Cambodia WT/TPR/S/253 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) INTRODUCTION  
1. After the fall of the Khmer Rouge regime ( 1975-79), Cambodia followed a path of communist 
policies during the 1980s before undertaking a grad ual transition to an open market economy in the 
1990s, paving the way for it to emerge from th ree decades of instability.  With peace and 
macroeconomic stability more firmly entrenched by  the time of its accession to the WTO, Cambodia 
has embarked on far-reaching reforms to achieve ra pid and sustained socio-economic development.  
International trade has been crucial to achieving this goal because it has been the driving force behind 
much of Cambodia's recent economic growth and poverty reduction, linking its economy more firmly 
to regional and global markets, and encouraging en ergetic reform on the regulatory and institutional 
front. 
(2) TRADE POLICY FRAMEWORK AND IMPLEMENTATION  
(i) General institutional and regulatory framework  
2. Cambodia is a constitutional monarchy.  The Constitution adopted in September 1993 
stipulates that the monarch is the Head of State for life.  The monarch appoints the Prime Minister and 
the Council of Ministers and, upon approval and ra tification by the National Assembly, signs and 
thereby promulgates internationa l treaties and conventions.   
(a) Legislative and executive branches of government 
3. Legislative powers are exercised by the National Assembly (lower house) and the Senate 
(upper house).  The National Assembly consists of  122 members elected simu ltaneously for five-year 
terms of office.  Members are elected directly by the electorate at large.  The National Assembly, the 
only organ empowered to adopt laws, approves the national Budget and various government 
development strategies and programmes.  It approv es government proposals to borrow or to lend, and 
imposes, alters or annuls taxes. 
4. The Council of Ministers constitutes the Royal Government of the Kingdom of Cambodia, the 
executive arm of the State.  It is in charge of  the overall execution of all national policies and 
programmes, and is responsible and accountable to the National Assembly.  The Council of Ministers 
is responsible for establishing Cambodia's economic  policy, including foreign trade policy.  
International treaties, conventions  and inter-governmental agreemen ts are negotiated by the Prime 
Minister and, after ratification by the National Assembly, are promulgated by the monarch.  For 
Cambodia's accession to the WTO, a package including the Protocol and all WTO Agreements and 
legal documents were s ubmitted by the Government to the Nati onal Assembly and the Senate for 
adoption and then presented to the monarch for promulgation, prior to publication in the Official 
Journal . In case of conflict between domestic legisl ation and the WTO Agreements, WTO provisions 
prevail over national legislation, with the exception of Cambodia's Constitution. 
5. The Prime Minister, through his regulatory authority, executes all decisions adopted by the 
Council of Ministers.  The Prime Minister presents decrees (kret) to the monarch for signature.  The 
Prime Minister may also issue sub-decrees (anu-kret) on his own authority, after the approval of the Council of Ministers.  Individual ministers issue ministerial prakas, and decisions and circulars. 
Provincial Governors issue decisions and circulars (B ox II.1).  All regulatory acts are published in the 
Official Journal  once they are signed.   WT/TPR/S/253 Trade Policy Review 
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Box II.1:  Legal hierarchy of official actions in Cambodia 
The Constitution:   the Supreme Law of the Kingdom of Cambodia.  
Treaties and Conventions:   according to Article 26 of the Constitu tion, the King shall sign and ratify 
international treaties and conventions, following the approval of the National Assembly. After such 
ratification, international treaties and conventions shall become one of the bases for judicial decisions. 
Laws (Chhbab):  laws adopted by the National Assembly. Royal Decree (Reach Kret):  to be issued under the name of the King to execute his constitutional powers. 
Sub-Decree (Anu-Kret):  to be signed by the Prime Minister and countersigned by the minister(s) in charge 
after adoption by the Cabinet.  The Prime Minister ma y use this in exercising his own regulatory powers. 
Ministerial Order (Prakas):  to be issued by members of the government in exercising their own regulatory 
powers. 
Decision (Sechdei Samrech):  indivi dual decision of the Prime Minister  and decision (Prakas-Deika) of a 
minister or a governor, which is used in exercising his own regulatory powers. 
Circular (Sarachor):  in general, to be issued by the Prime Minister as head of government, and by a minister 
as an official of the ministry eith er to explain or clarify certain lega l regulatory measures or to provide 
instructions. 
Provincial Deka (Arrêté):  to be used by a provincial governor within the geographical limits of his province. Source:   Council for the Development of Cambodia (CDC), 2010 Cambodia Investment Guide book . 
(b) Judiciary 
6. Cambodia has a unitary judiciary with courts of  first instance at the provincial/municipal 
level.  These courts have jurisdiction over all case s regardless of the nature or magnitude of the 
dispute.  Appeals are heard by an ap peals court, which sits in the capital.  Further appeal may be made 
to the Supreme Court, which is the highest appella te court (in all except electoral and constitutional 
matters).  
7. Cambodia's commercial regulatory environment pr esents a number of challenges for business, 
among which corruption, regulatory policy uncertainty, and the lack of reliable dispute resolution are 
identified as obstacles to doing business.  At th e time of its accession to the WTO, Cambodia's 
judicial system did not provide for administrative or commercial courts.  Cambodia recognized the need to establish an appeals process  and an independent tribunal to m eet the requirements of Article X 
of the GATT 1994 and related provisions, including customs valuation, trade remedies, and import 
licensing and quotas.  Since accession, the regulator y framework for commercial dispute resolution in 
Cambodia has evolved to some extent, including through administrative procedures in trade-related 
ministries.  
8. Recognizing the need for more effective comme rcial dispute resolution systems, Cambodia 
enacted the Law on Commercial Arbitration in 2006,  establishing a framework for private arbitration 
of business disputes that follows international practi ces.  In July 2009, the Government passed a sub-
decree creating a commercial arbitration body, th e National Arbitration Center (NAC) under the 
auspices of the Ministry of Commerce.  Once the NAC is operational, parties involved in a 
commercial dispute that have a written arbitrati on agreement will be able to settle commercial 
disputes by means of quasi-judicial methods wit hout involvement of the Cambodian courts, except 
when required by the law on commercial arbitration.   Cambodia WT/TPR/S/253 
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9. A new civil code and a code of civil pro cedure were promulgated in 2007 and 2006, 
respectively.  The draft Law on Judicial Organizat ion envisages the right to appeal administrative 
decisions before the Administrative Chamber of the Appellate Court and allows special courts to be 
established.   According to the authorities, this includes appeals of admini strative decisions in matters 
covered by WTO Agreements to an  independent tribunal, as provided for in Article X of the GATT 
and other WTO Agreements.  The draft Law on Judi cial Organization has been under examination by 
the Council of Ministers and the Council of Jurists and is expected to be submitted to the National 
Assembly after decision made by the Council of Ju rists, the Council for Legal and Judicial reform, 
and the Council of Ministers.   
10. The Ministry of Justice, together with the Mi nistry of Commerce (MoC), have been preparing 
a draft law establishing a commercial court, or a f unctional equivalent, with trained judges and staff, 
which is essential for creating a climate of tr ansparency and predictability.  The law is under 
preparation at the ministry level.  In the in terim, commercial cases have been brought before 
provincial and municipal courts .  Further legislation on the enforcement of judgements and 
commercial contracts is expected during the mandate  of the current Government (2008-13).  The draft 
Law on Commercial Contracts is under consider ation in inter-ministerial meetings.   
(ii) Trade policy objectives  
11. International trade plays a fundamental role in Cambodia's economic growth.  Despite recent 
setbacks caused by the world economic and financ ial crisis, Cambodia's garment exports to North 
America and Europe, along with its tourism sector, have played an important role in expanding 
income and employment, and in reducing poverty.  However, the economic an d financial crisis has 
also shown the danger of relying on a few export produc ts and markets.  To reduce this danger, trade 
policy has focused on two broad objectives:  to broade n the range of products exported and to enlarge 
the number of export markets.  
(a) Export product diversification 
12. Cambodia's National Export Strategy identifi es products that could be developed into 
successful exports.1  The strategy identifies steps that coul d be taken to reinforce the competitiveness 
of garments and tourism, but also identifies fruits and vegetables, fresh water fish, organic rice, and 
silk and silk products as having e xport potential.  The report makes a series of proposals regarding the 
steps that might be taken to assist these s ectors in achieving export competitiveness.   
13. Building on the 2002 Integrated Framework, th e MoC, with the support of the UNDP and 
development partners, finalized a Diagnostic Trade Integration Study (DTIS) in 2007.  The DTIS 
reviewed developments in key tr ade-related policies, including tariff and other restrictions, trade 
facilitation, legal reform, TBT and SPS measures, intellectual property rights, and investment 
promotion.  It concluded, inter alia, that tariff advantages were unlikely to drive future export growth 
and that Cambodia needed to diversify exports an d export markets.  The DTIS also examined the 
export potential of a wider range of  products and identified 15 produc ts and 4 services.  It also looked 
at the human development potential of the various products and services.2  
                                                      
1 Ministry of Commerce and Inte rnational Trade Centre (2006). 
2 The Sub-Steering Committee for Trade Development and Trade-related Investment decided to 
establish a working group to examine further the steps that could be taken, with support from development 
partners, to assist these sectors in becoming more competitive and entering or expanding export markets.  This usually involves using value chain analysis to identify areas that need policy attention.  This work is in progress. WT/TPR/S/253 Trade Policy Review 
Page 16 
  
14. The Government's trade development agenda, known as its sector-wide approach (SWAp) to 
trade, aims to sustain growth by diversifying th e country's still narrow economic base of garments and 
tourism.  Private-sector expansion is considered  key to achieving these objectives by improving both 
foreign and domestic trade by developing efficient backward linkages in the economy.3  As a vehicle 
to implement the DTIS, the Trade SWAp seeks to bring together activities in the trade area around a 
common monitoring framework.  It is structured to deal with issues in three broad areas or strategic 
pillars:  (i) reforms and cross-cutting issues for trad e development (legal reforms, trade facilitation, 
TBT and SPS regulation and practice);  (ii) pro duct and service sector export development with a 
focus on the products identified in the DTIS);  and (iii) capacity building for trade development.  
(b) Export market diversification 
15. Cambodia's policies for expanding market acces s have two dimensions:  support for the 
completion of the Doha Round and expansion a nd full exploitation of preferential trading 
arrangements.  Within the overall context of A SEAN policies, Cambodia attaches special importance 
to the preferential trading arrangements with ASEAN dialogue partners.  Cambodia has ratified 
free-trade agreements:  (i) for goods with China,  Republic of Korea, Japan, Australia and New 
Zealand, and India;  (ii) for services with China, Re public of Korea, and Australia and New Zealand;  
and (iii) for investment with China, Republic of  Korea, and Australia and New Zealand.  These 
agreements, together with ASEAN's AFTA, are expe cted to help Cambodia to expand exports to the 
dynamic economies of Asia, both by securing access for Cambodia's current products and by attracting investment to create produc tion targeted to those markets.  
16. Cambodia's policies to exploit preferential market  access have not been limited to Asia.  The 
Ministry of Commerce has been helping light ma nufacturers through information on how to shape 
their production process to make their goods eligible  for the EU's Everything But Arms preference 
scheme.  The Government is also supporting the e fforts of agricultural producers to gain access to 
European markets, especially now that Cambodian rice and sugar can enter those markets duty free.  
According to the Cambodian authorities, ASEAN negotiations with the European Union on a free-
trade agreement have been suspended. 
17. To secure better access to the U.S. garment ma rket, the Government has worked with the 
Garment Manufacturers' Association of Cambodia to promote legislation in the U.S. Congress that would grant duty-free status to Cambodian garments.  This effort is ongoing.  
18. Investment, an integral part of trade policy, plays a key role in bringing about the 
diversification of export products and markets.  Go vernment policy is to improve the perception of 
Cambodia as an attractive investment destination by maintaining competitive investment incentives, 
developing special economic zones, pursuing trad e facilitation, and improving the legal framework 
for business.    
(iii) Trade policy formulation and implementation   
(a) Institutions 
19. Policies related to foreign trade are formulated  and implemented by the Ministry of Economy 
and Finance (MEF), in close cooperation with the Mi nistry of Commerce (MoC), the Council for the 
Development of Cambodia (CDC), the National Bank of Cambodia (NBC), the Ministry of Planning 
(MoP), the Ministry of Industry, Mines and Energy (MIME), and the Ministry of Agriculture, Forestry and Fishery (MAFF).  Provincial and municipal authorities have no jurisdiction over policies 
                                                      
3 Ministry of Commerce (2007). Cambodia WT/TPR/S/253 
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affecting foreign trade, such as in the areas of subs idies, investment, applica tion of taxes, charges on 
imports not applied to domestic  goods, or quantitative restricti ons on imports or exports.   
20. The MEF is charged with maintaining macroe conomic stability and an  economic environment 
conducive to growth.  It collaborates with other mini stries in formulating the strategic policy of the 
Government for integrating the Cambodian econom y into the regional and global economies.  It 
prepares the national Budget and oversees its execu tion once adopted by the National Assembly.  It 
collects tax and non-tax revenue, including customs du ties.  It prepares draft laws on financial matters 
and implements them once they are promulgated. It administers and oversees government procurement activities and coordinates financial ma nagement of all assistance to Cambodia.  It 
proposes to the Government changes in import tariffs, and implements tariff and other trade policies 
through the General Department of Customs and Ex cise (GDCE), which is an integral part of the 
Ministry.  The GDCE is the operational arm of the MEF as regards the border control of international 
trade.  It is charged with:  preparating proposals as regards the tariff schedule; implementing all laws with regard to import and export of goods;  co llecting taxes and duties on imported and exported 
products;  and suppressing smuggling a nd other evasions of the law bearing on international trade.  
The MEF also regulates the insurance industry and portfolio investment.  
21. The Ministry of Commerce  registers foreign and domestic business activities and participates 
through Camcontrol (MoC's Department for Contro l of Import and Export and Fraud Repression) in 
border control, fraud repression, in the formulation and implementation of technical standards, and in 
the development of policies concerning certain inte llectual property rights.  It takes the lead in 
developing commercial legislation and issues certificates of Cambodian origin.  The MoC acted as the 
focal point for activities related to WTO accession a nd continues to do so in relation to WTO-related 
issues, in particular by coordinating the prepar ation of WTO notifications.  The Department of 
International Cooperation (DICO) of the MoC, reporting to the Secretary of State serving as the EIF Focal Point, acts as the National Implementation Un it (NIU) for the EIF and for the multi-donor Trade 
Development Support Programme (TDSP).  In additi on, DICO serves as the Secretariat for the Trade 
SWAp and has been tasked with th e coordination of Aid for Trade. 
22. The Council for the Development of Cam bodia implements investment regulations , inter alia,  
by reviewing and approving investment licence app lications, granting duty and tax exemptions and 
other incentives to investors, and arranging vi sas and work permits for foreign employees.  
23. Issues related to industrial and technological de velopment, exploitation of natural resources 
and the production and supply of electricity and po table water are under the Ministry of Industry, 
Mines and Energy.  The Ministry has responsibilit y for fostering an environment conducive to the 
industrial and technological development of Cambodi a. It manages and impl ements national policies 
on the exploitation of minerals, except petroleum and gas.  It recommends and implements policies 
designed to develop the production and distribution of electricity.  The Institute of Standards of 
Cambodia is also part of the MIME.  
24. The National Bank of Cambodia, in consultati on with the Government, determines monetary 
and exchange-rate policies, and implements such policies.  It licenses, regulates, and supervises 
banks, financial institutions other than the insuran ce industry, financial auditors and liquidators, as 
well as firms operating in the fo reign exchange market and the markets for precious stones and 
precious metals. 
25. The Ministry of Planning generates and main tains statistics on a variety of economic and 
social indicators, including the national account s.  It develops methodologies for measuring 
socio-economic progress.  It prepares indicative so cio-economic plans, which form the yardstick WT/TPR/S/253 Trade Policy Review 
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against which socio-economic progress is measured,  as well as the census and other socio-economic 
surveys.  
(b) Agency coordination 
26. The Government's 2004 Rectangular Strategy an d the National Strategic Development Plan 
2006-2010 are based on a vision of private-sector-led growth with a strong role for exports.  The 
reform agenda in private sector development (PSD) is led by a steering committee, comprising the MEF and other relevant ministries/agencies (not ably Commerce, MIME, Agriculture, Transport, 
Tourism, the NBC and the CDC).  The steering committee has four sub-steering committees and works with the Government Private Sector Forum (G -PSF) in an effort to strengthen coordination and 
minimize institutional fragmentation.   
27. The Sub-Steering Committee on the Investment Climate and Private Participation in 
Infrastructure is chaired by the MEF.  Its achieveme nts include:  enactment of the Law on Customs;  
progress on the WTO legal reform agenda;  initi al implementation of ASYCUDA;  and the 
establishment of several special economic zones (SEZs).  Recent priorities have included full 
implementation of the Law on Customs; design and implementation of the National Single Window to 
meet Cambodia's commitment to join the ASEAN Single Window by 2012 as well as further progress 
on the WTO legal reform agenda.  
28. The Sub-Steering Committee on Trade Development and Trade-related Investment, chaired 
by the MoC, has launched the Trade SWAp approach  to coordinate efforts on the Government side 
and align development partners' s upport.  Current priorities include:  implementation of the risk-
management framework for exports;  introduction of a flat fee for imports and exports;  institutional 
strengthening for handling TBT and SPS issues;  f acilitation of trade;  and streamlining of company 
registration procedures.  
29. The Sub-Steering Committee on SMEs, chaired by the MIME, has worked to streamline 
business registration and is currently concerned wi th implementation of the licensing review and 
establishment of the Institute of Standards.  
30. The Sub-Steering Committee on Corporate G overnance is chaired by the MEF.  
31. Cambodia's G-PSF, established in 1999, is a mech anism for public/private-sector consultation 
and dialogue, chaired by the Prime Minister.  It enab les the private sector to advocate, directly raise 
concerns with the Government, and provide inputs  on business and trade-related policies, laws and 
regulations.  Some G-PSF working groups ar e connected to steering committees and have 
development partner participation.  The private sect or is represented by business associations such as 
the Cambodia Federation of Employers and Business Associations, the Garment Manufacturers Association in Cambodia, the Cambodi a Hotel Association, and the Frei ght Forwarders Association.   
32. A notable achievement has been the examination of the current trade regulations and practices 
with the participation of representatives of private firms with long experience in importing and 
exporting.  Based on that experience, this exercise gave rise to a Twelve-Point Action Plan for Trade 
Facilitation, aimed at eliminating or reducing features of the present regime that unnecessarily raise the costs of moving goods across Cambodia's borders. 
(iv) Main trade and related laws  
33. Cambodia accession to the WTO in 2004 generated a la rge agenda of legal and other reforms.  
As a result of the intensive scrutiny undertaken by WTO Members in the context of the accession Cambodia WT/TPR/S/253 
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process, a work programme was a dopted by the Government, which laid out a set of legal and 
regulatory reforms to bring Cambodia's business, investment, and trade regimes into line with international norms and provide transparency and pred ictability.  It consists primarily in laws that 
must be enacted to achieve these goals and contains  subordinate legislation and administrative and 
other steps that need to be taken to ensure proper implementation and enforcement of these laws 
(Table II.1). 
Table II.1 
2011 update on WTO accession legal agenda 
Area Law/regulation Status/comment  
Trade  Customs Law Promulgated July 2007;  most sub-decrees approved  
 MEF Regulation 387 Adopted 2008 – impl ements Customs Valuation Agreement 
 Sub-decree 209  Adopted 2007 on list of prohibited and restricted goods  
 MoH Regulation 1031  Adopted 2008 – allows any registered firm to engage in import of 
pharmaceuticals 
 Law on Trade Remedies   At ministerial level - final draft in English, working on Khmer 
version  
 Law on Rules of Origin Draft unde r discussion at ministerial level 
 SEZ law Sub-decree adopted in  2005;  law under preparation  
 Law on Standards Promulgated 2007;  Sub- Decree No. 62 on Institute of Standards 
adopted in 2008 
 MAFF Regulation 589  Promulgated 2003 – elim inates QRs on pesticide and fertilizer 
imports 
 Anukret 15 on Plant Quarantine Adopted 2003 
 Anukret 16 on Control of animal Hygiene 
and Animal Products Adopted 2003 
 Inter-ministerial Prakas 868 on food safety Adopted 2010 
 Law on e-commerce First draft in English under consideration at ministerial level  
Investment  Amendment to the Investment Law and 
related sub-decrees Law promulgated in 2003;  severa l sub-decrees adopted, including 
No. 111 (2005) abolishing incentives contingent on export performance and No.149 (2005) on the establishment of the CDC 
Competition Law on Competition  First draft in English under consideration at ministerial level 
IPRs Sub-decree implementing the Law 
Concerning  Marks, Trade Names and 
Acts of Unfair Competition Adopted 2006 
 Law on Geographical Indications  Draft near completion 
 Law on Integrated Circuits and Layout 
Designs  Draft under development at ministerial level 
 Law on Trade Secrets  and Undisclosed 
Information  Draft under development  
 Law on Seed Management and Plant 
Breeder Rights Promulgated 2008;  contains provision s protecting new plant varieties  
 Regulation on IP Border Measures Unde r consideration at ministerial level  
 Law on Patents  In force since 2002. Two Prakas adopted in 2006 on procedures for:  
registration of industrial designs , and granting patent and utility 
model certificates 
 Law on Copyright and Related Rights 
 Prakas on Trade Mark Agent  
Sub-decrees on the establishment of a 
national Committee for IPRs (NCIPR) and sub-committees on enforcement and 
education  
 Draft compulsory licensing law/regulation 
for public health Promulgated in 2003 
 Adopted in February 2011  
Adopted 2008;  sub-committees sub-d ecrees finalized and to be sent 
to the Council of Ministers   
 
 Draft under preparation at ministerial level 
Table II.1 (cont'd) WT/TPR/S/253 Trade Policy Review 
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Area Law/regulation Status/comment  
Business 
framework  Law on Commercial Court Draft under preparation at ministerial level 
Law on Judicial Organization Allows special courts to be established; draft under consideration at 
the Council of Jurists  
 Law on Insolvency Promulgated in 2008; sub-decrees under preparation 
 Law on Commercial Contracts Draft under c onsideration by inter-ministerial meeting 
 Law on Commercial Agency Draft under preparation at ministerial level  
 Law on Commercial Arbitration Promulgated in 2006;  2009 Sub-Decree No. 124 established NAC 
 Civil Code, Civil Procedural Code, 
Criminal Code and Criminal Procedural Code Civil and criminal procedural c odes promulgated in 2006 and 2007, 
respectively; others promul gated between 2007 and 2010  
 Law on Anti-Corruption  Promulgated in 2010   
 Law on Commercial Enterprises  Promulgated in 2005 
 Law on Concessions  Promulgated in 2007;  sub-decrees under preparation  
Services Law on Telecommunications  Draft law to separa te operations from regulation and establish 
independent regulatory body  - under consideration at ministerial level 
 Amendment to the Labour Law Horizontal commitments :  to allow work permits for foreigners to be 
issued for 2-year periods with possi bility of renewal up to 5 years.  
Under preparation at  ministerial level 
 Draft amendment to the Law on Land 
Management and Urbanization  GATS commitment:  to allow foreign licensed architects to sign off 
on large projects.  Under prep aration at ministerial level 
 Amendment of the Law on Bar GATS legal services:  to bring various provisions into conformity 
with commitments.   Under preparation at ministerial level   
 Law on Tourism 
 Promulgated in 2009;  2009 Prakas on minimum standards for 
tourism resorts 
 Prakas on minimum standards in hotels Adopted 2009 
 Law on Maritime Transport  Work ongoing to ensu re that draft law contains provisions covering 
additional commitments  
 Law on Insurance and Reinsurance Draft under preparation at ministerial level  
 Law on Financial Leasing   Promulgated in 2009  
 Law on Civil Aviation  Promulgated in 2008 
Source: WTO Secretariat, based on information pr ovided by the Cambodian authorities. 
34. The Customs Law was enacted in 2007 and a firs t batch of supporting re gulations has since 
been adopted.  Under the Law on Standards in Cam bodia, passed in 2007, the Institute of Standards 
was created as a central authority to develop st andards and product confor mity assessments.  The 
ASEAN Harmonized Tariff Nomenclature was introduced in July 2007.  Further progress is required to implement the Customs Law and complete the lega l agenda that Cambodia committed to as part of 
the WTO accession.  The MoC is working on a draf t law on trade remedies consistent with best 
international practice and an econom y-wide perspective, which was e xpected to be submitted to the 
National Assembly in 2011.  
35. Cambodia continues to work to fulfil its WTO commitments to pass necessary business 
legislation concerning the general business environm ent, trade in goods, trade in services, and the 
protection of intellectual propert y rights.  It has made progress recently, passing several significant 
laws in 2008, including a Law on Plant Breeder Rights and Law on Civil Aviation, and in 2009, the Government promulgated a Law on Tourism, a La w on Insolvency, and a sub-decree establishing a 
national commercial arbitration body.  The Government  is still in the process of drafting further laws 
and regulations to create a favourable environment for trade and investment.  A commercial contract 
law and other important business -related laws, including on a co mmercial court, e-commerce, 
telecommunications, and personal property leasing are in draft.  Cambodia is also preparing a draft 
competition law.    Cambodia WT/TPR/S/253 
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36. According to the authorities, the legal refo rm agenda has evolved more slowly than 
anticipated because, until recently, technical assistan ce was insufficient.  There are also inherent 
difficulties in transforming WTO concepts into th e Khmer language, which may not have comparable 
terminology. 
(3) INTERNATIONAL TRADING RELATIONS  
(i) World Trade Organization  
(a) Accession 
37. The signing of the Paris Peace Agreement in  1991 and the 1993 elections allowed Cambodia 
to rejoin the international community and par ticipate in multilateral and regional institutions.4  I n  
1994 Cambodia applied for membership of the WT O and following approval in September 2003 at 
the Cancun Ministerial Conference, Cambodia's memb ership became effective in 2004.  With regard 
to tariff bindings, Cambodia negotiated average fina l tariff bound rates of 28.1% for agricultural and 
17.7% for non-agricultural products.  Cambodia did not provide agricultural export subsidies during 
the relevant base period and bound these at zero in its schedule.  Cambodia undertook specific 
commitments under the GATS in 94 services sub-sectors.  It was given transition periods to 
implement various WTO Agreements in areas such as SPS, TBT, TRIPS, and customs valuation, for 
which Cambodia provided precise plans for implemen ting WTO-related legislation and enforcement 
mechanisms.  
(b) Legal reform agenda 
38. As part of its WTO commitments to strengthen the trade and investment climate for both 
foreign and domestic businesses, Cambodia committed to  enact a large number of laws or regulations 
to address areas where existing law did not meet WTO requirements.  Accession to the WTO in 2004 
energized the legal reform agenda, the key items  of which are summarized in section 2(iv) above. 
(c) Transparency 
39. Cambodia confirmed that from the date of accession all laws, regulations, decrees, judicial 
decisions, and administrative rulings of general a pplication related to trade would be published in a 
manner that fulfils WTO requirements.  No law or  regulation related to international trade would 
become effective prior to such publication in the Official Journal .  Cambodia intended to establish or 
designate an official journal or website, published or update d on a regular basis, and readily available 
to WTO Members, individuals and enterprises, dedi cated to the publication of all regulations and 
other measures pertaining to or affecting trade in  goods, services, and TRIPS obligations.  Currently, 
all laws and regulations ar e published in Khmer in the Official Journal , which is updated monthly and 
is available to all individuals and institu tions.  There is no corresponding website.  
                                                      
4 Apart from the WTO, these include:  the International Bank for Reconstruction and Development;  
the International Monetary Fund;  the Asian Developmen t Bank;  the International Development Association;  
the Multilateral Insurance Guarantee Agency;  the United Nations Development Programme;  the United Nation 
Conference on Trade and Development;  the Food and Agriculture Organization;  the International Fund for 
Agricultural Development;  the International Civil Aviation Organization;  the World Intellectual Property Organization;  the International Standards Organization;  the World Health Organization;  the International 
Maritime Organization;  the International Telecommunications Union;  the United Nations Educational, 
Scientific and Cultural Organization;  the World Tourism Organization;  the Economic and Social Commission for Asia and the Pacific;  and the Paris Convention for the Protection of Industrial Property Rights. WT/TPR/S/253 Trade Policy Review 
Page 22 
  
40. The Department of Notification and Legal Co mpliance (WTO Department) at the MoC has 
strengthened its system for coordinating WTO notifi cations; Camcontrol is the enquiry point for SPS, 
and the MIME is the TBT enquiry point.  The e nquiry point for intellectual property is being 
developed in the IPR department within MoC.  Th e enquiry point for services is located in MoC's 
Department of Notification and Legal Complianc e; there have been no enquiries so far. 
41. The Department of Notification and Legal Compliance recently started submitting 
notifications to the WTO.  As of January 2011 these covered:  agriculture export subsidies and 
domestic support (G/AG/N/KHM/1 and 2, March 2 010);  Preshipment Inspection (G/PSI/N/1/Add.12, 
April 2010);  Customs Valuation (G/VAL/N /1/KHM/1, March 2010);  Import Licensing 
(G/LIC/N/3/KHM/1, November 2010);  Anti-Dump ing, Countervailing Measures and Safeguards 
(G/ADP/N/1/KHM/1, G/SCM/N/1/KHM/1, G/SG/N/1 /KHM/1, March 2010);  and Technical Barriers 
to Trade, one notification under Article 15.2 (G/TBT /2/Add.103, July 2010) and three notifications 
under Article 10.6 (G/TBT/N/KHM/1, 2 and 3, July 2010). 
(d) Doha Round negotiations 
42. At the 7th WTO Ministerial Conference held in December 2009, Cambodia joined the LDC 
group's call to developed countries to provide pr edictable duty-free and quota-free (DFQF) market 
access to products originating from LDCs and coveri ng products of export interest to individual 
LDCs.5  In the Dar es Salaam LDC Mini sterial Declaration of October 20096, LDCs called for an 
"early harvest" in the DDA negotiations, inter alia,  in the areas of duty-free quota-free market access 
for LDCs;  provision of a services waiver;  and implementation of SDT provisions.  Cambodia has 
been paying substantial MFN duties for its garment exports and the majority of its export items are 
dutiable. Cambodia argues that the granting of DF QF access would benefit not only the LDCs, but 
also low-income consumers in developed c ountries in accessing cheaper products imported from 
LDCs. 
43. Cambodia has called for the outcome of the NAMA modalities to ensure that the core 
principle of Special and Differential Treatment are made operational by granting all LDCs more 
preferential treatment than non-LDCs.  The conclusi on of the DDA is viewed as one of the solutions 
to the crisis, which could stimulate the growth of  the world economy through a better flow of goods 
and services, and preventing increased protectionism;  thus more employment could be created and 
poverty gradually reduced.  
44. The issue of LDCs' accession to the WTO is of  importance to Cambodia.  Since the WTO was 
established in 1995, three LDCs have acceded.  Cu rrently, 12 LDCs constitute over 40% of countries 
in the process of accession, and are facing great cha llenges due to their resource constraints and the 
complicated accession process.  Cambodia has calle d on WTO Members to provide their full support 
in the implementation of the Phnom Penh Round Table Statement, which emphasized, inter alia,  a 
greater role for the Director-G eneral in the accessi on process, strict respect of the 2002 LDC 
Accession Guidelines, and increased technical and financial support for acceding and acceded LDCs.7  
Cambodia has also emphasized that increased provision of financial support by the development partners to LDCs, through various mechanisms incl uding Aid for Trade and EIF, is needed during the 
global financial crisis in order to help  the recovery of the LDC economies.   
                                                      
5 Statement by Cambodia in WTO document WT/MIN(09)/ST/32/Rev.2, 7 December 2009. 
6 Circulated in WTO document WT/MIN(09)/2. 
7 WTO document WT/MIN(09)/1 and Add.1. Cambodia WT/TPR/S/253 
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(ii) ASEAN 
45. Cambodia joined ASEAN in 1999.  Its membersh ip in ASEAN affects its trade and trade 
regime in three broad ways, through:  (a) the libera lization of regional trade;  (b) the harmonization of 
trade and trade-related procedures;  and (c) the de velopment of trade relations with ASEAN dialogue 
partners.  
(a) Trade liberalization 
46. Like all ASEAN Members, Cambodia has been  following its agreed schedule for reducing 
tariffs on goods originating in its ASEAN trading part ners.  In 2008, duties on a large number of tariff 
lines on its inclusion list had been reduced to the 5% -0% level, and by 2010, all tariff lines on the list 
were at 5%-0%.  According to the authorities, tariffs on all products on th e inclusion list will be 
eliminated by 2015 (except for 7% of tariff lines for which tariff elimination is scheduled by 2018).  
47. The reduction of tariffs on ASEAN trade has been accompanied by rapid expansion of 
Cambodia's trade with its ASEAN partners.  During the three-year period 2006-08, Cambodia's 
exports to ASEAN countries rose at an average annual rate of 37%, compared w ith an average rise of 
14% in its exports to the rest of the world.  Imports from ASEAN also rose rapidly, the increase 
averaging 35% during the period, compared with 25% for imports from the rest of the world.  For 
Cambodia, however, the growth of intra-ASEAN tr ade is occurring from a small base:  despite its 
rapid expansion, in 2008 exports to ASEAN accounted for only 7% of the value of Cambodia's total 
exports. 
48. Cambodia follows the established schedule for liber alization of ASEAN trade in services.  As 
of the seventh package of commitments under the ASEAN framework Agreement on Services, 
Cambodia's ASEAN commitments on market access and national treatment have gone beyond its 
WTO commitments in a limited number of sectors, for example leasing of construction machinery, translation and interpretation services, paging servi ces, and dental services.  According to the 
authorities, information is not available on the va lue of Cambodia's trade in services with ASEAN 
member countries. 
(b) Harmonization 
49. ASEAN has established a number of programmes designed to harmonize the trade and trade-
related procedures of its members.  ASEAN's harm onization policies cover a wide range of topics.  
There is a Common Manual for post-clearance customs audit and customs valuation.  ASEAN is working toward a single window for cargo clearance .  Work is under way to harmonize intellectual 
property (IP) procedures and cooperate on enforcement of IP rights.  The harmonization of standards 
has begun, and the mutual recognition of conformity certifications is in progress.  In services, mutual recognition arrangements have been agreed in engi neering, nursing, architectural, surveying, and 
accounting services, and for medical and dental practitioners. 
(c) ASEAN Dialogue Partners 
50. ASEAN has negotiated free-trade agreements w ith Australia/New Zealand, China, India, 
Japan, and the Republic of Korea.  These agreements are broad in scope, covering trade in goods and 
services, as well as investment.  The agreement with Australia/New Zealand also contains provisions on intellectual property, SPS and TBT, and compe tition.  They all contain dispute settlement 
mechanisms, and create cooperation fora.  ASEAN is also negotiating a free-trade agreement with the WT/TPR/S/253 Trade Policy Review 
Page 24 
  
European Union.8  As a member of ASEAN, Cambodia is a nd will be subject to tariff reductions set in 
free-trade agreements (FTAs) between ASE AN and its dialogue partners (Table II.2). 
Table II.2 
Cambodia's tariff commitments under FTAs  between ASEAN and its dialogue partners 
ASEAN FTAs with:  
China 2002: Framework Agreement on Comprehensive Economic Cooperation signed 
2010: Tariff rates of China and ASEAN 6 reduced to 0% 2015: Tariff rates of newer ASEAN members including Cambodia will be reduced to 0% 
India 2003: Framework on Comprehensive Eco nomic Cooperation Agreement signed 
2011: Tariff rates of India and ASEAN 5 (except the Philippines) reduced to 0% 
2018: Tariff rates of Cambodia will be reduced to 0% 
Republic of Korea 2005: Framework  Agreement on Economic Cooperation signed (with the exception of Thailand) 
2010: Tariff rates of the Republic of Korea and the ASEAN 6 reduced to 0% 
2018: Tariff rates of Cambodia will be reduced to 0% 
Japan 2008: Agreement on Comprehensive Economic Partnership signed 
2018: Tariff rates of Japan and the ASEAN 6 will be reduced to 0% 
2026: Tariff rates of Cambodia (and Laos, Myanmar) will be reduced to 0%  
Australia and 
New Zealand  2009: Agreement Establishing Free Trade Area signed 
2010: Tariff rates of Australia and New Zealand reduced to 0% 2024: Tariff rates of Cambodia (and Myanmar) will be reduced to 0% 
Source: Cambodian authorities. 
(iii) Other trading relations  
51. Cambodia is a beneficiary of the Generalized System of Preferences (GSP) schemes operated 
by developed countries.  Under these schemes, impor t tariffs on many products from the beneficiaries 
are exempted or reduced if requirements such as rules of origin are fulfilled.  Since Cambodia is 
categorized as a least developed country, it is entitle d to additional preferences, under which more of 
its products qualify for duty-free treatme nt or tariff reductions (Table II.3). 
Table II.3 
Number of products qualifying for preferences under selected GSP schemes 
 Japan United States European Union 
For all developing countries 3,540 3,400 6,300 
Additional only for LDCs, including 
Cambodia 2,200 1,400 All other articles but arms 
and ammunition (EBA) and 
a few other exceptions 
Source:  Cambodian authorities. 
52. Cambodia was granted duty-free and quota-free access to the EU market under the 
Everything-But-Arms Initiative (EBA), which is pa rt of the EU's GSP programme for LDCs.  EBA 
was put into effect and applied to  Cambodia in February 2001.  Cam bodia is also entitled to privileges 
under the U.S. GSP programme.  In addition, in Ju ly 2006, Cambodia signed a Trade and Investment 
Framework Agreement (TIFA) with the United Stat es, which aims to promote greater trade and 
investment in both countries and provide a forum to address bilateral trade and investment issues. 
                                                      
8 For detailed information on these agreements, including Cambodia's commitments on trade in goods 
and services, see ASEAN online information.  Viewed at:  www.aseansec.org/22935.htm. Cambodia WT/TPR/S/253 
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(4) FOREIGN DIRECT INVESTMENT REGIME  
(i) Legal framework 
53. From the early 1990s, the growth in FDI to Cambodia was motivated by the country's shift 
towards a market economy and growing macroeconomic  stability.  In 1994, in recognition of the 
benefits of inward FDI, the Cambodian Government  introduced laws and regulations on investment 
with generous incentives offered to investors, including a tax holiday of up to eight years followed by a concessionary corporate tax rate of about 9% (as against a standard rate of 20%).  Total freedom 
was granted to repatriate profits or proceeds of investment without paying withholding tax. 
Reinvested profits were exempt from corporate ta x.  Investors were also provided with guarantees 
against nationalization and price control.  A c onsiderable amount of inward FDI between 1995 
and 2003 went into the manufacturing sector, in partic ular into apparel factories.  Garment companies 
exporting from Cambodia took advantage of the s upply of cheap labour and preferential access to 
U.S. lucrative and European mark ets.  However, excep t for the garment and tourism industries, 
Cambodia has yet to attract a critical mass of Cam bodian or foreign investors in its export-potential 
sectors. 
54. The Government subsequently scaled back its investment incentives, partly in order to 
increase government revenue, through a revised Law on In vestment, which entered into force in 2005.  
This was an attempt to achieve greater transparen cy in incentives provided and minimize distortions 
and delays arising from policy-maker discretion.   
55. The main features of the revised law relative to previous requirements are:  (i) the eight-year 
blanket tax holiday for foreign investors was repl aced with a tax holiday based on a formula (see 
Table II.4) for all qualifying new investors (foreign and local);  (ii) when the tax holiday expires, all investment projects are subject to the standard cor porate tax rate (currently 20%) and all previously 
approved and operational projects currently subject to the 9% concessionary corporate tax are to be brought under the standard corporate tax rate within the next five years;  (iii) in place of the provision 
of tax-free reinvestment of profits, an accelerated  depreciation allowance was introduced under the 
general tax law for all qualified investors, irresp ective of source of finance, and profit that is 
repatriated is now subject to a 1% withholding tax;  (iv) as part of the new reforms, a fast track 
procedure has been introduced with the aim of a pproving investment applications within 28 days 
under the "one-stop service" at CIB.
9 
56. The Council for the Development of Cambodia,  and the Cambodian Investment Board are 
Cambodia's mandated institutions in the area of i nvestment promotion and facilitation.  The CDC is 
the investment approval body and administers a package of investment incentives.  As a one-stop 
shop to facilitate foreign direct investment, the CDC is responsible for obtaining all the licences from 
relevant government agencies on behalf of investor  applicants.  The relevant government agencies 
must issue the required documents no later than  28 workdays from the date of the Conditional 
Registration Certificate.  At the end of the 28 days, the CDC will issue a Final Registration 
Certificate. 
                                                      
9 Seven working groups, which involve both private- and public-sector participation, have been set up 
in key sectors to work in collaboration with the Cambodian Investme nt Board to facilitate speedy investment 
approval, monitoring, and promotion.  An investor forum, headed by the Prime Minister, is held twice a year as part of the new investment regime. WT/TPR/S/253 Trade Policy Review 
Page 26 
  
Table II.4 
Foreign investment policy regime 
Area Comment 
Government agency dealing with FDI Cambodian Investment Board (CIB) 
Council for the Development of Cambodia (CDC) 
Limits on foreign equity participation 100% forei gn ownership is allowed in all sectors/industries 
Tax incentives A tax holiday determined according to the formula:  "trigger period + 3 years 
+ n priority years".  (Trigger period:  the first year of profit or 3 years after the 
first revenue is made, whichever is sooner.   Priority period:  to be determined 
by CDC) 
 A standard 20% corporate tax rate for all new projects (domestic and foreign-
invested firms) from May 2005 
 The 9% corporate tax rate applicable to  invested enterprises approved prior to 
the promulgation of the new law (5 August 1994) to be phased out, 20% 
within the ensuing 5 years 
 Accelerated depreciation 
 Duty-free importation of capital equi pment and spare parts for initial 
installation of promoted investment 
 100% exemption from export tax 
 Tax refund on reinvested earnings 
Tax on repatriation of profits and expatriates income 100% repatriation of capital and dividends is allowed 
 Profit repatriation subject to 1% withholding tax 
Ownership of land Not pe rmitted for foreigners 
Employment of foreign personnel Limited to 10% of workforce  
Performance requirements Not applicable 
Protection of foreign investment Includes  guarantee against nationaliza tion and international convention for 
settlement of industrial disputes 
Source : Cambodian authorities. 
57. All sectors are open to foreign investors, excep t for activities prohibited to all investors, 
contained in the negative list of Sub-Decree No. 111 (2005) on the Implemen tation of the Amendment 
to the Law on Investment.  This also details i nvestment activities that ar e excluded from incentives, 
although investment is permitted.  They includ e:  retail, wholesale, and duty-free stores;  
entertainment (including restaurants, bars, nightcl ubs, massage parlours, and casinos); tourism service 
providers;  currency and financial services; press an d media-related activities;  professional services;  
and production and processing of  tobacco and wood products.  
58. Article 44 of the Constitution provides that only Cambodian citizens and legal entities have 
the right to own land.  However, a new law allowi ng foreign ownership of properties located above 
the ground floor was passed in 2010.  Aside from th is, there is no discrimination against foreign 
investors either at the time of initial investment  or after investment.  However, some foreign 
businesses have reported that they are at a disadvant age compared with Cambodian or other foreign 
rivals, who engage in acts of corruption or ta x evasion, or take advantage of Cambodia's poor 
enforcement of legal regulations.10 
59. According to the IMF, in most respects Cambodia's investment framework compares 
favorably with that of its regional neighbours.11  Considerable work has been done to turn legal drafts 
into approved laws and fill in the regulator y details through sub-decrees and administrative 
                                                      
10 According to the World Bank, for example, corruption remains the most severe constraint on 
business and investment identified by existing firms.  See World Bank and the International Finance 
Corporation (2009), p. 38. 
11 IMF (2006), pp. 10-19. Cambodia WT/TPR/S/253 
 Page 27 
 
 
instructions as well as develop the institutional capacity to implement those.12  Although there is no 
sector closed only to foreign investment, the activities listed in Sub-Decree No. 111 (2005) are prohibited for investment by both Cambodian and foreign entities.  These are:  production/processing of psychotropic substances and na rcotic substances ;  production of poisonous chemicals, agriculture 
pesticide/insecticide and other goods by using chemical substances prohibited by international 
regulations or the World Health Organization, that affect the public health and environment; 
processing and production of electrical power by us ing any waste imported from a foreign country;  
forestry exploitation business prohibited by Forestry Law;  investment activities prohibited by law.  The 2007 DTIS noted that a major weakness of the investment framework  was the lack of a 
predictable and transparent set of rules that are enfo rced in a prompt, fair, and efficient manner by the 
appropriate government institutions.  In addition, inv estors in their dealings with each other could not 
rely on a functioning commercial justice system. 
(ii) Bilateral investment agreements 
60. Cambodia has signed bilateral investment pr omotion and protection agreements with 
24 countries or territories.
13  The agreements generally provide reciprocal national treatment to 
investors, excluding benefits deriving from membersh ip in future customs unions or free-trade areas 
and agreements relating to taxati on.  The agreements preclude expropriations except those that are 
undertaken for a lawful or public purpose, are non-discriminatory, and are accompanied by prompt, adequate, and effective compensation at the fair mark et value of the property prior to expropriation.  
The agreements also guarantee repatriation of inv estments and provide for settlement of investment 
disputes via arbitration.  
61. Cambodia has no double taxation treaties (DTTs) nor tax-sparing agreements. 
                                                      
12 The main sub-decrees are:  Su b-Decree on the Establishment of the Sub-Committee on Investment of 
the Provinces-Municipalities of the Kingdom of Cambodia (Sub -Decree No. 17 ANK/BK dated 
9 February 2005);  Sub-Decree on the Implementation of the Amendment to the Law on Investment of the 
Kingdom of Cambodia (Sub-Decree No. 111 ANK/BK dated 27 September 2005);  and Sub-Decree on the 
Organization and Functioning of the Council for the Development of Cambodia (Sub-Decree No. 149 ANK/BK dated 3 October 2008). 
13 Agreements in force as of 31 December 2010 are with:  Australia, China, Croatia, Cuba, the Czech 
Republic, France, Germany, Indonesia, Kuwait, Japan, Laos, Malaysia, the Netherlands, North Korea, OPIC 
(USA), the Organization of the Petroleum Exporting Countries (OPEC), Pakistan, the Philippines, Singapore, 
Republic of Korea, Switzerland, Thailand, and Viet Nam.  Agreements with Algeria, Bulgaria, Egypt, Hungary, 
Libya, Malta, Myanmar, Qatar, Russia, the United Kingdom, United States, and Ukraine are planned or near completion.