Formalities and Procedures for Administrative Sanctions and Penalties in Trust Sector
On 3 January 2024, the Non-Banking Financial Services Authorities issued Prakas No. 002 on Formalities and Procedure for Administrative Sanctions and Penalties in Trust Sector (“Prakas”), which aims to set out the rules, formalities, and procedures for imposing administrative sanctions and penalties by the Trust Regulator against any person who violates any terms of the license, permit, and/or other registrations granted by the Trust Regulator.
The Prakas is applicable to any individuals and legal entities who violate the laws and regulations in trust sector in the Kingdom of Cambodia.
We highlight some key features of this Prakas below:
Competent Authority
The Trust Inspector of the Trust Regulator is granted specific authority to impose administrative sanctions and transitional penalties, and to determine compensation, against those committing violations.
Types of Sanctions and Penalties
| Transitional Fines and Penalties | a. The Trust Inspector may impose transitional fines or penalties against the offender in an amount as determined in the trust law and regulations. b. Continued offending may result in imposing double the fine. c. Any offence that adversely impacts the public, customers, or any party in the trust arrangement, may lead to fine equal to two times the amount of damages caused. d. The transitional fine or penalty must be paid to the Trust Inspector within 15 days or within a period as determined by the Trust Regulator. e. Late payment or failing to pay may lead to additional 2% of the transitional fine or penalty. f. Failure to pay within 30 days without any appeal against such fine/penalty may lead to more severe administrative sanctions or a petition by the Trust Inspector to the court. |
| Administrative Sanctions
| The Trust Inspector may impose the following administrative sanctions against any person who fails to follow the requirements of the license, permit, registration, or accreditation: a. warning; b. corrective guidance; c. restriction on license, permit, registration, accreditation; d. restriction on the management and/or preservation of trust assets; e. suspension of licence, permit, registration, accreditation; f. suspension or dismissal from the position of director or senior officer; and g. revocation of licence, permit, registration, and accreditation. |
| Additional Administrative Sanctions
| Where a person under the management and supervision of the Trust Regulator has violated other laws and regulations, the Trust Regulator may take additional, administrative measures as follows: a. ordering the person to compensate in accordance with the Prakas and other regulations; b. requesting the competent court to issue an order for person to comply with the laws and pay the damages as determined by court; c. temporarily suspending or dismissing the director, head, the management board or senior staff of legal entities that have obtained a license, permit, registration, accreditation from the Trust Regulator; d. selecting and giving authority to the competent person to review the business activities and other related activities of the person who has obtained a license, permit, registration, accreditation from the Trust Regulator; and e. restricting or ceasing particular or general activities carried out by the person who has obtained a license, permission, registration, accreditation from the Trust Regulator regardless of whether such activities were carried out in accordance with or against the terms of the license, permit, registration, and accreditation. |
Opportunity to Clarify and to Appeal Sanctions/Penalties
Before taking any measures under the Prakas, the offender shall have an opportunity to clarify orally, or in writing, within a specific period. The Trust Regulator will take the clarification into consideration to determine, at its sole discretion, existence of any aggravating and/or mitigating circumstances.
If the punished person is not satisfied with any measure, the person may appeal against such measure to the Trust Regulator within 30 days from the date of receiving the measure; and if still unsatisfied, then the punished person may appeal to the competent court within 30 days.
Any decisions, administrative sanctions, and transitional penalties may be publicly announced or notified to any person.
If you have any queries on the above, please feel free to reach out to any of the contributing authors below:
Contributing Authors:
Matthew Rendall
Managing Partner
+855 10 890 632
matthew.rendall@soksiphana.com
Visot Nom
Associate
+855 81 238 195
Sopheareach Prum
Paralegal
+855 81 886 274
prum.sopheareach@soksiphana.com
This alert is for general information only and is not a substitute for legal advice.
