CORPORATE & COMMERCIAL
PERMIT REQUIREMENT FOR VEHICLES USED IN IN-COUNTRY LAND TRANSPORT BUSINESS IN CAMBODIA
Prakas 343 of the Ministry of Public Works and Transport (“MPWT”), dated 6 October 2017.
Parkas 343 aims to regulate vehicles engaging in land transport business and the land transport of goods and passengers in Cambodia (“Land Transport Business Activities”), except for state-owned public transport vehicles.
Under this Prakas, any vehicle and trailer used for Land Transport Business Activities must be issued with an in-country land transport business permit (“Permit”). It is important that the Permit must be kept in the vehicle at all times while the vehicle is on the road. Nonetheless, if a vehicle is part of a transport service agent providing shared vehicles, the Permit is not required for such a vehicle. It is not entirely clear from the Prakas what a transport service agent providing shared vehicles is referred to.
The Permit is valid for one year from the issuance date. The application for an in-country land transport business permit for vehicle must be filed, via the MPWT’s online system, with the General Department of Land Transport (“GDLT”).
LICENSING REQUIREMENTS FOR LEGAL PERSONS CONDUCTING IN-COUNTRY LAND TRANSPORT BUSINESS IN CAMBODIA
Prakas 344 of the MPWT, dated 6 October 2017.
Prakas 344 aims to regulate companies conducting land transport business activities in Cambodia, including goods or passengers transport companies, agents providing transport services and car rental services in Cambodia.
Under this Prakas, goods or passengers transport companies, agents providing transport services and car rental services in Cambodia, must obtain a certificate of registration and a domestic transport operation license from the MPWT. A company holding a domestic transport operation license that wishes to open any branch in Cambodia must also obtain a separate domestic transport operation license for its branch.
A domestic transport operation license is valid for two years while the certificate of registration of domestic transport operation is permanently valid. The application for the above mentioned licenses must be filed, via the MPWT’s online system, with the GDLT.
Importantly, a company cannot apply for an in-country land transport business permit for vehicle if the company does not hold a valid domestic transport operation license.
PROMULGATION OF THE LAW ON RATIFICATION OF THE AGREEMENT BETWEEN THE ROYAL GOVERNMENT OF THE KINGDOM OF CAMBODIA AND THE EUROPEAN PATENT ORGANISATION ON VALIDATION OF EUROPEAN PATENTS
Royal Kram № NS/RKM/1117/017, dated 22 November 2017.
Cambodia promulgated Royal Kram Nº NS/RKM/1117/017 to ratify the Agreement on Validation of European Patents between the Government of the Kingdom of Cambodia and the European Patent Organisation (“EPO”) (“Validation Agreement”) on 22 November 2017. The Validation Agreement was signed on 23 January 2017 and came into force on 1 March 2018. The Validation Agreement is valid for five years and will be extended for a further five-year period unless a contracting party objects to this in writing no later than six months prior to the end of the five-year period. From 1 March 2018, a European patent application and a European patent can be validated in Cambodia. The validation of a European patent application and a European patent in Cambodia occurs at the applicant’s request. The request for validation of any European patent application must be filed on or after 1 March 2018. That is, patents filed before 1 March 2018 are not entitled to the same conditions.
The procedures for validation include filing a request for validation and paying a fee to the EPO. The validation fee must be paid to the EPO within six months following the date of publication of the validation in the European Patent Bulletin of the publication of the European search report, or, where applicable, within the period for performing acts required for entry into the European phase of an international application. Within two months after this period expires, the validation fee may still be validly paid provided that a 50% surcharge is paid within this additional period. Validation fees paid cannot be refunded. The request for validation may be withdrawn at any time. Particularly, it will be deemed withdrawn where the prescribed validation fee has not been paid in time or where the European patent application has been finally refused, withdrawn, or deemed withdrawn.
After validation, the European patent will have the same effect and be subject to the same conditions as a national patent application and a national patent under the Law of Cambodia on the Patents, Utility Model Certificates and Industrial Designs. Furthermore, within three months of the date on which the grant of the European patent has been published, the owner of the patent needs to furnish to the Ministry of Industry and Handicraft the Khmer and English translation of a granted European patent, and pay the prescribed fee for publication. Annual fees for a validated European patent must also be paid to the Ministry of Industry and Handicraft for the years following the year in which the grant of the European patent was published.
BANKING & FINANCE
DETERMINATION OF CAPITAL BUFFERS FOR BANKING AND FINANCIAL INSTITUTIONS
Prakas No. B7-018-068 Pror-Kor dated 22 February 2018.
This Prakas is to determine the capital buffer including Capital Conservation and Countercyclical Capital in order to strengthen the durability of banking and financial institutions (“Institutions”).The objectives of this Prakas are to strengthen the capital base for any losses, prevent capital decreases below minimum capital levels, and to reduce risks emanating from the relationship between the financial sector and economic cycle (Pro-cyclicality).
According to this Prakas, Institutions are required to have a Capital Conservation Buffer in place in order to ensure that these Institutions can resist capital decreases when there are any losses. When the Capital Conservation Buffer partly or wholly decreases, the Institutions must replenish this as soon as possible. In the event that Institutions are unable to do so immediately, the Institutions must submit a “Capital Management Plan” to the National Bank of Cambodia (“NBC”) explaining the method and the date on which the Institutions expect to restore the Capital Conservation Buffer.
The Capital Conservation Buffer shall be increased in a high quality Tier 1 Capital, namely registered capital and/or a non-distributable reserve.
The Institutions shall maintain the Capital Conservation Buffer to supplement the Minimum Tier 1 Capital Requirement (MCR1). The Capital Conservation Buffer shall equal 2.5% of the total risk-weighted assets unless otherwise determined by the NBC. Therefore, the aggregate sum of the Tier 1 Capital Ratio (7.5%) and the Capital Conservation Buffer Requirement (2.5%) shall constitute no less than 10% of the total risk-weighted assets.
In the event that Institutions have a Tier 1 Capital Ratio exceeding the Minimum Requirement (MCR1=7.5%), the Institutions may use the excess level of Tier 1 Capital to fulfil the Minimum Total Capital Ratio (MCRt=15%). However, it cannot be used as part of the calculation for the Institutions’ Capital Conservation Buffer. The report template and explanation for the calculation of the Capital Buffer for the Institutions are attached in Annexes 1 and 2 of this Prakas.
Any forms of distribution that may affect Tier 1 capital, such as those for dividends, share buy-backs, and the payment of staff bonuses are prohibited.
According to this Prakas, the Countercyclical Capital Buffer is set to be added to the Conservation Capital Buffer. It is designed to ensure that Institutions have sufficient capital to absorb losses when the NBC records excessive levels of credit which could possibly lead to systemic risks. The NBC may set the Countercyclical Capital Buffer from 0% to 2.5% of total risk-weighted assets. Accordingly, the NBC will issue a separate instructional circular in order to set or adjust the Countercyclical Capital Buffer.
This Prakas requires Institutions to implement the provisions related to Capital Conservation Buffer, at least 50% of capital buffer to be added before 1 January 2019 and fully implement before 1 January 2020. For Countercyclical Capital Buffer, the Institutions shall implement the provisions related to it in a separate instructional circular.
Enforcement of the Prakas on the Determination of Capital Buffers for Banking and Financial Institutions, Circular No. B7-018-001 Sor-Kor-Nor dated 7 March 2018.
Based on the Law on Banking and Financial Institutions dated 18 November 1999, and Prakas No. B7-018-068 Pror-Kor on the Determination of Capital Buffers for Banking and Financial Institutions dated 22 February 2018 and in light of strong financial conditions and credit growth in line with the economic context with regard to Cambodia’s current banking system, the National Bank of Cambodia has set the Countercyclical Capital Buffer Ratio at 0% pending further notice.
The information provided is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situation.
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