Regional Round-Up

Your Snapshot of Key Legal Developments in Asia

Issue 1 - Q1 2020 (Special Edition on COVID-19)

COVER STORY

    CAMBODIA
    CHINA
    INDONESIA
    LAO PDR
    MALAYSIA
    MYANMAR
    PHILIPPINES
    SINGAPORE
    THAILAND
    VIETNAM

    CAMBODIA

    Control and Support Measures in Cambodia Amid the COVID-19 Pandemic

    In combatting the spread of COVID-19 in Cambodia, the Royal Government of Cambodia ("RGC") first started to issue travel restrictions on a selective basis, targeting travellers coming from countries or region most hard-hit by COVID-19, which included the European countries, the United States of America and Iran. As the situation continues to worsen, the RGC has sought to impose travel restrictions on all inbound foreign travellers by requiring them to fulfil a set of conditions before they can be allowed to enter the country. These conditions include obtaining a health certificate within 72 hours upon arrival in Cambodia, securing travel insurance with a coverage of not less than USD50,000 and being placed under quarantine by the health officials of Cambodia.


    In addition, the RGC has issued various measures aimed at alleviating the burden of local businesses and individuals affected by the COVID-19 pandemic. These measures range from tax holidays for the aviation, tourism and garment industries, subsidies on allowances for suspended employees, exemptions from or deferment of certain monthly obligations. In addition to the above, the RGC has also advised financial institutions in the country to restructure their loan repayment with borrowers in the tourism, garment, construction, and transportation industry.


    On 29 April 2020, the acting head of state has signed the Royal Kram No. NS/RK/0420/018 to promulgate the Law on State of Emergency, which is a new major legislation aimed at tackling head-on any possible serious outbreak of COVID-19 ("Law"). Given the current situation, this Law was promulgated on an urgent basis, which means that this Law can be implemented immediately from the date of the promulgation. The Law mainly provides for how and under what conditions the country can be placed under a state of emergency, and the measures that can be taken by the Government under such a condition. The Law does not specifically provide for or elaborate on the various obligations or restrictions to be imposed upon citizens or businesses. The only obligation imposed is to strictly comply with and not to breach any measure, order or action that the government will issue, failing which the errant citizen will be subject to imprisonment or fine or both. If the situation demands, the Law also allows for the country to be put under martial law.



    CHINA

    Control and Support Measures in China Amid the COVID-19 Pandemic

    China is at a different stage in combating the COVID-19 pandemic. Generally speaking, the COVID-19 pandemic in China has been under control, but China is at the stage of preventing the virus from being imported and the potential occurrence of a second wave of infections. Most of the lockdown and movement control measures in China have been lifted, including the lockdown of Hubei Province (except for Wuhan City),  which ended on 25 March 2020. The lockdown of Wuhan City (the epicenter of the outbreak) ended on 8 April 2020. Currently, most of the businesses in China have resumed normal production and operations or are in the process of resuming normal production and operations, subject to certain relevant local rules such as the working space and safe social distancing requirements. For example, as of 2 April 2020, 16 industries in Shanghai (including industrial enterprises above the designated scale (规模以上工业企业), enterprises involving in major projects, foreign-invested enterprises and foreign trade enterprises, etc.) have almost fully resumed production and operations. However, entities operating in certain industries such as theatrical performances, cinemas and indoor stadiums are still required to  file an application for resumption of operations with the local authorities to seek a confirmation of the resumption.


    The central government of China has released temporary policies, reliefs and guidelines to support businesses affected by the pandemic. The ministries of the central government and the local governments have also issued temporary policies and reliefs in accordance with the guidelines issued by the central government. For example, the State Taxation Administration released several announcements which established preferential tax policies involving value-added taxes, individual income taxes and enterprise income taxes. The Ministry of Human Resources and Social Security, together with other governmental authorities, issued a circular on phased reduction of social insurance contributions for enterprises. People's Bank of China issued a circular on further strengthening financial support for enterprises and individuals substantially affected by the COVID-19 pandemic which include relevant policies of extension of loans, adjustments of interest rates, introduction of interest subsidy etc. Most of the above measures are aimed at helping enterprises (especially SMEs) relieve their burden and overcome the difficulties during this period.



    INDONESIA

    Control and Support Measures in Indonesia Amid the COVID-19 Pandemic

    The Indonesian government's response to the COVID-19 pandemic has been steadily intensifying in the past weeks. Pursuant to Regulation of the DKI Jakarta Governor No. 33 of 2020 and Decree No. 380 of 2020, Jakarta became the first province in Indonesia to impose a massive social restriction. This is evidenced by the closing of schools, offices (except for those conducting essential services) and places of worship, enforcement of passenger's limitation for public and personal transportation and prohibition of mass gathering. By mid-April, President Joko Widodo declared COVID-19 as a non-natural national disaster, which obliges the governors, regents, and mayors of the various regions in Indonesia to establish policies in line with this declaration. West Java and Tangerang soon followed Jakarta's lead and declared a massive social restriction in their respective regions.


    On the business side, the government has begun setting the stage to allow public institutions to introduce future measures to ensure that business can go on as usual. The OJK, Indonesia's financial services authority, now allows the submission of certain reports online and has issued a regulation on electronic general meeting of shareholders. Further, OJK has also issued Regulation No. 11/POJK.03/2020 to stabilise the nation' financial system and support economic growth amidst the outbreak. Various courts have also embraced technology by allowing certain hearings to be held via teleconference.



    LAO PDR

    Control and Support Measures in Lao PDR Amid the COVID-19 Pandemic

    On 29 March 2020, the Prime Minister issued the Order on Reinforcement Measures on Containment, Prevention and Full Response to the COVID-19 Pandemic ("Order"). Pursuant to the Order, restrictions were imposed on movement and gatherings, and employees (other than those in essential services) were required to work from home for the period from 30 March 2020 to 19 April 2020.


    Even before the Order was issued, the Bank of Lao PDR ("BOL") had on 26 March 2020 issued the Decision on Policy in Respect of Loans to Provide Relief Measures Due to the Impact of the COVID-19 Pandemic ("BOL Decision").  The BOL Decision requires commercial banks to allow borrowers more time to repay principal and interest and to support parties adversely affected by the pandemic.  Loans re-structured pursuant to the BOL Decision need not be classified as non-performing.


    On 31 March 2020, the Ministry of Industry and Commerce issued a Notice to temporarily suspend factories (other than those producing essential goods as stated therein) from operating ("MOIC Notice"). These factories would have to provide accommodation and social welfare benefits to their employees. Factories that were allowed to operate would have to take steps to protect their employees by monitoring employees' temperature, practising social distancing and sanitising the premises.


    On 2 April 2020, the Prime Minister issued the Decision on Policies and Measures to Reduce Impact from COVID-19 Pandemic ("PM Decision"). Pursuant to the PM Decision, certain employees and businesses were exempted from making payment of income tax. Personal protection equipment was also exempt from import duty. BOL was authorised to instruct commercial banks to increase their Loan-to-Deposit Ratio. BOL would also be authorised to permit commercial banks to defer repayment by their customers of principal and interest, and to continue to grant loans. Various measures and instructions were also set out in the PM Decision to reduce government expenditure and promote SMEs and the tourism industry.


    On 2 April 2020, the National Task Force Committee for Prevention and Control of COVID-19 ("Task Force") issued Guidelines on Implementation of the Order ("Guidelines"). The Task Force acts as co-ordinator to monitor and assess efforts to prevent and control to spread of COVID-19. The Guidelines provide more details on steps to be taken to implement the Order. It also set out the objectives of the Task Force.


    On 5 April 2020, the Ministry of Energy and Mines issued a Notice to temporarily suspend mineral processing plants from operating and suspend construction of dam projects ("MEM Notice"). The terms of the MEM Notice are similar to those of the MOIC Notice. 


    As at the date hereof, the Order has been extended to 3 May 2020.



    MALAYSIA

    Control and Support Measures in Malaysia Amid the COVID-19 Pandemic

    On 16 March 2020, the Malaysian Prime Minister announced the implementation of a nationwide Movement Control Order ("MCO") which began on 18 March 2020 and was initially scheduled to end on 31 March 2020. This order was made pursuant to the Prevention and Control of Infectious Diseases Act 1988 with the objective being to restrict the spread of COVID-19.


    However, due to the increase in the number of COVID-19 cases seen in Malaysia during that time, the Government made a decision to extend the initial period of the MCO to 14 April 2020 (Phase 2) and the MCO was subsequently further extended until 28 April 2020 (Phase 3). The Prime Minister recently made an announcement extending the MCO period to 12 May 2020.


    The MCO has essentially resulted in the restriction of movement for all residents and includes the imposition of bans on gatherings nationwide whereby individuals are required to stay within the confines of their own residences and are only allowed to travel to obtain essentials such as food and medicine, and where necessary, access to healthcare and medical services. The MCO has also caused the imposition of travel restrictions and the closure of all government and private premises save for those involved in the supply of essential goods and services. 


    During the MCO, the Government gazetted the Prevention and Control of Infectious Diseases (Measures within Infected Local Areas) Regulations 2020 ("Regulations") which provides that any person who is in breach of the Regulations shall commit an offence and shall, upon conviction, be liable to a fine not exceeding RM1,000 or to a term of imprisonment not exceeding 6 months, or to both.


    As part of the Government’s efforts to mitigate the social and economic impact of COVID-19 and the MCO, on 27 March 2020, the Prime Minister announced a RM250 billion stimulus package known as the Prihatin Rakyat Economic Stimulus Package (PRIHATIN). Through this stimulus package, financial assistance will be channelled to targeted individuals, Small and Medium Enterprises (SMEs) and industries to provide temporary relief. Such relief measures under PRIHATIN include cash payouts, wage subsidy programmes, deferment for repayment of certain loans, and an exemption period for payment of rental for public housing.



    MYANMAR

    Control and Support Measures in Myanmar Amid the COVID-19 Pandemic

    In light of the COVID-19 pandemic, the Myanmar government has introduced a number of measures to manage the spread of COVID-19, and provide relief to businesses, individuals, employers and employees affected by the outbreak. 


    On 25 March 2020, the President's Office with the advice of the Ministry of Health and Sports ("MOHS"), issued Letter No. 70(23)/1 to all Regional and State Governments on Preventive and Precautionary Measures of COVID-19 ("Letter"). The Letter instructed all Regional and State Governments to allow only 50% of the employees in the government offices and departments to work during office hours. It also instructed the government offices and departments to: (i) report any person suspected of being infected with COVID-19 in the office, department, dormitory or within the neighbourhood to the relevant health authority without delay; (ii) restrict guests coming to the residence of the employees; and (iii) restrict employees from leaving the workplace during office hours without permission. 


    In addition to the above, the Ministry of Labour ("MOL") also issued a set of notifications and directives for employers and employees registered under the Social Security Regime.


    On 20 March 2020, MOL issued Directive 1/2020 ("Directive") stating that  Cut- Make-Pack ("CMP") Factories and Workshops, Hotel and Tourism companies, and other medium and small business enterprises economically afflicted by COVID-19 ("Afflicted Businesses") which have been temporarily or permanently shut down, or whose number of labourers has been reduced, are permitted to be exempted from Social Security Board ("SSB") contribution payments. Under the Directive, employees and labourers affected by the temporary or permanent shut down of the Afflicted Businesses due to COVID-19 ("Afflicted Employees") are entitled to medical benefits and financial benefits (i.e. 60% of the previous salary) of up to six months of unemployment if the person becomes sick during the term of unemployment from the SSB.


    On 20 March 2020, the MOL also issued Notifications 63 and 64/2020 allowing the Afflicted Businesses to make SSB contribution payments no later than three months from the end of the relevant month, as opposed to the previous 15-day requirement. The Notifications also allow the Afflicted Employees to be entitled to Health Protection, and Medical and Travel Benefits of up to one year from the time of unemployment.


    Most recently, on 19 April 2020, MOL issued an Announcement that MOL and MOHS will inspect factories, workplaces and workshops from 20 April 2020 to 30 April 2020. During this period, only qualified factories are allowed to open and operate subject to MOL's approval. 


    Inspection is to be conducted in the following order of priority:


    1. Pharmaceutical factories;
    2. Food manufacturing factories;
    3. Factories, workshops and departments that are ready for re-operation in line with health instructions;
    4. Factories and workshops with more than 1,000 workers; and
    5. Other factories, workshops and departments.

    The approval for allowing businesses to operate will depend on whether the employers meet serveral criteria including the following:


    1. employees who are sick, pregnant and living together with a suspected person are allowed to stay home;
    2. provision of a ferry, hand sanitisers and surgical masks to the employees;
    3. work arrangement involving small groups working alternatively; and
    4. provision of a hygienic workplace.

    PHILIPPINES

    Control and Support Measures in the Philippines Amid the COVID-19 Pandemic

    On 16 March 2020, the Philippine President declared a State of Calamity throughout the Philippines for a period of six months and imposed an Enhanced Community Quarantine ("ECQ") throughout Luzon (the biggest island in the Philippines where Metro Manila is located) until 12 April 2020.  The ECQ was subsequently extended to 30 April 2020.  The imposition of the ECQ resulted in the implementation of strict social distancing, travel restrictions, alternative work arrangements, and strict home quarantine measures in all households with some limited exceptions such as for purposes of accessing essential goods and conduct of essential services.  Several government offices have also limited their operations and extended the submission to their office of required filings and documents. 


    In order to optimise the government’s efforts in responding against the health and economic costs posed by the COVID-19 pandemic, the Philippine Congress enacted Republic Act No. 11469, or the Bayanihan to Heal as One Act ("Act").  The Act granted the President certain emergency powers and the authority necessary to carry out urgent measures, including the authority to direct the operation of privately-owned hospitals and medical and health facilities, and ensure availability of essential goods, among others. 


    The Act also authorised and prioritised the augmentation of the operational budget of government hospitals, calamity funds, and budget of various social amelioration programs.  These programs aim to assist those heavily affected by the pandemic and come in the form of cash subsidies.  Under the Act, the President is empowered to move statutory deadlines and timelines for the payments of taxes. The Act likewise directed the implementation of a minimum of a thirty 30-day grace period for the payments of loans, utility bills, residential, and commercial rents. The Act also liberalised the grant of incentives for the manufacture or importation of critical or needed equipment or supplies wherein the importation of these equipment and supplies shall be exempt from import duties, taxes, and other fees.  Local government units are also authorised to enact other necessary measures to protect its citizens. 


    On 24 April 2020, the Philippine President announced the extension of the ECQ in Metro Manila, Central Luzon (except Aurora which is under general community quarantine), CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon), and other high-risk areas in Luzon until 15 May 2020. Moderate-risk and low-risk areas in Luzon will be placed under general community quarantine starting 1 May 2020. The President also placed some areas in Visayas and Mindanao under ECQ.



    SINGAPORE

    SPECIAL EDITION ON COVID-19

    The COVID-19 pandemic has caused a deep impact across the globe, affecting all sectors of society. It has fundamentally changed the way we work, the way we live and the way we function.


    As governments work to overcome the pandemic and its consequences, policies and measures have been implemented at a swift rate. In this quarterly issue of our Regional Round-Up, we present a special COVID-19 Edition to provide our clients with an overview of the control and support measures put in place in the South-East Asia region and in China. This issue also consolidates Rajah & Tann Asia's key Client Updates to date on the legal and regulatory developments in response to the pandemic in the respective jurisdictions.


    The COVID-19 situation continues to change and develop on a daily basis, and Rajah & Tann Asia seeks to keep our clients informed on the latest updates. Visit our COVID-19 Resource Centre for the latest publications from our lawyers across the region on common issues and legal implications brought about by COVID-19. For specific inquiries, please reach out to your relationship partner or send an email to our COVID-19 Legal Team.


    Control and Support Measures in Singapore Amid the COVID-19 Pandemic

    In response to the COVID-19 pandemic, Singapore has introduced a number of control and safe distancing measures progressively to manage the spread of COVID-19, and to provide relief to individuals and businesses affected by the outbreak. Under the COVID-19 (Temporary Measures) Act 2020 ("Act"), the Minister for Health has issued the COVID-19 (Temporary Measures) (Control Order) Regulations 2020 ("Regulations"), which seeks to minimise the movement of and interaction between individuals with effect from 7 April 2020. As part of Singapore's circuit breaker efforts to pre-empt the increasing trend of local transmission, the Regulations have been progressively updated with enhanced measures. Except for essential service providers and their related supply chains and service providers, businesses are not allowed to operate from their workplace premises. However, if they are able to continue to operate their businesses (in limited or full capacity) with their employees working from home, they should continue to do so. All other business, social or other activities that are not essential services and cannot be conducted through working from home shall be suspended. Essential service providers and their related supply chains and service providers must put in place safe distancing measures to reduce physical interactions among their employees and must permit and provide the necessary facilities for their workers to work from their places of residence, and direct them to do so, unless it is not reasonably practicable to do so. Individuals are required to stay in their place of residence and are only allowed to leave for certain purposes. Schools and institutes of higher learning are on full home-based learning. Safe distancing measures have also been implemented and enforced in public places and non-residential premises. The movement control and elevated safe distancing measures which were originally stated to be in force until 4 May 2020 will be extended to 1 June 2020 pursuant to an announcement by Prime Minister Lee Hsien Loong on 21 April 2020. Non-compliance with the circuit breaker measures is an offence punishable with fine, imprisonment or to both. 


    The Singapore Parliament has also introduced legislative provisions in the Act that will afford temporary relief from actions for parties unable to perform their contracts, repay loans or pay rent due to COVID-19 events, and will increase the monetary thresholds and time limits for insolvency and bankruptcy. In addition, the Government has introduced various initiatives to provide financial support for businesses and individuals during this time, including the Unity Budget, the Solidarity Budget, the Resilience Budget together with further support measures for businesses to cover the prolonged circuit breaker. These initiatives include measures such as tax rebates, credit financing, business grants, wage and training support, cash payouts, and the establishment of funds such as the Temporary Relief Fund, the COVID-19 Support Grant and the Courage Fund for individuals and families.



    THAILAND

    Control and Support Measures in Thailand Amid the COVID-19 Pandemic

    In order to control the COVID-19 pandemic situation in Thailand, the Thai government announced an Emergency Decree which applies to all areas in Thailand from 26 March 2020 to 30 April 2020 ("Emergency Decree"). The Emergency Decree empowers the Bangkok Governor and other provincial governors to issue orders for the closure of places posing a risk of disease contagion. Under the Emergency Decree, the Thai government has issued notifications and set out certain measures in order to prevent and suppress the spread of the disease. The measures include prohibiting entry into risk areas, closure of points of entry into Thailand, prohibiting the assembly of persons, and the closure of places that are risk-prone to the transmission of the disease (including 34 types of venues in the Bangkok area such as department stores, schools, universities, pubs, bars, theatres and sports stadiums).  Notably, the government has imposed a curfew between 10 pm and 4 am. The government has, however, introduced measures to keep certain places which are considered essential in normal operation for the convenience and well-being of the nation, and to prevent shortages or unnecessary distress.  Examples of such places are hospitals, medical centres, medical clinics, pharmacies, banks and supermarkets. 


    The government and governmental authorities have also introduced several measures to support businesses and individuals during the COVID-19 pandemic. The measures include emergency loans and soft loans for businesses and individuals affected by the pandemic, SME relief measures, a reduction in the rate of withholding taxes, tax relief measures, additional grounds for tax deductions, extension of time for tax filings, the acceleration of VAT refunds for exporters, cash payouts, the reduction of contributions by employers and employees to the Social Security Office ("SSO") for six-month salary cycles, and compensation from the SSO for employees who are absent from work due to the COVID-19 pandemic at the rate of 62% of their daily wages for up to 90 days.


    On 28 April 2020, the Thai government has announced the extension of the Emergency Decree until 31 May 2020.



    VIETNAM

    Control and Support Measures in Vietnam Amid the COVID-19 Pandemic

    In response to the COVID-19 pandemic, the Vietnamese Government has introduced a number of measures to manage the spread of COVID-19, and  provide relief to individuals and businesses affected by the outbreak.


    Pursuant to the Prime Minister's Directive No. 16/CT-TTg (as extended), nationwide social distancing measures were imposed from 1 April 2020, and had recently ended on 22 April 2020 for high-risk areas (including Hanoi and Ho Chi Minh City). During such measures, people were advised to stay home and only leave for essential purposes. Furthermore, key state authorities (including the courts and the Department of Planning and Investment) had suspended non-essential meetings and face-to-face interactions – instead, implementing postal or online submissions/communications or postponing sessions altogether. While such measures have recently ended, the transition back to original procedures may take time to implement, as provincial authorities await guidance from the central bodies. Travel entry restrictions, however, will remain in place until at least 30 April 2020 unless otherwise directed by the Government.


    Regarding relief, the Government has rolled out various initiatives for eligible individuals and businesses. These include tax relief (by way of deferral of tax payment deadlines), suspension of social insurance contributions, and the State Bank of Vietnam asking commercial banks to waive, reduce or defer interest payments on loans to affected businesses.







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