More than 100 senior level representatives from commercial banks, microfinance institutions, insurers and payment processing companies gathered in the Financial Industry Competency Building and Knowledge Sharing workshop on the 22^nd of November 2017 to examine the challenges presented by the latest financial crimes and explore possible solutions. The workshop focused on money laundering, terrorism financing, cybercrimes and technological advancement to help companies comply with existing regulation. A managing director of a technology consulting firm said that “Cambodia’s financial sector has experienced remarkable growth in recent years, but warned that awareness of the banking system and the software and technology involved in the sector was still limited”.

Source: Khmer Times, November 23, 2017

According to the annual general assembly of Cambodia Microfinance Association’s decision, the Association agreed to reduce time it takes for collateral to be returned from 10-15 days to three working days after they have fulfilled their obligation. It is noted that in 2017 the MFI sector’s portfolio is recorded $4 billion, which is equal to 25.5 percent increase.  The high proportion of the loans were taken by agricultural sector.

Source: Khmer Times, 23^th February 2018

The draft law on the Chamber of Commerce is being reviewed by the Cambodia Chamber of Commerce. Once completed, the draft law will be sent to the Council of Minister for approval. It is noted that the new legislation will enable Cambodia to set up chambers of commerce in other countries and overseas investors to open branches in Cambodia. According to Mr. Lim Heng, vice president of the Cambodia Chamber of Commerce, the legislation will facilitate the private sector to obtain information on doing business in Cambodia. He added that Cambodia will set up offices in bigger countries with sizeable Cambodia population like Europe, United States and Canada. It is worth mentioning that currently Cambodia has commercial centres in Macaue, Nanning, Guangzhou and Beijing.

Source: Khmer Times, 01 February 2018

The system to authenticate electronic documents, which was approved by the sub-decree last year, will take at least another year before it is fully implemented. According to Mr. Ou Phannarith, the director of the department of ICT security at the Ministry of Post and Telecommunication, since there is no digital signature system in Cambodia, the origin of the documents are difficult to verify. He added that once the digital signature system is fully implemented, there is no need for in-person signature to verify the identity of the registrant in online platform such as taxation and business registration.

Source: The Phnom Penh Post, 31 January 2018

The Inland Revenue Authority of Singapore issued an announcement that the Double Taxation Agreement between Cambodia and Singapore, which was signed on 20^th of March last year, comes into effect on the 1^st of January 2018. The bilateral agreement aims to avoid double taxation as a result the application of tax laws in both countries and also lower the barriers to cross-border investment and boost bilateral trade. According to an expert, the agreement with Singapore has helped Cambodia gain invaluable experience in the negotiation of this type of treaties and it is a logical choice since Cambodia is a part of ASEAN and will integrate into the community. It is noted that on September last year, Cambodia also reached an agreement with Thailand.

Reference: Khmer Times, 08 January 2018

According to the announcement made on the 3^rd of January 2018, the National Bank of Cambodia (NBC) has decided to revoke license of 11 Rural Credit Institutions or Operators. The NBC states that the reason for such decision is that these Institutions did not comply with the existing laws and regulations, and it also requests relevant authorities to take measures as appropriate. According to Chea Serey , director general of the NBC, “the closure of these 11 operators won’t have any impact on the industry as their size is negligible.”

Source: NBC’s Announcement & the Phnom Penh Post, 04 January 2018

On the 5^th of December 2017, the National Bank of Cambodia (NBC) announced that Crypto Currency like BitCoin and related instruments are not permitted by the laws, and the NBC does not recognize it. Crypto Currency advertisement and operation will put public at risk since it can be used as means for money laundering, financial termism and black market.  The NBC prohibits all banks and financial institutions from performing any transactions related to Crypto Currency and other related instruments, which is not recognized by the NBC.

Source: Letter issued by the National Bank of Cambodia on December 5, 2017.

Ministry of Labor and Vocational Training has issued a Prakas on the registration of enterprise and employee in National Social Security Fund (NSSF) for all persons who are under the scope of the Labor Law of Cambodia. The Prakas aims at determining formality and procedure for registering enterprises, establishments and employees with Working Risk and Health Care Section of NSSF. It also obligates employers and owners of enterprise or establishment to register their entities with NSSF. Furthermore, employers and owners of enterprise or establishment have obligation to register employees with NSSF three days after the date of commencement of the work unless the employees have already possessed NSSF membership card. Non-compliance with this Prakas will result in penalty stipulated in Chapter five of Law on Social Security Fund.

Source: Prakas No. 448 on the Registration of Enterprises/Establishments and Employee in the National Social Security Fund (NSSF), dated the 10^th of November 2017.

Mr. Kong Vibol, director of the General Department of Taxation (GDT), announced at the tax seminar yesterday that GDT has officially launched e-payment platform that allows individual and corporate taxpayers to pay their obligations online, directly through bank account or at local tax department branch with less procedural steps. He said that the e-payment platform is currently only available for taxpayers that hold account with Vattanac, Acleda and Canadia banks. He added that GDT will launch a separate e-filling system early next year that would allow taxpayers to submit relevant documents online without the need of mailing them to tax authorities or submitting them in person. However, a taxpayer expressed her opinion that “many taxpayers will not be familiar with the technology, and this could prevent them from benefiting from system and it will take time before everything runs smoothly.”

Source: The Phnom Penh Post, 21 November 2017

On 15^th of November 2017, the Ministry of Economy and Finance (MEF) issued a Prakas to reduce withholding tax on interest from local microfinance institutions (MFIs) from 14 percent to 10 percent. The new Prakas aims at shrinking the expendable interest rates that MFIs take on loans from abroad to ensure the sustainability of microfinance sector. Also, the withholding tax rate reduction applies only on loans acquired abroad. It is known that the remaining 4 percent will be paid by the government.

Experts said that “This Prakas is clearly intended to provide benefits to the people by reducing the cost of microfinance loans and MFIs on which these savings will be passed on to clients to be ensured.” This reflects the fact that the government has understood the MFIs’ Operations burden and the timeline for the reduction which will finish by the end of 2018, another expert said. He added that this period of time will give the MEF enough room to amend the fiscal policy, especially if a new government is formed after next year’s election. 

Source: The Phnom Penh Post, 15 November 2017