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April 28, 2023

Cambodia Sets Penalties for Competition Law Violations

On March 28, 2023, Cambodia’s Ministry of Economy and Finance and Ministry of Commerce issued Inter-Ministerial Prakas No. 168 on Penalties for Persons Violating the Law on Competition. This release was in line with the country’s recent establishment of a framework and thresholds for merger filings.

The penalties for violating the Law on Competition center on the following three offenses:

1.  Entering into vertical agreements. This can be done by:

  • requiring buyers to resell goods or services in limited geographic locations;
  • requiring buyers to resell goods or services to specific customers or specific types of customers;
  • requiring buyers to purchase goods or services from one seller only;
  • preventing sellers from selling goods or service to other buyers; or
  • requiring buyers to buy additional goods or services that are not related to the goods or services being sold.

2. Abusing a dominant market position. This can be done by:

  • requiring or persuading suppliers or customers to not do business with competitors;
  • refusing to supply goods or services to competitors;
  • selling goods or services subject to commercial terms that require buyers to buy other goods or services separately that are not related to the purpose of the transaction;
  • selling goods or services below production cost; or
  • refusing to give competitors access to the necessary means of selling their goods and services.

3.  Undertaking a business combination that actually or potentially restricts or distorts market competition.

Each of these violations is punishable by a fine of 3% to 10% of the infringer’s total turnover during the period of violation, limited to three years.

Next Steps

The first half of 2023 has seen three new regulations strengthening Cambodia’s competition law framework, as noted above. Although certain unclear terms do remain, regulators are expected to issue additional decisions in 2023.

For more details on competition regulations or the legal framework for corporate transactions in Cambodia, please contact Tilleke & Gibbins at [email protected].

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