You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

December 28, 2020

Consumer Protection Associations in Laos Introduced under New Regulations

Subscribe to Updates

The practice of business operators taking advantage of Lao consumers has always concerned Lao authorities, especially because the application of the country’s consumer protection regulatory framework has been restricted and unfamiliar to the country’s civil society. For example, the main piece of legislation, the Law on Consumer Protection no. 02/NA, dated June 30, 2010, enunciates a series of broad principles that are too general to be implemented effectively.

Moreover, Laos has no independent entity to assist the country’s consumers in making informed decisions, namely by advising them on local operators’ malpractices and defective products that may endanger their health. Under Lao law, the powers delegated to the Ministry of Industry and Commerce (MOIC) and the Internal Trade Department are limited to administering consumer protection measures, such as controlling the price of products below the government’s price ceiling (e.g., for daily commodities, such as pork and traditional soups) and ensuring that products and services observe the country’s minimum safety standards. In practice, selected ministries have also overseen such measures for products under their respective areas of expertise; for example, the Ministry of Health monitors complaints related to medicinal products and pharmaceuticals.

For this reason, the Lao authorities have been leading consultations to fill the legal vacuum and better promote consumer protection measures in the country. From these consultations to revamp and enhance the consumer protection legal framework, in mid-2020 the authorities issued recommendations that provide a legal framework for the establishment of consumer protection associations. This guidance was outlined in the Recommendations Concerning the Establishment and Operation of Consumer Protection Associations no. 0707/MOIC, dated July 30, 2020, which were published in the official gazette of the Ministry of Justice on August 3, 2020.

Authority of Consumer Protection Associations

The recommendations were issued to elaborate on the scope of consumer protection associations in the Law on Consumer Protection. According to the legislation, consumer protection associations can do the following:

  • Advise and help consumers with issues relating to goods and services by providing transparent and fair representation for consumers during a settlement dispute.
  • Represent a consumer in a dispute against a supplier, including both amicable negotiations and bringing the dispute before the court by filing a complaint with the Lao People’s Court on behalf of the consumer.
  • Receive and consider consumer complaints and organize mediation between consumers and suppliers.
  • Report infringement of laws by suppliers to the authorities that oversee consumer protection (e.g., the MOIC).
  • Report illegal acts carried out by Lao officials to the relevant authority in charge of consumer protection.
  • Provide opinions on the current legal framework, and suggest amendments or new regulations for consumer protection.

Requirements for Consumer Protection Associations

There are three potential geographical scopes of operation for consumer protection associations, with corresponding membership requirements:

  • Nationwide associations must have 25 or more members;
  • Province-wide associations must have at least 15 members; and
  • District- or city-wide associations must have at least 10 members.

Only Lao nationals can manage the country’s consumer protection associations (e.g., as founders or audit and management committees members), but foreign nationals may be appointed as counsel as this is not prohibited by the recommendations.

Consumer protection associations cannot borrow or secure loans from financial institutions, legal entities, or individuals. On the other hand, the recommendations permit consumer protection associations to receive funds from individuals, legal entities, and Lao or overseas organizations. According to the recommendations, when receiving funds from Laos, such associations must declare them and their sources to the MOIC; when funds are received from overseas, associations must declare them to the MOIC and obtain approval from the Ministry of Foreign Affairs (which will also consult the Ministry of Home Affairs).

The associations must also submit updates to the local authorities every six months, reporting on the status of the association, the operations, and the income and expenditures made. The funds received must be used, and directed toward the object of the association.

The recommendations’ provision on the establishment of consumer protection associations is in line with the previously issued Decree on Associations no. 238/GOV, dated August 11, 2017, which pertains to all forms of associations in the country. The MOIC will review the objectives and the internal governance structures of consumer protection associations, while the Ministry of Home Affairs adjudicates on the applications.

Conclusion

So far, no consumer protection association has been set up; establishment of an association can be a lengthy process in Laos due to administrative constraints. The 2020 consumer protection association recommendations have the potential to ensure a quick and straightforward process for establishing consumer protection associations, and it is hoped that the recommendations will serve as a landmark for consumer protection in Laos, facilitating the involvement of the country’s growing civil society in this important issue.

Related Professionals

Industries

Consumer Products

Practices

Corporate/M&A

Dispute Resolution and Litigation

Regulatory Affairs

Location

RELATED INSIGHTS​ 

November 3, 2023
Vietnam’s new Law on Protection of Consumer Rights No. 19/2023/QH15 (CPL 2023) was promulgated by the National Assembly on June 20, 2023, and will replace the existing Law on Protection of Consumer Rights No. 59/2010/QH12 (CPL 2010) when it enters into effect on July 1, 2024. The main points of interest of the CPL 2023 are summarized below. 1. Definition of Consumer Under the CPL 2023, a consumer is defined to be “a person who purchases and/or uses products, goods and services with the aim of consumption for daily needs of individuals, families, or organizations, and not for commercial purposes” (Article 3.1). Compared to the CPL 2010, this definition introduces the phrase “and not for commercial purposes” to emphasize the exclusive focus on the consumption of goods and services. However, the CPL 2023 retains the use of the term “person” for defining a consumer, leading to uncertainty regarding whether an organization or a family can qualify as a consumer. Similarly, the CPL 2023, as in the CPL 2010, maintains an ambiguous comma between “purchase” and “use,” so it remains somewhat ambiguous whether purchase (without use) or use (without purchase) of goods/services is sufficient to qualify as a consumer under the law. 2. Vulnerable Consumers The CPL 2023 introduces a new concept known as the “vulnerable consumer.” This term pertains to a consumer who, at the time of purchase or use of products/services, is potentially subject to various adverse situations in terms of information access, health, property, or dispute settlement. This category encompasses individuals such as the elderly and disabled, children, ethnic minorities, people of remote or economically difficult regions, pregnant women and breastfeeding mothers of infants under 36 months, individuals with severe illnesses, and members of poor households (Article 8.1). The rights and privileges of vulnerable consumers must be
Read More
October 30, 2023
On October 9, 2023, Laos issued Presidential Decree No. 003, which raised excise tax rates for certain goods, effective immediately. The move to increase excise tax rates comes amid the marked depreciation of the Lao kip (LAK). The Lao government is trying to monitor and discourage imports of non-essential products in order to reduce the outflow of foreign currency from the country. Increasing the tax rate for some of these products is part of these efforts. The specific products and excise tax rates are listed in the table below.   This new rate policy is also in line with recent government efforts to encourage avoiding payment in foreign currency to prevent the depletion of foreign currency reserves in Laos. In this regard, commercial banks have already taken action to ration the supply of foreign currency by prioritizing imports of essential goods, such as fuel. The products listed above formalize this impetus to prioritize certain imports and discourage others deemed not essential. In addition, the increased excise tax rates on fuel-powered vehicles show the commitment of the Lao government to move toward electric vehicles, which would also lessen the country’s dependence on fuel imports. For more information on these excise tax changes, or on any aspect of Laos’ international trade regulations, please contact Tilleke & Gibbins at [email protected].
Read More
October 17, 2023
On June 20, 2023, Vietnam’s new Law on Protection of Consumers’ Rights (“CPL 2023”) was officially promulgated, followed two days later by a new Law on E-Transactions (“LOET 2023”). The new laws, which will both take effect from July 1, 2024, replacing the CPL 2010 and the LOET 2005, respectively, provide new regulations for e-commerce platforms and will impact e-commerce activities in Vietnam. Some of the more significant changes are outlined below. Law on Protection of Consumers’ Rights Regulation of offshore entities: Previously, the CPL 2010 regulated only organizations and individuals in the territory of Vietnam. Under the CPL 2023, both onshore and offshore agencies, organizations, and individuals related to protecting consumers’ rights are regulated. In other words, Vietnam intends to monitor and manage activities of platforms with no legal presence in Vietnam. Remote transactions: Previously, the laws on consumer protection regulated “remote contracts.” The CPL 2023 introduces and defines “remote transactions” as transactions made online, by electronic means or by other means wherein consumers cannot check or have direct contact with products, goods or services before participating in the transaction. In addition, the CPL 2023 also provides for additional responsibilities of business entities offering remote transactions such as adequately and precisely providing consumers with information when entering into these remote transactions, including the rights of consumers in case of incomplete or inaccurate provision of information and complaint handling mechanisms. Online businesses: The CPL 2023 introduces “online businesses,” which are defined as (i) those trading products, goods, and services via their self-established platforms or digital platforms or (ii) those establishing or operating intermediary digital platforms. According to the Vietnam Competition Commission in a recent workshop, the definitions of “digital platforms” and “intermediary digital platforms” can be referred to in the LOET 2023 (see below). Under this new category, online
Read More
October 4, 2023
Extended producer responsibility (“EPR”), a strategy whereby producers are held accountable for the environmental impact of their products throughout their entire life cycle, including disposal and recycling, has become more and more familiar to manufacturers in Vietnam. According to the director of the legal department of the Ministry of Environment and Natural Resources, EPR is an alternative financial solution for managing waste and increasing recycling without raising environmental protection taxes and fees, which may help Vietnam to maintain a closed loop of resources in manufacturing. New EPR Regulations Applicable to Producers and Importers In 2020 and 2022, the new Law on Environmental Protection 2020 and its guiding Decree No. 08/2022/ND-CP were promulgated, introducing a legal framework for EPR (“New EPR Regulations”) imposed on not only producers but also importers. Under the New EPR Regulations, producers and importers of certain types of products and packaging are responsible to collect and treat waste and recycle their products and packaging. The responsibility to collect and treat waste took effect on January 10, 2022, while there are different timelines being phased in from 2024 to 2027 for the recycling of products and packaging, depending on the type. For the purpose of compliance with the recycling requirement under the New EPR Regulations, the producers and importers can implement the recycling obligation by themselves, or engage a third party to recycle or organize the recycling, or make a financial contribution to the Vietnam Environment Protection Fund to support the recycling process. This will cause an increase in cost and, hence, an impact on prices of certain products in the near future. Exceptions to the recycling obligation include: Producers and importers of products and packaging for (i) export or temporary import for re-export or (ii) manufacture or import for research, study, or testing purposes. Packaging producers
Read More