July 2016

Amb. Ted Osius
Amb. Ted Osius
President & CEO
US-ASEAN Business Council

Greetings from Cambodia!  

I am sad to report that the Council lost a great friend and supporter when Derek Williams passed away suddenly in Singapore this past Saturday.  Derek was a longstanding leader for Oracle in Asia.  As Oracle’s Executive Vice President, Derek lead Oracle in Asia from 1991 to 2009 building the Oracle business from a small base to 75 offices in 29 countries.   More recently he focused on Oracle’s business in Japan and served as Oracle’s Ambassador for business, government and policy throughout Asia.  He worked closely with the Council and often represented Oracle at major Council events and at the APEC CEO Summit.  We send our condolences to the entire Oracle family.  Derek will be missed.

I will be spending much of the next six weeks in the region, as we are heading into one of the busiest times on the Council calendar. Following our successful business missions to Thailand and Cambodia in the last week, we have more missions to the Philippines and Vietnam, ASEAN Economic Ministers Meeting as well as an Innovation Road Show to Myanmar that I am co-leading with State Department Assistant Secretary Charles Rivkin.   In addition we will be leading an Infrastructure mission to Kuala Lumpur, a Health & Life Sciences Mission to Indonesia, and I will be speaking on a panel at the ASEAN Business and Investment Summit alongside the ASEAN Leaders Summit in Laos before the summer concludes.

The American Innovation Roadshow to Myanmar mentioned above is part of the U.S.-ASEAN Connect Initiative announced by President Obama.  It will take place from August 8-9. The Roadshow will meet with senior government officials, entrepreneurs and business leaders to showcase American ingenuity and discuss the creation of an innovation environment.  Members interested in joining the Roadshow should reach out to Anthony Nelson at anelson@usasean.org.

We said farewell to two friends in the region at special events in July:  U.S. Ambassador to Indonesia Robert O. Blake, and U.S. Ambassador to Malaysia Joseph Y. Yun.  In the meantime, the White House has tapped several nominees for ASEAN diplomatic postings, including Sung Y. Kim (the Philippines), Rena Bitter (Lao PDR), Kamala Shirin Lakhdhir (Malaysia), and Joseph R. Donovan, Jr. (Indonesia).

Back in Washington, D.C., Prime Minister Lee Hsien Loong of Singapore will join us for a reception in August 1 (for more information, please contact Riley Smith at rsmith@usasean.org).  We were proud to host Deputy National Security Advisor Ben Rhodes for a public briefing July 12, where he touched on the President’s plans with regard to ASEAN for the remainder of his administration. 

Keep an eye on your email for more information about early autumn activities, including engagements with leaders attending the U.N. General Assembly, the ASEAN Energy Ministerial, the ASEAN Agriculture and Forestry Ministerial, and the Council’s annual Gala Dinner on October 6 in Washington, D.C., in concert with the U.S. Ambassadors’ Tour earlier that week.

HIGHLIGHTS

Advocacy

  • The Council, in coordination with several other associations, submitted additional input recently to the Vietnamese government on implementation on the Law on Network Information Security. The Council is currently scheduling a follow-up meeting with MIC and also seeking a meeting with GCC.
  • Draft Implementing Rules and Regulations were recently released for the Philippines’ Data Privacy Act (2012), which seeks to provide protection for sensitive information in both public and private IT systems. The Council, with the Information Technology Industry Council, is currently developing comments on the draft IRRs to submit to the National Privacy Commission.
  • The Council in partnership with other U.S. trade associations transmitted comments to the Government of Indonesia on their proposed new regulations and tax policies on Over the Top (OTT) application-related services. Some proposed regulations would require foreign service providers to establish a physical local presence in order to operate in Indonesia. Earlier this month, the GOI's Minister of Communication and Informatics announced that some of the proposed regulations, such as a local presence requirement for foreign service providers, would not be implemented in order to allow for broader public stakeholder consultations.

Intelligence

Relationship Building

Please save the date for the following Business Missions:

  • August 3-5, ASEAN Economic Ministers Meeting, Vientiane
  • August 8-9, American Innovation Roadshow to Myanmar
  • August 10-12, Philippines Business Mission
  • August 24-26, Vietnam Business Mission
  • August 31, Health & Life Sciences Mission to Indonesia
  • September 7-9, ASEAN Business & Investment Summit and ASEAN Leaders Summit, Vientiane
  • September 21-23, ASEAN Energy Ministerial Meeting, Yangon
  • October 6-7, ASEAN Ministerial Meeting on Agriculture and Forestry, Singapore
  • October 6, US-ABC Gala Dinner, Washington, D.C.

Promotion

The Council is joining the U.S. State Department to organize the first American Innovation Roadshow to Myanmar, led by Assistant Secretary of State Charles Rivkin and me, August 8-9.  For more information, please contact Anthony Nelson at anelson@usasean.org.

MEMBERSHIP

  • The Council is very proud to welcome Netflix as our newest member at the Chairman’s Council level.  Headquartered in Los Gatos, California, Netflix is the world’s leading Internet television network with over 81 million members in over 190 countries enjoying more than 125 million hours of TV shows and movies per day, including original series, documentaries and feature films.
  • We are also very pleased to welcome Accenture back to the Council at the Corporate level.  Based in Chicago, Illinois, Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations.
  • Finally, we are pleased to announce that Gilead Sciences has upgraded to the Chairman’s Council level.
  • Currently, the Council’s membership includes 73 member companies at the Chairman’s Council level and 81 members at Corporate level, for a total of 154 members.

REGIONAL HEIGHLIGHTS

APEC

Major Developments

  • APEC nations agreed on a new export certificate system for wine products to reduce bottlenecks and red tape in trading of wine. The APEC Model Wine Export certificate program is voluntary for APEC nations to implement. 
  • The value of wine trade between APEC economies has more than tripled to over US $23 billion since 2000. But businesses in the sector incur an estimated US $1 billion in costs annually due to the emergence of unnecessary non-tariff barriers, with multiple, overlapping export certificates for wine imports contributing considerably to this total. 

Looking Ahead

  • The third APEC Business Advisory Council (ABAC) meeting will be held August 1 in Shenzhen, China.
  • The third Senior Officials’ Meeting will be held beginning August 15 in Lima, Peru.
  • For a full list of upcoming APEC events please click here.  

View the Council's latest APEC updates

ASEAN

Looking Ahead

  • The Council’s annual Business Mission to the ASEAN Economic Ministers meeting will take place August 3-5 in Vientiane, Laos. For more information, contact Anthony Nelson at anelson@usasean.org.
  • The ASEAN Online SME Academy is a fantastic opportunity to share content with a wide variety of SMEs and contribute to the lasting success of the US-ASEAN Business Alliance for Competitive SMEs.  To contribute to the Academy, please contact Mario Masaya at mmasaya@usasean.org to discuss opportunities and check out the Alliance on the web here.

View the Council's latest ASEAN updates

INDUSTRY HIGHLIGHTS

Customs

Major Developments

  • The United Kingdom’s expected exit from the European Union over the next two years may have substantial effects on present and future trade arrangements with ASEAN.  Free trade agreement (FTA) negotiations will be complicated by a distracted EU leadership, lack of clarity on the EU’s membership status, and resurgent nationalist pressure.  Vietnam will inevitably lose the Free Trade Agreement access to the UK it had expected under the recently concluded EU-Vietnam Free Trade Agreement (EVFTA).  There may also be delays as the EVFTA will need to amend its clauses to account for Brexit and is still pending ratification from the European Parliament.  Likewise, the ratification of the European Union-Singapore Free Trade Agreement (EUSFTA), which has already been delayed, may be delayed further.  Indonesian Trade Minister Tom Lembong has said that he expects Indonesia’s attempt to negotiate an FTA with the EU will be delayed.  Overall, renewing trade negotiations such as the ASEAN-EU FTA, which launched in 2007 and broke off two years after, will not be a high priority for the EU. ASEAN members may also see less value in negotiating agreements with the now smaller EU.
  • On July 1, Vietnam implemented Decision no. 18/2016/QD-TTg (Vietnamese | English), substantially loosening restrictions on the import of used IT products.  Since 2015, the Council has been advocating for the loosening of these regulations. The final Decision has loosened some restrictive requirements.
  • In May, Indonesia unveiled a draft regulation on importation of consigned goods into Indonesia.  The regulation includes changes to goods classification and de minimis rules that could raise costs for importers.  The government plans to finalize the regulation in August with few apparent changes from industry feedback.  The draft regulation can be found here (Bahasa |  English).

Looking Ahead

  • The report from the Customs Directors General mission is now available.
  • The Customs Committee held a quarterly call to discuss proposed programming on July 12/13.
  • Please save the date for a workshop with the ASEAN Customs and Trade Facilitation Working Group on September 26 or 30 in Vietnam. The exact time and location are still to be determined. More details will be distributed soon.

View the Council's latest Customs updates

Defense & Security

Major Developments

On July 12, the Permanent Court of Arbitration in The Hague, Netherlands, ruled in favor of the Philippines in a case brought by Manila against China’s claims in the South China Sea.  The case has serious implications for how the nascent Duterte administration will handle relations with China, and how the five other countries that also lay claim to parts of the South China Sea will now approach these long-simmering disputes.  Analysis on the implications of the ruling can be found here.

View the Council's latest Defense & Security updates

Energy

Major Developments

  • On June 3, the National Research Foundation and National Climate Change Secretariat launched three national energy technology roadmaps with the goal of increasing energy efficiency and reducing carbon emissions.  The three roadmaps—which cover electro-mobility, industry energy efficiency, and solid waste management—are intended to serve as a guide for government agency technology master plans and funding initiatives that fall under the Urban Solutions and Sustainability domain of the Research, Innovation and Enterprise (RIE) 2020 initiative.  More information on the new national energy technology roadmaps can be found here.
  • In a reversal of earlier plans to increase the percentage of coal in its energy mix, Indonesia’s latest 10-year power development plan calls for a reduction in the percentage of coal consumption to help the country meet its COP21 carbon emissions goals.  The Ministry of Energy and Mineral Resources (ESDM) had targeted increasing coal’s percentage in Indonesia’s energy mix to around 64 percent by 2024 in the last 10-year power development plan; however, the new plan calls for call usage to drop to around 50 percent of the country’s energy mix by 2025.  More information on Indonesia’s new 10-year power development plan can be found here.

Advocacy

On July 13, the Council participated in the Senior Officials Meeting on Energy (SOME) in Nay Pyi Taw, Myanmar.  At the SOME, the Council provided a briefing on the June 3 workshop on human capital development in ASEAN’s energy sector that it hosted in Singapore alongside the Energy Policy and Planning Sub-sector network (REPP-SSN) meeting.  The Council also provided a briefing on the Energy Committee’s activities in 2016 thus far and the committee’s plans for the rest of the year.

Looking Ahead

On July 28, the Council will hold its 2016 Energy & Infrastructure Industry Mission to Malaysia.

View the Council's latest Energy updates

Financial Services

Major Developments

  • The United Kingdom’s decision to leave the European Union (EU) on June 23 shook global markets.  As polls closed on the referendum, ASEAN member states witnessed substantial rises in their currencies’ value against the British Pound Sterling.  But these currencies bounced back right after a few days of the result.  As of now, Asian stocks have climbed up to erase Brexit loss as commodity shares increased and speculation grew that central banks will look into measures to ease the economic fallout from the Brexit shock.
  • On June 13, the Monetary Authority of Singapore (MAS) announced that it will set up dedicated departments to combat money laundering and strengthen and streamline enforcement.  Currently, different departments at the MAS are responsible for the regulation and enforcement of money laundering and financial malfeasance.  From August 1, there will be a new Anti-Money Laundering Department and a new Enforcement Department.  In describing the need for the overhaul, MAS Managing Director Ravi Menon cited the increasing complexities of transnational flows, as Singapore’s financial sector continues to grow in scale and become increasingly sophisticated and connected.
  • On June 15, Deputy Governor of the Bank of Thailand Tong-Urai Limpiti and high-ranking executives from 19 financial institutions held a press conference to jointly announce the rollout of PromptPay, a part of the government's new National e-Payment Master Plan.  PromptPay will link citizens’ ID card numbers or mobile phone numbers to their bank accounts to enable financial transactions. Registration for the first phase began on July 15.  The Council will continue to monitor developments on the efficacy of PromptPay.

Looking Ahead

  • On June 16, the Council held a meeting with the head of Bank Negara of Malaysia (BNM)'s Financial Technology Enable Group (FTEG), Aznan Abdul Aziz.  The Council learned more about BNM’s plans for regulating the FinTech ecosystem and proposed a FinTech development workshop during the review of Malaysia’s financial sector development blueprint in September.  More information from the meeting may be found at this link.
  • On June 13/14, the Financial Services Committee held its second quarterly call.  The call focused on proposals that grew out of the Mission to the 2016 ASEAN Finance Ministers and Central Bank Governors Meeting.  Please see this link for a summary of the call.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

In June 2016, Thailand's Ministry of Agriculture and Cooperatives (MOAC) announced the intention to charge the trading of counterfeit agricultural chemicals and plant seeds in accordance with the Anti-Money Laundering Law.  Agriculture Permanent Secretary Thirapat Praynonsit noted that the Ministry of Agriculture had recently submitted a request to the Anti-Money Laundering Office (AMLO) to consider the inclusion of counterfeit agricultural products as a series of offenses in a bid to discourage illegal trade.  He further acknowledged that farmers often resort to utilizing counterfeit fertilizers and plant seeds as cheaper alternatives. However, such a practice has in turn resulted in an unexpected increase in production cost, lower farming productivity, and lower quality of rice produced, thereby affecting Thailand's overall agricultural business.

Advocacy

  • The Council’s Food & Agriculture Committee is planning to work on a new research project, focused on Non-Tariff Barriers in the ASEAN Agricultural Sector, framing it in terms of trade policy, and addressing it in the context of the Trans Pacific Partnership (TPP), Regional Comprehensive Economic Partnership (RCEP) and the EU FTA negotiations.  There will also be a call for action through public-private partnerships, and we plan to present/submit the paper during the 38th ASEAN Ministerial Meeting on Agriculture and Forestry (October 2016 3-7 in Singapore).  Possible research focus areas include food safety, addressing food security in changing climate conditions, and the value of agricultural technology.  Please contact Sunita Kapoor at skapoor@usasean.org  to discuss ideas for review and opportunities for collaboration.
  • The new Philippines government is open to new agricultural policy recommendations this year.  The Food & Agriculture Committee can take this opportunity to lead the charge with input from member companies.  The Philippines’ agriculture sector priorities are available here.  The Council plans to draft recommendations for the government based on our current position. Please send your inputs and recommendations to Sunita Kapoor (skapoor@usasean.org) and Hai Pham (hpham@usasean.org).

Looking Ahead

  • In October, the Council will organize a Business Mission to the 38th ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF).  More detailed registration information and updates are forthcoming. Please contact Sunita Kapoor at skapoor@usasean.org or Hai Pham at hpham@usasean.org with any questions.
  • The Council is planning its second Food & Agriculture Industry Mission to Myanmar in September.  More details will follow.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

On June 13, Presidential Deputy Spokesperson Ernesto Corpuz Abella named Dr. Paulyn Jean Rosell-Ubial as the next Secretary of the Philippine’s Department of Health (DOH).  The incoming Health Secretary is a familiar face in the healthcare sector as she holds a long track record at the DOH, having worked with 13 health secretaries over the span of 28 years.  Prior to her appointment, Dr. Ubial served as the Assistant Secretary of Health, where she headed the Office for Health Regulations since 2008.  She has also served as Regional Director for the Center for Health Development in Davao City from 2006-2008.  In addition to her strong anti-tobacco stance, Dr. Ubial’s areas of expertise lie in maternal, neonatal and child health programs.

Advocacy

Following the release of the draft implementation regulation on the Halal Law by the Indonesian Ministry of Religious Affairs (MoRA) in June, the Indonesian National Standards Agency (BSN) recently released the draft Halal standard.  This standard will apply to the provision of materials, processing, storage, packaging, distribution, sales, and presentation of products and services by organizations that produce Halal products.

Looking Ahead

On August 31, the Council is planning a Health & Life Sciences Industry Mission to Indonesia. For more information, please contact Hai Pham at hpham@usasean.org

View the Council's latest Health & Life Sciences updates

ICT

Major developments

  • On July 6, Indonesia’s Minister of Communications and Information Technology Rudiantara told the press that the Ministry would remove some of the problematic requirements of the proposed Over the Top (OTT) regulation, though he did not go into further detail.  According to the Minister, the new draft would not require local establishments or joint ventures for foreign companies, but would instead advise that they partner with local telecoms to handle customer service and data protection.  OTT providers should also still expect changes to tax policy, on which Minister Rudiantara said that providers will have to comply with prevailing income tax and value-added tax regulations to remain legal.
  • Minister Rudiantara has recently said that Indonesia plans to create new digital standard rules for three priority sectors: finance and banking; transportation and energy; and mineral resources.  The standardized rules will aim to improve the country’s cyber security and are expected to be ready in September, according to the Minister. The rules would be monitored by the yet-to-be established national cyber agency.
  • On July 1, Vietnam implemented Decision no. 18/2016/QD-TTg (Vietnamese | English), substantially loosening restrictions on the import of used IT products. The Council had advocated in 2015 for these regulations to be loosened even further. Some restrictions, however still remain.

Advocacy

  • The Council, in partnership with Mastel (Indonesia ICT Society), held a knowledge-sharing session via digital video conference on Internet Regulation to Support the Development of the Digital Economy.  A recap of the session can be found here.
  • The Council, in coordination with several other associations, submitted more input recently to the Vietnamese government on implementation on the Law on Network Information Security.  The Council is currently scheduling a follow-up meeting with MIC and also seeking a meeting with GCC.
  • Draft Implementing Rules and Regulations were recently released for the Philippines’ Data Privacy Act (2012), which seeks to provide protection for sensitive information in both public and private IT systems.  The Council, with the Information Technology Industry Council, is currently developing comments on the draft IRR’s to submit to the National Privacy Commission.

View the Council's latest ICT updates

Infrastructure

Major Developments

After more than four years of negotiations, the Singapore Government and rail operator SMRT (Singapore Mass Rapid Transport) Corp. have signed a new rail-financing framework, pending final approval from relevant stakeholders.  Once approved, all 600,000 operating assets under this S$1 billion framework will fall within a private-public distribution module, commencing October 1.  As Singapore’s Land Transport Authority (LTA) assumes authority over new assets, SMRT is said to be able to better manage their service standards, with an expected average 5 percent margin posting in EBIT (Earnings before interests and taxes).  This new rail-financing framework appears to be a progressive response to the rise in transport-related controversies in recent years.  In April 2016, the LTA announced that there were 14 major breakdowns on the SMRT network during 2015, an increase of 40 percent from the previous year.  SMRT is also currently embroiled in a public controversy arising from investigations leaked by Hong Kong’s FactWire, on faulty train infrastructures purchased from China. According to the July 5 report, “a source from the mainland railway industry told FactWire that Singapore’s subway operator SMRT was secretly shipping defective trains back to mainland China for replacements and repair by manufacturer CSR Sifang Locomotive & Rolling Stock Company Ltd.” Former Ambassador and current Dean of the Lee Kuan Yew School of Public Policy Kishore Mahbubani has attributed the nature of privatization as a reason for the lowered transport service standards.  In this context, Singapore displays a unique public-private reversal role when addressing infrastructure problems.

Smart Cities, Regions, and Communities - Opportunities and Resources Dialogue

On July 14, the Council and the American Chamber of Commerce Singapore co-hosted a dialog session on Smart Cities with U.S. Assistant Secretary of Commerce for Global Markets Arun Kumar and Austin, TX Mayor Steve Adler.  During the session, Mayor Adler highlighted Austin as a case study for evolving Smart Cities, emphasizing the need to have a risk-willing workforce dedicated to using innovative technologies and entrepreneurship to solve social problems.  A Smart City should also be dedicated to producing cleaner, greener, and more efficient infrastructures while balancing the needs of the people simultaneously.  He further noted that disruptive technology is beneficial in driving economic growth, but needs to be balanced with consultative dialogs between the government and the private sector.  In a bid to increase trade and investment opportunities for U.S. companies globally, the U.S. Chamber of Commerce has recently published a Smart Cities Resource Guide that identifies various opportunities and programs related to Smart Cities.  Subsequent chapters in the book include information on access to capital, data, the Internet of Things, as well as a global calendar of events.  Click here to access the resource guide.  The presentation slides on the dialogue can be accessed here.

Looking Ahead

  • The Council’s inaugural Energy and Infrastructure Industry Mission to Malaysia will take place on July 28.  This one-day event in Kuala Lumpur offers members an opportunity to engage key public and private sector stakeholders who make up Malaysia's energy and infrastructure ecosystem.  For more information, contact Sunita Kapoor at skapoor@usasean.org and Jack Myint at jmyint@usasean.org.
  • The Council will be hosting the 2016 Infrastructure Technology Seminar in the Philippines on September 7.  This is a one-day conference during which companies can both offer and raise awareness of technological solutions available in the market to an audience of key Philippines government officials.  By leveraging the expertise of participating companies, this seminar aims to position itself as a trusted advisor to key ministries and officials who oversee infrastructure development.  Please contact Sunita Kapoor (skapoor@usasean.org) and Jack Myint (jmyint@usasean.org) for more information.
  • The Council is exploring opportunities to conduct an inaugural business mission to the 22nd ASEAN Transport Ministers Meeting in the Philippines later this year.  Please contact Sunita Kapoor (skapoor@usasean.org) and Jack Myint (jmyint@usasean.org) for more information.

View the Council's latest Infrastructure updates

COUNTRY HIGHLIGHTS

Brunei

Major Developments

The Department of Trade Development under the Ministry of Foreign Affairs and Trade (MOFAT) has launched the Brunei Darussalam National Trade Repository (BDNTR), which provides trade-related information for Brunei Darussalam's import tariffs, rules of origin, non-tariff measures, procedures and documentary requirements.  MOFAT is also working together with the relevant government agencies to ensure that that the BDNTR is continuously being improved and up to date.

View the Council's latest Brunei updates

Cambodia

Major Developments

On May 30, the privately owned Phnom Penh Special Economic Zone (PPSEZ) held its initial public offering (IPO) and became the fourth company to be listed on the Cambodian Securities Exchange (CSX).  The IPO signals a positive and unprecedented development for the emerging Cambodian stock market as the other three public listings on the CSX are state-run enterprises.  Since its opening, PPSEZ has already raised $11.6 million through the sale of 11,575,000 shares.  It began construction in 2005 and aims to "liberalize and expedite business" as one of the country’s most industrialized business parks.  With a capital valuation of approximately $460 million, stocks for PPSEZ are expected to rise, as financial observers have expressed long-term confidence in the company and its viability.  With the maturation of the CSX, talks have also begun for the creation of better legal framework to accommodate a corporate bond market, which would help control national interest rates by permitting companies to secure the debt of private investors.

View the Council's latest Cambodia updates

Indonesia

Major Developments

  • On July 18, President Obama announced his intent to nominate Joseph R. Donovan, Jr., to be America's next Ambassador to the Republic of Indonesia.
  • On July 6, Indonesia’s Minister of Communications and Information Technology Rudiantara told the press that the Ministry would remove some of the problematic requirements of the proposed Over the Top (OTT) regulation, though he did not go into further detail.  According to the Minister, the new draft would not require local establishments or joint ventures for foreign companies, but would instead advise that they partner with local telecoms to handle customer service, protect data and level the playing field.  OTT providers should also still expect changes to tax policy, on which Minister Rudiantara said that providers will have to comply with prevailing income tax and value-added tax regulations to remain legal.
  • On June 28, the Indonesian House of Representatives approved revisions to the state budget after ministries answered the government’s pleas to cut budgets due to lower-than-expected state revenues.  In the same session, the Indonesian House also passed the tax amnesty law.  Taking effect on July 1, the law charges tax rates of 2-5 percent to those who declare and repatriate their offshore assets and 4-10 percent to those who declare but do not repatriate the funds.  Minister of Finance Bambang Brodjonegoro has said that the tax amnesty is expected to draw in Rp 165 trillion (US $12.44 billion) in revenue for the government.  Even with the tax amnesty law, reduced budgets and reduced subsidies on diesel, the revised budget anticipates a deficit of Rp 296.7 trillion (US $23 billion), or some 2.3 percent of GDP, compared to the original budget’s deficit of Rp 273.2 trillion (US $19.94 billion), or 2.1 percent of GDP.
  • On June 21, the Financial Services Authority (OJK) unveiled a draft of a new regulation on cybersecurity for commercial banks for public comment.  In addition to the security requirements, the regulation also mandates that banks locate their data centers within Indonesia, although there appear to be procedures to partially opt out of this requirement.  The regulation will replace Bank of Indonesia regulation No. 9/15/PBI/2007. The draft of OJK Regulation POJK.03/2016 on Implementation of Risk Management in the Use of Information Technology by Commercial Banks and instructions for submitting feedback is accessible at this link.
  • On June 20, the World Bank released its quarterly economic report on Indonesia (available here), which forecasts GDP growth of 5.1 percent, aligning with the previous WB IEQ released in March and slightly lower than the 5.3 percent in the latest national budget revision.

Looking Ahead

On August 31, the Council is planning a Health & Life Sciences Industry Mission to Indonesia. For more information, please contact Hai Pham at hpham@usasean.org.

View the Council's latest Indonesia updates

Laos

Major Developments

  • U.S. President Barack Obama is expected to announce an increase in funding to clear unexploded ordnance (UXO) during his visit to Vientiane in September.  Since 2010, the U.S. has steadily increased spending to help Laos fund and clear UXO from $5 million a year, to $15 million in 2014.  During Secretary Kerry’s visit to Laos last January, he also committed to increasing U.S. funding towards UXO programs, which led to an increase to $19.5 million in Laos’ current national budget.  President Obama is expected to make an announcement that would exceed this figure in September.  The U.S.-backed UXO program is aimed at clearing bombs left behind during the Vietnam War as well as helping victims who have debilitating injuries due to leftover bombs. 
  • Rena Bitter testified before the U.S. Senate Committee on Foreign Relations on July 13 as the nominee for U.S. Ambassador to Laos.  Ambassador-Designate Bitter most recently served as Consul General in Ho Chi Minh City, Vietnam. Here are the Ambassador-Designate’s bio, testimony, and a video of the Senate hearing.

Looking Ahead

  • The Council is leading a delegation to Vientiane, Laos for the ASEAN Economic Ministers Meeting August 3-5. For more information, contact Anthony Nelson at anelson@usasean.org.
  • The Council’s Mission to the AEM will be preceded on August 2 by a program on E-Commerce Applications for Lao SMEs in the agricultural and handicrafts sector. For more information, contact Mario Masaya at mmasaya@usasean.org.  

View the Council's latest Laos updates

Malaysia

Major developments

  • On June 27, Prime Minister of Malaysia Najib Razak announced a cabinet reshuffle with four new ministerial and six new deputy ministerial appointments.  The reshuffle can be considered a move to shore up support for the administration.  However, the hasty reshuffle raises questions about transparency from international spectators and Malaysia’s opposition parties, considering this is the third time Prime Minister Najib has reshuffled his cabinet since he retained his position as prime minister after the 13th general election. The Council’s analytical update on the reshuffle can be found here.
  • Kamala Shirin Lakhdhir testified before the U.S. Senate Committee on Foreign Relations on July 13 as the nominee for U.S. Ambassador to Malaysia. Ambassador-Designate Lakhdhir’s testimony can be found here.  A video of the hearing can be found here.
  • The Malaysian Health Ministry is reviewing the proposal to impose a sugar-sweetened tax on all imported and locally produced beverages.  Deputy Health Minister Dr. Hilmi Yahaya noted that this proposal will be aligned with the Malaysian Government's National Plan of Action on Nutrition III and policy options from 2016-2025 to formally address the country's recurring problems of obesity and diabetes.  However, Health Minister Datuk Seri Dr. S. Subramaniam has reaffirmed that the sugar tax proposal is still being discussed at a ministerial-level, and is subject to the approval of the Malaysian Ministry of Finance.

Looking Ahead

  • The Council is hosting an Energy and Infrastructure Mission to Malaysia on July 28.  Please contact Sunita Kapoor at skapoor@usasean.org for more information.
  • The Council is seeking a meeting with Minister of Communications and Multimedia Datuk Seri Salleh Said Keruak in August to follow up on the much anticipated amendments to the Communications and Multimedia Act.

View the Council's latest Malaysia updates

Myanmar

Major Developments

  • On June 24, the Financial Action Task Force (FATF) announced the full removal of Myanmar from its list of “high risk and non-cooperative jurisdictions.”  Myanmar had been on the list since June 2011.  According to FATF, the upgrade represents significant progress made in addressing strategic anti-money laundering and counter-terrorist financing deficiencies.  Removal from the list is expected to significantly reduce the due diligence burden for foreign investors. For more information, see our recent update here.
  • On June 30 the U.S. Department of State released its annual human trafficking report, which downgraded Myanmar from “Tier 2 Watch List” status to the lowest “Tier 3” designation.  The demotion was attributed to Myanmar’s failure to meet “minimum standards” in tackling human trafficking and slavery.  For more information, click here.
  • The Myanmar Investment Commission (MIC), the powerful government-run body responsible for approving major local and foreign investments, was reformed on June 7 to include 11 new members.  A full list of members is available here.  The reorganized MIC faces a backlog of investment applications—more than 100 since April, including $2.3 billion in proposed foreign investment projects.  For more information, view our recent update here.

Looking Ahead

  • The Council is collaborating with the U.S. State Department to lead an Innovation Roadshow to Yangon and Naypyidaw August 8-9. Companies interested in proposing a Senior Executive for participation should contact Anthony Nelson at anelson@usasean.org.
  • The Council will host a conference call with the Honorable Scot Marciel, U.S. Ambassador to Burma on July 28 (DC)/July 29 (Yangon). More information can be found here.  

View the Council's latest Myanmar updates

Philippines

Major Developments

Advocacy

Draft Implementing Rules and Regulations were recently released for the Philippines’ Data Privacy Act (2012), which seeks to provide protection for sensitive information in both public and private IT systems.  The Council, with the Information Technology Industry Council, is currently developing comments on the draft IRRs to submit to the National Privacy Commission.

Looking Ahead

Please mark your calendars for the 2016 Business Mission to the Philippines August 10-12.  The business mission will offer participants the opportunity to meet officials in the new government and hear about their goals and priorities first hand.  A meeting with the new Secretary of Information and Communications Technology Rodolfo Salalima has already been confirmed.  Notes from the first planning call for the mission, which featured a briefing by the Honorable Philip S. Goldberg, U.S. Ambassador to the Philippines, can be found here.

View the Council's latest Philippines updates

Singapore

Major Developments

  • On June 16, the Ministry of Finance announced that Singapore would join the Base Erosion and Profit Shifting (BEPS) tax framework, which aims to deter multinational corporations (MNCs) from using loopholes in different countries’ tax regimes to avoid paying taxes.  More information on Singapore’s adoption of BEPS.
  • The Monetary Authority of Singapore (MAS) has proposed a “regulatory sandbox” approach for the development of the city-state’s Financial Technology (FinTech) industry.  The approach is intended to create an environment that encourages innovation and experimentation in FinTech solutions while limiting the consequences such experimentation ultimately entails.  More information on MAS's "regulatory sandbox" approach.

Advocacy

On July 14 in Singapore, the Council co-hosted with the American Chamber of Commerce in Singapore a Lunch Dialogue with U.S. Assistant Secretary of Commerce Arun Kumar and EPA Deputy Assistant Administrator for the Office of Water Joel Beauvais.  The event occurred alongside the start of the U.S. International Trade Administration’s Water Infrastructure Business Development Mission to Singapore, Vietnam and the Philippines.

Looking Ahead

The US-ASEAN Business Council and the U.S. Chamber of Commerce are co-hosting a reception and discussion with H.E. Lee Hsien Loong, Prime Minister of Singapore, on August 1.  The event will feature a keynote address by and WEF-style discussion with Prime Minister Lee, who is visiting Washington to mark the 50th anniversary of diplomatic relations between Singapore and the United States.  For more information on the event, please click here.  If you are interested in sponsoring the event, please contact Riley Smith as rsmith@usasean.org.

View the Council's latest Singapore updates

Thailand

Major Developments

  • Prime Minister Prayut Chan-o-cha will chair a megaproject watchdog panel set up to monitor the progress of ongoing and planned infrastructure projects throughout Thailand.  The working group will propose legal amendments to make it easier for companies to invest in large-scale projects, and seeks to streamline approval and commencement of construction.  The government expects that 20 megaprojects, worth a total of US $45 billion, will come down the pipeline.  For more information, see our recent update here.
  • The U.S. Department of State’s annual Trafficking in Persons (TIP) Report was released on June 30.  Thailand was upgraded to the “Tier 2 Watch List,” indicating that “Thailand made significant efforts to eliminate trafficking during the rating period, but still does not fully meet the minimum standards for doing so.”  For more information, see the U.S. Embassy’s Statement here.

Looking Ahead

The public referendum on Thailand’s new Constitution is scheduled for August 7.  The Council will continue to monitor developments in the lead-up to the vote.

View the Council's latest Thailand updates

Vietnam

Major Developments

On June 28, the National Committee for APEC 2017 held a meeting chaired by Deputy Prime Minister Pham Binh Minh to discuss the appropriate selection of topics proposed for APEC 2017 by Vietnam and to ensure good preparation in logistics and related issues for the event next year.  Ten years ago, Vietnam hosted APEC 2006 in its capital, Hanoi.  Next year, Da Nang will be the host of the 2017 APEC Economic Leaders' Meeting.  To prepare for the event, the People's Committee of Da Nang has approved a US $10.9M budget to upgrade major roads in the city.  The Da Nang International Airport is also scheduled to be completed in March 2017.  DPM Minh emphasized the need for greater cooperation among ministries, agencies and local authorities across sectors to ensure the quality of the preparation process.

Advocacy

On August 24-26, the Council will engage the new Government of Vietnam (GOV) during its annual Business Mission to Vietnam.  This mission will be an opportunity for the Council to establish new working relationships with the newly-elected leadership, address key business and investment challenges, support the GOV in its reform efforts and TPP implementation, and discuss plans for APEC 2017.  Please contact Hai Pham at hpham@usasean.org with any questions.

View the Council's latest Vietnam updates