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Today’s Cambodia Daily (print only) reports that the government is finalizing a draft law on price dumping.

“Dumping” is a form of predatory pricing, where foreign exporters sell products below costs into a country, aiming to drive domestic producers out of business. Once the domestic competition has gone under, the dumpers can jack up prices and recoup their losses. In the end, domestic production is hurt, and the country is reliant on more expensive foreign imports.

Anti-dumping laws, like the draft under consideration, allow governments to temporarily raise tariffs or restrict imports to counteract the dumpers. While dumping can do serious harm, in many countries there’s a strong tendency for domestic producers to accuse foreign competitors of dumping, when in reality they’re being undercut simply because the foreign producers are more efficient.

According to the draft, a new committee will be setup to investigate dumping claims and take countervailing measures. The article indicates the drafters hope to send it to the Council of Ministers by the end of the year.

 

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What happens in Cambodia to a person’s property when they die? Book VIII of the new Civil Code deals with succession and how a person’s estate is administered upon their death.

With some notable exceptions, people are free to leave their property to whomever and however they wish through a will. This is called “testamentary succession”. The code lays out three different ways for a testator to make a will:

  • Will by notarial document: the will is produced with the assistance of a notary and at least two witnesses, following certain formal procedures.
  • Will by privately produced document: the testator writes the will by hand (“holographically” in legal jargon), and signs and dates it.
  • Will by secret document: the will is written by the testator, closed up (such as in an envelope), signs the envelope over the closures, and takes it to a notary who then signs it again.

Be sure to refer to the actual text of the code, as there are very specific formalities that need to be followed, or else the whole document can be declared null and void. A will can specify who will inherit what property and how it will be controlled after the testator’s death.

If a person dies without having written a valid will, there are certain default rules that a court will apply in dividing up their property. This is called “statutory succession”. The rules apportion shares to surviving family members depending on their ties to the decedent. Surviving spouses always get some share, though the size will depend on the structure of the rest of the family. If there is no surviving spouse, the property will first be divided amongst the decedent’s children. If the decedent didn’t have any children, it will go to the ascendants (parents, grandparents, etc.). If there are no ascendants, then to the decedent’s siblings. The rules are quite a bit more complicated than this, however, and can become tricky the more complicated the family tree.

Succession and estate matters are a relatively undeveloped area of law in Cambodia. Although it will take some time, the Civil Code should be a positive step forward in formalizing and routinizing such matters.

In today’s installation of our Civil Code series, we look at contracts for gifts, found in Chapter 3, Book V.

A “gift” is defined as “a contract which comes into effect when one party manifests the intention to give property to another gratuitously, and the other party accepts it.” In plain English, if someone promises to give you their car – for free – when they move abroad, that’s a gift.

Unless this gift is in writing, the giver can revoke it and the intended recipient is left with nothing. But if you do get the gift in writing, the gift becomes an enforceable contract – and the recipient would be able to force the giver to turn the object over.

Interestingly, the Civil Code allows a gift giver to take back their gift, even after its been given. First, if the recipient commits a serious breach of trust against the giver, the giver can take the gift back (within 5 years of the breach). Second, if the giver falls into extreme poverty and is unable to support themselves, they can get their gift back (again, only within the last 5 years).

Finally, the code provides for “encumbered gifts”, where the recipient is obliged to do something before they’re entitled to the gift. While some would say that sounds an awful lot like a regular contract (person A does something for B, B gives A money), we presume the drafters meant this to cover less commercial transactions. For instance, a father promises his daughter to buy her a computer if she goes to college. The law provides that if one party performs, they can demand that the other perform.

In the first of our series on the new Civil Code, we take a look at two types of contracts – a “contract for work” and a “contract for employment”.

If this post’s title is confusing, you’re not alone. While in everyday usage, “work” and “employment” are generally synonymous, they’re very different when it comes to the law. The Civil Code defines them as follows:

652. (Definition of contract for work)
A contract for work is a contract whereby one party (the “contractor”)  assumes the obligation to complete agreed work and the other party (the “principal”) assumes the obligation to pay remuneration for the results of such work.

664. (Contract of employment)
(1) A contract of employment is formed by the promises of one party to perform services under employment, and another party to pay wages for it.

(2) The party who promises to perform services under employment is referred to as the “employee” and the other party as the “employer”.

Put another way, the first type creates an independent contractor, and the second an employment relationship. For instance, if you hire someone to renovate your kitchen or build you a website, you probably intend them to be an independent contractor (under a “contract for work”) rather than your employee. This is a crucial distinction, as employees are granted a number of protections and entitlements in the Labor Law, while contractors have far less protection.

Companies sometimes will try to hire individuals as independent contractors, rather than as employees. Even though the contract might claim it is a “contract for work” and that the person is an “independent contractor”, courts can look to other factors in deciding whether it is indeed so – including how the person is paid, who controls and directs the work, and whether any tools or work space is provided. Taking a close look at these factors, and deciding which type of contract to use, can save you from unpleasant surprises down the line.

Over the past several years, Cambodia has passed a number of fundamental laws, perhaps none more so than the Civil Code of 2007. The code’s 1,305 articles deal with a broad range of issues – from contracts, to marriage, to real estate and torts. Many years in the making, the code unifies and revises a great number of earlier laws and regulations. While there’s no way to summarize all the provisions, the titles of the code’s books give an idea of what is covered:

  • Book I: General Rules
  • Book II: Persons
  • Book III: Real Rights
  • Book IV: Obligations
  • Book V: Particular Type of Contracts/Torts
  • Book VI: Security
  • Book VII: Relatives
  • Book VIII: Succession
  • Book IX: Final Provision

Though the code was promulgated in 2007, it didn’t come into effect until late last year. It’s important to note the 2011 “Promulgation on the Law of Implementation of the Civil Code” amends and supplements a number of the Civil Code articles. Also, a number of articles from prior laws and regulations survive and are still in effect, and must be read in conjunction with the new code. In the coming months, we’ll be taking a closer look at the most significant parts of this important new law.

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The work of a handful of attorneys at BNG Legal, this blog's mission is to keep the world up-to-date on legal issues in the Kingdom of Cambodia.

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