi-sided markets and the specific considerations involved in analysing them. The second guideline, the Negative Impacts Guideline, establishes criteria and indicators for measuring the negative impact of monopolistic practices and unfair competition. It emphasises the assessment of unreasonable prices and adopts a case-by-case approach. Lastly, the Bid Rigging Guideline addresses bid-rigging practices and introduces a new scheme that expands the range of parties involved. It acknowledges the use of indirect evidence, including algorithmic evidence such as the Bid Rigging Indicator Analysis System (BRIAS).

These guidelines signify KPPU's commitment to data-driven and quantitative-based approaches in competition enforcement. Businesses may wish to revisit their competition law training and procurement policies to ensure compliance and align their strategic decisions with the evolving landscape. It is particularly important for businesses to be aware of the impact of these guidelines on their market positioning, and to consider revising their procurement policies to ensure compliance with competition rules in Indonesia.

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

Constitutional Court Rulings Illuminate Certain Provisions of PDP Law

The Indonesian Constitutional Court recently received two constitutional review petitions regarding Law No. 27 of 2022 on Personal Data Protection ("PDP Law"). The petitions sought to declare specific articles of the PDP Law as unconstitutional. One petition questioned the classification of legal entities as controllers, while the other focused on the limitations of data subjects' rights related to defence and national security. However, the Court ruled that the provisions in question were valid and consistent with the Constitution.

In its rulings, the Court clarified certain aspects of the PDP Law. It emphasised that personal and household data processing activities conducted for non-commercial purposes are exempt from the PDP Law. The Government provided guidance on the criteria for this exemption. Additionally, the Court addressed the restrictions on data subjects' rights in the context of defence and national security, highlighting that data processing must align with legislative requirements governing defence and national security.

These rulings provide valuable guidance and enhance the understanding of the PDP Law. While awaiting the issuance of implementing regulations, the rulings contribute to the effective implementation of the PDP Law and empower stakeholders to navigate data protection regulations in Indonesia more confidently.

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

New KPPU Case Handling Procedure May Allow Dismissal of Anti-Competition Investigation Based on Change of Behaviour

The Indonesia Competition Commission ("KPPU") has introduced a new case handling procedure through KPPU Regulation No. 2 of 2023 on Case Handling Procedure ("New Regulation"). One notable change is the allowance for reported parties to propose a change of behaviour during the investigation stage instead of going through a preliminary examination hearing. If the proposed change is accepted by KPPU and fully implemented by the reported party, the investigation may be dismissed, and no sanctions will be imposed. Previously, a change of behaviour required an admission of guilt and agreement from all reported parties. However, the New Regulation no longer necessitates unanimous agreement among reported parties during the investigation stage. Additionally, the New Regulation provides more detailed technicalities regarding evidence, expands the definition of witnesses, requires company directors to represent business entities during testimonies, and imposes a requirement for all documents submitted to KPPU to be in Bahasa Indonesia.

The introduction of the change of behaviour option during the investigation stage offers reported parties the opportunity to halt the case earlier and potentially minimise adverse impacts such as negative publicity and higher legal costs. However, caution should be exercised as the proposed change must meet specific requirements for KPPU approval and case dismissal. If the proposal is rejected during the investigation stage, another change of behaviour proposal cannot be submitted during the subsequent preliminary examination hearing. Businesses should therefore be prudent in fulfilling the change of behaviour requirements during the investigation stage.

Overall, the New Regulation takes a more stringent approach to case handling procedures, potentially posing technical challenges for reported parties as they navigate through cases under the New Regulation.

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

New Regulations Relax Criteria for Foreign-to-Foreign Merger and Charge Filing Fees for Merger Notification

The Indonesia Competition Commission ("KPPU") has introduced a new merger control regulation, KPPU Regulation No. 3 of 2023 on the Assessment of Merger, Consolidation, or Acquisition of Shares and/or Asset that could Result in Monopolistic and/or Unfair Business Competition Practices ("New Merger Regulation"), which came into effect on 31 March 2023. The New Merger Regulation brings significant changes to the notification requirements for foreign-to-foreign merger transactions. Notification to KPPU is now required only if both parties involved in the transaction have assets and/or generate sales in Indonesia. Additionally, asset value calculations for the threshold analysis will be based on the Indonesian basis instead of a worldwide basis. The New Merger Regulation also implements an online filing system, shorter review periods for document completeness, and a comprehensive assessment hearing for transactions that may result in a significant change in market concentration.

In conjunction with the New Merger Regulation, the Government has introduced a filing fee for merger notifications through Government Regulation No. 20 of 2023 on Types and Tariffs of Non-Tax State Revenue Applicable to the Commission for the Supervision of Business Competition. The fee, calculated based on the lower value of assets or sales turnover, is payable if KPPU finds the transaction to be notifiable. However, provisions exist for reducing or fully waiving the filing fee under certain circumstances, such as supporting the development of micro, small, and medium enterprises or due to force majeure events. Businesses should be aware of the stricter administrative requirements introduced by the new regulation, including the need to file notifications online and ensure accurate information and document submission. Early assessment and compliance with the notification obligations to KPPU are strongly recommended to navigate the new regulatory landscape effectively.

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

OJK Sets New Cyber Security Best Practices for Banking Industry

The Financial Services Authority ("OJK") of Indonesia has taken significant steps to boost the digital banking transformation in the country. In line with this goal, OJK Regulation No. 11/POJK.03/2022 on the Implementation of Information Technology by Commercial Banks was issued last year, addressing various aspects such as data, technology, risk management, collaboration, and institutional setting. As a follow-up to this regulation, Circular Letter No. 29/SEOJK.03/2022 on Cyber Security and Resilience for Commercial Banks ("Circular") has been introduced. The Circular emphasises the importance of cyber security and places the responsibility on banks to assess their cyber security risk annually, report their self-assessed ratings, and establish dedicated cyber security units.

Under the Circular, banks are required to conduct assessments of inherent risk and cyber security maturity to determine their cyber security risk level. The results of these assessments must be reported to OJK, along with regular cyber security testing. Additionally, banks must establish independent cyber security units to manage cyber security and coordinate cyber incident response teams. While some market players view the requirements under the Circular as reasonable for effective risk management, challenges may arise in implementing certain aspects, particularly those related to human resources for the cyber security units. The success of these regulations will depend on customer awareness and participation in preventing cyber security threats, and it remains to be seen if similar standards will be adopted by non-bank financial services and other industries in the future.

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

LAO PDR

Decision on Debt and Asset Management Companies

On 20 April 2023, Decision on Debt and Asset Management Companies No.323/BOL ("Decision"), which was issued by the Bank of Lao PDR ("BOL") on 7 April 2023, was published in the Official Gazette of Lao PDR ("e-Gazette"). The Decision took effect 15 days after its publication in the e-Gazette.

Pursuant to the Decision, debt and asset management companies shall be established and operated under the corporate form or as corporate entities as defined in the Law on Enterprise. They must also be registered with the Ministry of Industry and Commerce. Thereafter, they must apply to BOL for a business operating license.

An investor that wants to operate a debt and asset management business must first register as a company with a minimum registered capital of LAK100 billion.

To be an investor in a debt and asset management business, the investor must meet the following conditions:

1. It must be a legal entity.
2. It must be in good financial standing and have sufficient fundcerts to properly and fully establish the registered capital in accordance with BOL’s requirements.
3. The members of its board of management or board of directors must be knowledgeable and experienced in finance, banking, or related areas, and must not have a criminal record that includes intentional misconduct such as financial, banking, or money laundering offences.
4. It must have an appropriate location for business operations.

The activities of a debt and asset management business consist of the following:

1. purchase of debts;
2. sale and purchase of assets;
3. debt collection services; and
4. rental of assets pending sale.

Additionally, debt and asset management companies are permitted to (i) invest in bonds; (ii) make additional loans; (iii) act as consultants and agents for debt and asset management; (iv) guarantee loans made by their debtors to other financial institutions; and (v) perform other services in accordance with BOL’s regulations.

Instruction on Notification of Recognition and Request for Permission to Conduct Electronic Commerce Business

On 20 April 2023, Instruction on Notification of Recognition and Request for Permission to Conduct Electronic Commerce Business No.0479/MOIC ("Instruction"), which was issued on 5 April 2023, was published in the Official Gazette of Lao PDR ("e-Gazette"). The Instruction took effect 15 days after its publication in the e-Gazette. The Instruction amends the contents of Articles 6 to 17, 35 to 40, 42, 51 and 59 of the Decree on Electronic Commerce No.296/GOV, dated 12 April 2021, for more clarity and to achieve uniformity in its implementation throughout the country.

The Instruction clarifies the requirements for electronic commerce ("e-commerce") businesses, including the notification requirement, certification of recognition of e-commerce, and application for business operating licences.

Notification of E-commerce Business

Individuals or legal entities that have been conducting electronic trading business or trading in the electronic market and electronic market services must notify the Department of Domestic Trade ("DDT") of their businesses or activities within ninety days from the date the Instruction came into effect, in order for DDT to verify, recognise and grant permission to allow them to engage in electronic trading businesses or activities. If they do not apply for permission to conduct business by the set deadline, measures as defined in Article 59 of the Decree on Electronic Commerce and the relevant laws and regulations will be taken against them.

Certification of Recognition of E-commerce

The affected individuals and entities must apply for a certification of recognition of e-commerce ("certification"). The certification is not a business operating licence. It is a verification of the identity of the electronic merchant to build public confidence in e-commerce, and also serves as a basis for resolving disputes.

The certification comes in two forms: (i) in printed form; and (ii) in electronic form issued through the electronic channel designated by DDT. Both forms have the same legal effect.

DDT will assess the application for the certification and the issuance of the same within three business days from the date of application. DDT may reject the application if the documents are incomplete or incorrect, and it must give a written response along with the reasons for the refusal. A certification is valid for two years and can be renewed.

Application for Permission to Conduct E-commerce Business

Individuals or legal entities that intend to conduct e-commerce business in the form of providing electronic market services must submit an application to DDT for the issuance of an e-commerce market service business operating licence.

Decision on Trademarks

On 11 April 2023, the Decision on Trademark No.0436/MOIC ("Decision"), which was issued on 30 March 2023 ("Decision"), was published in the Official Gazette of Lao PDR ("e-Gazette"). The Decision took effect 15 days after its publication in the e-Gazette. It replaces the Decision on Trademarks and Trade Names No.2822/MTC dated 17 December 2019.

The key provisions of the Decision are set out below.

Conditions of Trademark Samples

The Decision provides that trademark samples in the form of drawings, photos or images, three-dimensional images or motion marks must be made in electronic form or in the form of quality paper (non-glossy), with detail and clarity, showing only the mark. It shall not contain other elements that are not part of the mark to be registered.

Conducting Searches of Trademarks

Individuals, legal entities or organisations that intend to find out whether a trademark they want to use has been registered or not, can submit a request for trademark search to the Department of Industry and Commerce ("DIC") of their province or the capital city. They will be notified of the result within 10 working days.

Trademark Registration

Applicants for trademark registration may submit a request for such registration or extension to the DIC of their province or the capital city. This may also be submitted electronically in the same form as the hard copy form by the Department of Intellectual Property.

Representation in Trademark Registration and Other Operations

The following can represent themselves, or an entity or organisation in the trademark registration process and other operations:

1. Any person who is jointly designated and appointed as a representative in the case of several joint designs;
2. Lawyers;
3. Intellectual Property Agent;
4. debt collection services; and
5. Lao citizens hired by the trademark registration applicants to represent them.

Trademark owners who are based overseas must assign a local trademark representative, which can either be an Intellectual property registration service representative company or a lawyer, in order to register their trademarks in Laos. They must execute a Power of Attorney ("POA") in favour of the representative, specifying the validity period of the POA and the  scope of the representative's work.

Term of Protection and Maintenance of Term of Protection

A trademark has a protection period of ten years from the filing date, which can be renewed for another ten years by filing an application for renewal of protection with the DIC of the province or capital, or through electronic means. The application for renewal must be submitted within six months prior to the expiry of the protection period.

A trademark that does not have a term of protection or has expired/has not been renewed will be considered as a public mark.

Decree on the Imposition of Fines and other Measures Against Violators of Laws and Regulations on Measurement

On 7 April 2023, the Government of Lao PDR issued Decree on the Imposition of Fines and other Measures Against Violators of Laws and Regulations on Measurement No.192/NA ("Decree"). The Decree took effect on 9 May 2023, and  applies to individuals, legal entities and organisations that violate laws and regulations on measurement in Lao PDR.

Imposition of Fines

The imposition of fines is a type of administrative sanction imposed on a violator that commits a breach that is not criminal in nature, i.e. is administrative in nature. A breach of laws and regulations on measurement intentionally or unintentionally for the second time, which is not a criminal offence, attracts a fine equivalent to twice the value of the damage.

Other Sanctions

Apart from fines imposed on violators of administrative breaches as opposed to criminal offences, other sanctions include (i) suspension of certificate regarding measurement, (ii) withdrawal or cancellation of certificate regarding measurement, and (iii) cessation, revocation, seizure, or destruction of measuring templates, instruments and equipment, and packaged goods.

Acts that constitute violation of laws and regulations regarding measurement

The following acts constitute a violation of laws and regulations regarding measurement:

1. Production and distribution of measuring templates, tools and measuring equipment that are not compared, verified and re-verified or not registered;
2. Unauthorised importation of measuring templates, instruments and devices;
3. Using expired or revoked certificates and using measuring templates, instruments and or equipment regarding measurement that have expired;
4. Violation of regulations on the comparation, verification and re-verification of measuring templates, instruments and equipment. Comparation refers to checking or comparing the measuring instruments and equipment to the standard template of Industry and Commerce sector;
5. Unauthorised removal of locking devices;
6. Locking or removing stickers and markings from measuring templates, instruments and devices;
7. Affixing fake or illegal certifications or re-inspection marks;
8. Violation of conditions regarding packaged goods;
9. Intentionally misrepresenting calculated amounts to mislead or deceive others; and
10. Modification of measuring templates, instruments and measuring devices that do not constitute components of a criminal offence.

The Industry and Commerce Sector imposes fines and applies other sanctions to violators of laws and regulations on measurement, in coordination with relevant ministries, agencies and local government agencies.

Amended Law on Enterprise

On 29 December 2022, the Amended Law on Enterprise No.33/NA was issued and endorsed by the National Assembly and promulgated by the President of the Lao PDR ("Amended Law"). The Amended Law came into effect on 30 March 2023, replacing the previous Law on Enterprise No.46/NA dated 26 December 2013. The key changes introduced by the Amended Law include the following:

Enterprise Registration

Under the Amended Law, to register an enterprise, application documents may be submitted either in person or electronically to the relevant enterprise registration office.

The timeframe for reviewing an application to register an enterprise has been shortened. Upon receipt of a complete application, the enterprise registration office must make a decision on the application within three business days, rather than the previous 10 business days.

Once they have registered and obtained an enterprise registration certificate, enterprises must comply with the following additional requirements:

1. For enterprises that operate controlled business activities, they must first obtain an investment license from the government investment and planning division, and thereafter obtain a business operation license from the relevant government office.
2. For enterprises that operate business activities that are not on the controlled list, only a business operation license from the relevant government office is required.

Share Contribution and Effect of Default on Payment

The Amended Law provides that the contribution of shares is carried out after the registration of the enterprise. It further stipulates that the date and time for the contribution of shares is to be agreed internally at the company's shareholders' meeting. The effect of default on payment is as follows:

1. Shareholders who do not fully contribute their shares based on the agreed amount and at the agreed time have the right to vote in a shareholders' meeting and receive dividends in proportion to the number of shares that they have contributed.
2. In the event that they do not contribute their shares at all, they do not have a right to vote in the shareholders' meeting or receive dividends.

Enterprise Management after Enterprise Registration

The Industry and Commerce Sector (enterprise registration and management) has been assigned to manage business organisations in relation to the establishment of enterprises, variation in the contents of enterprise registrations and the dissolution of enterprises.

For the relevant sectors (providing business operating license/approval), their function is to manage, monitor and inspect the business operations of related sectors according to the business activities.

MALAYSIA

Antitrust Developments in Malaysia

In February 2023, the Competition Appeal Tribunal ("CAT") unanimously affirmed the Malaysia Competition Commission's ("MyCC") infringement decision against warehouse operators for engaging in a price-fixing cartel in relation to long length handling and heavy lift handling services for import and export cargoes at Port Klang. Uniquely, in this decision, CAT decided that the deeming provision under section 4(2) of the Competition Act 2010 ("Competition Act") is not rebuttable once the conditions for its operation have been satisfied.

On 7 June 2023, MyCC issued a press statement highlighting that it was working with the Ministry of Domestic Trade and Cost of Living to tackle competition issues surrounding the supply and sale of sugar in the Malaysian market. These issues include behaviour such as:

1. hoarding: the restriction or control of market access and outlets for supply and sale of sugar;
2. conditional sales: tying and bundling; and
3. refusal to supply by certain market players.

According to MyCC, such behaviour may result in infringements of the Competition Act, carrying penalties of up to 10% of the player's worldwide turnover during the infringement period.

In the telecommunication sector, the Malaysian Government announced in May 2023 that it would adopt a dual network model for the rollout of 5G services in the country. This would terminate its previous plans to have a single state-run network owned by a state-owned agency, Digital Nasional Berhad. This move appears to address concerns about pricing and competition, and supports the dismantling of monopolies.

Additional Requirements under Revised Policy Document on Risk Management in Technology (RMiT)

On 1 June 2023, the Central Bank of Malaysia, Bank Negara Malaysia ("BNM"), issued a revised version of its Policy Document on Risk Management in Technology ("Revised RMiT PD").

This document sets out additional requirements for a financial institution's ("FI") management of cloud technology risks and the adoption of multi-factor authentication ("MFA") security controls by financial institutions, including the following:

1. New Requirements for Adoption of Public Cloud for Critical Systems

Under the Revised RMiT PD, an FI is only required to consult BNM prior to the first-time adoption of a public cloud for critical systems, and to notify BNM for any subsequent such adoptions. For non-critical systems involving the cloud, an FI is no longer required to notify BNM of its intention to use the same.


2. Guidance on Assessment of Common Key Risks and Control Measures for Adoption of Public Cloud for Critical Systems

The Revised RMiT PD incorporates a new Appendix 10 which adopts the Cloud Technology Risk Assessment Guideline (CTRAG) Exposure Draft released in 2022. FIs are encouraged to carry out an assessment of common key risks and control measures specified in Appendix 10 when adopting a public cloud for critical systems.


3. MFA Security Controls as a Standard Requirement

The Revised RMiT PD makes it mandatory for FIs to deploy MFA technology and channels that are more secure than the unencrypted short messaging service (SMS), and to ensure that the MFA solution is resistant to interception or manipulation by any third party throughout the authentication process.

The Revised RMiT PD came into effect on 1 June 2023. However, for the new amendments specifically related to cloud technology risk management, the amendments will take effect as follows:

1. 1 June 2023 – for licensed digital banks and Islamic digital banks; and
2. 1 June 2024 – for FIs other than licensed digital banks and Islamic digital banks.

High Court Rules that DGIR is under a Duty to Give Reasons for Imposing Additional Taxes on Taxpayers

In Government of Malaysia v Inoapps Sdn Bhd [2022] MLJU 2280, a taxpayer had not filed its required tax returns, leading the Director General of Internal Revenue ("DGIR") to issue Estimated Notices of Assessment based on his "best judgment". The Government then commenced legal proceedings and applied for summary judgment against the taxpayer under sections 103 and 106 of the Income Tax Act 1967 ("ITA").

The High Court granted a stay of execution of the summary judgment pending the outcome of the appeal before the Special Commissioner of Income Tax ("SCIT").

The High Court held that while it was bound to enter summary judgment against the taxpayer under the ITA, its discretionary power to grant a stay of execution pending the disposal of the appeal before the SCIT should be exercised in view of the special circumstances, namely, the lack of explanation for the substantial increase in the income chargeable to tax against the taxpayer.

The High Court observed that if the DGIR had offered a reasonable explanation, the summary judgment – on an unconditional basis – could have been entered, but this was not the case.

The decision underscores the importance for public decision-making bodies to provide reasons for their decisions. This decision aligns with the judicial trend that giving reasons is fundamental to good administration as it demonstrates transparency and accountability in public decision-making process.

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

5G: Malaysia to Transition from Single Wholesale Network to Dual Wholesale Network

On 3 May 2023, the Malaysian Government announced that the country will move away from a Single Wholesale Network ("SWN") as the model for the implementation of its 5G infrastructure, to a Dual Wholesale Network ("DWN").

The Minister of Communications and Digital, Fahmi Fadzil, explained that this transition was necessary to avoid a single point of failure, and to increase capacity, taking into account the sustainability of the telecommunications industry ecosystem and the benefits that can be derived from a competitive landscape for 5G wholesale services.1

Under the DWN model, Digital Nasional Berhad ("DNB") would continue its implementation of the 5G network until it achieved 80% 5G coverage of the country's populated areas. This is targeted to be completed by end-2023. Once done, a separate entity would be selected via an open tender process to operate another 5G network in parallel with DNB.

This entity would then build its own 5G network from January 2024 and is expected to provide approximately the same level of coverage as DNB. The entity selection would be based on several criteria including the reasonable pricing of the wholesale price for 5G services.

On 9 May 2023, it was reported that the Malaysian Government would form a task force to ensure achievement of its goal of 80% 5G coverage by end 2023, and to facilitate a smooth transition from a SWN model to a DWN model in early 2024.2 This task force, under the purview of the Malaysian Communications and Multimedia Commission and co-chaired by the Secretaries-General of the Finance Ministry and the Communications and Digital Ministry, will include representatives from Malaysia's mobile network operators.

A key takeaway from these announcements is that the Malaysian Government will not be part of the new separate entity, nor will it have a stake in DNB.

________________________

1 https://www.thestar.com.my/news/nation/2023/05/03/dnb-to-roll-out-5g-network-until-80-coverage

2 https://www.nst.com.my/news/nation/2023/05/907529/task-force-ensure-implementation-5g-smooth-transition-dual-network

Revised Consent and Disclosure Requirements for Customer Information by Bank Negara Malaysia

The Central Bank of Malaysia, Bank Negara Malaysia ("BNM"), has issued a revised version of the Policy Document on Management of Customer Information and Permitted Disclosures ("Revised MCIPD"), which came into effect on 3 April 2023 (save for provisions related to consent requirements on permitted disclosures to third parties, which will take effect on 1 January 2024).

The Revised MCIPD includes:

1. the definition of "outsourcing arrangement", which has been aligned with the Policy Document on Outsourcing issued by BNM;
2. clarifications on the usage of the eFSA portal, through which financial institutions ("FI") upload customer information for disclosure to the Royal Malaysian Police. For instance, FIs are now required to verify the authenticity of the eFSA portal before uploading customer information, to ensure that it is not a phishing site; and
3. matters concerning customers' consent for disclosures to third parties. FIs must now fulfil four conditions when seeking customer consent for such disclosures: (i) the terms seeking the consent must be specific; (ii) the consent must be voluntary, and FIs must not obtain the customer's consent by combing the consent statements for disclosure of customer information with other matters in a single statement; (iii) the consent must be given explicitly and deliberately by the customers; and (iv) the consent must be revocable upon request except where required by law or contract.

However, the Revised MCIPD clarifies that the requirements in (c) do not apply to scenarios where the disclosure of customer information is already permitted under the Financial Services Act 2013, Islamic Financial Services Act 2013, and Development Financial Institutions Act 2002.

Essentially, the Revised MCIPD enhances the existing regulatory framework for handling customer information by FIs. These amendments are welcomed as they enhance the protection of customer information in the financial services sector.

First-Ever Malaysian Court Decision Recognising an ICSID Award

On 17 February 2023, in Elizabeth Regina Maria Gabrielle von Pezold & 7 Ors v Republic of Zimbabwe (unreported), for the first time in Malaysia, its High Court recognised an award by the International Centre for Settlement of Investment Disputes ("ICSID") against a foreign government, which involved a sum over US$200 million ("ICSID Award"), pursuant to section 3 of the Convention on the Settlement of Investment Disputes Act 1966 ("ICSID Act").

Facts of the Case

Between 2000 and 2007, the Plaintiffs' properties and their associated assets were expropriated without compensation by the Republic of Zimbabwe ("Zimbabwe") pursuant to Zimbabwe’s Land Reform Programme. In 2015, a tribunal at the International Centre for Settlement of Investment Disputes ("ICSID Tribunal") found, among others, that the said expropriation of the Plaintiffs' properties by Zimbabwe constituted a breach of the bilateral investment treaties entered into by Zimbabwe with Switzerland and Germany, respectively, and accordingly awarded, among others, damages exceeding US$200 million in favour of the Plaintiffs ("ICSID Award"). In 2018, an application for annulment filed by Zimbabwe to annul the ICSID Award was dismissed by the relevant ICSID Tribunal ("Decision on Annulment").

The Plaintiffs subsequently commenced actions before the High Court of Malaya at Kuala Lumpur seeking, among others, the recognition of the ICSID Award and the Decision on Annulment in Malaysia.

Key Findings of the High Court

Some of the key findings of the High Court are set out below.

1. The Court is mandated under the ICSID Act to recognise the ICSID Award, provided the requirement of Article 54(2) of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States ("ICSID Convention") is satisfied, namely, furnishing a copy of the ICSID Award certified by the Secretary-General of ICSID.
2. Sovereign immunity cannot be used to prevent recognition of the ICSID Award. According to the ICSID Convention, the consideration of sovereign immunity is limited to the execution stage after the recognition of the ICSID Award in the final judgment. Further, the High Court found that the Republic of Zimbabwe had, through its conduct, submitted to the jurisdiction of the courts of every contracting state to the ICSID Convention where the ICSID Award is recognised. Accordingly, the Republic of Zimbabwe was considered to have waived immunity.
3. The absence of a specific procedural framework for the enforcement of ICSID awards in Malaysia did not preclude the High Court from exercising its substantive powers under the ICSID Act, and it could adapt its own procedures to give effect to such powers.
4. The absence of any reservation made to restrict the terms of the ICSID Convention was significant, as it means that an ICSID Award could be enforced in any ICSID contracting state.
5. Identification of the assets of the Republic of Zimbabwe within Malaysia was irrelevant and not required at the recognition stage.

The matter is currently pending appeal before the Court of Appeal. Christopher & Lee Ong is acting for the Plaintiffs in this case.

MYANMAR

Custom Department Reduces Customs Duty on SKD and CKD Vehicles

Myanmar's Custom Department has reduced customs duties on imports of semi-knocked-down ("SKD") and completely-knocked-down ("CKD") vehicles with effect from 1 June 2023 until 31 May 2024.

The new customs duty rates for SKD systems as compared to the old rates are set out below. 

SKD	New Rate	Old Rate
Passenger vehicles	5%	7.5%
Motorcycles	1.5%	3%
Three-wheeled motorcycles	3%	7.5%
Buses	3%	7.5%
Trucks and trucks for body building	3%	7.5%

The new customs duty rates for CKD systems as compared to the old rates are set out below.

CKD	New Rate	Old Rate
Passenger vehicles	3%	5%
Motorcycles	1.5%	3%
Three-wheeled motorcycles for transportation of passengers	1.5%	5%
Three-wheeled motorcycles for transportation of goods	3%	5%
Buses	3%	5%
Trucks and trucks for body building	3%	5%

Issuance of New Exporter and Importer Registration Procedures

On 23 May 2023, the Department of Trade under the Ministry of Commerce ("MOC") issued new guidelines on importer and exporter registration through Notification 35/2023, which replaces the previous Order 42/1954 and Export and Import Bulletin No. 6/2018. Under the new procedure, MOC has divided the importer and exporter registration structures into two categories: (i) for trading purposes and (ii) for non-trading purposes. Both categories require an import export registration certificate ("EIR").

Applicants must apply for the EIR through the TradeNet 2.0 system, and pay the application fee directly through the system. Upon receipt of the application, MOC will carry out an on-site inspection. If MOC is satisfied, it will grant approval after 15 working days.

Renewal applications for an EIR must be submitted six months before its expiry, as opposed to the previous requirement of three months. An EIR will be automatically cancelled if a renewal application is not made within one year after its expiration.

If a director of a company ("Company A") is also a director of another company (Company B) whose EIR has been suspended or cancelled, Company A will not be eligible to apply, renew or amend its EIR during the penalty period. An applicant may appeal the rejection, suspension or cancellation of an EIR to MOC within 30 days from the date of MOC's decision.

Use of E-Tax Registration System

Myanmar's Internal Revenue Department ("IRD") has informed newly-registered companies, entities, and individuals to register for tax using the e-Registration Management System ("ERMS") commencing 23 May 2023.

Before the ERMS was put in place, taxpayers applying for a Taxpayer Identification Number ("TIN") had to manually submit the application to IRD's Central Taxpayer Service Unit ("CTSU"), and the processing of the application could take up to two weeks. With the new system, companies, entities and individuals may now apply for a TIN by registering via their accounts on the IRD website. Currently, only TINs may be registered through the ERMS. It does not extend to registrations for commercial tax and special goods tax.

Ministry of Education Introduces the new Private Education Law

On 12 May 2023, the Ministry of Education issued the new Private Education Law ("PEL"), which repeals the 2011 Private School Registration Law. Under the new PEL, private education institutions including technical and vocational training schools, whether operating for profit or not, as well as private education institution teachers, are now required to register with the new Central Supervisory Board ("CSB"). Moreover, the schools are now required to meet new sets of registration criteria including the submission to CSB documents evidencing (i) their ownership or lease of school premises; (ii) student and teacher living spaces (if any); and (iii) that the status of the campus is in good condition. The schools must also submit their curricula and teaching plans, emergency health care programmes, and school safety and fire prevention programmes.

It may also be necessary for some schools to obtain a separate permit or endorsement from the Myanmar Investment Commission.

Schools which are established prior to 12 May 2023 must register within one year and the registration is valid for five years. 

Changes to Standard Operating Procedures of Offshore Remittances

On 1 May 2023, the Ministry of Planning and Finance ("MOPF") issued new set of rules regarding offshore remittances. These rules require all taxpayers including entrepreneurs, companies, organisations and individuals to provide tax documentation such as tax payment receipts or tax exemption letters issued by the Internal Revenue Department ("IRD") and tax clearance certificates, to the Authorised Dealer Banks when remitting offshore payments exceeding US$10,000 per transaction. 

The taxpayers must now make Withholding Tax or Personal Income Tax payment first with IRD before making offshore remittances. This is a matter of question since this particular requirement conflicts with the Income Tax Regulations and Withholding Tax Notification 47/2018.  Approval from the Foreign Exchange Supervisory Committee (FESC) is still required for any offshore remittances.

PHILIPPINES

IPOPHL Temporarily Suspends Strict Implementation of Rules on Payment of Filing Fee and 1st Publication Fee for Patents, Utility Models, and Industrial Designs

On 29 May 2023, the Intellectual Property Office of the Philippines ("IPOPHL") issued Memorandum Circular No. 2023-014 ("MC 2023-014"), which took effect on 1 July 2023, suspending the strict implementation of rule 401.1 of the 2022 Revised Implementing Rules and Regulations for Patents, Utility Models, and Industrial Designs ("Rules") ("Rule 401.1"). Under Rule 401.1, if the Filing Fee and 1st Publication Fee for patent applications are not paid at the time of filing of the application, the application shall be considered as a failed application. In practice, however, if the Filing Fee and 1st Publication Fee are not paid either at the time the application is filed or within 24 hours from filing, the application is not considered to have been filed and there is no application to speak of.

However, IPOPHL has become aware that its external online payment gateway partners have encountered challenges in adapting their systems to align with the Rules such that late payments, up until one week from submission of applications to IPOPHL, have been accepted by the external online payment gateways. This has resulted in the assignment of an application number to applications which would have otherwise been considered as failed applications under Rule 401.1 for failure to pay the Filing Fee and 1st Publication Fee within the prescribed period.

As a compromise between the Rules and the present limitations in the external online payment gateway system, MC 2023-014 allows an applicant to pay the Filing Fee and 1st Publication Fee of its patent application within one week from the initial submission of the application with IPOPHL. The full payment of the Filing Fee and the 1st Publication Fee must actually be paid within the one-week period; otherwise, the application shall be considered to have failed, and a Notice of Failed Application shall be issued. IPOPHL stressed that this is an interim measure that will be implemented only until such time that the external online payment gateway system is able to align with the requirements of the Rules.

The Philippines and Hong Kong Sign Memorandum of Understanding on Personal Data Protection

On 22 May 2023, the National Privacy Commission of the Philippines ("NPC") and the Office of the Privacy Commissioner for Personal Data of Hong Kong (PCPD) (collectively, "Parties") signed a Memorandum of Understanding ("MOU") to strengthen collaboration and cooperation on personal data protection while complying with the domestic laws and regulations of each jurisdiction. With the MOU, NPC aims to build trust in digital services in order to harness the potential of data as a tool for social and economic progress.

The Parties are obliged under the MOU to provide mutual assistance during investigations regarding potential breaches of each country's privacy and data protection laws. The investigations may be conducted jointly if the case involves cross-border personal data incidents or breaches. The Parties shall also engage in knowledge sharing, training, education on data privacy and protection issues and trends, and exert joint efforts to promote personal data protection within their regions and beyond. The execution of the MOU is in line with section 6 of the Republic Act No. 10173 or the Data Privacy Act of 2012 which provides that the provisions of the Data Privacy Act of 2012 have extraterritorial application and apply to any act done or practice engaged in by an entity if:

1. the act, practice or processing relates to personal information about a Philippine citizen or resident;
2. the entity has a link with the Philippines and is processing personal information in the Philippines, or outside the Philippines as long as it is about Philippine citizens or residents, such as, but not limited to, a contract entered into in the Philippines, an unincorporated juridical entity in the Philippines that has its central management and control in the country, or an entity with a branch, agency, office, or subsidiary in the Philippines and the parent or affiliate has access to personal information; and
3. the entity has other links in the Philippines such as, but not limited to, carrying on business in the Philippines or where the personal information was collected by or held by an entity in the Philippines.

NPC Signs Memorandum of Understanding with Leading Telcos to Strengthen Data Privacy and Protection

On 10 May 2023, the National Privacy Commission ("NPC") signed a Memorandum of Understanding ("MOU") with leading telecommunication companies – Globe Telecom, Inc., Smart Communications, Inc., and Dito Telecommunity Corporation (collectively, "Telcos") to enhance privacy and data protection awareness and practices. The MOU aims to establish a framework for collaboration between NPC and the Telcos in addressing privacy issues and ensuring the protection of personal data.

A Joint Task Force has been established under the MOU comprising representatives from NPC and the Telcos to strengthen coordination, communication, and implementation of the parties' obligations regarding data privacy and protection. The Joint Task Force shall convene once every six months, or more frequently if necessary, to share information, identify priorities, and discuss relevant issues. The MOU emphasises the importance of educating the public on their privacy rights and providing them with mechanisms to exercise control over their personal data. In this light, a joint information and dissemination campaign will be launched by NPC and the Telcos across multiple platforms such as television, radio, and social media to educate and inform the public on fraudulent schemes such as targeted smishing messages and the proper way to report them (more details on "smishing" below). The expenses related to this campaign will be shouldered by the Telcos.

With the cooperation of the Telcos, NPC aims to strengthen its efforts to combat the rising number of fraudulent schemes conducted through text message scams that induce the public to disclose personal data such as "smishing", which is a short term for SMS phishing. It is a security attack involving text messaging in which the user is tricked into downloading a trojan horse, virus, or other malware onto the user’s mobile device. A smisher often targets the user's online password, social security number, credit card information, and other personal information.

NEDA Approves the Implementing Rules and Regulations of the Amended Public Service Act

On 4 April 2023, the Implementing Rules and Regulations ("IRR") of Republic Act No. 11659 which amended Commonwealth Act No.146 or the Public Service Act ("Amended Public Service Act") took effect. The IRR was released by the National Economic and Development Authority ("NEDA") on 20 March 2023. It implements the Amended Public Service Act, which liberalised foreign ownership restrictions in key public services such as airports, railways, expressways, and telecommunications, but also retained foreign restrictions in public utilities, namely, distribution and transmission of electricity, petroleum and petroleum products' pipeline transmission systems, water pipeline distribution systems, wastewater and sewerage pipeline systems, seaports, and public utility vehicles.

The Amended Public Service Act has also introduced the concept of critical infrastructures, the operation and management of which are subject to a 50% foreign ownership restriction unless the country of the foreign national intending to own more than 50% of the critical infrastructure extends reciprocal rights to Philippine nationals. The IRR clarifies that reciprocity requirements are deemed satisfied when (i) Philippine nationals are allowed to own more than 50% of capital stock in any activity related to agriculture, industry and services in the home country of the foreign national, and (ii) the home country of the foreign national allows Philippine nationals to invest the same value of capital in any economic activity related to agriculture, industry, or services.

The Amended Public Service Act also specifically recognises only telecommunication services as critical infrastructure. The IRR has likewise recognised only telecommunications services as critical infrastructure and provided that no other public service shall be considered critical infrastructure unless declared so by the President through an executive order. The classification of a public service as a critical infrastructure by executive fiat shall apply prospectively.

The Amended Public Service Act grants the President to power to suspend or prohibit merger and acquisition transactions and other investments on the basis of national security.  The IRR clarifies the criteria for reviewing these investments:

1. impact on national security;
2. applicability of other Philippine laws and policies;
3. implication of any national security risk arising from the investment to the Philippine economy and community;
4. whether the investment will affect the ability of the Philippines to protect its strategic and security interests; and
5. nature, history, and previous business transactions of the investor and any cases filed against the same, in their country of origin, or in any other country or state where the investor is involved.

The review may be undertaken by any relevant government agency.

Supreme Court Clarifies Period for Confirmation of Domestic Arbitral Award and Public Policy Exception to Enforcement of Arbitral Awards

In the En Banc decision of Maynilad Water Services, Inc. v. National Water and Resources Board, et. al dated 7 December 2021, the Supreme Court ruled that rule 11.2(A) of the Special Rules of Court on Alternative Dispute Resolution ("Special ADR Rules") ("Rule 11.2") has superseded section 23 of the Republic Act ("RA") No. 876 ("Domestic Arbitration Law") ("Section 23"). As such, the period for filing a Petition for Confirmation and Execution of Arbitral Award is no longer any time within one month after an award is made (as provided under section 23 of the Domestic Arbitration Law) but at any time after the lapse of 30 days from receipt of the arbitral award (as provided under rule 11.2 of the Special ADR Rules).

In this case, Maynilad Water Services, Inc. ("Maynilad"), secured a favorable arbitral award and then sought to enforce it. Maynilad thus filed a Petition for Confirmation of the Arbitral Award with the Regional Trial Court, albeit beyond the period for filing provided in Section 23, but within the period provided in Rule 11.2. The Supreme Court held that Maynilad's Petition was timely filed in accordance with Rule 11.2. The Supreme Court explained that Section 23 is deemed to have been superseded by rule 11.2(A) of the Special ADR Rules insofar as the reglementary period for filing a Petition for Confirmation of a Domestic Arbitral Award is concerned. While RA No. 9285 or the Alternative Dispute Resolution Act states that domestic arbitration shall continue to be governed by the Domestic Arbitration Law, it also provides that its provisions are without prejudice to the alternative dispute resolution system that the Supreme Court may adopt, which shall be governed by the rules that the Supreme Court may approve.

Nevertheless, the Supreme Court held that the arbitral award in favor of Maynilad could not be enforced as it would be contrary to public policy. Rule 19.10 of the Special ADR Rules provides that recognition and enforcement of an arbitral award may be refused on public policy grounds such as when the enforcement of the award would be contrary to the state’s fundamental tenets of justice and morality, or would blatantly be injurious to the public, or the interests of the society. The Supreme Court held that the award in favor of Maynilad, which allowed Maynilad to include its corporate income taxes in its water charges, would adversely affect and be unfair to Maynilad's customers vis-à-vis customers serviced by another water service provider (Manila Water) that was previously prohibited from incorporating its corporate income taxes in its water charges. According to the Supreme Court, the enforcement of Maynilad's arbitral award would result in an unequal protection of water consumers.

SINGAPORE

Court Grants Extension of Moratoria and Sealing of Documents in Restructuring of Cryptocurrency Business

The law is constantly developing to fit the ever-changing world. Most recently, with the digitalisation of the commercial landscape and the proliferation of cryptocurrencies, non-fungible tokens (NFTs) and metaverse-related businesses, the courts have had to apply or adapt the law to deal with novel situations. This was the case in Re Babel Holding Ltd and other matters [2023] SGHC 98, where the Singapore High Court had to apply restructuring and insolvency law in the context of a cryptocurrency-related business.

The applicants were a group of companies in the cryptocurrency industry seeking to extend moratoria under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 to facilitate the formulation of a restructuring plan, as well as to seal certain documents which contained the unredacted versions of lists of the applicants' creditors as well as letters of support in respect of the moratoria extension.

The Court allowed the sealing of the documents, highlighting the need to safeguard the commercially sensitive information at this point in the restructuring process. The Court also allowed the extension of the moratoria, finding that the applicants had met the statutory and common law requirements for such extension. In particular, the Court found that: (i) the applications were made bona fide; and (ii) there was a reasonable prospect of the intended scheme of arrangement working and being acceptable to the general run of creditors.

The decision demonstrates the application of Singapore's restructuring and insolvency framework to foreign companies and the Court's approach to the grant of moratoria and sealing orders in the particular circumstances of cryptocurrency and other digital businesses.

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

Singapore Conducts World's First Live Electronic Transferable Record Cross-Border Trade

The digitalisation of trade has been the subject of increasing focus, with accelerating developments in both the technology and the legal framework required to support the necessary transformation. Countries are looking to digitalisation for the advantages it carries in terms of efficiency, security and cost savings. In this regard, Singapore has taken a position as a regional leader in trade digitalisation, with numerous programmes and initiatives directed at achieving effective implementation.

In line with this, the Infocomm Media Development Authority ("IMDA") has announced that it has successfully executed a live shipment from Singapore to Thailand during the first quarter of 2023. This fully paperless, live cross-border trade was conducted using an Electronic Transferable Record ("ETR"), which is functionally equivalent to a paper Bill of Lading using Singapore's TradeTrust framework.

IMDA has provided further details on the ETR cross-border trade it conducted with the participation of industry partners. ExxonMobil Asia Pacific Pte. Ltd. was the shipper, Bunkerchain was the digital platform provider, and VLK was the vessel owner. The process took place as follows:

1. ExxonMobil Asia Pacific shipped liquid chemicals from Singapore to Thailand.
2. VLK issued an electronic Bill of Lading ("eBL") using Bunkerchain, which is a TradeTrust-enabled digital platform.
3. A Digital Passports for Ships was created on the eBL, ensuring that digital identity used in the signing was onboarded and verified.
4. The eBL was surrendered on the TradeTrust Reference Implementation, demonstrating interoperability across different systems, and interoperability between digital and paper-based processes.
5. VLK was supported by their Protection and Indemnity Club, on the basis that liabilities arising from the use of the eBL are equivalent to the liabilities under the use of a paper-based Bill of Lading.
6. The eBL was legally supported solely by statutory law without the use of any contract law or rulebook, demonstrating that an eBL issued using the TradeTrust framework can be used in a jurisdiction that has not implemented the United Nations Commission on International Trade Law Model Law on Electronic Transferable Records (UNCITRAL MLETR), such as Thailand.

This is the world's first ETR cross-border trade, and demonstrates Singapore's championing of the pushing of boundaries of digitalisation for global trade. Parties involved in international trade should be aware of Singapore's growing capabilities in this regard, and the development of trade options that they may be able to take advantage of in the near future.

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

Singapore and Cambodia Sign Memorandum of Understanding for Carbon Credits Cooperation

In a press release, the Ministry of Trade and Industry Singapore announced that Singapore and Cambodia had signed on 26 April 2023 a Memorandum of Understanding ("MOU") to collaborate on carbon credits aligned with Article 6 of the Paris Agreement ("Article 6"). Article 6 allows countries to voluntarily cooperate to achieve emission reduction targets set out in their respective nationally determined contributions ("NDCs").

It is the intention of Singapore to achieve net zero emissions by 2050 and advance global climate action through collaborations with like-minded partners. Establishing partnerships with like-minded countries like Cambodia to work together on carbon credits is one way to attain this. 

Under the MOU, both countries have agreed to:

1. work towards crafting a legally binding agreement that provides a framework for the transfer of correspondingly adjusted carbon credits by end-2023;
2. identify Article 6 compliant carbon credit projects to enable them to achieve their respective NDCs; and
3. exchange information on best practices and capacity building relating to carbon credits collaboration.

Singapore and Shanghai Reaffirm Strong Ties and Broader Cooperation with 14 MOUs

Enterprise Singapore has announced that the 4th Singapore-Shanghai Comprehensive Cooperation Council ("SSCCC") meeting took place in Singapore on 24 April 2023.

Established in 2019, SSCCC serves as a pivotal platform in developing deeper ties between Singapore and Shanghai, as well as between Singapore and the broader Yangtze River Delta region.

At the meeting attended by Singapore and Chinese officials and business representatives, the participants agreed to enhance bilateral cooperation in digital and green economies and deepen strong partnerships in financial services and innovation. The leaders also reaffirmed their commitments to the global climate change agenda and agreed to explore more substantive partnerships in sustainability. For example, Singapore intends to work with Shanghai to facilitate greater cross-border green and transition finance to support the region's transition, and to pilot green and digital solutions in improving global maritime supply chains. 

A total of 15 agreements, comprising 14 Memoranda of Agreement ("MOUs") and one Letter of Intent ("LOI"), were signed at the meeting, covering areas such as people-to-people exchanges, financial services, technology and innovation, as well as emerging areas such as digital economy. These MOUs and LOI include, amongst others, the following:

Partners	Purpose
Singapore Business Federation (SBF) – China International Import Expo Bureau (CIIEB)	Collaboration on Singapore's participation in the 6th China International Import Expo
Maritime and Port Authority (MPA) - Shanghai Maritime University	Collaboration on maritime talent and knowledge exchange
OCBC Bank - UnionPay International	Collaboration on digital payments
Singapore Exchange (SGX) – Shenwan Hongyuan Securities	Collaboration in equities derivatives, FICC and equities-related business
Ministry of Health (MOH) – Shanghai Municipal Health Commission	Cooperation in healthcare
Singapore Tourism Board (STB) – Shanghai Municipal Administration of Culture and Tourism	Promotion of tourism exchanges and cooperation
Infocomm Media Development Authority (IMDA) and Shanghai Municipal Commission of Economy and Informatization	Collaboration in digital economy
CrimsonLogic – Shanghai Data Group	Cooperation to enhance cross-border flow of goods through digitalisation

Green Finance Taskforce Established to Strengthen Collaboration in Green and Transition Finance between China and Singapore

On 21 April 2023, the Monetary Authority of Singapore (MAS) and the People's Bank of China ("PBC") announced the establishment of the China-Singapore Green Finance Taskforce ("GFTF").

The GFTF is co-chaired by MAS' Assistant Managing Director (Development and International) and Chief Sustainability Officer, Ms Gillian Tan, and Chair of the China Green Finance Committee, Dr Ma Jun. The members of GFTF comprise senior representatives and sustainable finance experts from Singapore and China's financial institutions, and green FinTech companies.

To better meet the region's needs as it transitions to a low carbon future, the GFTF seeks to:

1. provide a platform for knowledge exchange;
2. enhance bilateral cooperation between China and Singapore in green and transition finance; and
3. facilitate greater public-private sector collaboration.

At the inaugural meeting held in Chongqing on 21 April 2023, the GFTF discussed joint initiatives that aim to scale up green and transition financing flows between China, Singapore, and the region. Initially, the GFTF will establish three workstreams focusing on the following priority areas:

1. Taxonomies and Definitions. Under the International Platform on Sustainable Finance ("IPSF"), MAS and PBC will collaborate to: (i) achieve interoperability between the China and Singapore taxonomies; (ii) enhance the use of the IPSF's Common Ground Taxonomy; and (iii) deepen the understanding of transition activities defined by China and Singapore.

The IPSF's Common Ground Taxonomy provides an in-depth comparison of the existing taxonomies for environmentally sustainable investments and puts forward areas of commonality and differences between the European Union's and China's green taxonomies.


2. Products and Instruments. China International Capital Corporation and the Singapore Exchange will establish a workstream to strengthen sustainability bond market connectivity between China and Singapore. This includes the issuances of, and mutual access to, green and transition bond products in China and Singapore.


3. Technology. A workstream will be established by Beijing Green Exchange and Metaverse Green Exchange that leverages technology to facilitate sustainable finance adoption. This will include the piloting of digital green bonds with carbon credits.

Supreme Court of Singapore and Supreme People's Court of the People's Republic of China Sign MOU on the Management of International Commercial Disputes in Context of Belt and Road Initiative

On 1 April 2023, the Singapore International Commercial Court ("SICC") announced that the Supreme Court of Singapore and the Supreme People's Court of the People's Republic of China had signed a Memorandum of Understanding ("MOU") on Cooperation on the management of international commercial disputes in the context of the Belt and Road Initiative ("BRI") through a Litigation-Mediation-Litigation ("LML") framework.

The two courts concluded the MOU in view of the increasing complexity of international commercial disputes particularly in the context of the BRI ("BRI disputes"). The development of an LML framework to resolve BRI disputes is in recognition of the flexibility and efficiency afforded by mediation, which not only saves the parties' time and costs but also preserves business relationships in the course of the dispute resolution process.

Key features of the MOU include the following:

1. SICC and the China International Commercial Court ("CICC") will each develop and implement the LML framework for the management of BRI disputes.
2. The LML framework in each court may be developed in collaboration with any domestic or foreign mediation expert and any domestic, foreign or international mediation institution in accordance with their respective procedural laws and rules of court.
3. Both courts will share information on their LML framework and other dispute management practices, including information on procedural rules, case management protocols, and enforcement processes relating to SICC and CICC.
4. Both courts agree to promote the LML framework by recommending to the parties to disputes the adoption of the prescribed LML Model Clauses in appropriate circumstances.

The signing of the MOU demonstrates the strong commitment of the two countries to collaborate to enhance the resolution of BRI disputes.

ASEAN Taxonomy V2: Enabling a Just Transition Towards Sustainable Finance Adoption by ASEAN

The ASEAN Taxonomy for Sustainable Finance Version 2 ("ASEAN Taxonomy V2") was released on 27 March 2023 by the ASEAN Taxonomy Board. The release follows extensive stakeholder consultations upon the earlier released ASEAN Taxonomy for Sustainable Finance Version 1. A crucial addition to the ASEAN Taxonomy V2 is the inclusion of social aspects as the third essential criteria, adding a holistic dimension to the taxonomy principles. Other additions include the completion of the Foundation Framework, building upon the broad framework laid out previously, and also the finalisation of the details in the initial Plus Standard.

The ASEAN Taxonomy seeks to enable a just transition towards sustainable finance adoption by ASEAN Member States ("AMS") by providing a common and credible framework for AMS and their stakeholders to assess and classify sustainable economic activities. Having an ASEAN Taxonomy will attract more capital flow into the region to help AMS and their stakeholders to transition to a low carbon economy and achieve AMS' climate change goals.

While designed to be interoperable with other international taxonomies, there are unique aspects of the ASEAN Taxonomy V2, such as the following:

1. The adoption of a multi-tiered approach with two main elements:


• A Foundation Framework that uses principles-based guiding questions and a decision tree to assess and classify sustainable activities; and
• A Plus Standard which is developed as an advanced form of assessment approach that uses both threshold-based (quantitative) and process-based or practice-based (qualitative) technical screening criteria to assess and classify sustainable activities.


2. A global first for a regional taxonomy, the ASEAN Taxonomy V2 introduces coal phase-out as an activity eligible for classification as a sustainable activity. The novel inclusion of coal phase-out provides an avenue to expedite energy transition efforts within ASEAN.

For more information, click here to read our Legal Update which provides a brief overview of the ASEAN Taxonomy V2 and what it means for AMS and businesses in the region.

THAILAND

Digital Platform Service Providers – Decree Takes Effect on 19 August 2023

The Royal Decree on Digital Platform Service Businesses Requiring Notification ("DPD"), which was issued on 22 December 2022, will come into effect on 19 August 2023, amidst the lack of a clear guideline or interpretation on which operators will be subject to the new law.

Under the DPD, a "digital platform service" means "a provision of service as a medium via electronic means which processes information management to create linkage by using computer networks between entrepreneurs on digital platform, consumers, or service's users to carry out electronic transaction, with or without charging service fees. [T]his does not include a provision of digital platform service which is intended to offer only goods or services of the digital platform service operator or its affiliate which is an agent thereof, whether the offer is made to a third party or its affiliate." With this broad definition, many existing digital platforms in Thailand's market, including food delivery platforms, e-commerce platforms, and ride-hailing platforms, may all be regulated under the DPD.

The DPD is also written to be extra-territorial. An offshore platform would be deemed as having an intention to provide services to users in Thailand and be subject to the DPD if it has one of the following characteristics:

1. displaying its platform in the Thai language (whether in whole or in part);
2. having its domain registered ".th", ".ไทย", other names which means Thailand, or using a domain name in the Thai language;
3. providing a payment method or option of payment in THB currency;
4. specifying a term to use Thai law as the governing law for transactions relevant to the sale of products or services on the digital platform service, or specifying a Thai court as the choice of forum;
5. paying remuneration to a search for a computer's location service provider to specifically support access to the digital platform service by users in Thailand;
6. having an office, organisation, or personnel to support or assist users in Thailand; or
7. other characteristics as prescribed by the Electronic Transaction Commission.

Platforms regulated by the DPD are required to notify the Electronic Transactions Development Agency ("ETDA") of their business details before commencing their business, or within 90 days from the effective date of the DPD for existing service operators. Apart from this, platforms have several duties, including annual reporting and disclosure of the platform's terms and conditions. Offshore platforms will also be required to appoint a coordinator in Thailand to liaise with ETDA. Failure to comply with the requirements may result in a suspension of business and criminal penalties.

New Private Placement (PP) Rules for Listed Companies in Thailand

Thailand's Securities and Exchange Commission ("SEC") has amended the rules governing private placements ("PPs") by listed companies which are intended to ease the offering process and provide more procedural efficiency. The new rules are set out in the Notification of the Capital Market Supervisory Board No. TorJor. 28/2565 Re: Approval for Listed Companies to Offer Newly Issued Shares through Private Placement ("TorJor. 28/2565 Notification") which has repealed and replaced the the Notification of the Capital Market Supervisory Board No. TorJor. 72/2558 Re: Approval for Listed Companies to Offer Newly Issued Shares through Private Placement. The TorJor. 28/2565 Notification takes effect for the issuance of PP shares from 1 July 2023.

The key changes and updates in TorJor. 28/2565 Notification include:

1. The new rules eliminate the requirement for SEC approval. The allocation and pricing of PP shares shall be deemed to have obtained SEC approval, provided that the issuer fully complies with its information disclosure and corporate approval requirements.
2. In case the PP is considered to have material events (e.g. PP shares are issued at a price below market price), the issuer is also required to obtain an independent financial advisor's opinion report and propose it to the shareholders’ meeting for consideration.
3. A silent period no longer applies for the remaining shares from the Right Offering ("RO") and Preferential Public Offering ("PPO") to be offered to PP investors, provided that the PP share price is not lower than the offering price of the RO or PPO.
4. The new rules improve the calculation for "market price", provided that the issuer must first use the weighted average price of the shares as a benchmark to fix the market price, except for certain cases where such calculation is not suitable or cannot be calculated. Other benchmarks may be used in the following order: (i) the book building price or (ii) the fair price evaluated by a financial advisor as in the qualified list of SEC.

Board of Investment Introduces Additional Criteria and Conditions for Granting Land Ownership Rights to Foreign Entities

On June 23, 2023, the Office of the Board of Investment of Thailand ("BOI") issued Announcement No. Por. 10/2566, which outlines the criteria and conditions for granting land ownership rights to foreign entities that have been promoted and intend to establish an office and residential premises for their promoted business. This announcement introduces supplementary criteria and conditions, in addition to those stated in the previous announcement by the Board of Investment of Thailand No. 6/2565.

The following are the significant conditions specified in the Announcement that warrant attention:

1. The foreign entity must maintain a paid-up registered capital of at least 50 million baht throughout the period in which they are permitted to own land for establishing office and residential premises for their promoted business.
2. The land used for executives' or experts' residences must not exceed 100 square meters per family, and each plot must not exceed one rai (approximately 1,600 square meters). The land ownership for this purpose shall not exceed one rai per 50 million baht of paid-up registered capital, with a total limit of 10 rai.
3. The land designated for factory workers' residences must not exceed one rai per 300 people. The land ownership for this purpose shall not exceed one rai per 50 million baht of paid-up capital, with a total limit of 20 rai.
4. If the residence is located separately from the establishment, the owned land intended for residential purposes must be located within a 50-kilometer radius from the promoted establishment along the main public road.
5. In the event of a breach of the conditions stated in the Announcement, BOI will initiate the revocation of the rights and benefits of land ownership. The land must be disposed of within one year from the date of notification from BOI.

Personal Data Protection Committee Releases Practical Guideline for Data Controllers and Data Processors

On 10 February 2023, Thailand's Personal Data Protection Committee ("PDPC") released a practical guideline for data controllers and data processors, focusing on case studies extracted from consultation issues related to the implementation of the Personal Data Protection Act B.E. 2562 (2019). The purpose of the guideline is to demonstrate the application of the law through real-life examples and scenarios.

We provide below two examples of case studies mentioned in the guideline.

Case Study 1

Is a business operator managing condominiums on behalf of condominium juristic persons considered a data controller which is a small business that would fall under the exemption from the requirement of preparing records of processing activities ("ROPA"), pursuant to the PDPC's Notification on An Exemption from the Recording by the Data Controller which is a Small Business B.E. 2565 (2022) ("PDPC's Notification on ROPA exemption")?

PDPC responded that a condominium juristic person whose objective is to manage and maintain common property, without providing goods or services to non-owners or non-residents, would be considered a data controller which is a non-profit organisation and shall be exempted from the preparation of ROPA pursuant to PDPC's Notification on ROPA exemption.

However, the condominium management company has the operational objective of sharing profits, thus, it would not be considered a non-profit organisation. In addition, as the company processes personal data under the instructions or on behalf of the condominium juristic person who acts as a data controller, the company would be regarded as a data processor who has a duty to prepare and maintain a ROPA according to PDPC's Notification on Rules and Methods in Preparing and Maintaining Records of Personal Data Processing Activities for the Data Processor B.E. 2565 (2022).

Case Study 2

Does a bank need to obtain consent from customers who are minors if the bank wishes to introduce a new product to them for marketing purposes? Can the minors give consent alone?

PDPC issued an opinion that if personal data is used for marketing purposes and is not related or necessary for compliance with a contract, and other legal bases were not applicable, the bank should obtain consent from the minors. In addition, taking into consideration the age of minors, their maturity level and the impact of their decision, consent for marketing purposes should also be obtained from the holder of parental responsibility over the minors.

VIETNAM

Issuance of Power Development Plan VIII

On 15 May 2023, the Prime Minister of Vietnam issued Decision No. 500/QD-TTg, approving the National power development plan for the period between 2021-2030 and setting out the vision for 2050 ("PDP VIII").

PDP VIII sets out the roadmap for the development of energy sources and grid infrastructure, including for the renewable energy service and industry in Vietnam. It also includes planning for grid connections with neighbouring countries.

PDP VIII takes into account the commitments given by Vietnam in the Just Energy Partnership (JEPT), with priority given to renewable energy sources. It is expected that by 2030, renewable energy will account 30.9% to 39.2% of Vietnam's power sources (and by 2050, it will reach 67.5% to 71.5%). PDP VIII also sees phase out of coal-powered electricity generation by 2050 (and coal-fired plants are to be converted into clean energy or ammonia by this time).

In terms of legislative plan, PDP VIII paves the way for the amendment of the current Law on Electricity and the initiation of the drafting of a separate law on renewable energy.

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

Decree 21/2023/ND-CP on Microinsurance

On 5 May 2023, the Government enacted Decree 21/2023/ND-CP on microinsurance. This marks the first time microinsurance products have been comprehensively regulated by the Government, and was introduced after the Law on Insurance Business was passed in 2022. According to lawmakers, the decree was enacted to develop an effective microinsurance landscape, allowing for greater access to insurance by low-income individuals.

The Law on Insurance Business defines microinsurance as insurance aimed at low-income individuals and households to protect them against life, health and property risks.

The decree prescribes caps on the chargeable premiums and insurance terms for such products. For example, premiums are capped at 5% of the annual per capita income of the near-poverty households in urban areas, and must be suitable to the insurance benefits.

It also introduces the licensing, organisation and operational framework for mutual microinsurance organisations for the first time.

Decree 19/2023/ND-CP Guiding the Law on Anti-Money Laundering

On 28 April 2023, the Government enacted Decree 19/2023/ND-CP to guide the recent Law on Anti-Money Laundering (replacing the former Decree 116/2013/ND-CP which was passed around 10 years ago). Save for certain customer due diligence requirements which will come into effect from 1 December 2023, the decree came into effect from the date of its enactment.

The decree regulates the specific circumstances in which customer due diligence requirements need to be undertaken by reporting entities, with particular focus on financial institutions. Keeping track with the recent Law on Anti-Money Laundering, it regulates the requirements for digital wallet service providers.

The decree also regulates the criteria for identifying beneficial owners, as well as ascertaining when there is a complex or unusually large transaction for which reporting is required.

Decree 17/2023/ND-CP Guiding a Number of Articles and Measures on the Implementation of the Law on Intellectual Property Regarding Copyright and Related Rights

On 26 April 2023, the Government enacted Decree 17/2023/ND-CP to regulate copyright and related rights, following the recent amendments to the Law on Intellectual Property that were passed in 2022. The decree marks one of the most comprehensive laws to date on copyright, and came into force immediately on the date of enactment.

One of the key areas of regulation introduced by the decree is the regulation of online intermediary service providers ("ISPs"), particularly as to their extent of liability for copyright infringement and violations that occur on their platforms. It stipulates the conditions that need to be met by ISPs in order to enjoy safe harbour protections.

The decree also regulates, in greater detail, the criteria for determining when a copyright infringement has occurred. It also regulates the method for quantifying damages arising from infringement, while maintaining the principle that only actual damage will be awardable.