Traders Manual for Least Developed Countries: CAMBODIA

_______________________________________________________________________________________________________

_______________________________________________________________________________________________________
Part Three
BUYING FROM CAMBODIA

I. EXPORT POLICY, REGULATIONS AND PROCEDURES

A. General

In general, the Government promotes export activities to encourage employment and
generate foreign exchange. Any trading companies of Cambodian or foreign nationalities,
registered with the Ministry of Commerce, are allowed to freely engage in import-export
activities as stipulated in Law on Commercial Regulations and Commercial Register, 1995.
The registration fee costs about US$ 70 for both national and foreign companies.

B. Export approval

In general, no approval is required to exports goods from Cambodia. Most exports
only require an export declaration made into 3 copies to accompany with the invoice and
packing list. However there are some exceptions such as.
The export of timber products is controlled and very restricted, therefore an
application to export timber has to be filled in and authorized by the First and
Second Prime Minister according to the Decision No. 65 on the Annulment the
Existing Procedure for Timber Export, J une 18 1994;
The sale and export of solidified rubber should also be authorized by the
Government, as stipulated in the Anukret on Conferring the Right to Sell and
Export Rubber Products to the Ministry of Agriculture, Forestry and Fisheries,
October 13 1994.
Other export restrictions and prohibitions are detailed in the next section.

C. Licensing, quotas and prohibitions

In general, the limited licensing system in place is for protection of Cambodias
environment, as well as its archaeological and cultural heritage.

Table 10. Products subject to export licensing

Product Measure Concerned agency
Articles of processed wood Licence Ministry of Agriculture, Fisheries
and Forestry
Fish Export monopoly granted to
State enterprise
Ministry of Agriculture, Fisheries
and Forestry
Footwear Export licence to EU Ministry of Commerce
Live animals Export licence Ministry of Agriculture, Fisheries
and Forestry
Pharmaceuticals and medical materials Export licence Ministry of Health
Precious stones, raw gold Licence as long as declared
items above US$10,000
Central Bank of Cambodia
Vehicles and machinery for military
purposes
Export licence Ministry of National Defence
Weapons, explosives and ammunitions Export licence Ministry of National Defence

Source: WTO Diagnostic Trade Integration Study for Cambodia, WT/IFSC/W/12/Add.1, page 36 and
http.//www.wto.org/english/thewto_e/acc_e/factsheet_cambodge_e.htm.



Part Three: Buying from Cambodia 24 of 48
Traders Manual for Least Developed Countries: CAMBODIA
_______________________________________________________________________________________________________

_______________________________________________________________________________________________________
Table 11. Products subject to quota

Product Measure Concerned agency
Rice Quota Ministry of Agriculture, Fisheries
and Forestry
Textiles and garments Export quota to the United States Ministry of Industry, Mines and
Energy/ Ministry of Commerce
Textiles and garments Export quota to EU Ministry of Industry, Mines and
Energy/ Ministry of Commerce

Source: WT/IFSC/W/12/Add.1, page 36.

Table 12. Products subject to export prohibitions

Product Measure Concerned agency
Cambodian antiques Prohibited Ministry of Culture
Illicit drugs Prohibited Ministry of Health
Logs and unprocessed timber Prohibited Ministry of Agriculture, Fisheries
and Forestry
Printing materials Prohibited if negative impact on
society
Ministry of Education, Youth and
Sports
Sandal wood Prohibited Ministry of Agriculture, Fisheries
and Forestry
Sawn timber Prohibited Ministry of Agriculture, Fisheries
and Forestry

Source: WT/IFSC/W/12/Add.1, page 36.

D. Documentary evidence under trade agreements and preferential schemes

Canada

In J anuary 2003, Canada and Cambodia signed a Memorandum of Understanding
under the Canadian Least Developed Countries Market Initiative which grants tariff-free and
quota-free access for textile and apparel products originating from Cambodia. In order to be
eligible for the LDC tariff rates, textile and apparel products originating from Cambodia have
to satisfy. (a) rules of origin, (b) certification and (c) direct shipment. The Canada Customs
Revenue Agency may also conduct verification of the Rules of Origin by means of a
verification visit, letter or questionnaire.

According to the regulations concerning Certificate of Origin, Commercial Invoice
and Export Licence for Garments by the Cambodian Ministry of Commerce, textile
manufacturers should obtain the following documents from the Ministry.
Cambodian Certificate of Origin Form A;
Commercial Invoice; and
Export Licence.

European Union (EU)

The EU-Cambodia Textile Trade Agreement signed in 1999, provided Cambodia
with unlimited access to the EU market for Cambodian textiles exports and simplifies
documentary requirements for such trade, until the expiry of the Agreement at the end of
2002. With Cambodia's entry into ASEAN, EU granted the country the regional cumulation
and derogation benefits offered by the EU Preferential Rules of Origin, which has resulted in
the EU-Cambodia Textile Trade Agreement being prolonged until the end of 2004.

Part Three: Buying from Cambodia 25 of 48
Traders Manual for Least Developed Countries: CAMBODIA
_______________________________________________________________________________________________________

_______________________________________________________________________________________________________
The EU-Cambodia textile agreement allows quota-free access to the EU market.
However, nine categories of the Cambodian textile products must go through double-
checking (surveillance) in order to certify Cambodian origin of the products. Details of the
agreement are available at the trade section of the European Commission.

Cambodian textile manufacturers need the following documents in order to export to
the EU market.
Exporter registration in Cambodia with the general system of preferences (GSP)
Trade Preferences System Department of the Ministry of Commerce;
Export Licence issued by the Ministry of Commerce; and
Cambodian Certificates of Origin Form A (if raw materials are imported from
ASEAN member countries, a copy of the certificate of origin verifying the origin
should be submitted to the Ministry of Commerce).

Application procedure with the Cambodian Ministry of Commerce is detailed in
Prakas No. 1347/MOC/PRK and Prakas No. 3413/MOC.

Japan

In December 2002, J apan revised its GSP scheme by expanding its coverage,
especially duty-free and quota-free treatment. To receive this preferential tariff treatment
Cambodian goods must be accompanied by a GSP Form A issued by Cambodia Trade
Preferences System Department.

The GSP Form A is not required for consignments of customs value not exceeding
200,000 Yen or of goods whose origins are evident. The latter are included in the list
available from the J apan Ministry of Foreign Affairs.

J apans GSP scheme also applies certain origin criteria, rules for transportation (direct
consignment) and rules of cumulative origin for certain processed products. The list is
available from to the J apan Ministry of Foreign Affairs.

United States of America

In 1999, Cambodia and the United States of America signed an agreement relating to
trade in cotton, wool, man-made fiber, non-cotton vegetable fiber and silk blend textiles and
textiles products. Under this agreement, a quota system for export of garments from
Cambodia into the United States was established for 13 broad categories of garments.
Details on the broad categories are available at the United States Office of Textiles and
Apparel (OTEXA).

The United States-Cambodia textile agreement, 1999, was also the first bilateral
textile trade agreement containing a labour provision. It permits an annual quota increase of
14 per cent if the United States finds that Cambodia is in "substantial compliance" with its
labour laws and internationally recognized core labour standards. In December 1999, the
United States Government offered a 5 per cent increase. And in 2001, the United States
eased its quota restrictions by another 9 per cent in addition to the annual increase of 6 per
cent. Therefore, the total textile exports from Cambodia for 2002 were 15 per cent higher
than in 2001. The new extension covers the period from 31 December 2001 to 31 December
2004.

Part Three: Buying from Cambodia 26 of 48
Traders Manual for Least Developed Countries: CAMBODIA
_______________________________________________________________________________________________________

_______________________________________________________________________________________________________

Textile products of Cambodian origin gain access to the United States market through
the United States GSP. However, this scheme also means the exclusion of these textile
products from the list of goods that are subject to low or zero tariff rates.

Textiles exporters should apply to the Ministry of Commerce for the following
documents prior to any shipment to the United States.
Export visa. Under the ELVIS (Electronic Visa Information System) Visa
Arrangement between Cambodia and the United States, a "visa" issued by the
Government of the country of origin of the textile exported to the United States,
describes the shipment, certifies the country of origin, and authorizes the
shipment to be charged against any applicable quota.
A visa is required for each shipment of textiles, except for merchandise imported
for the personal use of the importer and not for resale, regardless of value, and
properly marked commercial sample shipments valued at US$ 800 or less.
An ELVIS transmission is a message, sent electronically to the United States
Customs Service, by the Government of Cambodia or by its representative, which
describes the shipment and includes the visa number assigned to the shipment.

D. Other requirements

In Cambodia, laboratory testing of pharmaceutical products is required prior to
registration to check the conformity of the samples.


II. EXPORT CHARGES

There is no export tax as such but garment exports are under the garment visa system
put into place by the Ministry of Commerce which decides on the visa.

The following products are subject to 10 per cent export tax payable to the Ministry
of Finance:
Live horses and bovine animals;
Fish: live, fresh, chilled, fillet;
Raw hides, skins and semi processed skins;
Semi processed wood;
Veneer sheets and sheets for plywood and veneer panels; and
Wood cases, boxes, casks, etc.

Additionally, CAMCONTROL charges an inspection fee of 0.1 per cent of export
value while contractors of the Kampuchea Fish Import and Export Company (KAFIMEX)
collect a 4 per cent fee on all fish transported in the province. KAFIMEX also collects an
export licence fee of US$1 of all live fish export at Pochentong Airport.


Part Three: Buying from Cambodia 27 of 48
Traders Manual for Least Developed Countries: CAMBODIA
_______________________________________________________________________________________________________

_______________________________________________________________________________________________________

Table 13. Export tariffs

HS heading Description of good
Export tariff
(per cent
ad valorem)
01.02; 01.03 Pure bred breeding bovine animals and swine 10
03.01; 03.02; 03.03;
03.04; 03.05
Live fish, prepared fish and fish products 10
03.06; 03.07 Live crustaceans and molluscs and products thereof 10
12.11; 13.01; 13.02 Cannabis, cannabis resin, extracts and dyes, coca, opium* 50
29.05.50 Halogenated, sulphonated, nitrated or nitrated derivatives
of a cyclic alcohol*
50
29.26 Nitril-function compounds* 50
40.01; 40.04 Natural rubber in primary forms or in plates, sheets or
strips and rubber waste
10
44.02; 44.03; 44.04;
44.05; 44.06; 44.07
Unprocessed and semi-processed wood; wood charcoal 10
44.08.10.00; 44.09 Sawn and shaped wood. Veneer sheets and sheets for
plywood; strips for flooring
5

Source: WT/ACC/KHM/21, table 8.

* Categories included for the sake of formal completeness. The products in these
groups require a licence in order to be exported.



III. SETTLEMENT OF BILLS, LETTERS OF CREDIT

The Foreign Trade Bank provides letter of credit to Cambodian importers under the
condition of a 20 per cent deposit, a collateral of land or building, and a good credit history.
Minimum acceptance fee is 0.1 per cent, however importers are required to pay 0.2 per cent
fee due to the perceived country risk.



IV. DOCUMENTS, INCLUDING INSURANCE

Document
Number
of copies
Body concerned
Form
number
Cost
Bill of lading/Air waybill 8 Shipping company/airline
company

Certificate of origin 8 Ministry of Commerce
Commercial invoice 8 Exporter
Customs declaration form 3 Customs Department 15,000 Riels
GSP 4 Ministry of Commerce Form A
Insurance certificate 3 Insurance company
Packing list 8 Exporter

Source: http.//www.camnet.com.kh/customs/ .



Part Three: Buying from Cambodia 28 of 48
Traders Manual for Least Developed Countries: CAMBODIA
_______________________________________________________________________________________________________

_______________________________________________________________________________________________________
V. STATE MONOPOLY IN EXPORTS

Although Cambodias economy is liberal, there are a few State-owned trading
companies that hold exclusive rights to some trading activities.

Fisheries sector is dominated by the Kampuchea Fish Import and Export Company
(KAMFIMEX). KAMFIMEX holds the exclusive rights to fish exports. Fish for exports
should be sold through KAFIMEX which in turn grants licences to five export traders to
handle and transport the fish across the border to Thailands Aranyaphatet fish market.

According to the Anukret on Conferring the Right to Sell and Export Rubber
Products to the Ministry of Agriculture, Forestry and Fisheries on 13 October 1994,
Cambodias Ministry of Agriculture, Forestry and Fisheries is the only agency in charge of
selling and exporting rubber products. The Ministry could use 30 per cent from the proceeds
of the sales to import equipment necessary for rubber production.


VI. PRINCIPAL EXPORTS

Cambodias main export partner is the United States with which it has the special
agreement for garments and textiles.

Table 13. Direction of exports
(Million of US$)

Country/area 1998 1999 2000 2001
United States of America 292.5 493.0 739.7 832.1
Hong Kong, China 26.7 37.8 262.2 208.3
United Kingdom 24.8 52.8 81.6 126.3
Germany 71.7 40.0 66.0 98.7
France 12.2 20.5 27.7 35.0
Singapore 132.7 179.6 18.0 28.0
Netherlands 6.7 9.4 20.5 25.7
Viet Nam 41.9 12.7 19.5 21.2
China 42.2 8.8 23.8 16.7
J apan 7.9 9.3 10.7 13.3
Ireland 4.9 10.2 11.6 11.0
Canada 1.9 3.1 4.9 10.4
Malaysia 6.1 6.5 9.8 10.3
Thailand 76.8 18.3 22.9 7.6

Source: On the basis of data from the Ministry of Commerce


Part Three: Buying from Cambodia 29 of 48
Traders Manual for Least Developed Countries: CAMBODIA
_______________________________________________________________________________________________________

_______________________________________________________________________________________________________
Table 14. Composition of exports
(Million of US$)

Item 1998 1999 2000 2001
GSP Exports 392.4 564.3 1,012.0 1,141.5
Rubber 26.9 28.1 31.9 23.2
Sawn timber 90.1 73.5 25.3 9.1
Logs 88.0 37.2 7.6 7.4
Other domestic exports 0.1 0.9 3.5 6.1
NR carrier procurements 2.5 2.7 4.2 4.7
Fish products 2.5 3.4 4.5 4.1
Agricultural products 1.4 2.0 2.0 2.0
Total 603.9 712.1 1,091.0 1,198.1
Re-exports 296.0 171.8 169.8 175.6
TOTAL 899.9 883.9 1,260.8 1,373.7

Source: On the basis of data from the Ministry of Commerce.




References for part three: Buying from Cambodia

Canada Gazette, Part II, 1 J anuary 2003.
http.//canadagazette.gc.ca/partII/2003/20030101/html/index-e.html
Ministry of Commerce, Prakas on the Issuance of the Certificate of Origin, Commercial
Invoice and Export Licence for Garments
http.//www.moc.gov.kh/laws_regulation/prk1437-99-moc_ci.htm ;
Ministry of Commerce, Prakas Amending and Supplementing the Issuance of Certificates of
Origin, Commercial Invoice and Export Licence for Garments
http.//www.moc.gov.kh/laws_regulation/prk3416-99-moc_co.htm
WTO Report of the Working Party on the Accession of Cambodia, 15 August 2003,
WT/ACC/KHM/21.
WTO Diagnostic Trade Integration Study for Cambodia,
WT/IFSC/W/12, WT/IFSC/W/12/Add.1 and WT/IFSC/W/12/Add.2.



Part Three: Buying from Cambodia 30 of 48