18 Jul ASEAN Today – Regional Legal and Business News – June 2022
ASEAN Today – Regional Legal and Business News for June 2022 including an Immigration Update on the Cancellation of Thailand Pass and the Health Insurance Reequirement and Corporate Law News on the Exemption for SME Data Controllers under the Personal Data Protection Act.
ASEAN Economic Community News
ASEAN Sustainable Finance
A multinational universal bank and an international organization working to mobilize global capital for climate action released a report, ASEAN Sustainable Finance – State of the Market 2021. The report says that the sustainable debt markets in Singapore, Thailand, Indonesia, Malaysia, the Philippines and Vietnam continued to grow rapidly in 2021. In the same countries, issuance volumes of green, social and sustainability bonds (GSS) reached a record of US$24 billion, an increase of 76.5% on 2020, and sustainability-linked debt grew to $27.5 billion, up 200% on 2020. The report attributes the growth to the positive sentiment of the ASEAN member states in allocating capital for the purpose of responding to the COVID-19 pandemic and supporting sustainable economic growth amid climate change and low carbon emissions in the long term.
Regional Circular Economy
The ASEAN Secretariat and the Economic Research Institute for ASEAN and East Asia (ERIA) held the Multi-Stakeholder Policy Dialogue on Empowering ASEAN for Circular Economy online this month. The meeting allowed stakeholders from various sectors to share work on the circular economy, assess existing practices in the region, and determine expectations. Key regional challenges include shifting producer and consumer behavior towards circular practices, lack of markets for secondary goods, fragmented actions across the region, and limited technical capacity. The outcomes of the policy dialogue will serve as a reference for the development of the Work Programme to Support the Implementation of the Framework for Circular Economy for the AEC. A circular economy is defined as the restructuring of the conventional linear and extractive economy into a closed-loop recycling process that regenerates natural systems and designs out waste and its harmful by-products.
ASEAN Digital Economy Growth
ASEAN’s digital economy continues to grow and thrive and ASEAN was awarded the top prize by the World Summit Information Society (WSIS) under the category of International and Regional Cooperation in recognition of the ASEAN Data Management Framework (DMF) and ASEAN Model Contractual Clauses (MCCs) for Cross-Border Data Flows. After adding 60 million new digital consumers since the beginning of the COVID-19 pandemic, ASEAN now has the world’s third-largest internet base with 400 million users. ASEAN’s digital revenue increased from US$117 billion in 2020 to US$174 billion in 2021 and is expected to reach US$363 billion by 2025. The ASEAN digital economy is projected to grow significantly and ASEAN’s regional GDP is estimated to reach US$1 trillion by 2030.
MSME Franchise Requirements
The Philippines issued Executive Order (EO 169) this month that will provide protections for Filipino enterprises against unfair trade practices and create competitive conditions for micro, small, and medium-sized enterprises (MSME) franchisees by developing a transparent and business friendly environment and promoting fair and equitable practices. Under EO 169, franchise holders of MSMEs are now required to have franchise agreements registered with the Department of Trade and Industry (DTI), and all future agreements must comply with the required terms and conditions set out in EO 169. According to the Philippine Statistics Authority, 99.5% of all businesses in the Philippines are MSMEs and 68% are into franchising.
Capital Gains Tax Delayed
Cambodia announced that it will delay the planned implementation of its capital gains tax to January 1, 2024, according to Notification 4577 of General Department of Taxation (GDT). The capital gains tax was supposed to be implemented in July 2020 with residents and non-resident taxpayers being taxed at a fixed rate of 20% for capital gains. Implementation was delayed until January 2021 and then again to January 2022 before the government decided on 2024. The delayed implementation is part of the Cambodian government’s new strategic framework for economic recovery post-COVID. Immovable property, intellectual property, foreign currencies, leases, goodwill, investment assets are considered capital under the tax.
Apostille Convention Accession
Indonesia acceded to the 1961 Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents (Apostille Convention) in 2021 and the implementing regulation to enforce the Apostille Convention in Indonesia entered into force on June 4, 2022. The Apostille Convention is an international treaty intended to simplify the procedure through which a document issued in one of the contracting states can be certified for legal purposes in all the other contracting states. An apostille is an international certification comparable to a notarization, and an apostille issued one signatory of the Apostille Convention is sufficient to certify the document in any other signatory country and removes the need for any further certification.
Energy Imports Begin
Singapore began importing renewable energy from Laos that is channeled through Thailand and Malaysia earlier this month. The Lao PDR, Thailand, Malaysia, and Singapore Power Integration Project (LTMS-PIP) will import up to 100 megawatts (MW) of renewable hydropower and is the first multilateral cross-border electricity trade involving four ASEAN countries. The LTMS-PIP is a pathfinder towards realizing the broader vision of an ASEAN power grid, a key regional initiative to enhance interconnectivity, energy security and sustainability through existing electricity interconnections. Interconnected power grids can accelerate the deployment of renewable energy, promote supply diversification, and strengthen grid stability for the region as a whole. Singapore plans to import 4 gigawatts (GW) of low-carbon electricity a year by 2035, about 30% of the country’s electricity supply for that year.
ASEAN is considered fertile ground for financial technology (fintech) development especially as the COVID-19 pandemic encouraged large-scale demand and adoption of digital financial services. However, experts say that Malaysia’s Islamic financial technology companies are falling behind in the booming Islamic finance market due to competition from banks, Six of the top 20 Islamic banks globally are headquartered in Malaysia, and a lack of funding and product offerings. Islamic finance is a fast-growing segment of global finance and represents 36% of total banking assets in Malaysia.
THAILAND LEGAL REVIEW
Thailand Pass Cancelled
On June 17, 2022, Thailand’s Centre of COVID-19 Situation Administration (CCSA) canceled the Thailand Pass registration scheme and the US$10,000 health insurance requirement for foreign visitors, effective July 1, 2022.
Starting July 1, 2022, the Thailand Pass registration scheme and US$10,000 health insurance requirement will be lifted. Foreign nationals are only required to show proof of one of the following documents:
1. A certificate of vaccination OR;
2. A negative RT-PCR test result within 72 hours of travel OR;
3. Professional ATK test result within 72 hours of travel.
The documents for items 1, 2, and 3 above can be in print or digital format. Random checks will be made on arrivals at Thailand’s international airports or land border checkpoints. Unvaccinated/not fully vaccinated travelers who are randomly checked and are unable to show proof of a pre-arrival negative test will be required to undergo a professional ATK test at the point of entry.
Corporate Law News
Exemption for SME Data Controllers
On June 21, 2022, the Notification of the Personal Data Protection Committee on the exemption of record keeping for data controllers for Small and Medium Enterprises (SMEs) B.E. 2565 (the “Notification”) came into effect. The summary is as follows:
1. Under the Personal Data Protection Act B.E. 2562, data controllers are obligated to maintain, at least, the following records for enabling the data subject and for the Office of Personal Data Protection Committee to check. Such records can be either in written or electronic form.
1.1. Personal data as collected
1.2. Purposes of personal data collection
1.3. Details of personal controller
1.4. Retention period of personal data
1.5. Rights and methods to access to personal data, including conditions of the authorized persons who are entitled to access the personal data and conditions of access to personal data
1.6. Use and disclosure as prescribed by law
1.7. Rejection of request or objection as prescribed by law
1.8. Explanation of security measure according to the law
2. The above records, except (1.7), will not apply to the following SME data controllers pursuant to the Notification unless (i) the collection, use, or disclosure of personal data involves a risk to the impact rights and freedoms of data subjects, or (ii) it is not a business where the collection, use, or disclosure of personal data is occasional, or (iii) it is a collection, use, or disclosure of personal data which is sensitive according to the law.
• A small or medium-sized enterprise (SME) under the laws concerning small and medium enterprises promotion
• A community enterprise and community enterprise network under the laws concerning community enterprise promotion
• A social enterprise (SE) or social business under the laws concerning social enterprise promotion
• Cooperative, cooperative community, or farmer group under the laws concerning cooperatives
• Foundation, association, religious organization, or non-governmental organization (NGO)
• A family-owned corporation or other similar business
Note: Any SME data controller that is exempted from the record keeping as mentioned above excludes service providers that must keep and maintain traffic data (logfile) under the laws concerning acts of commissions of offences relating to computers except for service providers in the internet café category.
The material contained herein is only provided for information purposes. No part thereof may be deemed to constitute legal advice or the opinions of this law firm or any of its attorneys. Whilst every effort has been made to verify the contents of the material contained herein, we do not represent, warrant, undertake, or guarantee that the information contained in this newsletter is correct, accurate, or complete. Legal advice must be sought before acting on any information contained herein.