Your Snapshot of Key Legal Developments in Asia
Issue 3 - Jul/Aug/Sep 2016
- Slight Changes to the Sporadic Land Registration Procedure
- Determination of Certifying Authority on Documents Related to Registration of Rights over Immovable Property
- MEF and MLVT Set Out Fines for Labour Law violations
- MEF Provides Tax Incentives to Educational Institutes Until 2018
- MLVT Launches its Employees' / Workers' Data Centralized Management System
- OJK Moves to Support Tax Amnesty by Relaxing Disclosure and Tender Offer Rules
- New Patents Law Enacted by DPR
- Tax Amnesty: A Game-Changer?
- Geothermal Energy Producers Required to Pay Bonuses to Local Governments
- Ministry of Energy/Mineral Resources Introduces 3-Hour Licensing Service for Infrastructure Development
- Tobacco Companies to Display Graphic Health Warnings on Cigarette Packets
- Modern Machinery, Technical Skills Needed to Enhance Competitiveness of Lao Wood Processing Industry
- Intellectual Property Case Updates
- High Court Allows MyCC to Challenge CAT's Decision to Set Aside RM10 Million Fine Imposed on MAS and AirAsia Bhd
- Employees’ Social Security (Amendment) Act 2016
- State Economic Policy
- Liberalizing Trading of Construction Material by Foreign Joint-Venture Company
- List of 48 Prioritized Laws to be Enacted
- Insurance Market will be open to Foreign Players in 2017
- Social Media Marketing Guidelines – Influencers to Disclose Sponsorships
- Suspicious Transaction Reports and the Indonesia Tax Amnesty
- Employment Claims Tribunal
- Proposals on Activity-based Payments Framework and New National Payments Council
- Natural Justice in Arbitral Awards
- Business Collateral Act Comes into Effect
- Amendments to the Bankruptcy Act
- Process for Stay of Duty Payment
- Establishment of a Corruption Court
- Proposed Amendments to the Trade Competition Act
Slight Changes to the Sporadic Land Registration ProcedureThe procedure for sporadic land registration was previously established in Sub-Decree No.48 on Sporadic Land Registration dated 31 May 2002 and was amended by Sub-Decree No.121 dated 9 June 2016 on certain parts of the registration procedure, which resulted in an overall reduction in the registration timeline from 75 working days to 49 working days. The changes made are as follows:
- Upon acceptance of the application, the District / Khan governor shall make an announcement regarding the date of boundary demarcation work to the applicant and the public within at least seven days in advance of the above date;
- Public announcement of the data collection and measurement will be made available to the public for a period of 15 days; and
- District / Khan governor shall notify the applicant of the public announcement at least three days in advance.
Determination of Certifying Authority on Documents Related to Registration of Rights over Immovable PropertyIn accordance with Inter-ministerial Prakas No.215 on the Role and Responsibility of Commune / Sangkat Administration in Land Registration Process dated 9 September 2005, the authority of District / Khan or Commune / Sangkat were empowered to certify certain documents relating to registration of various rights over immovable property (such as Vente Definitif, donation, pledge, guarantee, hypothec, long-term lease, easement agreement and usufruct agreement). So far, we have observed that these documents always go through the District / Khan administration for certification.
However, on 15 June 2016, the Ministry of Land Management, Urban Planning and Construction and the Ministry of Interior jointly issued Inter-ministerial Prakas No.159 to amend the above Inter-ministerial Prakas No.215. This clarifies that only the authority of Commune / Sangkat is empowered to certify those documents related to various real rights over immovable property. Moreover, before certifying those documents, the Commune / Sangkat administration must be careful and be responsible on the identity of the immovable party and the identities of both parties to the agreement.
MEF and MLVT Set Out Fines for Labour Law violationsOn 6 June 2016, the Ministry of Labour and Vocational Training and the Ministry of Economy and Finance jointly issued Joint Prakas No. 659 on Fines for Labour Law Violations ("Joint Prakas"). The Joint Prakas determines different types of Labour Law violation, the amount of fine for each violation, and the formula to calculate the fine.
In accordance with the Joint Prakas, there are 105 acts, set out in the annex of the Joint Prakas, considered as violations of Labour Law by the employers. The annex specifies each type of violations, base daily wage for calculation and the amount of fine, which vary from US$300 to US$3,600.
Click here to read our update on the violations and fines established by the Joint Prakas.
MEF Provides Tax Incentives to Educational Institutes Until 2018The Ministry of Economy and Finance ("MEF") has issued Prakas No.904 on Tax Incentives for Educational Institutes dated 8 August 2016. It aims to provide tax incentives for the education sector in order to support and enhance the human resources development and to reduce the expenses of parents and guardians of students. The objective is to determine mechanisms in the implementation of tax on profit, withholding tax and Value-Added Tax ("VAT") applied to educational institutes in the Kingdom of Cambodia.
Under this Prakas, "Educational Institutes" refer to public and private educational establishments which provide educational services from kindergarten to tertiary education. This also includes technical and vocational training institutes.
Click here to read our update on the tax incentives established under this Prakas.
MLVT Launches its Employees' / Workers' Data Centralized Management SystemThe Ministry of Labour and Vocational Training ("MLVT") has recently launched its Online Foreign Employees/Workers Centralized Management System to ensure the labour migration and protection of migrant employees / workers in the Kingdom of Cambodia through a Prakas No. 352 MLVT.P on the Employees' / Workers' Data Centralized Management System dated 17 August 2016.
According to the Prakas, starting from 1 September 2016, all investors, companies, factories, enterprises-establishments employing any foreign employees / workers are required to request for foreign employees / worker quota through the online web-based management system of MLVT at www.fwcms.mlvt.gov.kh. Furthermore, foreign employees / workers must also prepare an online application requesting for a foreign work permit and work permit through the said website.
Click here to read our update on the new requirements regarding the employment of foreign employees and workers.
New Prakas Issued to Govern Residential Development BusinessOn 24 August 2016, the Ministry of Economy and Finance ("MEF") issued Prakas No.965 on the Management of Residential Development Business ("Prakas No.965") to substitute its previous Prakas on Real Estate Development Business, being the Prakas No.1222 dated 15 December 2009 ("Prakas No.1222").
Prakas No.965 plays an important role in clarifying points that were not clear under Prakas No.1222, and makes a few significant changes with regard to the license types, license fees and validity of the licenses, new licensing requirements and reporting obligations, etc., to the residential development business in Cambodia.
Click here to read our update on the key changes brought about by the new Prakas.
OJK Moves to Support Tax Amnesty by Relaxing Disclosure and Tender Offer RulesIn recognition of the reality that a taxpayer's disclosures made in the context of the Tax Amnesty could reveal that they are in fact the controlling shareholder of a public company, thus automatically triggering the need for a mandatory tender offer under the provisions of Capital Markets & Financial Institutions Supervisory Board Rule IX.H.1, the Financial Services Authority ("OJK") has issued a Circular to exempt an amnesty participant from the need to conduct a tender offer in the case of a (de facto) acquisition that becomes apparent as a result of Tax Amnesty disclosures.
Further, a public company that becomes aware that it has a new controlling shareholder as a result of disclosures made under the Tax Amnesty is exempted from the requirement to disclose material information and facts under OJK Regulation No. 31/POJK.04/2015.
Click here to read our update on this development.
New Patents Law Enacted by DPROn 27 July 2016, the House of Representative ("DPR") passed the Patents Bill into law. The new legislation ("2016 Patents Law") is aimed at stimulating innovation and growth in the number of patents granted to Indonesian inventors from both the public and private sectors, while placing an express obligation on patent holders to use their patented processes or manufacture their patented products in Indonesia. It further streamlines the patenting process and introduces the possibility of engaging independent experts as patent examiners in anticipation of rapid developments in the technological, communications, information and health sectors. The 2016 Patents Law has recently been gazetted as Law No. 13 of 2016.
Click here to read our client update on this.
Tax Amnesty: A Game-Changer?After months of prolonged debate and considerable controversy, the House of Representatives finally approved the Government-initiated Tax Amnesty Bill during a plenary session on 28 June 2016. The Tax Amnesty (the "Amnesty") was proposed by the Government as a stop-gap measure to shore up declining tax revenues amid the ongoing economic downturn. The Government hopes that up to Rp 165 trillion will be repatriated as a result of the Amnesty, although the figures vary wildly depending on which government department is doing the talking. This has led many economists and commentators to question whether the government is actually in possession of accurate data as to the true amount of Indonesian funds parked overseas that would come within the scope of the Amnesty. The Tax Amnesty Law has recently been gazetted as Law No. 11 of 2016.
Click here to read our client update on this new legislation.
Geothermal Energy Producers Required to Pay Bonuses to Local GovernmentsGovernment Regulation No. 28 of 2016, which came into force on 14 July 2016, requires the holders of: (i) geothermal licenses; (ii) geothermal resources exploitation rights; (iii) joint-operating contracts for the exploitation of geothermal resources; and / or (iv) geothermal resources exploitation licenses to pay geothermal energy production bonuses to local governments in geothermal production zones. The amounts of such bonuses are set at: (i) 1% of gross income generated from sales of geothermal steam; or (ii) 0.5% of gross income generated from sales of electricity.
Ministry of Energy/Mineral Resources Introduces 3-Hour Licensing Service for Infrastructure DevelopmentMinister of Energy and Mineral Resources Regulation No. 15 of 2016, which came into force on 30 June 2016, established a three-hour licensing service for infrastructure development in the energy/mineral resources sector. This applies to the following lines of business: (i) geothermal energy exploitation; (ii) power plants; (iii) electricity transmission; and (iv) temporary licenses for downstream oil-and-gas businesses. This service only applies to the issuance of licenses that come within the purview of the minister via the Investment Coordinating Board (BKPM), i.e. licenses for foreign direct investment ("FDI") in the energy and mineral resources sectors.
Business Size Classifications Redefined in Industrial SectorMinistry of Industry Regulation No. 64/M-IND/PER/7/2016, which came into force on 27 July 2016, redefines business size classifications in the industry sector as follows:
- Small industrial business - maximum of 19 employees and investment value of less than IDR 1 billion, excluding land and buildings;
- Medium industrial business - maximum of 19 employees and minimum investment value of IDR 1 billion, or maximum of 20 employees and maximum investment value of IDR 15 billion; and
- Large industrial business - minimum of 20 employees and investment value of greater than IDR 15 billion.
OJK Issues Circular to Clarify Capital Adequacy ReservesThe Financial Services Authority ("OJK") has issued Circular No. 26/SEOJK.03/2016 (on Mandatory Minimum Capital Reserves Based on Risk Profile and Compliance of Capital Equivalency Maintained Assets).
The Circular provides as follows:
- Commercial banks must comply with the mandatory minimum-capital allocation requirements based on their risk profiles, namely: (i) 8% of a bank’s risk-weighted assets ("RWA") for banks which have a level-1 risk profile; (ii) 9% of RWA for banks which have a level-2 risk profile; (iii) 10 - 11% of RWA for banks which have a level-3 risk profile; and (iv) 11 - 14% of RWA for banks which have a Level-4 risk profile.
- Banks must design and apply an internal capital adequacy assessment process ("ICAAP") comprising; (i) active monitoring of the bank's risk level, capital sufficiency and risk management by directors and commissioners (including policy preparation and strategies for the management of capital, ensuring the implementation of the bank's strategic plan, etc); (ii) assessment of captial-adequacy levels; and (iii) internal controls.
- Banks are required to submit reports on their compliance with the minimum capital-allocation requirement to the OJK every semester, along with the results of self-assessments of soundness levels.
OJK Clarifies Rules for Investment of Tax Amnesty Funds in Capital MarketsOJK Regulation No. 26/POJK.04/2016, which came into force on 25 July 2016, clarifies a number of aspects related to the investment in the capital markets of funds repatriated under the Tax Amnesty. The provisions of the Regulation may be summarized as follows:
- It sets out further details on the investment of repatriated funds in the capital markets under the tax-amnesty program, covering: (i) procedures for opening a securities account; (ii) management of investment funds by an investment manager; (iii) registration statements for public offerings of asset-backed securities; and (iv) sanctions for non-compliance (i.e. written warnings, fines, restrictions on business operations, suspension of business operations, cancellation of OJK approval or cancellation of registration).
- It mandates that taxpayers should present a Tax Amnesty Certificiate (Surat Keputusan Pengampunan Pajak) from the Minister of Finance to a financial-services provider when opening a securities account and when investing in any of the following financial instruments: (i) mutual fund; (ii) management of securities portfolio for individual customer; (iii) asset-backed securities in the form of collective-investment contracts; (iv) asset-backed securities in the form of participation letters; (v) real-estate investment funds in the form of collective-investment contracts; (vi) securities which are traded both internally and externally on the stock exchange.
New Rules and Procedures Issued for Investment of Repatriated Funds in Financial Market Instruments under Tax AmnestyMinistry of Finance Regulation No. 123/PMK.08/2016 (amending Minister of Finance Regulation No. 119/PMK.08/2016) sets out the requirements and procedures for the repatriation and investment of taxpayer funds in financial market instruments in the context of the tax amnesty. The Regulation, which entered into force on 8 August 2016, contains the following key provisions:
- Funds repatriated from foreign countries to Indonesia as part of the tax-amnesty program must be deposited in special accounts with one of the gateway banks designated by the Minister of Finance and must also be supported by evidence of participation in the amnesty from the relevant authorities.
- Introduces a new type of investment instrument for repatriated funds, namely, futures contracts traded on the Jakarta Futures Exchange.
- The investment of repatriated funds in bonds issued by state-owned companies and investment products issued by gateway banks must be made via special accounts that are managed by the Indonesian Central Securities Depository (Kustodian Sentral Efek Indonesia/KSEI).
New Rules and Procedures for Investment of Repatriated Funds in Non-Financial Market Instruments under Tax AmnestyThe Ministry of Finance has issued Regulation No. 122/PMK.08/2016 to provide for the procedures for the repatriation and investment of taxpayer funds in non-financial market instruments as part of the tax-amnesty program. The principal features of the new regulation, which entered into force on 8 August 2016, may be summarized as follows:
- Tax-amnesty participants may invest repatriated funds in, among other things, (i) infrastructure projects developed under public-private partnership schemes; (ii) equity investments in areas of the real sector that are prioritized by the government; and (iii) property (land and / or buildings), with the exception of government-subsidized property developments.
- Such investments must be made through a gateway bank.
Authorized Capital Requirement for Companies RelaxedUnder Government Regulation No. 29 of 2016, which came into effect on 14 July 2016, the amount of authorized capital required to establish a limited liability company is to be determined based solely on the agreement between the promoters of the company, with the exception of companies that are required to satisfy certain minimum authorized capital levels under the prevailing laws and regulations, such as venture-capital companies and banks.
Tobacco Companies to Display Graphic Health Warnings on Cigarette PacketsLaos has been finding it difficult to implement health and legal policies to reduce smoking in the country. To address this, several measures have been adopted by the Government. One such measure is to require tobacco companies (the "Companies") to display health warnings on cigarette packets that they produce and distribute to the market. Commencing in October this year, the Companies must include in cigarette packets information on the dangers of smoking. Moreover, all cigarette packs sold in the country must have 75% photographic health warnings ("PHWs") on both sides of the all cigarette packs.
To convey health warnings to people who cannot read, the Companies are also mandated to include graphic health warnings ("GWHs") on all cigarette packets. This will aid people who cannot read to understand the dangers of smoking.
In addition, the Ministry of Health (the "Ministry") will designate more smoke-free areas in the airports, bars and pubs, coffee shops, government offices, health venues, hotels, restaurants, religious sites, public transport, shopping malls, universities, and workplaces. The newly-designated smoke-free areas must display "No Smoking" signs within their premises.
According to the Ministry, up until recently, almost 40% of the Lao population smoked. However, recent surveys show that the percentage of people who smoke has dropped down to 29%. The decrease in the smoking population indicates that more Lao people are starting to understand the dangers of tobacco smoking. The Government considers tobacco control a top priority, given its significant effect in preventing non-communicable diseases and the promotion of health.
Modern Machinery, Technical Skills Needed to Enhance Competitiveness of Lao Wood Processing IndustryLaos is rich in forest resources, but it was observed that the country has lost more than it gained from timber exports in the past years. As it is, the country lacks modern machines and technical skills to improve the quality of its wood products.
To address this, the Okawa Chamber of Commerce and Industry of Japan signed an agreement with the Department of Industry and Handicrafts under the Ministry of Industry and Commerce in relation to a human development project for Lao wood processing. Pursuant to this agreement, Lao students and technical staff are sent to train in Japan so they will be able to enhance their skills and bring knowledge and lessons to use in Laos. The Okawa Chamber is coordinating with a local skills development centre to implement the project. Okawa city has many years of experience in producing wooden furniture and its technical team has been trained to teach workers in China, Vietnam and Thailand to produce better products before coming to teach students in Laos.
It is expected that the project will significantly boost the competitiveness of the Lao timber processing industry in line with other countries in the region.
Intellectual Property Case UpdatesIn Restoran Oversea Holdings Sdn Bhd v Overseas Seafood Restaurant Sdn Bhd, the plaintiff, owner of two registered trademarks and alleged that the defendant had been promoting its business (by the use of business cards and advertisement) using the defendant's business name which was identical to the plaintiff's two registered trademarks. The defendant's counterclaim for invalidation of the plaintiff's registered trademarks to which the plaintiff applied to strike out such counterclaim. The High Court allowed the plaintiff's striking out application and held that the defendant was not a "person aggrieved" by the entry of the trademarks owned by the plaintiff within Section 45 of the Trade Marks Act 1976. Thus, the defendant is without the legal standing to institute its counterclaim under the said provision. The High Court curiously based its decision on the finding that the defendant was not using a 'mark' but "simply a name – a business name" although Section 3(1) of the Trade Marks Act 1976 defines a 'mark' to include device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof.
Click here to read more about this case.
High Court Allows MyCC to Challenge CAT's Decision to Set Aside RM10 Million Fine Imposed on MAS and AirAsia BhdOn 25 July 2016, the High Court granted leave to the Malaysia Competition Commission’s ("MyCC") to challenge the decision by Competition Appeal Tribunal ("CAT") setting aside the landmark MyCC decision where Malaysian Airline System Berhad ("MAS") and AirAsia Berhad ("AirAsia") were fined RM10 million respectively for infringing the Competition Act 2010 in respect of market sharing. MyCC filed for a judicial review on the decision by CAT.
Employees’ Social Security (Amendment) Act 2016The amendments to the Employees Social Security Act 1969 in the Employees' Social Security (Amendment) Act 2016 have entered into force as of 1 June 2016. Prior to the amendments, only employees earning less than RM3,000.00 per month are required to contribute to Social Security Organisation ("SOCSO").
With the coming into force of the Employees' Social Security (Amendment) Act 2016, SOCSO contributions are now mandatory for all employees who are employed under a contract of service or apprenticeship in the private sector and contractual/temporary staff of federal/state government as well as federal/state statutory bodies regardless of their salary. Hence, all employers who are not yet registered with SOCSO but do have employees are required to register their business and employees with SOCSO irrespective of the actual wages of the employees unless such employees fall within the First Schedule of the Employees Social Security Act 1969. If the wages of an employee at any time exceeds RM4,000.00 per month, his wages will be deemed to be a monthly remuneration of RM4,000.00 for the purposes of computing the contribution.
Under the Employees Social Security Act 1969, contributions in respect of an employee shall comprise of contribution payable by the employer and contribution payable by the employee. This means that employers will face an increase in operating cost as employers will have to start making SOCSO contributions for all its employees.
State Economic PolicyThe Union Government released the State Economic Policy on 29 July 2016. The State Economic Policy aims to bring the continual development of the country in a manner which is people-centered and inclusive across all states and regions. Privatization of some state-owned economic enterprises, promoting SMEs, developing infrastructures including electrification facilities and ports to implementing an ID card system, the Digital Government Strategy and the e-Government System are captured in the State Economic Policy. The policy also aims to implement systematic practices for intellectual property rights and encourages the improvement and innovation of advanced technology, while it also states that separate policies will be drawn up which will promote the increase of foreign investment and the private sectors under a free-market system, and promote the rule of law as well as establish an effective and fair tax system.
Liberalizing Trading of Construction Material by Foreign Joint-Venture CompanySubsequent to Notification No. 11/2016 from the Ministry of Commerce ("MOC") which permits foreigner joint-venture companies to undertake trading, wholesaling and retail of 4 items, namely (i) fertilizer; (ii) insemination seeds; (iii) pesticides; and (iv) hospital equipment, the MOC further issued Notification No. 56/2016 dated 7 July 2016 which permits foreigner joint-venture companies1 to undertake trading, wholesaling and retail of construction materials following the same set of conditions and procedures imposed on local Myanmar companies.
1 Foreigner Joint-Venture Companies; Informal consultation was made to the MOC clarifying if the term Foreigner Joint-Venture ("FJV") is meant only to individual foreigner itself or Foreign Companies can be fallen under the term FJV, and if FJV Companies are meant to be joint-ventures only between the foreigners/foreign entities or the joint-ventures between Myanmar citizens (including Myanmar companies) and the foreigners/foreign entities. We understand from our consultation with MOC that Foreigner Joint-Venture means the joint-venturing between Myanmar Citizens/Companies and foreigners/foreign companies.
List of 48 Prioritized Laws to be EnactedThe Legal Affairs Commission issued a letter dated 5 September 2016 (Letter No. 03/PaHtaSa(KaMaYa-1)/2016-484) which sets out a list of 48 prioritized laws to be enacted in the near future. The list includes a new Trademark Law, Copyright Law, Anti-Dumping Law, Information and Technology Law, Myanma Privatization Law, Foreign Employment Law, and a Law on Protection for Bank Customers.
Insurance Market will be open to Foreign Players in 2017According to a news article from the 23 September 2016 issue of the Myanmar Times, U Thant Zin, an official in the Financial Regulatory Department of the Ministry of Finance and Planning, said that the government is going to speed up liberalization to the foreign players involving in the insurance business in Myanmar. He also said that current restrictions imposed on foreign insurance firms are intended to protect the local insurance companies before they are ready to compete with foreign players, and it is because the local firms may need time to develop their own products and pricing structures so that they are well-prepared before foreign firms enter the market.
Social Media Marketing Guidelines – Influencers to Disclose SponsorshipsThe Advertising Standards Authority of Singapore ("ASAS"), the self-regulatory watchdog of the advertising industry in Singapore, has published the new Guidelines on Interactive Marketing Communications & Social Media ("Guidelines"), which are aimed at setting ethical standards of conduct for digital marketing communications, with a focus on social media marketing. The Guidelines came into effect on 29 August 2016, and marketers and media owners were given until 29 September 2016 to comply. The Guidelines were released in response to the recent spate of controversies and public complaints that the ASAS had received in relation to misleading or inaccurate online marketing communications.
Click here to read our update on the key features of the Guidelines.
Suspicious Transaction Reports and the Indonesia Tax AmnestyRecent statements by the Monetary Authority of Singapore ("MAS") have cast the spotlight on the need for banks to file a Suspicious Transaction Report ("STR") in respect of clients who participate in the Indonesia tax amnesty programme. The Indonesian Tax Amnesty Bill was passed on 1 July 2016. Under the tax amnesty contemplated under Tax Law 11/2016, participating taxpayers would have their tax liabilities (including administrative and criminal sanctions) waived upon payment of a redemption charge, which would depend on the timeframe within which declaration is made, whether the declared assets are onshore or offshore and whether the offshore assets are repatriated to Indonesia.
A close reading of the applicable statutory provision suggests that the mere fact of participation in a tax amnesty programme may not in and of itself trigger an obligation to lodge an STR under section 39 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act ("CDSA").
Click here to read our update on this.
Employment Claims TribunalThe Employment Claims Bill was passed on 16 August 2016 and it provides for a new forum for the resolution of salary-related disputes between employers and employees – the Employment Claims Tribunal ("ECT"). The ECT will be available to professionals, managers and executives earning more than $4,500 a month, who form an increasing proportion of Singapore's workforce. Currently, this group of persons do not have recourse to a specialised employment disputes forum, and have to resort to the civil courts for their claims.
Click here to read our update on the key features of the ECT, its powers and its procedures.
Proposals on Activity-based Payments Framework and New National Payments CouncilOn 19 August 2016, Mr Ravi Menon, the Managing Director of the Monetary Authority of Singapore ("MAS") delivered a keynote address on "An Electronic Payments Society", setting out the roadmap for the future electronic payments roadmap in Singapore. This was followed by MAS issuing a consultation paper on 25 August 2016, setting out proposals for a new activity-based e-payments framework and the establishment of a National Payments Council to foster competition and collaboration in the payments industry. The consultation ends on 31 October 2016.
Click here to read our update on the proposals set out in the consultation paper.
Natural Justice in Arbitral AwardsThe vast majority of challenges to arbitral awards involve allegations of breach of natural justice, but few are actually successful. JVL Agro Industries Ltd v Agritrade International Pte Ltd provides a rare example of a case where an arbitral award was successfully set aside on this ground. This landmark case is the first reported decision in which the Singapore High Court has gone on to set aside an arbitral award after remitting the matter back to the arbitral tribunal.
Click here to read our update on the case.
Enhancements to Regulatory Requirements on Protection on Customer's Moneys and AssetsIn recent times, financial crises like the Lehman Brothers and MF Global insolvencies have brought the issue of protection of client assets to the forefront. As a result of these events, investors are now trying to better understand the potential implications of placing their assets with intermediaries. Regulators, such as the Monetary Authority of Singapore ("MAS"), are also looking for ways to address potential risks to client assets and how to transfer or return client assets in case of default, resolution or insolvency scenarios.
MAS has undertaken a review of the regulatory requirements governing the protection of customers' moneys and assets and is proposing to enhance those relating to the safeguarding, identification and use of customer's moneys and assets, and disclosures to customers and has come up with several proposals, which are contained in the Consultation Paper on Enhancements to Regulatory Requirements on Protection of Customer's Moneys and Assets that was published on 18 July 2016. The consultation period ended on 19 August 2016.
Click here to read our update on the proposed enhancements in the Consultation Paper.
Business Collateral Act Comes into EffectThe Business Collateral Act B.E. 2558 (2015) ("BCA") came into effect on 2 July 2016 and substantially added to the traditional and limited forms of security previously available under the Thai Civil and Commercial Code.
The key changes affect a number of areas, including what constitutes a valid security interest, retention of assets under security, non-court enforcement options, and the registration of security agreements.
Click here to read our client update.
Amendments to the Bankruptcy ActThe Bankruptcy Act has undergone recent amendments, focusing on improving the ability of SMEs and individuals to access rehabilitation proceedings provided for under the Bankruptcy Act. From 25 May 2016, the minimum debt has been reduced for natural persons, juristic bodies and partnerships, and private limited companies.
However, it should be noted that the rehabilitation process for these debtors will be different from the original rehabilitation process.
Click here to read our client update.
Process for Stay of Duty PaymentOn May 24, 2016, the Customs Department announced Customs Notification No. 67/2559 re: Rules on appeal against duty assessment, request for a stay of duty payment and detention of goods under customs custody.
The right to request for a stay of duty payment pending appeal consideration is generally provided under Section 112 of the Customs Act B.E. 2469 (1926); however, the process to request such a stay is unclear. This recently issued Notification sets out the process required to be followed in order to request for a stay of duty payment during appeal consideration by the Customs Department’s Board of Appeal or the Court.
Click here to read our client update.
Establishment of a Corruption CourtOn 16 August 2016, the Act to establish a Criminal Court for Corruption and Misconduct Cases was published in the Royal Gazette and became effective the following day. The Criminal Court for Corruption and Misconduct Cases will be a Court of First Instance and is intended to hear "Corruption and Misconduct Cases" against State Officials, as well as against other persons, whether as a principal, instigator, supporter or accomplice.
The establishment of a Corruption Court is expected to facilitate the trend towards greater enforcement of anti-corruption investigations and cases against officials and private parties who act as principals, instigators, supporters or accomplices.
Click here to read our client update.
Proposed Amendments to the Trade Competition ActA draft amendment to the Trade Competition Act B.E. 2542 (1999) ("TCA") will soon be presented to the Cabinet for consideration. The amendment would introduce broad changes to the TCA and is likely to trigger greater enforcement, a trend which we have seen developing over the past 18 months.
In addition to providing additional power and authority to the Office of Thai Trade Competition Commission, significant changes include extending the scope of the TCA to cover certain state enterprises and affiliated companies of business operators, specifying the criteria for triggering the application of the merger control provisions and amending the penalties for violating the substantive prohibitions in the TCA. Importantly, the proposed amendments also provide for the establishment of a leniency programme in cartel cases, in line with international trends.
Click here to read our client update.
New Decree No. 73/2016/ND-CP Guiding the Law on Insurance BusinessOn 1 July 2016, the Government passed Decree No. 73/2016/ND-CP to detail the implementation of the Law on Insurance Business. The new decree sets forth new conditions that apply to investors who wish to set up an insurance business in Vietnam. The Ministry of Finance is currently in the process of drafting circulars to implement this decree.
Decree No. 73/2016/ND-CP brings forth some changes in the conditions applicable to prospective investors, compared to the former law. With respect to financial conditions:
- The minimum capital required for an insurance company providing health insurance is now VND 300 billion (approx. US$13.5 million).
- The minimum financial requirements have become more stringent for institutional investors. Vietnamese investors must have minimum total assets of VND 2,000 billion (approx. US$90 million) and foreign investors must have a minimum total assets of US$ 2 billion.
Draft Resolution on Tax Changes for SMEsEarlier this year, the draft Law on SMEs was circulated for comments. The law regulates the contents, plans and programs designed to support SMEs in Vietnam. In July 2016, the Ministry of Finance published a draft resolution from the National Assembly setting forth a number of tax changes corresponding to the programs set out in the draft Law on SMEs.
Under the draft, a corporate income tax rate of 17% will apply to companies with revenue of less than VND 20 billion (approx. US$ 900,000) and start-ups for the period from 1 January 2017-31 December 2020. Furthermore, employees working in high-tech and the IT sector may have personal income tax reduced by up to 50%.
Law on Network Information SecurityOn 1 July 2016, the Law on Network Information Security came into effect. The Law aims to detail a number of prohibitions against compromises to network information, and regimes for maintaining security in this field. Currently, the law awaits further decrees to be passed by the Government for guidance and details on implementation.
The new law prohibits activities including phishing, spamming, unlawful disclosure of personal information, exploitation of bugs and spread of harmful software. Anti-spam regulations have also been promulgated, and now, commercial information may not be emailed to a recipient without his / her prior consent.
New Regulations on Public-Private Partnership (PPP)On 20 September 2016, Circular No. 06/2016/TT-BKHDT (the "Circular") came into effect. This circular, passed by the Ministry of Planning and Investment in June 2016, brings greater clarity to the uncertain Public-Private Partnership ("PPP") regime in Vietnam. From 2015, investors had struggled with the lack of details to Decree No. 15/2015/ND-CP, the primary legal basis on which PPP is implemented.
The Circular stipulates that projects that have been implemented by the State can now draw involvement from private corporations, through conversion into a PPP contract. Procedures for such involvement are set out in the Circular.
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.