Updated: Dec 22, 2020
Two significant implementing regulations on the licensing requirements for electronic commerce service providers and intermediaries (E-Commerce Operators) has been issued since the enactment of the law on Electronic Commerce (“E Commerce Law”) on 2 November 2019. These regulations which came into effect in the final quarter of 2020 include:
Sub-Decree No. 134 on the Classification, Formalities and Procedures for the Issuance of Permits and Licenses to Electronic Commerce Service Providers and Intermediaries dated 27 August 2020 (Sub-Decree 134/20); and
Ministry of Commerce’s Prakas No. 290 on the Provision of Permits and Licenses for Electronic Commerce dated 9 October 2020 (MOC Prakas 290/20).
Scope of regulations and applicability
Under the current regulatory framework, the scope of e-commerce regulations applies to all persons (natural or juristic) conducting business or facilitating transactions through electronic means. Under MOC Prakas 290/20, this includes: (i) natural persons; (ii) sole proprietorships; (iii) legal entities; and (iv) branches of foreign companies.
Permit and licensing conditions
Sub-Decree 134/20 provides that there are two types of authorisation which E-Commerce Operators need to obtain prior to operation: a permit or a license.
1.) The E-Commerce license which is granted to only legal persons and branches of foreign companies carrying out the following activities:
e-commerce web services;
e-commerce platform services;
online market services;
online auction website services; and
other similar services provided through software or smart devices for the promotion of e-commerce.
2.) The E-Commerce permit which is granted to only natural persons and sole proprietors that operate a business via electronic system in Cambodia (including those who conduct business via social media and electronic system to supply or sell/purchase goods and services).
In this connection, there are certain conditions listed under MOC Prakas 290/20 which would exempt one from the need to apply for the E-Commerce permit. These include:
advertising goods or services, including advertising to sell the goods or services which do not give rise to an offer to form a contract.
booking of services that does not require any deposit or payment by users of the service.
natural persons or sole proprietors whose annual turnover is below the small taxpayers revenue bracket (currently at USD 62,500 per annum).
sale that are of a family or seasonal nature or purely of one’s personal artistic work.
training and/or education provided on a personal basis, for state religious purposes, or those provided by public institutions and not-for-profit NGOs.
The current regulatory framework subjects E-Commerce Operators to a dual licensing framework, i.e.: (1) obtaining the e-commerce permit/license from the Ministry of Commerce (“MOC”); and (2) obtaining a permit to operate via the internet and register a domain name with the Ministry of Posts and Telecommunications (“MPTC”). While there are existing licensing regimes under the MPTC for internet services, licensing requirements under the Sub-Decree 134/20 and Prakas 290/20 are fairly recent. The Department of Business Registration within the General Department of Trade Service of the MOC has been designated as the competent authority to issue, renew, suspend and revoke e-commerce permits and licenses.
Notification of change of information
MOC Prakas 290/20 also requires E-Commerce Operators to notify the MOC in a separate application on any change of information which it has submitted to the MOC as part of its initial application for the e-commerce license. This application is to be made within 15 days of such change occurring during the course of its business. Further, the Prakas requires any licensed E-Commerce Operators to notify the MOC on any suspension or cessation of e-commerce activity or business operations in general.
Despite the two implementing regulations above coming into force, there are several areas which have not been clarified still. Notably, although Sub-Decree 134/20 defines e-commerce activity to include services provided by overseas operators, there has yet to be clear guidance on how the MOC will regulate foreign operators selling services and goods to consumers in Cambodia. Moreover, current e-commerce regulations have not specified what technical standards e-commerce operators need to abide by in order to protect electronic data collected during the course of the e-commerce activities, let alone the burden of ensuring such protection resting on the e-commerce operator as provided by the E-Commerce Law.
For more information, please contact:
Liew Shan Berg, Senior Partner, SokSiphana&associates (a member of ZICO Law)