On 30 April 2025, the Ministry of Economy and Finance and the Ministry of Commerce (“MOC”) issued an Inter-Ministerial Prakas aimed at preventing origin fraud and enhancing the transparent enforcement of the Laws on Rules of Origin for exports of certain goods to the U.S. market. This Prakas applies to all producers and exporters of specified goods originating in Cambodia and exported to the United States. It will come into effect on 12 May 2025.
Key Points
- Origin Certification Letter (“OCL”): Producers and exporters must obtain an OCL from the MOC in accordance with Prakas No. 047 dated 30 April 2025. This OCL must be attached to the Customs Declaration for exports to the United States. No public service fees are required for the OCL application.
- Information Exchange: The General Department of Customs and Excise (“GDCE”) and the General Directorate of Trade Support Services (“GDTSS”) will exchange relevant information and documents to ensure compliance with the rules of origin. The mechanisms for data exchange will be determined by an Inter-Ministerial Decision.
- Joint Investigations: In case of doubt regarding the origin of goods, or upon request by the importing country, the GDCE and GDTSS will conduct joint investigations and may seek cooperation from relevant institutions.
- Sanctions: Producers and exporters found committing origin frauds, including concealment of transshipment operations and misdeclaration, will be subject to penalties as stipulated in the Law on Rules of Origin and the Law on Customs.
DFDL views
The issuance of this Inter-Ministerial Prakas came after negotiations between Cambodia and the United States about a 49% tariff increase on Cambodian goods, which has been temporarily paused for 90 days. In addition, this was also primarily driven by concerns over trade dumping practices involving solar panels. The U.S. Department of Commerce determined that solar panels from Cambodia were being sold in the U.S. at less than fair value, a practice known as dumping, which can harm domestic industries by undercutting prices. This resulted in the U.S. imposing tariff of more than 3,500% on solar panels exported from Cambodia.
This Prakas is a significant regulatory measure to ensure the integrity of Cambodian exports to the United States by preventing origin frauds and promoting compliance with established rules of origin. It mandates strict documentation and cooperation between relevant governmental bodies to uphold these standards, thereby aiming to restore fair trade practices and maintain good trade relations with the United States. In addition, it strengthens the mechanisms for exports to the United States and clearly checks original sources to stop individuals or entities from mislabeling goods as “made in Cambodia” for export purposes.
Further bilateral discussions between representatives of the Royal Cambodian Government and their United States counterparts are scheduled to take place on 14-15 May 2025, in Washington DC. These talks will address the unilateral imposition of the 49% tariffs by the United States on imported Cambodian goods. It is expected that these discussions will cover reciprocal tariff rates and non-tariff barriers, particularly the issue of transshipment of Chinese goods to the United States via Cambodia.
Tax services required to be undertaken by a licensed tax agent in Cambodia are provided by Mekong Tax Services Co., Ltd, a member of DFDL and licensed as a Cambodian tax agent under license number – TA201701018
