18 November Cambodia enacts a new e-commerce law & a Consumer Protection Law
In support of Cambodia’s rapidly growing economy, the Cambodian government enacted the Law on Electronic Commerce (E-commerce Law) and the Law on Consumer Protection (Consumer Protection Law) on November 2, 2019. Both of these new laws change the legal landscape in important ways for businesses under their purview.
The E-commerce Law regulates domestic and cross-border e-commerce activities in Cambodia, establishes legal certainty for electronic transactions, and enacts a number of important protections for consumers.
The E-commerce Law broadly applies to all commercial and civil acts, documents, and transactions executed via an electronic system, except those that are related to powers of attorney, wills and successions, and real estate. The E-commerce Law grants the Cambodian government the authority to issue further regulations to limit the law’s scope; thus it will be necessary to monitor whether other types of transactions are later excluded from the scope of the law.
The E-commerce Law has 12 chapters, 67 articles, and one annex
- The first chapter contains general provisions on the aim, purpose, and scope of the law, as briefly described above, and refers to the annex, which contains a glossary of 38 key terms used throughout the law.
* The second and third chapters deal with the validity and process of electronic communications, including clarifying the regulatory requirements for recognizing electronic agreements and e-signatures. These chapters also discuss certain technical matters, such as when and where electronic communications are considered sent and received.
* The fourth chapter addresses the security of electronic records and e-signatures, and specifically prohibits identity theft.
* The fifth chapter is material to electronic-commerce service providers and intermediaries. This chapter covers potential liabilities for third-party content on platforms and content takedown requests. Furthermore, service providers and intermediaries, possibly including foreign entities making their platforms accessible in Cambodia, may be subject to a licensing regime and codes of conduct in Cambodia.
* The sixth chapter contains legal provisions on consumer protection on e-commerce platforms, including matters on adequate information requirements, scams, malicious codes, and data protection. Interestingly, this chapter specifically requires both domestic and foreign e-commerce businesses, regardless of their places of business, to comply with the legal obligations regarding unsolicited emails.
* The seventh chapter governs electronic acts and transactions by the Cambodian government, which may facilitate governmental agencies using online application forms in the future.
* The eighth chapter gives legal recognition to the use of evidence in an electronic form in Cambodian legal proceedings.
* The ninth chapter further regulates electronic fund transfers and payments. Banking and financial institutions should be aware of this chapter as it imposes certain obligations and liabilities on them concerning electronic fund transfers and payments. For instance, when a banking and financial institution has received a customer’s notification that his or her electronic payment instrument has been lost or stolen, banking and financial institutions are now liable for any transactions occurring after the notification.
* The tenth chapter designates the Ministry of Commerce and the Ministry of Posts and Telecommunications as the competent authorities who may issue warnings and disciplinary sanction decisions on e-commerce matters.
* The eleventh chapter outlines a number of penalties, such as fines and imprisonments, on persons violating provisions of the E-commerce Law.
* The last chapter notes that the E-commerce Law will not be implemented until May 2, 2020, which leaves time for government agencies to prepare any necessary implementing regulations required under the law, and for private companies to prepare for compliance.
* As businesses have almost six months to prepare for the implementation of the E-commerce Law, we recommend that they familiarize themselves with the new requirements of the law and watch out for additional implementing regulations that are likely to be released before the full implementation of the law on May 2, 2020.
Consumer Protection Law
The Consumer Protection Law establishes rules to guarantee the rights of consumers and to ensure that businesses conduct commercial competition in Cambodia fairly. The Consumer Protection Law applies to any person who conducts any trading activities with consumers in Cambodia, regardless of whether the trading activities are for profit. The law applies to the sale of goods, services, and real rights over immovable property.
The Consumer Protection Law has 11 chapters and 51 articles
- The first three chapters touch on introductory and general provisions, and explain the aims and purposes of the law and key definitions. Importantly, these chapters establish the National Committee on Consumer Protection (NCCP) as Cambodia’s competent authority for consumer protection and empower consumers in each industry to form an association to protect their interests.
* The fourth and fifth chapters regulate unfair trading activities and unfair practices. These deal, for example, with false, misleading, or deceptive advertisements, and business models equivalent to pyramid schemes.* The sixth chapter sets out minimum information standards that businesses must meet in connection with consumers, such as labeling requirements. These minimum information standards will be more specifically set by the relevant industry regulators. One notable element of the standards is that all information must be provided in the Khmer language.
* The seventh to the ninth chapters establish the procedures for the NCCP to receive consumer complaints, carry out investigations, and issue decisions, and the rules for appealing the NCCP’s decisions.
* The tenth and eleventh chapters present a number of penalties for non-compliance with the Consumer Protection Law, including disciplinary sanctions, fines, and imprisonment.
The Consumer Protection Law became effective upon promulgation on November 2, 2019 , and prudent businesses should therefore immediately review the law to understand their compliance requirements and prepare accordingly.
For more information, please contact our Phnom Penh office on [email protected] or at +855 23 964 210.