Your Snapshot of Key Legal Developments in Asia
Issue 2 - Apr/May/Jun 2019
- Guideline on the Determination of Types of Employment Contracts
- Revised Implementation of Withholding Tax on Dividend Distributions
- E-Court Registration is now Mandatory for Civil Cases
- New Capital Market Regulation Aims to Provide Greater Protection for Minority Shareholders
- Indonesian Competition Commission Issues a New Regulation on Case Handling Procedure
- NA Approves New Law to Safeguard Local Products from Unfair Imports
- Draft Instruction on the Implementation of the Social Security Law
- High Court Decision in Dr Fong's Case - Registrations under Section 6 and Section 54 of the Franchise Act 1998
- Digital Tax on Foreign Digital Service Providers to be Enforced from 1 January 2020
- MyCC Launches the Guidelines on Intellectual Property Rights and Competition Law
- Practical Measures to Defend Against Corporate Liability Charges
- Malaysian High Court Applies Doctrine of Equivalents in Patent Infringement Suit
- New Set of Interest Rates for Microfinance Institutions
- Myanmar Parliament Enacts Gambling Law Allowing Casinos to Operate in Myanmar
- New Tax Management Law
- Revocation of Trading Privileges for Foreign and JV Companies
- Energy Efficiency and Conservation Act
- Executive Order No. 80, rationalizing the rules for the engagement of third-party participants under Petroleum Service Contracts
- Tourism Act of 2009
- Sin Tax Hike Bill
- Draft Circular on the National Payment Systems Act
- Singapore International Commercial Court Issues First Judgment on Arbitration
- Five Judges of Appeal Overturn Conviction in Rosewood Transit Case
- Collective Sale Found to be Valid and in Good Faith
- Restraining Winding-Up Proceedings in Favour of Arbitration: What is the Standard for Granting an Injunction?
- Data Protection: New Guides on Managing Data Breaches and Active Enforcement
- Three Services Between Related Companies No Longer Require a Foreign Business License
- New Personal Data Protection Act
- Thailand's First Cyber Security Law
- Amendment to Trade Remedies Laws
- New Amendment to the Labour Protection Act now Effective
Guideline on the Determination of Types of Employment ContractsUnder Cambodian Labour Law ("Labour Law"), there are two types of employment contracts, being the undetermined duration contract ("UDC") and fixed duration contract ("FDC"). On 17 May 2019, the Ministry of Labour and Vocational Training issued Guideline No. 050/19 LV/N.MLVT concerning the determination of the two types of employment contracts ("Guideline").
According to the Guideline, an FDC is (i) a written employment contract (ii) made for a specific duration not exceeding 2 years and (iii) specifies commencement date and ending date. An FDC can be renewed for one or more times, so long as such renewed period does not exceed 2 years. Therefore, the longest period of an FDC, including both the first FDC’s period and renewed period(s), is 4 years.
The Guideline has also clarified that at least one month break in between FDCs is required to maintain the FDC status of the contracts; otherwise, the subsequent FDC shall be considered as a renewal of the former FDC which, together, shall form a UDC. However, such break condition does not apply if the subsequent FDC is made as an employment contract (i) to substitute the work of a temporarily absent employee; (ii) for a seasonal work; and (iii) for an occasional increase of work or unusual activities of the company as stated in Article 67.3 of the Labour Law. The Guideline also re-emphasizes Article 67 of the Labour Law on the exception to the "specified date" requirement. An FDC is allowed to have an "unspecified date" if such contract is made for the same three reasons mentioned above. However, the Guideline has clarified that the "unspecified date" exception is only extended to "unspecified expiry date".
Revised Implementation of Withholding Tax on Dividend DistributionsThe Ministry of Economy and Finance issued Prakas No. 372 on 5 April 2019 ("Prakas") concerning the revised implementation of withholding tax ("WHT") on dividend distributions. The Prakas replacing Prakas No. 518 dated 5 May 2017 aims to provide clarity and guidance on the application of the WHT regulations on dividend distributions from resident taxpayers in Cambodia to their non-resident shareholders.
With reference to the Law on Taxation ("LoT"), a dividend that is distributed from a resident taxpayer to a non-resident taxpayer will be subject to a 14% WHT on the amount paid. According to Article 6 of the Prakas, if the conversion of retained earnings to share capital is correctly processed, it will not be considered as a distribution of dividends, and therefore not subject to WHT. The conversion is treated as correctly processed when a taxpayer (i) has a resolution of the Board of Directors approving the conversion, and (ii) has any evidence to show that the change in share capital has been approved by competent authorities including the Ministry of Commerce.
The Prakas also provides clarity on sale of shares and distribution of equity or capital, specifying that in the event that there is a transfer of any part or all of the equity shares or capital, any retained earnings attached to the share transfer shall be deemed as having been distributed as dividend regardless of whether or not it has previously been converted into capital. Moreover, any reduction of the capital shall be deemed as a distribution of dividend to the maximum extent of the amount of the retained earnings.
China Releases Data Security Management Measures (Draft for Public Comments)On 28 May 2019, the Cyberspace Administration of China ("CAC") released the draft Data Security Management Measures for public comments (the "Draft Measures"). The Draft Measures are basically consistent with China's relevant existing guidelines and national standards. However, they are more stringent in some aspects.
The Draft Measures consist of 5 chapters and 40 articles in total, with a view to strengthening the network operators' obligations in data collection, storage, transmission, process and use, as well as enhancing personal data protection by the following notable measures:
- Data collection rules should be accessible, obvious and reader-friendly to the user;
- The collection of personal information of a minor under the age of 14 shall be subject to consent of their guardians;
- Discrimination against the users on the basis of whether they consent to information collection and the scope of consent is not allowed;
- Network operators that collect sensitive personal information and/or important data for "business operations" are required to file with the local CAC (which filing information includes the rules for collection and use, but excludes the personal data itself);
- Web-crawling may not hinder the normal operation of the websites;
- The network operator should clearly indicate the words "Directional Pushing" in an obvious way and provide users with the function of stopping directionally pushed information; and
- The network operator shall seek approval from relevant regulatory authorities before sharing or transferring important data outside of China.
E-Court Registration is now Mandatory for Civil CasesAs part of the push to file civil cases electronically in Indonesia, the Indonesian Supreme Court recently issued a Circular Letter to further emphasize this requirement.
In essence, this Circular Letter requires all District Court of Special IA Class, IA Class, and all District Courts under the jurisdictions of the Banten High Court, Jakarta High Court, Bandung High Court, Semarang High Court, Yogyakarta High Court, and Surabaya High Court to implement electronic registration of civil cases.
In order to ensure that e-registration is implemented effectively, the Circular Letter obliges:
- all Chairman of the District Courts to implement and monitor the One Stop Service Centre ("PTSP") and the Legal Aid Office within their courts and direct the registration of any civil case through the e-court system;
- all PTSP to employ IT staff/specialist to assist with the e-registration system; and
- all Chairman of the High Court to monitor and evaluate the implementation of e-court on a monthly basis.
Indonesian Competition Commission Issues a New Regulation on Case Handling ProcedureThe Indonesian Competition Commission ("KPPU") issued a new regulation on case handling procedure which will apply to cases commenced after 4 February 2019.
The most notable feature under this new regulation is the introduction of behavioural remedy, which allows a defendant to plead guilty at the beginning of a hearing and for the defendant to agree to change its behaviour in order to terminate the case against it. Other new provisions include the recognition of indirect evidence and expansion of the measures that can be taken by KPPU against a defendant who fails to comply with a final and binding decision.
Click here to read our client update.
New Capital Market Regulation Aims to Provide Greater Protection for Minority ShareholdersIn April 2019, the Indonesian Financial Services Authority ("OJK") issued a new regulation on capital increase with pre-emptive rights. This new regulation aims to provide greater protection for minority shareholders, especially in relation to an increase of capital whether through pre-emptive rights or not.
The key changes under the new regulation are as follows:
- if a capital increase without rights issue is undertaken for purposes other than to improve the financial position of the company, then the general meeting of shareholders approving such capital increase must be attended and approved by more than ½ of the total shares with valid voting rights held by the independent shareholders and the shareholders that are not an affiliated party, member of the board of directors or board of commissioners, or a majority/controlling shareholder of the public company; and
- a capital increase for purposes other than to improve the financial position of a company is capped at 10%. This 10% cap is based on a calculation that results in a smaller dilution effect for the minority shareholders.
NA Approves New Law to Safeguard Local Products from Unfair ImportsIn June 2019 , the National Assembly of Lao PDR approved a law to protect local products from unfair imports. The enactment of the Law on Anti-Dumping and Countervailing Duties ("Law") was part of Laos’ efforts to fulfil its obligations as a member of the World Trade Organisation ("WTO").
Minister of Industry and Commerce Ms Khemmani Pholsena said that if Laos does not have this law, it cannot apply anti-dumping and countervailing duty measures against unfairly imported products.
According to the WTO, if a company exports a product at a price lower than it generally charges in its home market, it is said to be dumping the product. The Law will serve as a legal instrument for the Lao government to take response measures against dumping and impose subsidy duties to safeguard domestic producers from unfairly imported products.
Laos became a member of the WTO on 2 February 2013.
Draft Instruction on the Implementation of the Social Security LawThe Social Security Law (Nº 54/NA, 27 June 2018) ("Social Security Law") has been in operation since 9 January 2019, but certain provisions lack clarity. One of these is the calculation of benefits. To address this, the Ministry of Labor and Social Welfare has commenced drafting an instruction to provide explanations and examples relating to the calculation of benefits listed in the Social Security Law, including the following:
- health care benefits;
- labor accident or occupational disease benefits;
- maternity allowances;
- sickness benefits;
- loss of working capacity benefits;
- death benefits;
- family member benefits; and
- unemployment benefits.
High Court Decision in Dr Fong's Case - Registrations under Section 6 and Section 54 of the Franchise Act 1998The recent High Court decision in Dr HK Fong BrainBuilder Pte Ltd v SG-Maths Sdn Bhd & Ors has brought about important changes to the franchise industry under the Franchise Act 1998, in particular on foreign franchisors. This is in light of the Court's interpretation of the term "franchisor" appearing in a provision of the Franchise Act 1998 ("FA") on the requirement to register a franchise with the Registrar of Franchises (the "Registrar"). As a result of this decision, in addition to the need to obtain the Registrar's approval or consent under section 54 of the FA, foreign franchisors are now required to register their franchises with the Registrar under section 6 of the FA. This decision is currently pending appeal at the Court of Appeal.
Digital Tax on Foreign Digital Service Providers to be Enforced from 1 January 2020The Government of Malaysia will impose a digital service tax of 6% on foreign digital service providers with effect from 1 January 2020, with the annual threshold being set at RM500,000, according to the Malaysian Deputy Finance Minister after the tabling of the Service Tax (Amendment) Bill 2019 (the "Amendment Bill") on 8 April 2019. The Amendment Bill has been passed by the lower house of the Malaysian Parliament. Upon the Amendment Bill being passed by the upper house of Parliament and receiving the royal assent, foreign digital service providers such as Spotify and Netflix will be taxed commencing 1 January 2020.
Under the Amendment Bill, any tax defaulter can, upon conviction, be fined up to RM50,000, or imprisoned for a term of up to three (3) years, or both.
MyCC Launches the Guidelines on Intellectual Property Rights and Competition LawAlmost one year after the Malaysia Competition Commission ("MyCC") issued its draft guidelines on intellectual property rights and thereafter sought public consultation thereon, the MyCC Guidelines on Intellectual Property Rights and Competition Law ("IPR Guidelines") came into force on 6 April 2019. The IPR Guidelines provide guidance on MyCC's approach to competition issues under the Competition Act 2010 ("Act") relating to intellectual property. The IPR Guidelines must be read together with the Act and all the other MyCC guidelines since the latter apply to competition law generally.
Among the various illustrations provided by MyCC within the IPR Guidelines include circumstances in which horizontal and vertical agreements would be seen as anti-competitive in nature; territorial and field of use restrictions; exclusive licensing; exclusive dealing; tying and grant-backs; and "cartel" arrangements.
Overall, the IPR Guidelines provide a useful guide to MyCC's approach on competition issues relating to intellectual property rights under the Act. Intellectual property rights owners should immediately review their existing agreements and behaviour to determine if there is a need to revise such agreements and / or behaviour to avoid any infringement of the Act. The consequences of an infringement of the Chapter 1 Prohibition (section 4 of the Act) or the Chapter 2 Prohibition (section 10 of the Act) could potentially be severe as it may result in MyCC imposing a financial penalty of up to 10% of the enterprise's worldwide turnover for the period during which an infringement occurred.
Practical Measures to Defend Against Corporate Liability ChargesThe Malaysian Anti-Corruption Commission issued guidelines on "adequate procedures" ("Guidelines") earlier this year. Under the Malaysian Anti-Corruption Commission Act 2009, adequate procedures are a defence against a corporate liability charge. Given the heightened efforts by the authorities to combat corrupt activities in the public and private sector, it is timely for commercial organisations to look inwards and do a stock take of their best practices taking into account the Guidelines issued.
Malaysian High Court Applies Doctrine of Equivalents in Patent Infringement SuitThe Improver questions in relation to the purposive construction of patent claims were once the bedrock of patent infringement principles. Such foundations have been shaken by the seismic shift in approach taken by the United Kingdom Courts in introducing the Doctrine of Equivalents into UK law. Closer to home, the effects of these have begun to take root, starting with the High Court's decision in Kingtime International Limited & Anor v Petrofac E&C Sdn Bhd. This update explores the merits of this eyebrow-raising decision, which represents the inaugural judicial recognition of the Doctrine of Equivalents in Malaysia with respect to the test for patent infringement, and what may lie in store for the future of Malaysian patent litigation.
New Set of Interest Rates for Microfinance InstitutionsThe Microfinance Business Supervisory Committee ("MBSC") recently issued Directive 1/2019 ("Directive"), which provides a new set of interest rates that must be followed by all microfinance institutions operating in Myanmar.
MBSC has amended the interest rates. A loan of K100 monthly will be charged K2.30 and the yearly maximum interest rate will be 28 percent. The previous rate was for K100 monthly at K2.50 and the yearly maximum interest rate is at 30pc. In comparison, the directive has decreased 2pc of the yearly interest rate.
Furthermore, the new interest rate on compulsory saving will be for K100 monthly, it will be charged K1.20. The annual minimum interest rate has been cut by 1pc to 14pc. The previous specification was that for K100 monthly, it will be K1.25 with the yearly minimum interest rate at 15pc.
Interest rate on voluntary saving remained the same. The Directive has designated that for K100 monthly, the amount charged will be K0.80 and the yearly minimum interest rate will be 10pc.
This Directive supersedes all other previous directives on interest rates on savings and loans that were issued in 2011, 2014 and 2016.
The Directive came into force on 1 June 2019, but it was only published on 5 June 2019. Microfinance institutions which conducted transactions in accordance with the previous interest rates from 1 June 2019 till 4 June 2019 would therefore be in default of this Directive. It is expected that, to provide clarity, the MBSC will issue additional guidance in relation to the transactions that were conducted after the coming into force of the Directive but before its publication on 5 June 2019.
Myanmar Parliament Enacts Gambling Law Allowing Casinos to Operate in MyanmarOn 7 May 2019, the Pyidaungsu Hluttaw (Myanmar Parliament) enacted the Gambling Law ("Law") allowing foreign investors to operate casinos in Myanmar. The Law defines "casino" as "any location or building registered in line with the stipulations with approval from the Union Government where only foreigners shall be allowed to gamble." It is further stipulated in section 23 of the Law that "the Union Government may screen and allow to establish and open Casinos in line with stipulations." The Law has not specified the foreign investment ratios, compliance requirements and required approvals / authorisation with respect to casino operations. However, it is expected that these will be spelt out in the implementing rules which will subsequently be released in connection with the Law. It is also not clear from the Law whether Myanmar citizens would be allowed to operate and invest in “casino” business, a gap which can be closed through the issuance of subsequent rules.
The enactment of the Law heralds a positive news for investors who intend to establish business presence in Myanamr through the "casino" business. However, given the inexperience and deficiencies currently embedded in Myanmar society, the Government needs to put in place well regulated mechanisms and systems to efficiently govern casino and gambling activities within the Union.
New Tax Management LawOn 7 June 2019, the Tax Management Law (Pyidaungsu Hluttaw Law No. 20/2019) was enacted. It will be made effective in the coming financial year, i.e. 1 October 2019. This provides a unified tax procedure for "income tax, commercial tax, special goods tax and other types of taxes of which the Director General of the Inland Revenue Department is in charge according to a law". Important provisions of the new law include: taxpayers' right for tax clearance certificate, public and advance rulings, anti-avoidance provision, requirement for Myanmar-resident representative of companies for tax purposes, document retention period of 7 years and punishment for tax evasion up to 7 years imprisonment plus fine over the tax or MMK250,000.
Revocation of Trading Privileges for Foreign and JV CompaniesLast year, the Ministry of Commerce ("MOC") liberalised foreign and joint venture companies ("JV Companies") to undertake wholesale and retail trading through MOC Notification 25/2018 and MOC Newsletter 3/2018. Prior to such liberalisation, foreign and JV Companies were allowed to undertake trading for 6 types of products including fertilisers, seeds, pesticides, hospital equipment, agricultural equipment and construction materials.
Although foreign companies and JV Companies undertaking trading in the 6 types of products were also required to apply for a wholesale / retail permit under Notification 25/2018, the MOC did not follow through with such requirement. Nonetheless, on 21 May 2019, the MOC issued Notification 23/2019 revoking trading privileges of all foreign and JV Companies undertaking trading in the 6 types of products and has required compliance with minimum investment requirements and application of the same within 90 days of the date of Notification (i.e. until 19 August 2019).
Energy Efficiency and Conservation ActRepublic Act No. 11285, otherwise known as the Energy Efficiency and Conservation Act ("EECA"), was signed into law on 12 April 2019, following the approval of the bill at the Bicameral Committee of the Senate, after more than thirty years of being repeatedly filed in Congress. The EECA focuses on the development and use of renewable energy, to provide a more stable option for power supply in the Philippines. The EECA also grants incentives to entities that undertake energy efficient projects, and imposes penalties on entities engaging in prohibited activities or violating the law or its implementing rules and regulations.
The law mandates the formulation of two plans. The National Energy Efficiency and Conservation Plan is a national comprehensive framework that lays out national targets, feasible strategies, and regular monitoring and evaluation of the country's energy efficiency and conservation efforts. On the other hand, the Government Energy Management Program ("GEMP") is aimed at reducing the government's monthly consumption of electricity and petroleum products, among others.
The EECA also created the Inter-Agency Energy Efficiency and Conservation Committee, composed of various Executive Department Secretaries, to evaluate and approve government energy efficiency projects and to provide strategy direction in the implementation of the GEMP.
The commercial, industrial and transport sectors are likely to see changes, as the Minimum Energy Performance ("MEP") will be developed by the Department of Energy ("DOE"). Fuel economy labelling requirements will be imposed by the DOE, by requiring vehicle manufacturers, importers, and dealers to provide technical information on the fuel economy rating of the engines. New and existing buildings will be required to implement measures to ensure that the activities carried on inside the buildings are geared towards energy conservation.
Manufacturers, importers, distributors and retailers of energy-consuming products are also required to comply with the MEP, by subjecting the products to testing and submitting the information to the DOE. As of date, the DOE has yet to issue the MEP. Moreover, the products to be sold, leased or imported must comply with the MEP and the labelling requirements of the EECA.
The IRR of the EECA is yet to be promulgated.
Executive Order No. 80, rationalizing the rules for the engagement of third-party participants under Petroleum Service ContractsExecutive Order No. ("EO") 80, signed by President Rodrigo Duterte on 28 May 2019, amended EO No. 556 (series of 2006) which previously prohibited the Philippine National Oil Company ("PNOC") from awarding farm-in and farm-out agreements for oil exploration, development and production.
Under EO 80, the rules for government dealings with third-party participants under petroleum service contracts allows more groups to explore possible fuel deposits in the country, subject to the requirement that PNOC Exploration Corporation enter into such agreements only with reputable, technically competent and financially capable entities.
The Department of Energy, in consultation with Government Commission for Government-Owned or -Controlled Corporations, will issue rules and regulations for the selection process to be followed by PNOC Exploration Corporation when selecting third-party partners.
Tourism Act of 2009Republic Act No. 11262 has extended the authority of the Tourism Infrastructure and Enterprise Zone Authority ("TIEZA") to grant incentives to tourism enterprises until 31 December 2029. Under the old law, i.e., Republic Act No. 9593 or the Tourism Act of 2009, TIEZA had only until August 2019 to grant incentives.
The incentives which may be granted to tourism enterprises include six-year income tax holidays, a 5% preferential tax on gross income, exemption on all taxes and duties on imported capital equipment, and exemption of transport equipment and spare parts from tariffs and duties. The new law also grants equal preference to large investments that have great potential for employment generation and to local small and medium enterprises, and encourages local government units to provide incentives through reductions in.
Sin Tax Hike BillOn 4 June 2019, the Philippine Senate approved Bill 2233 seeking to implement a scheduled increase in the excise tax on tobacco products over four years, and a five percent (5%) yearly hike effective on 1 January 2024. President Duterte had recently certified the bill to allow the Senate to approve it on second and third reading within the same day.
The Senate proposed to increase the tax from ₱37.50 to ₱45.00 in January 2020, ₱50.00 in January 2021, ₱55.00 in January 22, and ₱60.00 in January 2023. An amendment included “heated tobacco products” and “vapor tobacco products” in the measure as well.
On 5 June 2019, the House of Representatives adopted the Senate version of the bill, after having approved its own version in December of 2018. The bill is now awaiting the signature of President Duterte.
Part of the proceeds from the tax hike are intended to be used exclusively for the implementation of the Universal Health Care law and health programs endorsed by the Department of Health. An estimated ₱258 billion is needed by the program in its first year of implementation (i.e. 2020). The law, once passed, is expected to generate ₱136 billion in 2021.
Draft Circular on the National Payment Systems ActRepublic Act 11127, or The National Payment Systems Act ("NPSA"), mandates the Bangko Sentral ng Pilipinas ("BSP") to exercise supervisory and regulatory powers for the purpose of ensuring the stability and effectiveness of the monetary and financial system in the country. In keeping with its thrust to promote efficiency and ease of doing business, the BSP thus released a draft circular providing for the implementing rules and regulations of the NPSA - the first comprehensive legal and regulatory framework governing the payment systems in the Philippines.
The draft Circular is part of the first phase of the phased-in implementation of the NPSA, which prioritizes the creation of a baseline inventory of all operators of payment systems ("OPS"), which is required under Section 10 of the law. The draft contains a simplified registration process and streamlined documentary requirements through which funds are transferred to discharge payment obligations arising from transactions across the entire economy - an essential tool for the effective implementation of monetary policy and the smooth functioning of money and capital markets.
To ensure the smooth transition of the OPS existing at the time of the NPSA's effectivity, the draft Circular provides a transitory provision that allows said OPS to register with the Bangko Sentral within a reasonable period.
New Guidelines for External AuditorsThe external auditing function is often utilized by government regulatory agencies to safeguard the financial industry. The work of external auditors promotes good governance in the financial industry, by upholding fairness, accuracy and transparency in financial reporting. On 29 May 2019, the Monetary Board ("MB") of the Bangko Sentral ng Pilipinas ("BSP") approved the revised guidelines on the selection, appointment and delisting of external auditors of BSP Supervised Financial Institutions ("BSFIs").
The guidelines are intended to streamline the selection process in the financial sector, and promote ease of doing business. They introduce a centralized system for accreditation / selection of external auditors, with the integration of the accreditation requirements of the BSP, the Securities and Exchange Commission ("SEC") and the Insurance Commission ("IC"), introduced by the Financial Sector Forum ("FSF"), which is an inter-agency body composed of the BSP, SEC, IC and the Philippine Deposit Insurance Corporation.
The BSFIs and external auditors are grouped into categories, and external auditors are allowed to extend their services to BSFIs belonging to the same category or to categories lower than the category of the external auditor. Aside from the abovementioned safeguard, the guidelines also impose new audit engagement and reportorial requirements for the BSFIs.
Security of Tenure and End of Endo Act of 2018The bill seeking to amend the Labor Code and stop abusive forms of contractualization - the proposed Security of Tenure Act or more popularly known as the "End Endo" Bill - has been approved by the Senate and is now ready for signature by President Rodrigo Duterte.
Endo is a labor practice where a worker is hired for up to five months to skirt a labor law granting permanent tenure on the sixth month of service. The practice leaves many Filipino workers unprotected and without benefits.
According to Senator Joel Villanueva, the bill clarifies ambiguities in existing laws that have allowed employers to evade the prohibition on labor-only contracting. Under the newly-approved bill, labor-only contracting exists when any of the following instances occur: (i) the job contractor merely supplies, recruits, and places workers to a contractee; (ii) the workers supplied to a contractee perform tasks / activities that are listed by the industry to be directly related to the core business of the contractee; or (iii) the contractee has direct control and supervision of the workers supplied by the contractor.
The measure also trims down the classification of workers to four types: regular, probationary, project and seasonal. Under the bill, project and seasonal workers are now given the same rights and privileges granted to regular employees.
Guidelines on the Establishment of a One Person CorporationRepublic Act No. 11232, or the Revised Corporation Code of the Philippines ("RCC"), introduced the novel One Person Corporation ("OPC"). The Securities and Exchange Commission ("SEC"), in response to the growing interest in OPCs, recently issued guidelines on the establishment of OPCs. Memorandum Circular No. 7, series 2019, providing for the requirements and limitations of OPCs, also provides sample forms and sample letters.
In a press release on 2 May 2019, the SEC announced that it will start accepting applications for registration of an OPC on 6 May 2019. According to SEC Chairperson Emilio B. Aquino, the concept of an OPC is intended to make doing business in the Philippines easier. The OPC offers the "agility and complete dominion of a sole proprietorship, and the limited liability of a corporation," according to Aquino.
The requirements and process, which begins and ends with the Company Registration and Monitoring Department of the SEC, of incorporating an OPC are laid out in the circular.
Singapore International Commercial Court Issues First Judgment on ArbitrationThe Singapore International Commercial Court ("SICC") has issued its first judgment dealing with arbitration proceedings. In BXS v BXT  SGHC(I) 10, the SICC faced an application to set aside an arbitral award, as well as an application to strike out the setting aside application on the ground that the three-month time limit had expired. The SICC issued a judgment that confirmed that the three-month time limit was mandatory, and also dealt with whether the SIAC's appointment of a sole arbitrator in expedited proceedings was a grounds for challenge when the parties had agreed to three. The Defendant was successfully represented by Paul Tan, Alessa Pang and David Isidore Tan from the International Arbitration Practice on instructions by Allen & Overy.
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Five Judges of Appeal Overturn Conviction in Rosewood Transit CaseIn Kong Hoo (Pte) Ltd and another v Public Prosecutor  SGCA 21, a five-member Singapore Court of Appeal quashed the conviction of a Defendant accused of importing Madagascan Dalbergia rosewood logs, valued in excess of $70 million into Singapore without a permit. This was a rare instance of a successful criminal reference. In reaching its decision, the Court examined the purpose and operation of the Endangered Species Act, providing guidance as to when goods would be considered to be "in transit". Murali Pillai, Paul Tan and Jonathan Lai from the Commercial Litigation Practice and International Arbitration Practice were instructed as counsel for the Accused in this matter.
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Collective Sale Found to be Valid and in Good FaithIn Kok Yin Chong and others v Lim Hun Joo and others  SGCA 28, the Singapore Court of Appeal considered an application for the collective sale of a development, exploring the potential grounds of objection to such an application. The High Court had allowed the Respondent collective sale committee members' application, and the Court of Appeal here upheld the decision. Notably, the Court examined the issue of good faith in the context of the collective sale regime in Singapore, including which party bore the burden of proving good faith. The Respondents were successfully represented by Adrian Wong and Ang Leong Hao from the Commercial Litigation Practice.
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Restraining Winding-Up Proceedings in Favour of Arbitration: What is the Standard for Granting an Injunction?In BWF v BWG  SGHC 81, the Singapore High Court grappled with the applicable legal standard for determining whether an injunction restraining a winding-up should be granted in circumstances where the underlying claim is prima facie arbitrable – ought the standard to be that of a bona fide prima facie dispute, or that of a triable issue? After assessing contrasting approaches in earlier High Court cases, the Court here found in favour of the Plaintiff, holding that the applicable standard is that of a bona fide prima facie dispute. The Plaintiff was successfully represented by Kendall Tan and Ting Yong Hong from the Shipping & International Trade Practice.
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Data Protection: New Guides on Managing Data Breaches and Active EnforcementOn 22 May 2019, the Personal Data Protection Commission ("PDPC") published the following guides:
- Guide to Managing Data Breaches 2.0; and;
- Guide on Active Enforcement (collectively, the Guides")
The issuance of the Guides sets the stage for the introduction in Singapore of a mandatory data breach notification regime.
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Harassment Laws in Singapore Extended to CompaniesOn 7 May 2019, changes to the Protection from Harassment Act (Cap. 256A) ("Act") were passed in Parliament. Significantly, the amended Act expressly provides that companies fall within the ambit of the Act, which subject them to liability for, amongst others, causing harassment, alarm or distress, as well as for 'doxxing' – a new offence prohibiting acts of publishing information about a victim's identity to harass, threaten or facilitate violence against the victim. The Act also introduces enhanced protection for victims of harassment and falsehoods. This Update provides a summary of the key changes to the Act.
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Three Services Between Related Companies No Longer Require a Foreign Business LicenseA newly issued Ministerial Regulation has lifted the constraint on foreign companies providing services to other members of their group, such as "back-office services", without first obtaining a Foreign Business License ("FBL").
The conduct of business in Thailand by a foreign person or juristic person ("Foreigner") is regulated by the provisions of the Foreign Business Act B.E. 2542 (1999) ("FBA"). Schedule Three includes "the provision of services other than those specified by the Ministerial Regulations (Clause 21)", which operates as a catch-all provision which encompasses most service-oriented businesses. Certain service businesses are excluded from the FBA by way of Ministerial Regulations, and a new Ministerial Regulation was published in the Royal Gazette on 25 June 2019 prescribing three types of service businesses which do not require an FBL.
The three service businesses mentioned in the Ministerial Regulation are as follows:
- the service business of domestic lending between relataed juristic persons;
- the service business of office space rental with utilities between related juristic persons; and
- the service business of providing consultation between related juristic persons, only in the areas of administration, marketing, human resource and information technology.
New Personal Data Protection ActThailand's first data protection law, the Personal Data Protection Act B.E. 2562 (2019) ("PDPA"), was published in the Royal Gazette on 27 May 2019 and certain key provisions became effective the next day. These provisions, set out in Chapters 1 and 4 of the PDPA, provide for the establishment of the following regulatory bodies:
- the Personal Data Protection Commission ("PDPC"), whose duties and powers include preparing a master plan for the promotion and protection of personal data, and interpreting and determining issues arising from the enforcement of the PDPA; and
- the Office of Personal Data Protection Commission ("PDPC's Office"), which will be a government agency with the status of a juristic person. Its role will be to promote and support the development of personal data protection.
This means that companies have less than ten months in which to implement processes for the handling of Personal Data in a manner which complies with the PDPA.
Thailand's First Cyber Security LawThailand's first cyber-security law, i.e. the Cyber Security Act B.E. 2562 (2019) ("CSA"), came into effect on 28 May 2019. The Prime Minister shall be in charge of execution of the CSA.
The main reason for the promulgation of the CSA is to safeguard Critical Information Infrastructure ("CII") against Cyber Attack. CII is defined as a computer or computer system which a government agency or a private agency uses in its business which relates to the state security, public safety, economic stability of the country, or public infrastructure.
The CSA will establish the National Cyber Security Committee ("NCSC"), the Oversight Committee on Cyber Security and the Office of the National Cyber Security Committee, as well as the Executive Board of the Office of the National Cyber Security Committee. Pursuant to the CSA, the NCSC will issue a policy and plan on Cyber Security. The government agencies, regulatory authorities, and CII agencies are required to prepare their code of conduct and qualifications framework on Cyber Security in compliance with the NCSC's policy and plan on Cyber Security. They also have a duty to prevent, cope with and minimize the risk of Cyber Attacks according to their code of conduct and qualifications framework.
Amendment to Trade Remedies LawsAn amendment to the Anti-Dumping and Countervailing Act (No. 2) B.E. 2562 (2019) ("Amendment") was published in the Royal Gazette on 22 May 2019 and will come into effect on 19 November 2019.
There are a number of changes introduced by the Amendment, which are primarily intended to more consistently implement the provisions of the WTO Agreement on Subsidies and Countervailing Measure and the Anti-Dumping Agreement.
One of the key amendments is the introduction of anti-circumvention measures. In case a circumvention of anti-dumping and countervailing measure ("AD/CV measure") is found, the collection of anti-dumping duty and/or countervailing duty shall be extended to the importation of products circumventing the AD/CV measure at a rate not exceeding the maximum rate collected from the product subject to the AD/CV measure imposed on the exporting countries. This will enhance the ability of Thai authorities to more effectively enforce AD/CV measures.
New Amendment to the Labour Protection Act now EffectiveOn 5 April 2019, the Labour Protection Act (No.7) B.E. 2562 (2019) ("Amended LPA"), which amended the existing Labour Protection Act B.E. 2541 (1998), was published in the Royal Gazette. The Amended LPA came into force on 5 May 2019.
Amendments were made to the following areas:
- Minimum of 3 days' paid Business Leave
- Increased Maternity Leave entitlement
- New Category of Severance Pay for those who have worked for 20 years or more
- Wages Payable During Suspension of Business
- Relocation of Workplace
- Change of Employer
- Payment in Lieu of Advance Notice
- Statutory Payments shall be made within 3 days
Draft Amendment to Labour CodeIn April 2019, the Government released its second draft amendment to the Labour Code for public comments.
A notable change that has been introduced in this draft is the concept of deemed employment, whereby even in cases where the parties do not sign a "labour contract", contracts that contain provisions regarding scope of work, salary and management/supervision by the other will be interpreted as a labour contract. This means that even contracts that purport to create an independent contractor relationship may be construed as forming an employment relationship if the terms suggest so.
This is in contrast to the current Vietnamese law position, whereby an employment relationship will only arise where the parties have signed a "labour contract" (and it has been designated as such) – usually regardless of the extent of supervision/management role played by the employer.
Draft Amendment to Law on Intellectual PropertyOn 14 June 2019, during the working session of the National Assembly, the Draft Law on Amending and Supplementing the Law on Intellectual Property was tabled, for the purposes of aligning the existing law with the ratified Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP").
The draft introduces some key changes to the existing 2005 law. Among those is the abolishment of the need to register trade mark licence agreements with the National Office of Intellectual Property to ensure protection against use of licensed marks by third parties. Accordingly, such licence would still be recognised as legally valid and enforceable in the absence of registration – thereby removing an administrative layer that has currently created difficulties by licensees in securing IP protection.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.