Legal and Tax Updates

Issue: No. 002P/24 – 16 January 2024

On 03 January 2024, the Non-Banking Financial Services Authority (the “FSA”) issued a Prakas No. 002 FSA Br.K on Modality and Procedure of Administrative Sanctions and Transitional Fines in Trust Sector, which compose of 9 chapters and 24 articles (the “Prakas”). This Prakas aims to determine the rule, modality, and procedure of administrative sanctions and transitional fines as stipulated in the relevant laws and regulations related to the trust sector in Cambodia.

Competent Authority

The trust inspector is empowered to take action on the administrative sanctions and transitional fines against the person who is not complying with the existing Trust Law and relevant regulations.

Payment of Fines and Transitional Fines

The person who got a fine or transitional fine from the trust inspector shall pay the fine or transitional fine to the trust inspector within 15 days upon the receipt of decision of fine or transitional fine. In case of late payment less than 30 days, an amount of 2% (two percent) will be added into the fine or transitional fine amount. For any late payment more than 30 days, the trust inspector may impose more administrative sanctions for the fine, and may refer the case to the competent court for the transitional fine.

Administrative Measures

The trust inspector can take administrative measures against person who failed to comply with the requirement of license, permit, registration, or recognition in any of the following form:

• Warning;
• Correction direction;
• Restriction on license, permit, registration or recognition;
• Restriction on trust asset administration, management and/or maintenance;
• Suspension of license, permit, registration or recognition;
• Suspension or dismissal from board members and senior officer; and
• Revocation of license, permit, registration or recognition.

Procedure for Imposing Administrative Sanctions and Transitional Fines

Prior to impose any sanctions or fines, the trust inspector shall provide a chance to violated person to provide an explanation, in writing or verbal, within a given timeframe.

Disclaimer

The article is merely for general information purposes. It does not constitute a legal advice on the subject matter. If you have any questions or need any assistance, please feel free to contact us:

	NOEUM Sokvichhai, Partner, Managing Director sokvichhai.noeum@sithisak-lawoffice.com +855 12 826 785	Sokvichhai has more than 6 years of experiences in labour, corporate, commercial and investment advisory in Cambodia. He actively advices and assists various businesses in commercial, tax, and labour registration, business licensing, products registration & distribution, business recapitalization & restructuring, and mergers & acquisitions transaction. He also has particular experiences in advising collective investment fund and trust business, investment incentives & qualified investment project, and labour & employment related issues. Besides extensive compliance knowledge and experiences, he also assists major business in preparing and reviewing various commercial agreements, including but not limited to loan and security documents, join venture, partnership & shareholder agreements, franchise & distribution agreements, service & supply agreements, note subscription, pledge and guarantee agreements and other commercial contracts. Currently, Sokvichhai is also leading Sithisak’s Investigation Team to investigate any labour related misconduct within client’s company.
	Dr. CHHAK Limchheang, Partner, Head of Real Estate and Construction Practice Group limchheang.chhak@sithisak-lawoffice.com +855 89 813 160	He has several years of professional experiences in real estate-related transaction and construction sector in Cambodia. He has advised local and foreign clients on acquisition and disposal of residential, industrial and commercial properties, on commercial lease, factory perpetual lease, real estate joint venture development and FIDIC agreements. Recently, he led counsel to advise on both real estate and tax issues of real estate development project with an approximate investment portfolio of USD 40 million in Kampot Province. He is currently leading a legal counsel to advise a major domestic company in their joint venture property development with an investment portfolio nearly USD 200 million in Phnom Penh.

Read in PDF: