Your Snapshot of Key Legal Developments in Asia
Issue 2 - Apr/May/Jun 2015
- Royal Kram No. NS/RKM/0515/004, dated 18 May 2015, on the Control of Tobacco Products
- Decision No. 20 SSR, dated 20 March 2015, on the Determination of Sand Business Operation
- Guideline No. 01 MoJ.G/15, dated 29 May 2015, on Sustainability, Efficiency and Harmony of Administrative Unit of the Trial Chamber
- License Record in International Register Has No Effect in Cambodia
- Code of Conduct, dated 6 May 2015, of the National Commercial Arbitration Centre
- New Regulation Issued to Boost Public-Private Partnerships
- Bank Indonesia Clarifies Rupiah-Use Requirements
- Ministry of Finance Issues Regulations on Limited Tax Amnesty
- KPPU Finds "Bancassurance" Tying Arrangement Unlawful
- ACRA Announces Phased Implementation of Companies Act Amendments
- Recording Arbitration Agreements in Writing
- Consultation Exercise on Sustainability Reporting
Royal Kram No. NS/RKM/0515/004, dated 18 May 2015, on the Control of Tobacco ProductsThe objective of this Law is to protect the public health and to reduce the bad effects on health, economy, society and environment caused by tobacco products. The goals of this Law are to: (i) measure the management of tobacco products; (ii) educate the public about the negative effects caused by tobacco; and (iii) cooperate with all the relevant entities to promote knowledge regarding tobacco and reduce tobacco consumption. The Government’s mission is to establish a committee to control tobacco products, and this committee will be led by the Minister of the Ministry of Health.
Decision No. 20 SSR, dated 20 March 2015, on the Determination of Sand Business OperationThis Decision confers the right to the newly-created Ministry of Mines and Energy ("Ministry") to issue licenses, as well as assume liabilities on all forms of sand business, from the date where the application is filed to when the license is issued. Based on Article 2 of the Decision, a "provisional license" is absolutely prohibited from being issued by the Ministry. The Ministry is the competent authority conferred with the powers to receive recommendations on all technical standards from the sand resources management committee, as well as other relevant government entities.
Guideline No. 01 MoJ.G/15, dated 29 May 2015, on Sustainability, Efficiency and Harmony of Administrative Unit of the Trial ChamberBased on this Guideline, a new administrative unit shall be created in the Court, in accordance with the Law of the Organization of the Court. After the appointment of the Head of the Administrative Department, the position of the Head of the Clerks shall be removed, and all the relevant administrative work shall be transferred to the Administrative Department of the Court.
Any court clerks appointed to do administrative work for the Administrative Department of the Court shall not be involved in any court proceedings. Judges or prosecutors shall not be involved in the administrative work. Administrative officers, clerks, bailiffs, contracted officers and casual employees shall be under the Administrative Department of the Court.
License Record in International Register Has No Effect in CambodiaThe Royal Government of the Kingdom of Cambodia ("RGC") has notified the Director General of WIPO that the recording of licenses in the International Register shall have no effect in Cambodia. The RGC's notification is based on Rule 20bis(6)(b) of the Common Regulations under the Madrid Protocol.
We previously issued an Update on this. To access the Update, click here.
Code of Conduct, dated 6 May 2015, of the National Commercial Arbitration CentreOn 6 May 2015, Cambodia's National Commercial Arbitration Centre adopted its Code of Conduct ("Code of Conduct"), aiming to ensure the impartiality, independence and efficiency of the arbitral tribunal. The Code of Conduct sets out exhaustive list of common ethical obligations that all arbitrators must abide by. These obligations include appointment (in which the arbitrator is restricted from making a request for appointment), conflict of interest, withdrawal and resignation, disclosure obligations, communication, confidentiality, diligence and duty of care, fees and other common ethical obligations. These obligations are very much parallel with the established ethical obligations of other arbitral tribunals in the international community.
For more details, please access our Update here.
China Drafts the First Legislation to Strengthen Regulation of Overseas NGOsThe Standing Committee of the National People's Congress (the "NPC") of the People's Republic of China ("PRC") released the Second draft of Law on Administration of Overseas Non-Governmental Organisations ("NGOs") (境外非政府组织管理法(草案二次审议稿)) (the "Draft NGO Law") for public comments from 5 May 2015 till 4 June 2015. If passed, this law will become the first PRC legislation in relation to regulating overseas NGOs in the PRC.
The Draft NGO Law is intended to apply to overseas NGOs when they are carrying out activities in the PRC. According to the Draft NGO Law, overseas NGOs refer to non-profit, non-governmental social organisations which have been established outside of the territory of the PRC. Due to the broad and vague definition of "overseas NGOs" and lack of official clarification at this stage, it can include universities, international professional associations and interest groups, artistic groups and athletic associations in addition to what we view as traditional NGOs.
The Draft NGO Law does not have a definition on what constitutes carrying out "activities", but it provides that overseas NGOs may lawfully carry out activities favourable for the development of the public welfare in the areas of economy, education, technology, health, culture, sports, environmental protection and charity etc. There are also some principles which overseas NGOs must obey when carrying out activities in the PRC, including:
(a) the overseas NGOs shall abide by PRC laws;
(b) the overseas NGOs shall not endanger the national unity, security or ethnic solidarity;
(c) the overseas NGOs shall not harm the national interests of PRC, the public interests or the lawful rights and interests of other organisations and citizens;
(d) the overseas NGOs shall not violate the public order and fine custom; and
(e) the overseas NGOs shall not engage in or fund profit-making activities or political activities, or illegally engage in or fund religious activities.
Pursuant to the Draft NGO Law, if overseas NGOs want to carry out activities in the PRC, they shall either establish representative offices in the PRC or secure temporary activity permits (临时活动许可) in advance if no representative offices have been registered.
Overseas NGOs that intend to establish representative offices in the PRC need to first obtain an approval from the competent business supervisory authority under the State Council or provincial people's government or organisations authorized by the State Council or provincial people's government ("Business Supervisory Authority", 业务主管单位). Furthermore, overseas NGOs are required to apply with the PRC Ministry of Public Security or provincial public security bureau ("Registration Administration", 登记管理机关) for registration within thirty (30) days after obtaining such prior approval. In addition, unless special approval is obtained, an overseas NGO is only allowed to establish one (1) representative office in China, whose initial approved operation term should not exceed five (5) years.
Overseas NGOs which have not set up a representative office in the PRC but wish to conduct temporary activities in the PRC must cooperate with governmental authorities, people's organisations, public institutions, and social organisations located inside the PRC (the "Chinese Cooperating Entities", 中方合作单位). Also, such overseas NGOs must use their Chinese Cooperating Entity's bank account to run temporary activities in the PRC.
Apart from the above-mentioned regulations, the Draft NGO Law also controls over overseas NGOs' activities in the PRC with respect to their operational and financial affairs.
It has not been announced when this Draft NGO Law will be passed and whether it will be passed in its current form. However, we anticipate that it would have a profound impact on overseas NGOs in the PRC if it were in fact passed in its current form.
New Regulation Issued to Boost Public-Private Partnerships
New rules governing the establishment and operation of Public-Private Partnerships ("PPP") have been put in place by the recently issued Presidential Regulation No. 38 of 2015, which focuses on collaboration between the governmental and private sectors for the procurement of essential infrastructure. The new regulation repeals the previous PPP regime established by Presidential Regulation No. 67 of 2005, as subsequently amended.
Please click here to refer to our Firm's update on this subject.
Bank Indonesia Clarifies Rupiah-Use RequirementsIndonesia's central bank, Bank Indonesia, recently issued a circular (the "Circular") to further explain the scope and ambit of its Regulation No. 17/3/PBI/2015 on the obligation to use rupiah in payment transactions conducted within the territory of Indonesia. While most of the contents of the circular (which came into effect on 1 June 2015) merely reiterate the provisions of the regulation, it does contain some additional useful information, including those pertaining to dual price quotations, strategic infrastructure projects and non-cash transactions by parties with special characteriscitcs.
Please click here to refer to our Firm's update on this subject. We previously issued a related Update when Bank Indonesia issued Regulation No. 17/3/PBI/2015 on 31 March 2015. Please click here to view the full update.
Ministry of Finance Issues Regulations on Limited Tax Amnesty
To help achieve the Government's 2015 tax revenue target of Rp 1,489.3 trillion (up Rp 342.5 trillion from actual tax receipts in 2014), the Ministry of Finance ("MOF") has announced a limited tax amnesty (commonly referred to in Indonesia as a "sunset policy"). To support the implementation of the limited amnesty, the MOF recently issued two new regulations that detail its scope, and the requirements and procedures for its application.
The key provisions of the two new regulations are discussed in more detail in our Update which can be accessed here.
KPPU Finds "Bancassurance" Tying Arrangement Unlawful
In a recent decision, the Indonesia Competition Commission ("KPPU") found that a tying arrangement between one of the country's best known mortgage lenders and two insurance companies violated Indonesia's fair competition regime. The KPPU accordingly annulled the agreements and imposed fines totalling Rp 57 billion (US$ 4,397,983) on the three companies involved.
For further information, please refer to the Firm's update here.
New Anti-Money Laundering Law
The Law on Anti-Money Laundering and Combatting the Financing of Terrorism ("Anti-Money Laundering Law") came into operation on 24 February 2015. The Anti-Money Laundering Law applies to all local and foreign individuals and legal entities / organisations undertaking business within and outside the Lao PDR. They are mandated to put in place measures to combat money laundering and terrorism financing. The law imposes certain specific obligations on "reporting units", which can either be "financial sector institutions" or "non-financial sector institutions". These obligations include adopting an anti-money laundering and terrorism financing policy, conducting customer identification before transacting business, record-keeping, and reporting transactions which exceed certain thresholds as well as those which are suspected to be connected to money laundering or terrorism financing within a prescribed period.
Commercial banks, micro-finance institutions, loan and credit providers, pawnshops and securities companies belong to the category of "financial sector institutions". "Non-financial sector institutions" include firms that settle financial instruments, commercial real estate representatives, dealers in antiques or precious metals, law firms, auditors and casino operators.
Minimum Wage in MalaysiaFollowing consultation with the National Wages Consultative Council ("NWCC"), the Malaysian Ministry of Human Resources (the "Ministry") implemented the Minimum Wages Order 2012 ("2012 Order") pursuant to section 23 of the National Wages Consultative Council Act 2011 (the "2011 Act"). The Order became effective on 1 January 2013. The Order applies across the board, covering both local and foreign employees, with the singular exclusion of those who are classified as domestic servants under the Employment Act 1955. The minimum wage for employees in Peninsular Malaysia is set at RM900/- per month whilst employees in East Malaysia are entitled to RM800/- per month.
Under the 2011 Act, the Ministry is obliged to carry out a review of the national minimum wages at least once every two years to ensure that the minimum wage rates are in line with Malaysia's economic conditions as well as inflation rate. Concurrently, the Ministry is also set to publish a national wages index as part of the Malaysian Government's 11th Malaysian Plan once collection of all the pertinent data is concluded. The national wages index aims to serve as a guide or benchmark for employers to set a fair and transparent wage levels for employees based on the category of work, qualifications, skills and productivity. The Ministry has stated that it intends to take into account various factors such as employee qualifications, job category and industry in order to accurately furnish a national wages index that is practical, realistic and coherent. Whilst the implementation of the national minimum wages is widely welcomed by lower-income employees, employers, especially small-medium enterprises argue that they are now required to incur higher costs in their businesses, which will indirectly result in an increase of prices in products and services. The debates between the employers and employees are only expected to get more heated as trade unions are now pushing for higher minimum wages (in light of the reduced purchasing power due to the implementation of the Goods and Services Tax in April 2015) in the upcoming review of the national minimum wages by the Ministry.
Competition Law in Myanmar - A Work-in-ProgressIn line with the ASEAN Economic Community Blueprint, Myanmar enacted its competition law on 24 February 2015 (Pyidaungsu Hluttlaw Law No. 9/2015). The law will come into force on a date to be determined by the President of Myanmar. Not unlike other jurisdictions, Myanmar's competition law addresses: (i) anti-competitive agreements; (ii) abuse of dominance; and (iii) merger control. In addition, the law also prohibits unfair trade practices as well as certain specified practices that lead to monopolisation of markets (e.g. limiting the availability of a good or service with the aim of controlling prices). In other words, it pursues both competition and consumer protection policy objectives.
While Myanmar's competition law provides a basic framework for regulating restrictive practices and conduct in Myanmar, a number of gaps and uncertainties under the law remains to be addressed. For example, it is unclear whether the new law is intended to have extraterritorial effect against foreign businesses if their anti-competitive behaviour outside of Myanmar has an effect within Myanmar. This is typically known as the "effects doctrine" and is widely adopted by a number of other jurisdictions. Another notable absence is an explanation on what constitutes abuse of dominance. It is conceivable that this would be elaborated in the implementing regulations or guidelines issued by the competition authority. Similarly, in respect of merger control, the thresholds are not set out in the law. Given the nascent state of development of competition law in Myanmar at this juncture, current and prospective investors in Myanmar would be well-advised to monitor the developments in this area as the law develops.
ACRA Announces Phased Implementation of Companies Act Amendments
The Accounting and Corporate Regulatory Authority of Singapore ("ACRA") has announced that the legislative amendments to the Companies Act ("CA") will be implemented in two phases. ACRA had previously indicated that all the amendments would come into effect in the second quarter of 2015.
The first phase of implementation on 1 July 2015 will see about 40% of the over 200 amendments take effect. The rest of the amendments are expected to come into effect in the second phase, in the first quarter of 2016.
Click here to read more details about the implementation.
Recording Arbitration Agreements in Writing
It is commonly understood that an arbitration agreement has certain formalities, such as the requirement of being in writing. However, recent amendments have extended what it means for an arbitration agreement to be 'in writing'. The scope of this provision was examined in the recent case of AQZ v ARA  SGHC 49.
Please click here to read more about this case.
Consultation Exercise on Sustainability Reporting
The Singapore Exchange ("SGX") has begun a consultation exercise on "comply or explain" sustainability reporting with its listed companies. Results of this exercise will be used to develop a new listing rule and to revise the existing Guide to Sustainability Reporting for Listed Companies ("Guide").
The consultation exercise began in May 2015 with a survey of listed companies and a series of focus group engagements. Subsequently, SGX will reach out to institutional investors and sustainability professionals. Finally, SGX will seek the views of all stakeholders via a public consultation on the proposed Listing Rule and reviewed Guide.
The survey for listed companies will be available on the SGX website by the end of this week. It is anticipated that the proposed Listing Rule and reviewed Guide will be submitted for regulatory approvals by end 2015, with implementation targeted for FY2017.
Watch this space for more updates in the next edition