2020 31 January

Cambodia Legal Update January 2020

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TOURISM

NEW REGULATIONS ON TOURISM LICENSES FOR TOUR OPERATORS AND TRAVEL AGENTS

On 9 July 2019, the Ministry of Tourism (“MOT”) issued new Parkas 113 on the Issuance of Tourism Licenses to Tour Operators, Travel Agents and their Branches (“Prakas 113”) for the purposes of strengthening effective management and enhancing the quality of tour operators and travel agents in the interests of promoting better services for local and international tourists.

Prakas 113 replaces the old Prakas 041 dated 18 January 2016 on the Issuance of Tourism Licenses for Tour Operators and Travel Agents (“Prakas 041“). Prakas 113 introduces noticeable changes such as a new category of travel agents referred to as “domestic travel agents” and new conditions on the use of tourism licenses.

Similar to Prakas 041, Prakas 113 lays out three types of “tour operators” including: (1) inbound tour operators (i.e. individuals or entities arranging package tours for visitors residing outside of Cambodia to tour within the country); (2) outbound tour operators (i.e. Cambodian individuals or entities arranging package tours for tourists residing in Cambodia to tour in other countries); and (3) domestic tour operators (i.e. Cambodian individuals or entities arranging package tours for tourists within the country).

Prakas 113 also addresses two other types of “travel agents” including: (1) travel agents (i.e. Cambodian individuals or entities commercially operating as sale assistants involved in the arrangement of travel tickets, tourist accommodation services, and other tourist services including package tours created by tour operators); and (2) domestic travel agents (i.e. Cambodian individuals or entities commercially operating as sales assistants involved in family tour services such as the arrangement of travel tickets, tourist accommodation services, and other services including package tours within Cambodia created by tour operators).

Domestic travel agents is a new concept introduced by Prakas 113. To obtain a domestic travel agent license, an applicant must meet the following criteria: (1) commercially operate in a determined zone or within the province or municipality where the applicant resides; (2) commercially operate as a small family business, which is not categorized as taxable under the self-assessment regime; (3) receive income not exceeding KHR 50 million and only have capital lower or equal to KHR 20 million; and (4) employ less than four personnel and have an office with floor space no larger than three square meters.

As noted in its definitions, the above tour operators and travel agents (except for inbound tour operators) are defined as having Cambodian nationality. To conduct their activities, tour operators and travel agents must obtain tourism licenses suitable for such activities from the MOT, the Provincial-Municipal Department of Tourism, Sub-national Administration or through the online platform recognized by the MOT. In the event that an individual or entity operates different types of tourism businesses on the same location, the operator must have the relevant license for each. Furthermore, for individuals or entities that only engage in one type of tourism business but with many branches, each branch must obtain a separate tourism license. We note that depending on the type of business, a deposit must also be lodged as part of the application process.

Prakas 113 further establishes obligations for tour operator and travel agent license holders, procedures to sale and transfer tourism license and close down tour operator and travel agent businesses and penalties for tour operators and travel agents who fail to hold valid tourism licenses or violate the code of professional conduct and code of ethics governing tour operators and travel agents.

Shortly after issuance of Prakas 113, the MOT issued Prakas 119 on the Procedure of the Administration of the Deposit for Tour Operator and Travel Agent on 17 July 2019 to emphasize that tour operators and travel agents must deposit guarantee at the Foreign Trade Bank of Cambodia or the bank which recognized by the MOT. The deposit can be withdrawn upon cessation of business operation subject to the MOT’s approval.

Shortly afterwards, the MOL issued Notification 488 on the Implementation of Prakas 113 on 12 December 2019 (“Notification 488”) to notify all relevant authorities, Provincial-Municipal Departments of Tourism, Association of the Tourism Industry and tourism operators (including those intending to conduct such activities) that they must comply with Prakas 113 and that the application submission procedures for new tourism licenses (or renewals) will be implemented from 1 January 2020 onward

In light of these recent developments, we foresee that the MOT will strengthen enforcement actions upon and demand greater compliance by tour operators and travel agents.

Should you have any concerns or queries on the matters mentioned above, please feel free to contact our Corporate and Commercial team at cambodia@dfdl.com.

LABOUR   

LAW ON AMENDMENT OF ARTICLES 3, 17, 20, 21, 27, 28, 29, 54, 55, AND 59 OF THE LAW ON TRADE UNIONS dated 17 May 2016, dated 3 January 2020 (“AMENDED LAW”)

The Amended Law introduces a number of changes to the Law on Trade Unions dated 17 June 2016 (“Law on Trade Unions”), the most notable of which are set out below:

Firstly, it imposes additional requirements for unions’ or employer associations’ annual financial reports, financial records and annual activity reports. The annual financial reports, financial records and annual activity reports must be audited by an independent auditing institution legally registered in Cambodia upon request from: (1) 10% of the total membership or any donor of a union at the enterprise or employer association; and (2) 5% of the total membership or any donor for a union federation, union confederation or an employer federation.

Secondly, it removes certain requirements of persons who are leaders and those responsible for the administration of a union or employer association. Union leaders and those responsible for the administration of a union who are Cambodian nationals do not have to make a declaration of having minimal ability to read and write Khmer and do not have to make a criminal record declaration. The requirement of a foreign national being a union leader or administering a union to make a criminal record declaration has also been removed. The Amended Law also repeals this criminal record declaration requirement for Cambodian nationals who are leaders and those responsible for the administration of employer associations and foreign nationals who are eligible to be elected for these roles.  

Thirdly, in the event of a complete closure of an enterprise or establishment, a union or an employer association will be deemed automatically dissolved once the employees’ wages and other benefits have been fully paid off. Additionally, the Amended Law removes the grounds to dissolve a union or employer association in the event of a competent court finding leaders and/or those responsible for the administration of a union or an employer association guilty of a serious offense.

Fourthly, it amends one of the document requirements for a union to obtain most representative status (“MRS”). The Law on Trade Unions requires that a union has an accurate list representing most (i.e. at least 30%) of the total number of an enterprise’s or establishment’s employees, each of whom holds an appropriate membership identification card. However, the Amended Law requires that the union has a list of most members (i.e. at least 30%) who have paid up their union contribution fees.

Finally, the Amended Law confers rights on minority unions in an enterprise or establishment to act as representatives of its members in resolving collective labour disputes which do not arise from implementation of collective bargaining agreements.  Such rights were not available under the Law on Trade Unions.

Should you have any concerns or queries on the matters mentioned above, please feel free to contact our Labour team at labor.kh@dfdl.com.


The information provided here 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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