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Cambodia Adopts the Law on Competition to Curb Anti-Competitive Practices and Promote Competitive Markets

19 October 2021
News Cambodia

Phnom Penh - 18 October 2021

Cambodia's Law on Competition ("Law") was signed and promulgated by His Majesty King Norodom Sihamoni on 5 October 2021, bringing competition laws to all 10 ASEAN Member States (AMS), as envisioned under the ASEAN Economic Community Blueprint 2025. The enactment of this Law satisfies one of Cambodia’s obligations to not only ASEAN but also to the World Trade Organization.

The Law provides a level-playing field for businesses in Cambodia to compete through means including innovation, improved quality and lower prices of the products and services, and this increased competition is expected to bring benefits for consumers and foster national economic growth.

Comprising of 7 Chapters and 41 Articles, the Law covers the “three pillars” of competition law including (1). Anti-competitive agreements, (2). Abuses of dominance and (3). Anti-competitive business combinations where they have effects within Cambodian markets as described in Chapter III of the Law. The Law applies to all Persons conducting business activities, or any actions supporting business activities, which significantly prevent, restrict or distort competition in a Market in the Kingdom of Cambodia regardless of whether the activities take place inside or outside the territory of the Kingdom of Cambodia.

Pursuant to the Article 4 of this Law, the Competition Commission of Cambodia (“CCC”) will be established as a sole agency responsible to enforce the Law and to promote a competitive market economy for Cambodia. The composition, roles and functions of the CCC are set out in Chapter II of the Law. The chairman of the CCC will be the Minister of Commerce, while other members will be representatives from relevant ministries together with other Independent Commissioners including 1 (one) former judge, 2 (two) legal practioners and 2 (two) economists. The Consumer Protection, Competition and Fraud Repression (CCF) Directorate-General will be the Secretariat of the Commission.

The Law provides for civil penalties against persons for breaches of the Law. If it determines that a Person is in contravention of Article 8 (Anti-competitive vertical agreement), Article 9 (Abuse of Dominant Position in the Market) or Article 11 (Anti-competitive business combinations), the CCC shall impose a pecuniary penalty from 3% and 10% of the Person's turnover for each year in which a contravention occurred for a maximum of 3 years.

In case of a violation of Article 7 (Anti-competitive horizontal agreements), Individuals will be subject to a term of imprisonment from 1 (one) month to 2 (two) years and a fine from 5,000,000 (five million) to 100,000,000 (one hundred million) Riels, and Legal persons will be subject to a fine from 100,000,000 (one hundred million) to 2,000,000,000 (two billion) Riels.

Currently, CCF, as a secretariat of CCC, is undertaking preparatory and foundational work to effectively advocate the enforcement process of the Law including drafting the Sub-Decree on the organization and functioning of CCC, Sub-Decree on conditions and procedures of Business Combinations (also called Mergers), and relevant regulations under the Law, as well as reinforcing the capacity of law enforcement officers. Meanwhile, at the nascent stage, CCF will focus on raising awareness and disseminating Competition Law to businesses, consumers, legal professionals, government institutions, development partners and other stakeholders.