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

On March 14, 2023, the Competition Commission of Cambodia (CCC) set out its merger filing thresholds in Decision No. 095 on Thresholds for Prior Notification of Business Mergers. This was a follow-up to the recent issuance of a regulation outlining the requirements and procedures for merger and acquisition filings. Decision No. 095 applies to all business combinations subject to premerger notification requirements under this prior regulation. The thresholds for when the CCC must be notified of a merger are laid out in the table below. Decision No. 095 leaves room for the Ministry of Commerce to amend these thresholds as deemed necessary. Outlook In the last two years, Cambodia has steadily issued regulations to strengthen its legal framework for competition. Although gaps remain, especially with regard to enforcement of fines and certain unclear terms, more regulations are likely in 2023 and 2024. For more details on competition regulations or the legal framework for corporate transactions in Cambodia, please contact Tilleke & Gibbins at [email protected].

On March 6, 2023, Cambodia issued requirements and procedures for merger and acquisition (M&A) filings to allow the country’s competition regulator to monitor the impact of M&A transactions on the Cambodian market. These rules are contained in Sub-decree No. 60 on the Requirements and Procedures for Business Combinations. This subdecree is the latest in a series of detailed regulations issued to develop Cambodia’s competition and antitrust law framework since the 2021 enactment of the Law on Competition, which formally established the Cambodia Competition Commission (CCC), set out the CCC’s complaint and investigation procedures, listed prohibited anticompetitive practices, and outlined applicable penalties. Sub-decree No. 60 applies to any business combination that may materially affect competition in Cambodia, regardless of where in the world it takes place. Premerger and Postmerger Notifications The parties to a business combination must notify the CCC of the proposed combination if the transaction meets certain thresholds, which will be determined by the CCC at a future date. The notification must include, among other things, key terms of the relevant agreements, incorporation documents and financial statements of the parties, and an indication of the types of goods or services provided by the parties. All documentation submitted must be in Khmer, except for names, addresses, and certain other items. The CCC will determine within seven working days whether it requires additional information or documentation. Once it has all necessary documentation, the CCC will issue a decision on the proposed business combination within 30 days—the combination may be approved outright or declared subject to a secondary review. Sub-decree No. 60 states that a proposed business combination will not be subject to secondary review if the market share of each party does not exceed 30 percent in each relevant market, among other criteria. However, the CCC reserves to right to

The rapidly growing middle class in Southeast Asia is bringing with it increased household wealth, increased consumption, and increased investment. As a result, the commercial banking sector has seen a boom in the more economically developed countries of the region—especially in Thailand. A select few foreign banks have also been very successful in Cambodia, Laos, Myanmar, and Vietnam for many years, but as other banks seek to replicate their Thai success in these new markets, the field looks likely to become much more crowded in coming years. Six major Thai banks are active in at least one other jurisdiction in mainland Southeast Asia, with some already operating across them all, and many larger international banks also beginning to take note. Amid that background, this guide examines the legal frameworks for foreign banks seeking to operate in these jurisdictions, and addresses some current and upcoming developments that investors should note. The full guide is available as a PDF through the button below.