Cambodia: Penalties for Violations of the Law on Consumer Protection

DFDL Cambodia

30th July 2021

On 3 June 2021, Joint Prakas 338 on Provisional Fines for Violations of the Law on Consumer Protection was issued. This sets out the procedures on imposing penalties (and the levels thereof) to ensure effective implementation of the Law on Consumer Protection dated 2 November 2019.

On 3 June 2021, Joint Prakas 338 on Provisional Fines for Violations of the Law on Consumer Protection was issued by the Ministry of the Economy and Finance, the Ministry of Justice and the Ministry of Commerce (“Joint Prakas 338”). This sets out the procedures on imposing penalties (and the levels thereof) to ensure effective implementation of the Law on Consumer Protection dated 2 November 2019 (“Consumer Protection Law”).

The scope of Joint Prakas 338 is to give greater procedural clarity on the issuing of provisional fines for violations outlined in Articles 41, 44, 45, 48, and 49 of the Consumer Protection Law. Furthermore, the Investigating Officers of the Directorate General of the Consumer Protection, Competition and Fraud Repression (“CCF”) under the Ministry of Commerce have been given legal powers to act as judicial police officers. They may now impose provisional fines on individuals who violate the Consumer Protection Law.

The levels of fines payable by individuals who violate the Consumer Protection Law are to be determined in accordance with each type of violation outlined under Articles 41, 44, 45, 48, and 49 of the Consumer Protection Law:

No.	Consumer Protection Law 2019
1	Article 41: Dishonest Acts Relating to Goods, Services, or Misleading Claims A written warning will be issued to any individual who commits dishonest acts related to goods, services, or makes misleading claims as stated in Articles 9, 10, 11, and 12 of this Law. Where a written warning is already issued but the violation continues or is not rectified, the relevant commercial registration certificate or license may be suspended, revoked, or rendered null and void. Violations of the first paragraph above concerning the quality and provenance of goods will be subject to fines of up to KHR 20 million.
2	Article 44: Acts Related to Dishonest Practices Any individual who engages in predatory or misleading advertising, demands or accepts payment without the intention of providing the goods or services according to a purchase order, makes misleading claims or misrepresents certain business activities, uses coercion or duress, will be subject to interim fines of up to KHR 50 million.
3	Article 45: Pyramid Scheme Selling or the Sale of Goods through False Advertising Sales in the form of a pyramid scheme or the sale of goods through false advertising will be subject to interim fines of up to KHR 80 million (eighty million) Riels.
4	Article 48: Violations for Non-Compliance with the Provision on Information Standards for Consumers Individuals who fail to comply with the provision on information standards for consumers will be subject to interim fines of up to KHR 10 million.
5	Article 49: Violations on the Prohibition from Holding Management Positions Individuals who violate a decision on being prohibited from holding a management position will be subject to interim fines of up to KHR 10 million.

This Joint Prakas also lays out the following duties of Investigating Officers:

Issue reports on penalties;
Issue invoices for fines, receive payment of fines, and issue payment receipts to violators in the case of receiving payment in the form of cash or cheque;
Manage invoices, payment receipts, and revenue collected from fines;
Issue notification letters to offenders ordering them to make payment before the final deadline in the event that payments are not duly received within 15 days of the initial fine notification being issued; and
Prepare case files in adherence with applicable procedures for submission to the court in cases where violators fail to make payment as stated in this Joint Prakas.

Violators may immediately pay fines to the Investigating Officer(s) or within 30 days maximum upon receiving the relevant provisional fine notification from the Investigating Officer(s). In the event that the violator fails to pay the fine and does not file an appeal or complaint within the set timeframe, the Investigating Officers may file a lawsuit under applicable procedures to the relevant court with jurisdiction over such matters.

An individual who refuses to accept the Investigating Officer’s decision has the right to file a complaint to the CCF within 15 days from the date of receiving the Investigating Officer’s decision. The CCF must issue a decision within 15 days from the date of receiving the complaint. Additionally, an individual who disputes the CCF’s decision may file a complaint to the court within 30 days from the date of receiving the CCF’s decision.

Any regulations that contradict this Joint Prakas shall be considered null and void.

In recent weeks, the CCF has launched several public consultation sessions concerning the implementation of this Joint Prakas. It is important that enterprises review (and where necessary update) their marketing material (including representations, warranties and disclaimers) to accurately determine whether they are in full compliance with the Consumer Protection Law.

Should you have any concerns or queries on the matters above, please feel free to contact our team at cambodia@dfdl.com.

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DFDL Cambodia

Cambodia
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DFDL established its headquarters in Cambodia in 1995. DFDL is licensed as an investment company by the Council for the Development of Cambodia and the Cambodian Investment Board. We are also registered as a private limited company with the Ministry of Commerce. Under these licenses and registrations, we are permitted to provide business consulting, tax and investment advisory service of an international nature.

On 1 March 2016, DFDL and Sarin & Associates joined forces and established a commercial association and cooperation in order to form a new business transactions platform to serve clients with interests in Cambodia and across the expanding ASEAN marketplace.

DFDL and Sarin & Associates have worked together for over 10 years in Cambodia. Sarin & Associates has long been recognized for providing advice to companies in Cambodia in several sectors, such as telecommunication, energy, retail, real estate, financial services, banking, etc.

Our clients are major international and Asian foreign investors in Cambodia, including large foreign and Asian financial institutions. We have been involved in major projects in Cambodia including electricity projects, aviation, telecommunications, infrastructure projects and large real estate projects.

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