Cambodia Investment Review
At a comprehensive discussion organized by the American Chamber of Commerce in Cambodia (AmCham) and supported by Tilleke Gibbins at Raffles Hotel, experts from various sectors convened to address the complexities and operational challenges of the recently enacted Competition Law in Cambodia. This law applies to both natural and legal persons engaged in activities that might hinder competition within the Cambodian market, regardless of whether these activities are conducted within or outside the country’s borders.
Key provisions of the law include strict regulations against both horizontal and vertical agreements that could potentially disrupt market fairness. Horizontal agreements among competitors include practices such as price-fixing, limiting production, and unfairly allocating markets or customers. Vertical agreements involve different supply chain levels and might include conditions like resale price maintenance or exclusive purchasing requirements.
Streamline Market Practices And Promote Fair Competition
Significant focus is also placed on the abuse of a dominant market position, where companies are prohibited from engaging in practices like refusing to deal with competitors, tying sales to unrelated products, or using pricing strategies intended to undermine competitive market entry or sustainability. Additionally, the law scrutinizes business combinations that could lead to a substantial reduction in competition, necessitating thorough review and approval by regulatory bodies.
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During the event, Jay Cohen, partner and director of Tilleke Gibbins’ Cambodia practice, expressed support for the legislation, noting its potential to streamline market practices and promote fair competition. “This law marks a critical advancement in Cambodia’s economic reform efforts,” Cohen stated. “However, for companies engaged in significant transactions, both local and international, understanding and adhering to the new regulations is paramount.”
Despite the clarity and breadth of the law, participants identified major obstacles in its implementation. One of the primary concerns raised was the lack of explicit financial disclosure requirements, which are essential for accurately assessing market dominance and the competitive impact of business activities. Another significant challenge is the availability of trade information and information on market share, which is necessary when using tools like the Herfindahl-Hirschman Index to measure market concentration.
Experts emphasized the necessity for transparency by the Cambodia Competition Commission (CCC) in processing transactions and compliance checks. This is crucial for maintaining business confidence and ensuring that companies can adapt to and comply with the new legal framework without undue delay.
Clear Guidelines That Support Its Practical And Fair Implementation
The panel discussion also highlighted the need for further guidance from the CCC regarding the thresholds for reporting business combinations and the criteria for exemptions under the law. These factors are essential for businesses to fully understand their obligations and the potential impacts on their operations.
As the law begins to take effect, the overarching message from the legal and business communities is clear: while the Competition Law is a significant step forward for Cambodia, its success will largely depend on the ongoing development of detailed regulations and clear guidelines that support its practical and fair implementation. This will not only help businesses adjust to the new requirements but also ensure that the law’s objectives to foster a competitive and vibrant market are met.
