MoJ’s new requirements for Administrators in Insolvency Proceedings
On 12 March 2024, the MOJ issued Prakas No. 067 on the Granting of Administrator Licenses in Insolvency Proceedings (“Prakas No. 067”). With the aim of ensuring efficiency in insolvency proceedings, Prakas No. 067 outlines, among other things, the licensing requirements, conditions and procedures to become a qualified administrator, the competent authorities empowered to grant an administrator license, additional obligations after obtaining the license, consequences for failing to comply with the requirements under Article 18 of the Prakas No. 067, and other administrative penalties.
By way of background, this Prakas seeks to implement aspects of the Law on Insolvency, promulgated on 8 December 2017, (“Insolvency Law”), Article 68 of which sets out the minimum requirements for an administrator to be appointed by the court in insolvency proceedings as follows:
- Must be a natural person;
- The administrator shall not:
- Have been convicted by a court of law of an offence involving fraud or dishonesty;
- Be the debtor, any creditor, or a related person; or
- Be the spouse of any creditor or debtor or the relative of debtor or creditor.
Article 68 (3) of the Insolvency Law further provided that Ministry of Justice (“MoJ”) may, by Prakas, require the administrators be licensed by the MOJ (subject to licensing requirements and conditions to be determined by Prakas), or to possess qualifications in addition to the existing requirements set out above.
1. Licensing Requirements, Conditions and Procedure to Become a Qualified Administrator
The applicant must meet the primary conditions and formalities outlined by the MOJ, including:
- Being a Cambodian citizen;
- Holding an undergraduate degree or its equivalent in Law, Commerce, Finance, Accounting, Auditing, or Business Management;
- Having a minimum of five (5) years of relevant experience in the aforementioned fields; and
- Maintaining a workplace located in Cambodia.
The administrator license is valid for two (2) years and subject to renewal.
2. Competent Authorities to Grant the Administrator License
The license shall be granted by MOJ. The MOJ shall prepare and update the national list of administrators, which the court shall use for appointing administrators in insolvency proceedings.
3. Additional Obligations After Obtaining an Administrator License
| To provide reports and related documents | The administrator shall provide the MOJ no later than October 30 of each year with the following reports and related documents:
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| To notify any changes in office location and contact information | The administrator shall notify the MOJ within fifteen (15) days from the date of change. |
| To collaborate with any inspections by officers from MOJ | In case an officer of the MOJ visits the administrator’s office to inspect compliance with the licensing conditions and obligations outlined in Prakas No. 067. |
| To have professional indemnity insurance | The administrator shall have a professional indemnity contract with an insurance company recognized by MOJ. |
| To adhere to professional ethics | The administrator shall adhere to professional ethics as defined in separate Prakas. |
| To maintain records, documents, and other data | The administrator shall maintain records of the cases and all financial transaction documents for at least six (6) years from the date of the closing of the case file. These records, documents, and data must be kept securely and may be inspected by MOJ. |
| To participate in trainings | The administrator shall attend training courses organized by MOJ or authorized training institutions. |
4. Licensing Fee
The relevant fee for obtaining an administrator license is to be determined by the joint Prakas between the Ministry of Economics and Finance and the MOJ.
5. License Withdrawal and other administrative penalties.
MOJ can decide to revoke the license under certain conditions, including obtaining or renewing the license through deceitful methods; failure to comply with obligations; criminal convictions; serious misconduct; incapacity to perform duties; or at the individual’s request. Additionally, if the administrator fails to fulfil the required obligations, they may be subject to administrative penalties and, if relevant, other legal consequences, both criminal and civil in nature.
Sopheareach PRUM
Paralegal
+855 81 886 274
prum.sopheareach@soksiphana.com
[Disclaimer: The information provided herein is for the reader information only and is not intended to offer any form of legal advice. Always obtain formal legal advice from qualified legal counsel with respect to this matter]
