Cambodia: Monthly Legal Update

New Promulgated Law and Subsequent Regulations on Health, Administrative and Other Measures during Covid-19 Outbreak

In response to the recent community outbreak of Covid-19 on 20 February 2021, the Royal Government of Cambodia (“RGC”) promulgated and issued a number of regulations, specifically:

Law on Preventative Measures against the Spread of Covid-19 and other Highly Contagious Diseases dated 11 March 2021 (“Preventative Measures Law”);
Sub-Decree 37 dated 12 March 2021 on Health Measures to Prevent the Spread of Covid-19 and Other Contagious Diseases (“Sub-Decree 37”); and
Prakas 081 issued by the Ministry of Health dated 22 March 2021 on Mask Wearing and Social Distancing Obligations during Community Outbreak of Covid-19 (“Prakas 081”).

The Preventative Measures Law is aimed at safeguarding public health and order as well as mitigating against the impacts from the spread of contagious diseases to Cambodian society and its economy. It sets out health, administrative and other measures to combat and prevent the further spread of Covid-19 and other severe and contagious diseases.

Under this Law, health measures may be imposed by the RGC includes, but not limited to, personal hygiene, mask wearing, social distancing, Covid-19 sample collection, quarantine, isolation for treatment, Covid-19 vaccination, health declarations and other health measures necessary to respond to and prevent the spread of Covid-19.

Following the promulgation of the Law, the RGC issued Sub-Decree 37 which provides that health measures include:

Personal hygiene standards and temperature checks;
Mask wearing;
Social distancing;
Covid-19 sample collection and testing;
Quarantine;
Isolation for treatment;
Covid-19 vaccination;
Health declarations; and
Managing corpses of Covid-19 infectees.

Sub-Decree 37 prescribes detailed obligations that must be followed in relation to the above health measures by both individuals and enterprises.

In particular, with respect to enterprises, employers must comply with the following measures:

ensure that proper cleaning and disinfection procedures are in place, conduct temperature checks on all employee, impose mask wearing and social distancing measures;
inspect and guide employees and other individuals who enter the workplace to follow health measures including personal hygiene measures for disinfection, temperature checks and mask wearing;
not allow any person who fails to comply with personal hygiene measures or has a body temperature above 37.5 or who does not wear a mask to enter or stay inside the workplace; and
arrange the workplace in order to ensure that employees or customers maintain social distancing (i.e. 1.5 meters apart) when present in the workplace. The enterprise/establishment is not allowed to have excessive numbers of visitors present on its premises where social distancing measures cannot be adequately implemented.

In supplementing Sub-Decree 37, Prakas 081 sets out the types of individuals who are obliged to wear a mask, places where mask wearing is required and social distancing requirements. Under Prakas 081, individuals who are required to wear a mask include, among others, direct service providers, such as employees working in enterprises and other businesses. Clauses 7 and 8 of Prakas 081 reiterates the obligation of an enterprise to ensure that mask wearing and social distancing in their premises are properly enforced.

The failure to follow health measures, including mask wearing and social distancing measures, may subject employers to warnings issued by competent authorities or health officials. In the event that any such failure continues, a transitional fine of KHR 2 to 10 million (approximately USD 500 to 2,500) may be imposed for each instance of non-compliance. The competent authorities may also impose other penalties, including suspension or revocation of the business license, certificate, permit, or order closure of the business.

EMPLOYMENT AND PENSION

Sub-Decree 32 dated 4 March 2021 on the Social Security Scheme on the Pension Fund for Persons under the Scope of the Labour Law (“Sub-Decree 32”)

Sub-Decree 32 aims to implement the pension scheme and determine (among others) the mechanisms, conditions and procedures on registration, contributions and benefits under the pension scheme.

Under the current social security scheme, an enterprise employing one or more employees is required to register itself and all of its employees with the National Social Security Fund (“NSSF”) within 30 days after the date of its opening. The NSSF scheme currently covers three pillars: (1) occupational risk insurance (work‐related accidents and occupational diseases); (2) health care insurance; and (3) pension scheme. The NSSF implemented the occupational risk insurance scheme in 2008, followed by the implementation of health care insurance from 2016 onwards. In 2019, the new Law on the Social Security Scheme was promulgated, although implementation of the pension scheme has since remained pending.

Under Sub-Decree 32, an employer with one or more employees must register for the pension scheme with the NSSF within 30 days of the effective date of Sub-Decree 32 unless the employer has already registered with the NSSF for health care and occupational risk insurance. Sub-Decree 32 further stipulates that employers must register their employees within three days of them commencing employment if yet to be registered in the NSSF. The pension fund shall be under the sole management and supervision of the NSSF.

There are two main components of the pension scheme: (1) compulsory pension scheme; and (2) voluntary pension scheme. The rates of contribution are as follows:

1^st Phase: for the first five years, the contribution rate is 4% of contributable wages (i.e. wages before tax deductions to be used for the purpose of calculating contributions);
2^nd Phase: for the five years after the 1^st phase, contribution rate is 8% of contributable wages; and
3^rd Phase: after the second phase, contributions will increase by 2.75% of contributable wages for the next ten year period and by a further 2.75% in the subsequent ten year period.

During the first phase, contributions to the compulsory pension scheme are to be made jointly by both employers and employees at a rate of 2% each. The amount of contributable wages is to be further determined by a separate forthcoming sub-decree.

Employers are obliged to remit their contributions and those of their employees to the NSSF by the 15^th of the following month and the monthly report on the number of employees must be submitted to the NSSF before the 20^th of the same month. The employer may also request payment of these contributions on an annual basis to the NSSF.

Under the compulsory pension scheme, employees are entitled to the following benefits subject to the conditions below:

No.	Pension	Summary of Conditions for Eligibility
1	Old-age pension	Be registered under the pension scheme Be at least 60 years’ of age Have made contributions to the pension fund for at least 12 months
2	Disability pension	Be registered under the pension scheme Have made contributions to the pension fund for at least 60 months prior to becoming disabled
3	Survivor’s pension	Death of a person eligible to an old-age or disability pension or a member of the NSSF who made contributions to the pension fund for at least 60 months
4	Funeral allowance	Death of a person who is eligible for an old-age or disability pension

NSSF members may also request participation in the voluntary pension scheme upon meeting any of the following criteria:

being under 60 years’ of age and un-employed though still able to continue making contribution payments;
being at least 60 years’ of age and intending to continue making contribution payments in order to receive higher old age pension benefits than those provided under the mandatory regime; or
having income higher than the wage ceiling used to calculate contribution caps, which will be determined by a separate sub-decree.

The contributions to the voluntary pension scheme are at the sole responsibility of the individual applicant, but the rate of contribution must be at least equal to that paid under the compulsory pension scheme. The benefits are the same as for the compulsory pension scheme, except that the applicant participating in this scheme under criteria (3) above will be entitled to an old-age pension only.

Please note that Sub-Decree 32 does not indicate the actual date on which the pension scheme will be implemented, although Sub-Decree 32 states that this will be determined by a separate joint Prakas (i.e. ministerial order/regulation) from the Ministry of Labour and Vocational Training and the Ministry of Economy and Finance.

TELECOMMUNICATION

Sub-Decree 23 on the Establishment of the National Internet Gateway

Overview

On 16 February 2021, the Royal Government of Cambodia (“RGC”) issued Sub-Decree 23 on the Establishment of the National Internet Gateway (“Sub-Decree 23”), which aims to facilitate and manage internet connections, strengthen national revenue collection, ensure national security and ensure social order, culture and tradition.

The National Internet Gateways (“NIGs”), which will be established under Sub-Decree 23, consists of the Domestic Internet Exchange (“DIX”) and the International Internet Gateway (“IIG”). Any person who intends to operate an NIG must submit an application to obtain a license from the Telecommunication Regulator of Cambodia (“TRC”). The DIX and the IIG will be established and operated in Phnom Penh, Preah Sihanouk Province, Poi Pet City of Banteay Chey Province, Bavet City of Svay Rieng Province and other locations as determined from time to time with the approval from the Ministry of Posts and Telecommunications (“MPTC”).

Licensing Framework and Duties and Obligations of NIG Operators

The NIGs will be operated by an NIG operator to be approved by the RGC pursuant to a request from the Minister of the MPTC. Any person wishing to operate an NIG in Cambodia must submit an application to apply for a license from the TRC in accordance with Prakas on conditions and procedure for application, issuance, suspension and revocation of license to be issued by the MPTC.

Article 6 of Sub-Decree 23 sets forth certain duties and obligations of NIG operators, including:

manage and facilitate the connection and utilization of infrastructure and network and Internet services at all NIGs, including land-based cross border Internet infrastructure;
install routers, switches and related technical equipment to ensure quality and security of network connections;
connect and/or set up peering with other IIG operators;
submit reports on the status, quality and traffic of network connectivity to the MPTC and the TRC;
collaborate with the MPTC, the TRC and other relevant competent authorities to promote revenue generation from e-commerce and other related online services;
cooperate with the MPTC, the TRC and other relevant competent authorities to undertake necessary measures to block and disconnect any network connection that affects national revenue, security, social order, dignity, culture, traditions and customs; and
carry out other duties and obligations instructed by the Minister of the MPTC.

Quality of Service

In addition to the aforementioned duties and obligations, the NIG operators are also required to ensure the quality of services in accordance with the technical conditions and standards for internet network connection and traffic exchange to be determined in a separate Prakas of the MPTC. The NIG operators must install major and supporting equipment to ensure safety, accuracy and quality of internet network connection and traffic exchange, including:

smooth operation without interruption;
level of use of the equipment and the network must not exceed 80% of the total capacity of equipment and network; and
maintain a related plan for maintenance of network and equipment.

Further, the NIG operator is also required to submit monthly, quarterly, semester, third-quarter and yearly traffic reports to the MPTC and the TRC within seven (7) days after the end of the above timelines.

Connection Obligations to the NIG

For the domestic internet network, pursuant to Article 7 of Sub-Decree 23, in addition to the obligations stated in the Law on Telecommunication dated 17 December 2015, the internet service providers (“ISPs”) and the related persons must establish connection and/or peering of their networks with the DIX, which is under control of an NIG operator. The connection and/or peering of the network of the ISP and related persons must be implemented for domestic traffic exchange through the DIX and may accept connections via an international private leased circuit from abroad through the NIG.

With respect to an international Internet network, Sub-Decree 23 requires the holders of a license for the operation of the submarine cable landing station, a international gateway license and the satellite ground satiations license, which are undertaking business activities in Cambodia, to set up their network connections with the NIG.

Regarding the use of an Autonomous System Number (“ASN”) and Internet Protocol (“IP”) Address, Sub-Decree 23 requires the telecommunications operators and related persons to use the ASN for Internet network peering in the Kingdom of Cambodia. The conditions and procedure to apply for an ASN and IP address will be set out in a separate Prakas of the MPTC.

Implications to Existing Permits and Telecommunication Operators

Under Sub-Decree 23, any permits to connect physical infrastructure, such as fiber optical cable across Cambodian boarders, which were issued prior to the issuance of Sub-Decree 23 will become invalid within twelve (12) months from the date of this Sub-Decree (being, by 15 February 2022), except the rights granted under an international gateway license and the submarine cable landing station license.

The holders of an International Gateway License, the Submarine Cable Landing Station License and/or the ISP License that have direct connectivity and wholesale Internet services must re-route their networks to the NIG within twelve (12) months from the date of this Sub-Decree (being, by 15 February 2022).

Penalties

The TRC has authority to impose certain sanctions for non-compliance with the provisions of Sub-Decree 23. Pursuant to Sub-Decree 23, if an ISP, telecommunication operator and/or related person fail to comply with any provisions, as stated in Article 7 (obligation to connect to the DIX), Article 8 (obligation to connect to the NIG) and/or Article 9 (the use of ASN and IP address) of Sub-Decree 23 and fail to rectify such non-compliance when required by the TRC, the TRC may impose penalties including, without limitation, restriction, suspension or revocation of each applicable license or imposing monetary fines or freezing of account(s).

AGRICULTRE AND FORESTRY

Licensing Requirements for Rubber and Rubber Wood Processing Factory – Prakas 040 dated 19 January 2021 of the Ministry of Agriculture, Forestry and Fishery (“MAFF”) on the Procedure for the Establishment and Operation of Rubber and Rubber Wood Processing Factory and Handicraft (“Prakas 040”)

Prakas 040 sets forth the detailed procedures for the issuance of the factory establishment permit and the factory operating license for the establishment and operation of the rubber and rubber wood processing factories and handicrafts in Cambodia in order to promote quality of Cambodian rubber and rubber wood.

Pursuant to this Prakas, the General Department of Rubber of the MAFF has been granted with the authority to issue the license and permit for rubber and rubber wood processing factories and handicrafts which previously was supervised under the authority of the Ministry of Industry, Science, Technology and Innovation as stated under the Law on the Amendments to the Law on the Management of Factories and Handicrafts dated 23 June 2003 (as amended on 23 October 2014).

Regarding the application timeline, the MAFF is required to issue a factory establishment permit within 45 working days after receiving the complete application dossier from the applicant. A factory establishment permit has no specific expiration date.

Further under Clause 16 of Prakas 040, the owner of a factory or handicraft is required to apply for a factory operating license from the General Department of Rubber within 15 days prior to the operation of the factory and the MAFF must issue the license within 15) working days after receiving the complete application documents from the applicant. A factory operating license is valid for three (3) years.

Clause 19 of Prakas 040 requires the existing rubber and rubber wood processing factories or handicrafts to apply for the above permit and license within 6 (six) months from the date of this Prakas. However, this Prakas 040 is silent with respect to the penalties for a failure to apply for the above permit and license by the prescribed timeline.

Further, Prakas 040 also requires the new owner of a rubber and rubber wood processing factory and handicraft to provide a notice to the MAFF within 30 days from the date on which it become a legitimate owner of the factory or handicraft.

Should you need any further information or any legal support on the above, please contact us at cambodia@dfdl.com.

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