12 Jun ASEAN Today – Regional Legal and Business News – May 2018
ASEAN Today – Regional Legal and Business News for May 2018 and an Important Update on Cryptocurrencies and Digital Assets in Thailand.Download PDF
ASEAN Economic Community News
Consumer Protection Handbook
The ASEAN Committee on Consumer Protection launched the Handbook on Consumer Protection Law and Regulations which is the first ASEAN publication on consumer protection structures in the member states. The Handbook compiles the consumer laws and regulations of each member country and responsible agencies, the complaint mechanisms and mediation centers, and also lists the national consumer associations. The Handbook is a quick reference guide on consumer protection frameworks in the region and designed for the use of consumers, officials, policy-makers, legislators, and researchers.
Goods and Services Tax Cut
Malaysia will cancel its 6% Goods and Services Tax (GST) effective June 1, 2018. Cancelling the GST was one of the campaign promises of the new Prime Minister in response to Malaysian complaints that the GST kept pushing up the cost of living. However, economists warn that it will cut government income and widen the budget deficit. The government now plans to implement a moderate sales and services levy.
Under Vietnam’s proposed new cyber-security law, social media companies and digital multinationals will be required to store Vietnamese user data and any data collected or generated in the country in Vietnam itself. Many believe that this could have a negative impact on foreign investment and the overall economy. 64 million people have internet access in Vietnam and 55 million, 57% of the population, use social media.
New Intellectual Property Law
The new Law on Intellectual Property No. 38/NA (2017) of Laos comes into effect on June 8, 2018. The new Law amends and replaces the Law on Intellectual Property No. 01/NA (2011). Under the new law, 3D images and animated images can now be registered as trademarks and an opposition procedure was implemented that will allow third parties to oppose trademark registrations. Laos’s Department of Intellectual Property plans to create an electronic platform to publish new trademark application submissions. Now, a trademark registration will be valid for ten years from the filing date, not the registration date. A publication and opposition procedure for patents, petty patents, industrial design, and layout design of integrated circuits will also be implemented.
Indonesia has legitimized cryptocurrencies within the country and classified them as commodities on the Indonesia Stock Exchange (IDX). However, cryptocurrencies will not be recognized as valid means of payment. Further regulatory measures are expected.
Multiple business surveys in Myanmar reveal that both foreign and domestic companies in the country are facing major difficulties and believe they are on a downward trend. Two major reasons are taxes are too high and there is too much competition with goods illegally entering the market.
Red Tape Reduction
The Philippines enacted a new law, the Ease of Doing Business Act 2018, to continue the fight to reduce bureaucratic red tape in government institutions. It replaces the 2007 Anti-Red Tape Act long considered a failure.
THAILAND LEGAL REVIEW
The Emergency Decree on the Digital Asset Business B.E. 2561
On May 14, 2018, the Emergency Decree on the Digital Asset Business B.E. 2561 became effective. Under the Decree, digital assets are defined as cryptocurrencies and digital tokens. Cryptocurrencies include electronic data units generated on a system or network for the purpose of being a medium of exchange and used to obtain goods or services or any other rights, the exchange between digital assets, and any other electronic data specified by the Securities and Exchange Commission of Thailand (SEC). Meanwhile, digital tokens are defined as an electronic data units generated on a system or network with the objective of right specification of such person participating in an investment or to obtain goods and services, or any other right, as stipulated in agreement between issuer and holder.
The Emergency Decree was legislated due to concerns on the impact on Thailand’s financial stability, economic system, and general public in relation to the increasing use of cryptocurrencies and digital tokens as new tools for fundraising, as a medium of exchange, and for utilization in business or exchange in digital asset centers, and that there are no laws and regulations supporting these matters. Thus, the Emergency Decree was enacted to govern and regulate digital asset transactions in any business operation, to support new technological innovation for sustainable development, to protect investors from deception by providing and facilitating information in making decisions into investment, and to prevent the exploitation of digital assets from any illegal transactions, as well as to maintain the orderly purchase, sale, or exchange with transparency and integrity. However, digital assets will still not be legal tender in Thailand.
The Emergency Decree is under the Ministry of Finance’s control and it also authorizes the SEC to control and regulate these issues. Digital asset trading center/exchanges, digital asset brokerages, digital asset traders, and any other related digital asset businesses and participants specified by the Minister of Finance must be licensed. Those who were engaged in any digital asset business before the Emergency Decree came into force on May 14, 2018 are required to register with the Securities and Exchange Commission within 90 days from the effective date.
The Emergency Decree on Amendment of the Revenue Code (No.19) B.E. 2561
The Emergency Decree on Amendment of the Revenue Code (No.19) B.E. 2561 was published in the Royal Gazette on the same date as the Emergency Decree on the Digital Asset Business B.E. 2561. The Revenue Code was amended in accordance with the new developments with assessable income from digital assets by including the following revenues as assessable income:
1. The share of profit or any other benefit deriving from holding and possessing digital tokens.
2. Benefits deriving from the transfer of cryptocurrencies and digital tokens; however, this shall apply only to the monetary value exceeding the amount spent as capital.
Additionally, the above assessable incomes are also subject to 15% withholding tax.
Notification of the Contract Committee Re: Prescribing the Hire-Purchase Agreement of automobiles and motorcycles as a Contract-Controlled Business B.E. 2561 (2018)
The Notification will become effective on July 1, 2018. The purpose of the Notification is to protect automobile and motorcycle owners from exploitation by business operators by stipulating the calculation of interest rates. Under the new Notification, an Effective Interest Rate instead of a Flat Interest Rate shall now apply to hire-purchase agreements. Additionally, the interest rate in case of default in payment shall not exceed 15%. Previously it was 17%. In the event the hirer-purchaser requests payment in full, the related business operator shall discount the interest rate by not less than 50%. The Notification shall only apply to passenger cars or motorcycles for personal use.
The Royal Decree on Establishment of the Digital Government Development Agency (Public Organization) (DGA) B.E. 2561
The Royal Decree on Establishment of the Digital Government Development Agency (Public Organization) (DGA) B.E. 2561 came into effect on May 14, 2018 and improves on the Royal Decree on Establishment of Electronic Government Agency (Public Organization) (EGA) B.E. 2554. Under the new decree, the Digital Government Development Agency is under the supervision and management of the Prime Minister as a deputy, instead of the Minister of Digital Economy and Society. The Decree also includes a new amendment that applies to digital technology in order for it to be used as a tool for increasing efficiency for the facilitation of public management and public services. In addition, the provisions were amended, in accordance with the Public Organization Act (No.2) B.E. 2542, to help boost the DGA’s management productiveness and mission performance.
THAILAND IMMIGRATION UPDATE
Urgent Work Permits
The regulations for Urgent Work Permit (UWP) extensions under the Emergency Decree on Managing the Work of Foreigners B.E. 2561 (2018) (Chapter 2) have now been implemented. All companies can now apply for an extension of an UWP, but the application for the extension must be made before the first UWP period ends. A letter of explanation from the sponsoring company detailing the reason why an UWP extension is required and a new set of UWP applications must be submitted to the Employment Department. If an UWP application will be filed at a Provincial Employment Office rather than the Bangkok Office, there may be some additional requirements designated by the respective Provincial Employment Office. For example, the Provincial Employment Office in Chonburi Province requires the UWP extension to be made at least 3 days before the first UWP period ends. While at the One Stop Service Center in Bangkok, an UWP extension can be made at any time before the first UWP period ends.
In theory, the 45-day period between UWP applications still applies. The 45 days will start from the end date of the extended UWP. However, if the applicant has any justifiable reason and can explain and convince the Labour officer that the foreign employee needs to apply for a UWP within the 45 days, such person might be granted an UWP. The Labour officer will review the case and make a decision based on the needs and necessity of the applicant. Once again, a letter of explanation of why the UWP is needed before 45-day period has ended is strictly required.
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.