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Inter-ministerial prakas sets fines for business violations

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An unopened showroom covered with the brand logo of US electric automaker Tesla Inc, along Russian Federation Boulevard in the western Phnom Penh district, across the road from the commerce ministry. Heng Chivoan

Inter-ministerial prakas sets fines for business violations

Businesses found in violation of a list of business and e-commerce laws, and other commercial regulations could be landed with a fine of between 200,000 and 10 million riel ($50 and $2,500), according to an inter-ministerial prakas issued publicly on May 25.

Signed by commerce minister Pan Sorasak and finance minister Aun Pornmoniroth on May 12, the prakas centres on six classes of violations, ostensibly setting fines proportional to the severity of the offence.

“Unregistered adjustments and other changes” at the commerce ministry carry a one million riel fine, while companies failing to file an annual declaration could be slapped with a two million riel penalty, the prakas said.

According to the commerce ministry’s online business registration website: “Failure to file annual declarations for three consecutive years will result in a repeal of the business’s registration and licence to operate in Cambodia.”

The prakas added that providing false information or forged documents required for registration is punishable by a one million riel fine, while conducting unauthorised e-commerce transactions can result in a 10 million riel charge.

Submitting company reports, notes or other documents to the commerce ministry found to contain false information can attract a penalty of two million riel, it said, adding that failure to send copies of financial statements to the commerce ministry will incur a two million riel fine.

Additionally, applications for the re-registration of trademarks, brands and other intellectual property more than six months past expiration will be levied with a 200,000 riel fee, the prakas said, stressing that collected fines and fees will go to the national budget.

Commerce ministry spokesman Pen Sovicheat noted that the prakas generally applies to all individuals – both physical and legal entities.

He told The Post that the prakas “is to facilitate the effective implementation of our administrative measures set by various regulatory documents related to business registration, commercial laws and trademark registration.

“In the past, we have implemented guidance and education through repeated notifications for those who failed to comply.

“Therefore, the prakas allows the ministry to impose fines for any offences related to non-compliance as stated. Trademark [and] intellectual property infringement is already enshrined in all our existing intellectual property laws,” according to Sovicheat.

Last year saw 7,860 new businesses register with the commerce ministry, down by 40.72 per cent from 13,259 in 2019. Sole proprietorships accounted for 2,183 or 27.77 per cent, down by 44.24 per cent from 3,915 in 2019.

At the same time, the ministry dissolved 500 businesses last year, marking a 187 per cent increase from 174 in 2019.

Meanwhile, Phnom Penh municipal Department of Commerce deputy director Ly Kong on May 24 led a team that included Por Sen Chey District Administration officials to inspect an unopened showroom covered with the brand logo of US electric automaker Tesla Inc, along Russian Federation Boulevard in the western Phnom Penh district, across the road from the ministry.

According to Kong, while the team did not chance upon the showroom director, it did meet with representatives, calling on them to register the Tesla trademark and car brand at the commerce ministry, and to apply for a trademark permit with the Phnom Penh Municipal Administration.

The appeal comes nearly two months after a sizable billboard advertisement for Tesla sprouted up on the showroom, which has sparked a flurry of comments and images on social media fanning rumours surrounding the US electric car giant’s presence in the Kingdom.

Kong told The Post: “We merely went to keep track of things and directed them to follow the law. We haven’t seen an outcome yet, but we’ll have to wait and see after one or two more inspections.”

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