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D Investment restrictions

D.1 Sectors with investment restrictions

Source: Royal Government of Cambodia.

E Cambodia’s CEPT schedule

E.1 Cambodia’s CEPT schedule 2001

NT refers to normal track; FT refers to fast track. See text for details.

RCG intends to commence transferring goods from the Temporary List to the Inclusion List beginning January 2005.
Source: Ministry of Economy and Finance.

E.2 Cambodia’s tariff reduction schedule for AFTA

Source: Ministry of Economy and Finance.

F  Documentation processes

Documentation process for garment exports to country requiring proof of Cambodian origin

Preliminary Step — Registration with the Trade Preference Department of MOC. Every 12 months each garment exporter must register with the TPD. Twelve different documents must be filed with the TPD in addition to details of individual machine output and a description of garments produced. Required documents include photographs of the goods to be produced, copy of registration with CDC, and a copy of membership certificate of the Garment Association. Each month registered garment exporters must provide TPD with details of their inventory and imports of raw materials together with bills of lading.

Step One – For each export consignment the Cambodian manufacturer must apply in writing to MIME for a Certificate of Processing. Ministry officials will inspect the factory to confirm that the consignment garments are capable of being manufactured in the factory.

Step Two – Within four weeks prior to shipping the garment manufacturer applies to the Trade Preferences Department of the Ministry of Commerce for the necessary document evidencing proof of Cambodian origin. Based on the garment manufacturer’s history of good compliance, Department officials shall decide whether to visit the factory to assess if the goods intended to be exported have been, or are about to be, manufactured at the factory. The TPD provides a TEA in the same form as the final proof of origin document. The TEA permits the manufacturer to export the garments described therein to the stated export destination. If details of the eventual consignment change then a new TEA must be issued.

Garment manufacturers require an Export License (valid for six months) and Certificate of Origin if exporting to the EU. The same application form and supporting documents are used by both the Foreign Trade Department to issue the Licence and the TPD to issue the Certificate of Origin at the same time. Garment exports under quota to the US require a Commercial Invoice. Garment exports enjoying GSP access to other destinations require a Certificate of Origin.

If raw materials are sourced in ASEAN or the EU then garment exporters to the EU only require the Licence and certificates from the countries of origin of the raw materials. In practice, the TPD continues to issue a Certificate of Origin for the EU in addition to an Export Licence in order to strengthen its defence of Cambodian origin, even though this is no longer required by the EU under the 1999 textile agreement with RGC.

Step Three – Before the garments leave the factory premises the garment manufacturer has to request CED and Camcontrol to inspect the loading of the consignment into their containers and the sealing of the containers. Camcontrol issues a Certificate of Quantity verifying the contents of the consignment. Camcontrol charges 0.1 per cent of the FOB value of the consignment.

Step Four – The garment manufacturer prepares the customs export declaration and transports the containers to Sihanoukville Port. CED and Camcontrol check the sealed containers against the export declaration to permit loading of the vessel.

Step Five – After shipping, the manufacturer must submit the TEA, Bill of Lading, export declaration and Certificate of Quantity to the TPD in order to receive the Certificate of Origin, Commercial Invoice and/or Export Licence.

Summary of Draft Law on Industrial Zone — July 2001

The following is a summary of an oral translation of the Khmer text of the draft law. The translation was dictated by a Ministry of Commerce staff member.

• The law establishes a Council of Industrial Zones that is responsible for the development and management of zones and for operating a one-stop service for investors. The Prime Minister is the Chairman and the Minister of Industry is the Deputy Chairman. Other relevant ministries shall be represented, including the Secretary of State for Commerce. (Articles 6, 8 and 9.)

• A Secretariat shall be established in Phnom Penh managed by a Secretary General and reporting to the Council. The Council may delegate its executive functions to the Secretariat. (Articles 10 and 11.)

• Zone branches of the Council shall coordinate one-stop services as delegated by the Secretary General. (Article 12.)

• The functions of the one-stop service centre shall be: (Article 7)  

• providing incentives

• issuing work permits, visas, and other permits  

• registering land sales and leases

• collecting revenue

• permitting entry and exit of goods.

• There are two types of zone – a general industrial zone and an export processing zone. Each zone shall have a free trade area (fenced duty and tax free area for packaging, warehousing and assembly), commercial area (support services) and accommodation area for employees.       (Articles 4 and 5.)

• Each zone shall be separately defined by sub-decree. (Article 16.)

• The ownership structure of a zone shall be either public, private or a joint venture. (Article 17.)

• A zone developer shall apply to the Council for approval to develop a zone in compliance with criteria established by the Council. (Articles 21 and 22.)

• Every building shall comply with the Master Plan.

• The Council shall register all investors in the zone, except financial services subject to their own legislation. (Article 23.)

• Zone enterprises may trade with the domestic market subject to customs duties and taxes. (Article 24.)

• An inspection centre will be established in each zone to inspect imports and exports as necessary. (Article 26.)

• Developers and enterprises shall pay a fee according to a sub-decree for this purpose. (Article 29.)

• Enterprises may select their own workers domestic or foreign. Workers are subject to the Labour Law and immigration legislation. (Articles 30 and 38.)

• Officials authorised by the Council may impose fines (to be determined in the law) and initiate court proceedings. (Article 32.)

• Land may be leased to developer for 99 years. No land transfer or lease tax. Vehicles used only to carry construction materials into the zone may be duty-free. (Articles 33-35.)

• The general rate of profit tax for zone enterprises is 9 per cent, with 8 year tax holiday, 5 year loss carry-forward and exempt profits if reinvested or distributed. (Article 36.)

• Construction material and raw materials are duty free in first year. (Article 41.)

• Capital equipment is duty free. Raw materials duty free to extent that output is exported. (Article 37.)

• All imports into an EPZ are duty free without time limit. (Article 42.)

• The rate of profit tax on enterprises in an EPZ is 15per cent. (Article 43.)

• Natural water purified in the Zone and consumed or exported is free. (Article 39.)

• Council officials and relevant ministry staff can inspect enterprise premises, people and goods after working hours. All inspections subject to 24 hours notice in writing unless urgent. (Articles 44 and 45.)

• Persons may be arrested without a warrant. (Article 46.)

• Investor disputes can be heard firstly by the Council then referred to the courts or international arbitration. (Article 47.)

• Investors already receiving Law on Investment incentives may continue to receive such incentives if relocating to a zone. (Article 48.)