On August 27, 2024, the Royal Government of Cambodia issued a Sub-Decree establishing the National Committee on Trade Remedies (“NCTR”). This Sub-Decree introduces a new regulatory body intended to oversee and ensure the effective implementation of Cambodia’s trade protection measures under the Law on Trade Remedies, which covers anti-dumping, subsidies, countervailing measures, and safeguards related to trade in Cambodia. The creation of the NCTR is a significant step forward in aligning Cambodia’s trade policy with international standards, particularly those set by the World Trade Organization (“WTO”).

I. National Committee on Trade Remedies

The establishment of the NCTR, introduced by the new Sub-Decree, is a proactive measure by the Cambodian government to strengthen the country’s trade remedies framework. The primary objective of the NCTR, as outlined in the Law on Trade Remedies, is to protect domestic industries, particularly emerging sectors, from unfair trade practices such as dumping, subsidized imports, and import surges that may cause injury or threaten the viability of these industries.

1. Key Responsibility of the NCTR:

  • Enforcing the Legal Frameworks: The NCTR is responsible for implementing the legal procedures established under the Law on Trade Remedies and related international agreements, including WTO agreements to which Cambodia is a party. Additionally, it has the authority to develop legal procedures for safeguarding confidential information submitted during investigations and to prepare formal legal documents for judicial review in cases where an NCTR decision is appealed.
  • Advisory Roles: The NCTR shall provide recommendations on proposed amendments to the Law on Trade Remedies and addresses regulatory conflicts between governmental agencies. It is also tasked with reviewing and offering expert advice to ensure the effective application of the Law on Trade Remedies.
  • Collaboration and Supports: The NCTR shall collaborate with other member states and provides guidance, monitoring, and assistance to all stakeholders in the collection of information and other activities related to disputes on trade remedies to which Cambodia is involved.

2. Composition and Governance

  • Structure: The NCTR is composed of 13 members, chaired by the Minister of Commerce with a permanent Vice Chairperson and 3 Vice Chairpersons, and may be adjusted as deemed necessary. The precise makeup of the committee is expected to be covered in a forthcoming Decision by the Royal Government.
  • Meetings and Governance: The NCTR will meet at least twice annually and hold special sessions when necessary. External experts may be invited to assist in specialized trade issues. The Ministry of Commerce’s Information and Legal Notification Department will serve as the secretariat, providing administrative and logistical support.
  • Budget and Funding: The NCTR will be funded through the separate national budget, with additional revenues generated from penalties and public services related to trade remedies, to be regulated by a Joint Prakas between the Ministry of Commerce and the Ministry of Economy and Finance.

II. Specific POWERS OF THE NCTR Under the LAW ON Trade Remedies

While the new Sub-Decree outlines the general responsibilities for the functioning of the NCTR, NCTR’s specific powers are detailed in the earlier Law on Trade Remedies, which covers the following:

1. Anti-Dumping Measures:

Anti-dumping measures are designed to protect domestic industries from imports sold at unfairly low prices, referred to as “dumping.” Dumping occurs when foreign producers sell goods in the domestic market at prices lower than their normal value, typically below the price charged in their home market or below production cost. This can harm domestic industries by undercutting local prices and creating unfair competition. A product may be subject to investigation if it is being introduced into the Cambodian market at a price lower than its normal value in the country of origin.

The NCTR is empowered to:

  • Determine normal value and export prices for products under investigation.
  • Initiate and conduct anti-dumping investigations.
  • Impose provisional and definitive anti-dumping duties.
  • Review duties periodically to assess whether they should be continued or amended.

2. Subsidies and Countervailing Measures:

Subsidies provided by foreign governments to their exporters can distort trade by giving those exporters an unfair competitive advantage. Countervailing measures are duties imposed to offset the benefits of such subsidies, leveling the playing field for domestic producers.

The NCTR shall primarily be responsible for investigating and imposing countervailing duties to counterbalance any unfair advantages gained by foreign companies, despite the fact that subsidies and countervailing measures are to be further defined by a forthcoming Sub-Decree.

3. Safeguard Measures:

Safeguard measures are temporary protections imposed when a sudden surge in imports causes, or threatens to cause, serious injury to domestic industries, even if there is no unfair practice like dumping or subsidies. Safeguards are designed to give domestic industries time to adjust to increased competition.

The NCTR shall be responsible for:

  • Assessing whether increased imports are causing or threatening serious injury to domestic industries.
  • Initiating and conducting safeguard investigations.
  • Imposing safeguard measures such as tariffs or quotas to protect domestic industries.
  • Reviewing safeguard measures periodically to determine whether they should be extended or modified.

Judicial Review of NCTR’s decision and Appeal Process

The Law on Trade Remedies provides for judicial review of NCTR decisions to ensure compliance with legal standards. Parties affected by an investigation or remedy may appeal the NCTR’s decision to the courts, with such appeals required to be filed within 30 days of the determination’s publication in the NCTR’s official bulletin. During the appeal process, the Customs Authority may suspend the collection of duties if the importer provides security, such as a cash deposit or bond, pending the final court ruling.

Comments

The establishment of the NCTR is a critical step in enhancing Cambodia’s trade defense mechanisms, ensuring that the country is equipped to address unfair trade practices in accordance with WTO obligations. As Cambodia continues to integrate into the global trade system, the NCTR’s role will be vital in safeguarding domestic industries from harmful trade practices while promoting a rules-based international trading environment. With the forthcoming regulations expected to provide further clarity on its operations, the NCTR will serve as a cornerstone of Cambodia’s trade policy for years to come.

 

This legal update is brought to you by Davies SM Attorneys-at-law. For more information and guidance, contact our partners and explore the Library of Laws section on Aquarii’s online platform to stay informed on business and investment laws in Cambodia.