August 2017

August 8 marked a major milestone in ASEAN History.    On this date in 1967, five nations (Indonesia, Malaysia, the Philippines, Singapore and Thailand) met in Bangkok to sign the Bangkok Declaration that formally established the Association of Southeast Asian Nations (ASEAN).  It was a monumental undertaking which, 50 years later, would lead to a ten-nation regional grouping which together is home to the third largest population on the planet and the world's fifth largest economy.  From an American business perspective, ASEAN is our fourth largest export market and the largest destination for U.S. foreign direct investment in Asia.   It is also one of the youngest regions in the world with over 380 million people under the age of 35 and one of the fastest growing economies on earth with 5% average growth per year expected well into the next century.

ASEAN remains important to the United States, and September 8 will mark the 40th anniversary of official U.S. - ASEAN relations.  The Trump Administration continues to place a high priority on engagement with Southeast Asia.  Secretary of State Tillerson attended the ASEAN Regional Forum in Manila, Philippines and traveled to Thailand and Malaysia from August 5-9.   At the ARF, the ASEAN Foreign Ministers agreed to a stronger Chairman's Statement on demilitarization of the South China Sea than the previous statement in 2016.   We anticipate the leaders of Malaysia, Myanmar, Thailand and Singapore to visit the United States prior to President Trump's November visit to the region.

Since my last newsletter, the Council has lead successful business missions to the Philippines, the ASEAN Secretariat and Indonesia.  Over 60 of our members participated in these missions where we were able to engage minister level government officials covering a wide range of issues of importance to American industry including tax reform in the Philippines, data localization issues in Indonesia.  The Council also engaged the ASEAN Secretariat on 2018 priorities around the ASEAN Digital Economy and the implementation of the Master Plan on ASEAN Connectivity 2025 as well as clarity on the opportunities for private sector engagement in the remaining ASEAN Ministerials in 2018 including the upcoming ASEAN Economic Ministers Meeting on September 7-9 in Manila, Philippines.  A Health and Life Sciences Mission to Myanmar just concluded with engagements with officials in both Nay Pyi Taw and Yangon.

We were also honored to co-host a roundtable in New York City on Friday, August 4 for Finance Minister Sri Mulyani of Indonesia where we raised a number of important issues including proposed financial services foreign ownership restrictions as well as changes to the payment gateway for electronic payments.  The Council also hosted on a luncheon for Commerce Minister Pan Sorasak of Cambodia on August 9 while he was in Washington for U.S. - Cambodian TIFA talks.

• Business missions coming up:
  • Laos Business Mission (August 31-September 1 in Vientiane, Laos)
    Following Laos’ ASEAN Chair year in 2016, the first sitting U.S. president’s visit to the country last year, and the inaugural talks held under the U.S.-Laos Trade and Investment Framework Agreement (TIFA) in April, there’s a lot of momentum in the U.S.-Laos relationship. We will lead the annual Laos Business Mission to Vientiane on August 31-September 1 to highlight opportunities and challenges for American businesses in Laos.
     
  • Mission to the ASEAN Economic Ministers’ Meeting (AEM) (September 7-9 in Manila) On September 7-9, the Council will mount its annual mission to the ASEAN Economic Ministers (AEM) Meeting in Manila.  As always, the Council delegation will meet with all ten trade Ministers as part of the official USTR-AEM Consultation, which will be led by U.S. Trade Representative Robert Lighthizer. Additionally, we will schedule bilateral meetings and other engagements throughout the Mission.  Registration is open until August 24.
     
  • Mission to the ASEAN Ministers on Energy Meeting (AMEM) (September 26-28 in Manila)
     
  • Mission to the ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF) (September 28-29 in Chiang Mai)
     
  • Mission to the ASEAN Transport Ministers Meeting (October 12-13 in Singapore).

Also, looking ahead, Council staff has compiled a list of representatives from the ASEAN countries who are planning to attend the UN General Assembly meetings in September.  To-date we are aware of the following:

• Indonesia – Vice President Jusuf Kalla (tentatively scheduled to attend)
• Laos – Foreign Minister Saleumxay Kommasith (confirmed to attend)
• Malaysia – Foreign Affairs Minister Dato Sri Anisah Aman (confirmed attend)
• Myanmar – State Counsellor H.E. Daw Aung San Suu Kyi (likely to attend)
• Philippines – Secretary of Foreign Affairs Alan Cayetano (confirmed to attend)
• Thailand – Foreign Minister Don Pramudwinai (confirmed to attend)
• Vietnam – DPM/Foreign Minister Pham Binh Minh (confirmed to attend)

At this time, we do not anticipate organizing any events to engage these government officials in New York, but will alert you immediately if the plans change.

Highlights

Looking Ahead

• The Council is now registering executives for its Annual Business Mission to Laos. Click here to register. For more information, please contact Matt Solomon at msolomon@usasean.org.
• The Council is now registering executives for its Annual Mission to the ASEAN Economic Ministers Meeting (AEM). Click here to register. For more information, please contact Matt Solomon at msolomon@usasean.org.
• The Council is now registering executives for its Annual Mission to the ASEAN Ministers on Energy Meeting (AMEM). Click here to register. For more information, please contact Riley Smith at rsmith@usasean.org.

Advocacy

• The Council has initiated an advocacy effort with the Government of Singapore (GOS) regarding the proposed development of a new draft Cyber Security Bill.  The Bill does not focus solely on cybercrime; it broadly seeks to oversee the cybersecurity of essential services in Singapore and establishes a Commissioner of Cybersecurity.  While the GOS had requested public comments on the draft bill until August 3, the Council successfully submitted a written request to extend the public comment period by an additional 30 working days to enable the Council to develop a comprehensive position on the draft bill based on input from members.   We are in the process of completing this submission and if you have questions please contact, Shay Wester at swester@usasean.org
• One of the main themes during this year’s Business Mission to the Philippines was to seek greater clarity on what the comprehensive tax reform effort (the first package of which is dubbed the Tax Reform for Acceleration and Inclusion Act, or TRAIN) by the administration of President Rodrigo Duterte would entail.  In its current form, the TRAIN bill includes a proposed sugar-sweetened beverage (SSB) tax.  The bill has already passed through the House of Representatives, but is still being deliberated in the Senate.  In meetings throughout the mission, and especially in those with the Secretary of Finance Carlos Dominguez III and Senate President Aquilino Pimentel III, the Council emphasized that the Government take into account the adverse effect the tax could have on low-income and impoverished consumers, as well as those working in the sugar and beverage industries.  Another main theme of the business mission was the overall improvement of the business environment.  With regard to this theme, the Council continued to advocate for the loosening of foreign investment restrictions in the Philippine Constitution.
• During the Council’s recent Business Mission to Indonesia, the Council used all of the meetings to advocate a wide range of concerns and recommendations for reforms to the GOI.  Of the many issues raised, the Council continued its efforts on the GOI’s National Payment Gateway regulation which currently would significantly hinder the business activities of international payments companies, and the proposed implementing rules for GR-82 which could potentially require international financial services firms to localize their data in Indonesia in order to operate in the market.

Intelligence

At a press conference following his State of the Nation Address on July 24, Philippine President Rodrigo Duterte said that talks over joint exploration with China in the South China Sea were under way and intimated that Beijing already has a “partner” for such activities in the body of water, though he refrained from specifying who that partner is.  The following day, during a two-day visit to Manila, Chinese Foreign Minister Wang Yi stated that China supported the idea of joint energy exploration with the Philippines, but warned that unilateral action would put such cooperation at risk.  Despite these remarks, joint exploration by China and the Philippines in the South China Sea's disputed areas faces political and legal obstacles that threaten to scuttle such activities.  An analysis of the obstacles to Sino-Philippine joint energy exploration can be found here.

Relationship Building

Please save the date for the following Council events and business missions:

• Mission to the ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF), September 28-29 in Chiang Mai, Thailand
• Mission to the ASEAN Transport Ministers meeting October 12-13 in Singapore.

Promotion

• On August 10, the Council hosted Commander David Cornelius Jr., the Defense Security Cooperation Agency’s Country Portfolio Director for Japan, Indonesia and Malaysia, as part of the Defense Attachés Speaker Series.  The event provided members based in Washington with a chance to review and discuss key defense and security issues facing the region today. For more information, please contact Jack Myint at jmyint@usasean.org.
• The Philippine Department of Energy (DOE) is hosting the 35th ASEAN Ministers of Energy Meeting (AMEM) and its Associated Meetings in Manila September 27-29. In parallel, with the DOE as Official Host, the ASEAN Centre for Energy (ACE) and Leverage International are organizing the ASEAN Energy Business Forum (AEBF) 2017 incorporated with the Powertrends 2017 international exhibition at the SMX Convention Center. More information on the event, including registration information, can be found here.

Council in the News

Council President & CEO Alexander Feldman appeared on CNBC to discuss China's role in developing infrastructure in Southeast Asia: How China's ties with Southeast Asia might play out | CNBC, August 7

Council Senior Vice President and Regional Managing Director Ambassador Michael Michalak was quoted in a Jakarta Post feature piece, as a postlude to our annual business mission to Indonesia: US investors call on Indonesia to resolve regulatory issues | Jakarta Post, August 1

Membership

As of August 1, the Council has 154 members, with 82 Chairman’s Council members and 72 Corporate Members.  New members to the Council are: Expedia, who joined as of July 1, at the Chairman’s Council level; Sequoia Capital, who joined as of July 15, at the Corporate level; and Nathan Inc., who joined as of August 1, also at the Corporate level.  We are also pleased to report that Uber upgraded to Chairman’s Council level as of July 1.

Regional Highlights

APEC

Looking Ahead

On November 8-10, the APEC CEO Summit 2017 will be held in Da Nang, Vietnam.  Under the theme of “Creating New Dynamism, Fostering a Shared Future,” the Summit will bring together APEC leaders from the world’s most dynamic economies, speakers from the world’s top companies, and more than 700 CEOs from across the Asia-Pacific region.  The program will feature two days of interactive discussions, presentations, and dialogue on a wide range of issues that will impact the future development of the region, including innovation, healthy workforces, sustainability, inclusive growth, and entrepreneurship.

• To express interest in receiving an invitation for an executive, please complete the form, which can be accessed here.
• For more information on the event, please visit the APEC 2017 CEO Summit website here.
• For further information on the CEO Summit or sponsorship of the Summit, please contact Alex Parle (aparle@ncapec.org) and Loraine Ashcraft (lashcraft@ncapec.org).

View the Council's latest APEC updates

ASEAN

Major Developments

• U.S. Secretary of State Rex W. Tillerson attended the Annual Ministerial Meeting of the Association of Southeast Asian Nations (ASEAN) in Manila on August 6, using the ASEAN summit to allay fears of the U.S. abandoning Asia. In his opening remarks at the conference, Secretary Tillerson noted that his personal engagement so far, including meeting with the ASEAN Foreign Ministers and Ambassadors in D.C., is “indicative of the importance that the United States pays and places on this relationship with ASEAN.” While in Manila Secretary Tillerson also chaired the 10th Lower Mekong Initiative (LMI) Ministerial Meeting. A readout on Secretary Tillerson’s visit to the Philippines, Thailand, and Malaysia is available from the State Department here.
• At the conclusion of the ASEAN Regional Forum on August 6, ASEAN Foreign Ministers issued a statement that called for militarization of the South China Sea to be avoided and noted a general concern about artificial island-building in the region.  The unified ASEAN stance on the South China Sea goes further than last year’s communique at the ASEAN Foreign Ministers’ meeting in Laos by making reference to China’s reclaimed reefs.  The statement references extensive discussions, in which concerns were voiced by some members about land reclamation "and activities in the area which have eroded trust and confidence, increased tension and may undermine peace, security and stability.”

Advocacy

The US-ASEAN Business Council held its annual ASEAN Secretariat Business Mission on July 31, with ten leading U.S. companies engaging top officials at the ASEAN Secretariat in Jakarta to further develop longstanding commercial ties with the region. The delegation was received by ASEAN Secretary-General H.E. Le Luong Minh; Deputy Secretary-General for ASEAN Economic Community H.E. Lim Hong Hin; Deputy Secretary-General for ASEAN Socio-Cultural Community H.E. Vongthep Arthakaivalvatee; officials from the ASEAN Political-Security Cooperation Department; leaders of the ASEAN Business Advisory Council; and the Executive Director of the ASEAN Centre of Energy Dr. Sanjayan Velautham. The Mission also featured a briefing from Ambassador Daniel Shields, Chargé d’affaires ad interim at the U.S. Mission to ASEAN; a luncheon with the Permanent Representative of the Republic of Singapore to ASEAN H.E. Tan Hun Seng and ASEAN Secretariat Connectivity Division Director Lim Chze Cheen; and a reception hosted by U.S. Ambassador to Indonesia Joseph R. Donovan Jr.  The press release is available here, and meeting notes are available here.

Looking Ahead

The US-ASEAN Business Council is now registering executives for its 2017 Mission to the ASEAN Economic Ministers Meeting (AEM), taking place September 7-9 in Manila. Click here to register by August 24. Contact Matt Solomon at msolomon@usasean.org with any questions.

View the Council's latest ASEAN updates

TPP

Major Developments

Following the July 12th meeting of the Chief Negotiators of the TPP-11 group of nations in Japan, the Government of Australia announced that it is ready to move the agreement forward with a minimum amount of renegotiating. This position is shared by Japan, but opposed by Malaysia and Vietnam. 

Looking Ahead

The next round of talks for the TPP 11 group will be held in Australia in early September. 

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

• On August 2, the Indonesian government’s Regulation No. 20 of 2017 on the Controls of Import and Export Goods Constituting or Deriving from Intellectual Property Rights Infringement entered force.  The regulation creates a new Customs-enforced record for trademarks and copyrights that should enable more effective IPR enforcement at border checkpoints.  Weak IPR protection has been a long running source of contention between Indonesia and the United States.  Weak and uncoordinated border enforcement of IPR was included by the US Trade Representative as a reason for listing Indonesia as a Priority Watch List country in the 2017 Special 301 Report (accessible here).  Although the Council continues to advocate for Indonesia to do more to address IPR, the new regulation is a step forward in making Indonesia more attractive to investors and improving product quality for Indonesian consumers.  The Ministry of Finance is in the process of drafting additional guidelines to support the regulation, including on commercial goods carried by individuals crossing borders, postal consignments, and specific procedures for the record system. Regulation No. 20 of 2017 may be found here.
• Hong Kong and ASEAN are set to sign a free trade agreement (FTA) on the sidelines of the 31st ASEAN Summit in the Philippines this November.  Even though Hong Kong is already a free port, the FTA would bolster Hong Kong’s role as a gateway to the mainland Chinese market for ASEAN products.  When completed, the ASEAN-Hong Kong FTA, together with the ASEAN-China Free Trade Area (ACFTA) and the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA), will provide a platform to facilitate trade and investment among ASEAN, Hong Kong, and mainland China.  Once Hong Kong and ASEAN conclude the FTA, Hong Kong will likely begin exploring options for joining the Regional Comprehensive Economic Partnership (RCEP).  Hong Kong Secretary for Commerce and Economic Development Gregory So has previously said that he would seek to join RCEP if Hong Kong could conclude the FTA negotiations with ASEAN.
• The General Department of Vietnam Customs launched the Vietnam Trade Information Portal (VTIP) on July 12, which will serve as a source for cross-border traders of all import and export data, legal documents, regulations, trade and administrative procedures, definitions of customs terms, and market trends.  This open access to import and export information will move Vietnam closer to meeting its commitments in the World Trade Organization’s Trade Facilitation Agreement (TFA).  The portal may be found here.  Apart from launching the information portal, Vietnam has made substantial progress in expanding its National Single Window (NSW) to both promote ASEAN trade flows and implement the TFA for global integration.  According to the NSW implementation plan for the 2016-2020 period issued by Vietnam’s Ministry of Industry and Trade, which may be found here (in Vietnamese), six new procedures will be added to the NSW by 2018, pertaining to licenses for industrial explosive pre-substances, industrial pre-substances, chemical import declaration, non-commercial tobacco importation, e-ATIGA Form D, and tobacco material and rolling paper importation.  Since its launch in 2015, Vietnam’s NSW has been connected to 38 administrative procedures and 11 ministries.  The NSW is expected to fully implement 284 procedures by 2020.

Advocacy

The Customs and Trade Facilitation Committee is working with the Indonesian Directorate General of Customs and Excise, which chairs the ASEAN customs track for 2017, to create actionable plans based on the proposals the Committee made at the 2017 ASEAN Directors-General of Customs Meeting in May.  On August 4, the Committee’s leaders met with Robert Marbun, Director of International and Public Affairs at the Indonesian Customs DG and Chairman of the ASEAN Coordinating Committee on Customs (CCC), to discuss policy proposals to simplify procedures for low-value shipments in ASEAN.  A similar meeting was also held on July 27 to discuss the details of Global Data Standards product-tracking pilot projects. The detailed proposals, which are now in development, will be tabled for discussion at the October CCC meeting, which the Committee plans to attend.

View the Council's latest Customs updates

Defense & Security

Major Developments

At the conclusion of the ASEAN Regional Forum on August 6, ASEAN Foreign Ministers issued a statement that called for militarization of the South China Sea to be avoided and noted a general concern about artificial island building in the region.  The unified ASEAN stance on the South China Sea goes further than last year’s communique at the ASEAN Foreign Ministers’ meeting in Laos by making reference to China’s reclaimed reefs.  The statement references extensive discussions, in which concerns were voiced by some members about land reclamation "and activities in the area which have eroded trust and confidence, increased tension and may undermine peace, security and stability.”

Advocacy

On August 10, the Council hosted an ASEAN Defense Attachés’ Roundtable on the foreign military sales process, featuring Commander David Cornelius Jr. of the Department of Defense, and joined by representatives from the offices of the Defense Attachés of Brunei, Laos, Myanmar, Singapore, Thailand and Vietnam.  The Council's Defense Attachés' Speaker Series provides members with the opportunity to engage in meaningful dialogue on defense and security issues surrounding the ASEAN region today.  Additionally, it provides a great networking opportunity by bringing together industry experts from various sectors - government, business and academia.  

View the Council's latest Defense & Security updates

Energy

Major Developments

• On July 7, Indonesia's Deputy Minister of Energy and Mineral Resources Arcandra Tahar stated that the government is currently formulating a regulation on the gross split scheme.  The new regulation is expected to be completed by the end of July.  Deputy Minister Arcandra explained that there will be similarities to the recently revised Government Regulation No. 79 of 2010, where there will be regulations on special taxations for the oil and gas sector, in relation to the gross split scheme.  This new regulation continues the efforts that the Indonesian government has begun regarding the implementation of the gross split scheme for production sharing contracts (PSCs).  This structure, which was introduced earlier this year, is centered on dividing gross production between the state and PSC Contractors without providing a mechanism for the PSC Contractors to recover sunk costs.  More information on the new gross split scheme that is being formulated can be found here.
• At a press conference following his State of the National Address on July 24, Philippine President Rodrigo Duterte said that talks over joint exploration with China in the South China Sea were under way and intimated that Beijing already has a “partner” for such activities in the body of water, though he refrained from specifying who that partner is.  The following day, during a two-day visit to Manila, Chinese Foreign Minister Wang Yi stated that China supported the idea of joint energy exploration with the Philippines, but warned that unilateral action would put such cooperation at risk.  Despite these remarks, joint exploration by China and the Philippines in the South China Sea's disputed areas faces political and legal obstacles that threaten to scuttle such activities.  An analysis of the obstacles to Sino-Philippine joint energy exploration can be found here.
• On August 2, Indonesia Energy and Mineral Resources Minister Ignasius Jonan inaugurated the ministry’s new Director-General for Oil and Gas, Ego Syahrial.  Ego previously served as head of the ESDM’s Geology Agency and in the ministry’s R&D Center for Oil and Gas Technology.  Citing Ego’s professional experience as a geologist and academic degrees in petroleum engineering, Jonan said that he hoped the new Director-General for Oil and Gas would improve the oil and gas exploration and further enhanced oil recovery (EOR) activities.

Looking Ahead

The US-ASEAN Business Council is now registering senior-level executives for its Business Mission to the 35th ASEAN Ministers on Energy Meeting (AMEM) in Pasay, Metro Manila, from September 26-28. The mission schedule will consist of bilateral meetings with the ASEAN Energy Ministers, as well as relevant AMEM Dialogue Partners.  We are also attempting to organize a luncheon dialogue with the ASEAN Energy Ministers and the ASEAN Secretariat to discuss regional energy issues.  More information on the mission can be found here.

View the Council's latest Energy updates

Financial Services

Major Developments

• New cooperative initiatives on FinTech regulation and development are being established in ASEAN as the region continues to sharpen its focus on the emerging sector.  On July 11, the Bank of Thailand (BOT) and the Monetary Authority of Singapore (MAS) signed a FinTech Cooperation Agreement and updated a memorandum of understanding (MOU).  The cooperation agreement is meant to share information between BOT and MAS on market trends and their effect on existing regulations.  The emphasis on sharing financial information between the two countries could become a precedent for future agreements in the region.  The MOU, which was originally created in 2006, was updated to improve bilateral safety collaboration. In addition, on June 27 Securities Commission Malaysia (SC) and the Australian Securities and Investments Commission (ASIC) committed to information-sharing and innovation support.  The agreement is essentially a framework between the two countries that will allow for FinTech businesses from each country to connect to regulators in the other for support and allow the regulators themselves to exchange information about the sector.
• On July 14, the Central Bank of Myanmar (CBM) published updates to its bank regulations to conform with Basel II standards and the 2016 Financial Institutions Law.  Senior Advisor from Kanbawza Bank U Than Lwin explained that compliance with Basel II should reduce domestic risk.  “Without such controls, if there are large amounts of loans, the risk is high for our banks.  This is a good regulation as it is in line with international standards,” he added.  The new regulation stipulates that all banks must maintain a liquidity ratio above 20 percent.  In addition, a single loan cannot be more than 20 percent of shareholder equity, but state owned-banks can be exempted. Unsecured transactions will be limited to 100 percent of core capital.  Private banks will be given six months to comply with these regulations and in 2018 will be required to file monthly performance reports with CBM.  The banking sector was previously regulated by provisions issued by the former military government in 1990.  Weekly and monthly reports mandated under these reforms should improve transparency and diminish risk in the banking sector while the regulation brings the banking system more in line with international risk management practices.
• On July 6, Bank Indonesia issued Regulation No. 19 of 2017 (available here in Bahasa Indonesia) on the National Payment Gateway (NPG).  The regulation is meant to improve connectivity between payments systems and lower transaction costs, but introduces new local processing requirements, caps the number of allowed payments companies, and introduces a 20 percent foreign investment cap for companies handling domestic payments.  It had previously been reported that existing foreign investors would be grandfathered in and not subject to the 20 percent investment cap, but the provision was not in the final regulation.  Head of Bank Indonesia Transformation Program Onny Widjanarko stated that “…international service providers have the choice of partnering with existing companies or forming joint ventures with 20 percent caps on their shareholdings.”  Under the conditions established in this regulation, transactions with interoperable payment instruments will be required to be processed onshore, with the implementation for debit cards aimed for mid-2018 and for credit cards in 2019.  A new institution to oversee the NPG implementation will be established in the next few months.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

• The United States’ exports of distillers’ dried grains with solubles (DDGS) to Southeast Asia have shown an overall increase of 16 percent over the past marketing year, totaling more than 1.7 million metric tons, according to data from the U.S. Department of Agriculture (USDA) and analysis by the U.S. Grains Council (USGC).  The region, which represents the third largest market for U.S. DDGS, also accounts for 20 percent of overall U.S. DDGS exports, with many countries displaying a marked increase year-over-year.  Notable examples include Thailand, which saw a 55 percent increase, to 630,000 tons; Indonesia’s 42 percent increase, to 348,000 tons; and Malaysia and Myanmar, which each saw an increase of more than 100 percent, compared to the same time last year.  Vietnam, which saw a decrease in sales, still purchased more than 490,000 tons in DDGS, and continues to rank as the U.S.’s seventh largest market.  On multiple occasions, the Council has successfully advocated for the removal of import restrictions on DDGS exports in ASEAN this year.
• The Thailand Department of Trade Negotiations, under the Ministry of Commerce, has issued a concept paper proposing flagship projects in a range of sectors under the auspices of the U.S.-Thailand Strategic Partnership Initiative and ‘Thailand 4.0,’ launched in 2016 as the Government of Thailand’s key economic development policy to advance trade and investment relations.  The ‘Thailand 4.0’ model aims to deepen economic cooperation with potential trade partners with joint private- and public-sector flagship projects in areas of mutual interest, covering trade, investment, and commercial research and development.  The Department has requested that Council members review the document to identify opportunities for collaboration.  Proposed projects include research and development in processed agricultural products and technical cooperation to develop the educational capacity of the domestic rubber industry. The full paper can be found here.  The Council reiterates our support for “Thailand 4.0” and we are especially encouraged that international trade has been recognized as an integral component for further economic development. The successful implementation of the flagship projects will certainly require the tri-sector collaboration of government, businesses, and trade associations such as the Council.  The Council looks forward to working with Food & Agriculture committee members to identify areas of potential collaboration under this strategic partnership, and will facilitate communications between companies and the Ministry of Commerce.  Please contact Sunita Kapoor (skapoor@usasean.org) for a discussion.
• The Philippines’ Bureau of Animal Industry, a division of the Department of Agriculture, issued Memorandum Circular No. 4, announcing that, effective July 1, 2017, it would cease issuing Sanitary and Phytosanitary Import Clearances (SPSIC) for processed food products of animal origin intended for human consumption.  Instead, pursuant to the Implementing Rules and Regulations of the Food Safety Act of 2013 or Republic Act 10611, the responsibility will now lie with the Department of Health’s Food and Drug Administration, as part of its overall regulation of all activities pertaining to processed foods.  The full text of the memorandum can be found here.

Advocacy

On July 21, the Council’s Food & Agriculture Committee held a meeting with Vietnam’s Vice Minister for Agriculture and Rural Development Vu Van Tam in Hanoi. Topics of discussion included Antibiotic Regulations in Animal Feed; Harmonization with Global Testing Standards for Imported Products; Ban on the Importation of Distiller’s Dried Grains with Solubles (DDGS); Suspension of Herbicides (including Glyphosate); High-Tech Agriculture; and Establishment of the Authority of Agro Product Processing and Market Development (AgroTrade).  The full meeting notes can be found here.

The Council is following up on key action items that include:

• A conference showcasing international best practices and standards for managing antibiotics in animal feed;
• A workshop reviewing international standards and tests for managing veterinary medicine; and
• Reviewing the provision of evidence regarding the aluminum phosphate recirculation method for DDGS.

Please contact Sunita Kapoor skapoor@usasean.org for a discussion.

Looking Ahead

The Council will be leading a business delegation to the 39th ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF) in Chiang Mai, Thailand September 28-29.  This annual mission provides a platform for members to engage with the ten ministers of agriculture, senior agricultural officials, and the ASEAN Secretariat.  Some key focus areas include Mutual Recognition Agreements (MRAs), and technology development in the agricultural sector.  For more information, please contact Sunita Kapoor at skapoor@usasean.org.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

• The Malaysian Health Ministry is determining whether vaccinations should be mandatory for preschool enrollment.  Adopting such a policy would be effective in preventing the spread of contagious diseases.  The Government of Malaysia also using Australia as a model to employ best practices.  For example, rather than the government taking legal action, it would make it mandatory for school enrollment. In addition, the vaccination mandate would not be to discriminate against the unvaccinated, but rather a necessary action from a public health perspective.  Whether this policy goes into effect will fall to public opinion.  The Health Ministry noted that it would first be necessary to educate parents on the need to vaccinate their children. Those opposed to vaccines bring up the adverse effects, but Health Minister Datuk Seri Dr S. Subramaniam argues that the benefits of vaccination far exceed those adverse effects. In addition, many parents oppose vaccination for their children because they fear that the contents of these vaccines are not halal.
• By building health centers and making contraceptives more accessible, The United Nations Office for Project Services (UNOPS) and United Nations Population Fund (UNFP) have been integral in improving health care in rural Myanmar.

Here are the highlights of the health projects from the UNOPS, with funding from the Three Millennium Development Goal Fund (3MDG):

• 82 health centers built since 2014, with a focus on maternal, newborn, and child health; these health centers have made maternal care safer and cleaner than house visits
• Construction of a tuberculosis diagnosis laboratory in Yangon
• An outpatient department and caregivers’ quarters in Mandalay providing TB services to northern Myanmar
• 44 health centers built in 2016 alone

The UNFP provides free contraceptives to families in rural Myanmar and makes their health care service mobile, so that families do not have to travel for hours to their nearest health center. Access to free contraceptives can reduce unwanted pregnancies and complications from pregnancy; UN data shows that 178 women die for every 100,000 live births. Furthermore, the UNFP worked with John Snow, Inc. to establish a logistics system to keep track of contraceptive inventory. Every time a contraceptive is dispensed, it is recorded either online or on paper, for rural areas with no internet access. This allows health centers to keep track of where products are being used the most, and they can reallocate resources based on this tracking system. The logistics system has been implemented in 72 townships, across six states, and more than 4,000 health professionals have been trained to use it.

Looking Ahead

On August 16-17, the Council organized its inaugural Health & Life (HLS) Industry Mission to Myanmar.  During the mission, Council leadership and seven members of the HLS Committee engaged Myanmar government officials and stakeholders in the healthcare sector in both Nay Pyi Taw and Yangon. 

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• Thailand’s National Broadcasting and Telecommunications Commission (NBTC) has indicated it will not categorize Over-the-Top (OTT) video services as broadcasting businesses—a reversal of its previous position.  While NBTC’s new OTT regulatory framework is yet to be released, the announcement from NBTC Chairman Thares Punsri that "OTT is a digital application or service that is operated on an internet network, similar to the add-on digital application, and it's unjustified to be included in broadcast business," is an encouraging development for Thailand’s digital economy sector.  In June, the Council submitted a letter urging the Thai government to adopt forward-looking OTT regulations, and has engaged NBTC and other agencies regularly on the topic.  The Thai press has credited the Council in part for the change in approach.
• The Personal Data Protection Commission of Singapore (PDPC) is developing a series of initiatives to create a trusted data ecosystem in Singapore, including: launch of public consultation on PDPC’s review of the Personal Data Protection Act (PDPA) to keep pace with technology and global developments; publication of a new Guide to help organizations adopt best practices when sharing data;  plans to introduce a Data Protection Trustmark certification scheme by the end of 2018; and Singapore’s Notice of Intent to participate in the APEC Cross-Border Privacy Rules System and the APEC Privacy Recognition for Processors System (APEC CBPR and PRP).  Through these initiatives, PDPC aims to support Singapore’s digital economy through strengthening data protection.
• Indonesia’s Ministry of Communication and Information Technology (MCIT) recently released a new draft regulation on Over-the-top (OTT) services. The draft regulation may be accessed here in Bahasa and an unofficial translation in English.  Some changes have been made to the draft since a previous version was shared last year, but issues remain requiring OTT providers to set up a permanent establishment in Indonesia, offer terms of service in Indonesian language and use Indonesia’s national payment gateway.  Click here for the input that the Council submitted to the previous draft in 2016.

Advocacy

• The Council, along with partner associations AmCham Hanoi, BSA, CompTIA, DIGITALEUROPE, ITI, JEITA, SIA, and the U.S. Chamber of Commerce, shared a detailed submission on Vietnam's draft Law on Cybersecurity with the Ministry of Public Security (MPS) on August 8. It is available here: (English | Vietnamese). MPS has now issued an updated version of the draft law, available here in English (clean), English (track changes), and Vietnamese. Among its changes, the updated Draft Law: (1) Removes the criminal liability section; (2) Removes licensing requirements for "cybersecurity assurance services" (though certification requirements may still apply to entities providing products/services to state bodies and critical information systems); and (3) Maintains provisions on data localization, content restrictions, and other key issues highlighted in the recent industry submission. The Council and its partner associations will update the joint submission in response to the new Draft. Please send any comments to Matt Solomon at msolomon@usasean.org by COB Friday, August 18. On August 8 the Council organized a meeting with MPS officials in Hanoi to raise concerns on the previous version of the Draft Law. Meeting notes are available here. During the meeting, MPS indicated they would submit the Draft Law to the Legal Committee of the National Assembly in September.
• The Personal Data Protection Commission of Singapore is conducting a public consultation on its proposed amendments to the Personal Data Protection Act (PDPA).  The Council is working with BSA | The Software Alliance on a submission in response to this.  Among its provisions, potential areas of concern include a mandatory breach notification requirement, and two new bases for data collection, use, and disclosure.  With these new bases however, there is greater flexibility for members regarding collecting, using, and disclosing data.  If members are interested in offering preliminary input, please contact Shay Wester swester@usasean.org.
• On July 10, Singapore's Ministry of Communications and Information (MCI) and the Cyber Security Agency (CSA) issued a Draft Cybersecurity Bill (available here), currently under public consultation.  The draft Bill seeks to strengthen cybersecurity governance and legislative framework by laying out four objectives: providing a framework for regulating critical information infrastructure (CII); empowering CSA; establishing a framework for sharing cybersecurity information; and establishing a licensing framework for cybersecurity service providers.  The Council will be submitting recommendations to the draft bill as part of a joint association submission.  Comments from members are being incorporated into the letter, which will be circulated for final review.  The Council, along with BSA | The Software Alliance and AmCham Singapore, has also requested a meeting with Mr. David Koh, Chief Executive of the CSA, to better understand CSA's policies.  The event can be found here.

View the Council's latest ICT updates

Infrastructure

Major Developments

On July 14, a viaduct under construction as part of the upper Changi Road East project collapsed, leaving one Chinese national dead and 10 foreign nationals injured.  A Singapore Civil Defense Force team of 60 officers and search dogs were deployed following the incident, and on-site work has stopped.  The Land Transportation Authority (LTA) halted all infrastructure projects in Singapore for the day to conduct safety checks.  Or Kim Peow (OKP), the construction firm contracted to carry out the project, has been the subject of incidents in the past.  On July 11, the company was convicted and fined S$250,000 for the 2015 death of a worker resulting from an incident at the Yio Chu Kang Flyover site and from January to April this year, OKP was blacklisted by the Ministry of Manpower for not meeting safety standards. The other bids for the contract ranged from S$129.7 million to S$193.7 million, but OKP’s contract was valued at S$94.6 million – 27 percent lower than the next lowest bid.  The Building and Construction Authority has revoked OKP’s permit and required a detailed investigation report from project engineers while temporary bypass roads are constructed.

Looking Ahead

The Council's second business mission to the 23rd ASEAN Transport Ministers Meeting will be in Singapore October 12-13, 2017.  The Council has been invited to host the ten ASEAN Transport Ministers, Senior Transport Officials, and Secretary General of the ASEAN Secretariat for a working luncheon.  Bilateral meetings with key priority countries will also be conducted.  The official invitation with registration details will follow.  Please contact Sunita Kapoor at skapoor@usasean.org and Jack Myint (jmyint@usasean.org) with any questions or to express interest.  

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

• Brunei’s Ministry of Religious Affairs (MoRA) has issued a clarification following the recent Halal Certificate and Halal Label Order (Amendment) 2017, confirming that the country will now require all food entrepreneurs and restaurants to obtain Halal Certificates for all premises, and Halal Permits for all products.  The Order also notably covers persons operating home-based food businesses, without distribution by wholesalers and retailers.  The Brunei Islamic Religious Council has indicated that it may consider conditional exemptions based on the provisions of Chapter 49 (B) of the amendment.  The amendment would:
  • require any businesses (excluding product processing facilities) that prepare food for human consumption to apply for a Halal certificate;
  • require applications for each type of business and each business place under the same management;
  • limit applications for Halal certification to services-logistics, retailing, and warehousing businesses; and
  • require any businesses preparing food in a product processing facility to apply for a Halal label permit and comply with all Brunei Islamic Religious Council (MUIB) requirements.
• In line with Brunei’s Trans-Pacific Partnership (TPP) commitment, Brunei’s government agencies are taking initial steps to show their commitment to making reforms consistent with the labor-related objectives in the TPP, despite the fate of the trade agreement still being up in the air.  On May 31, in a statement that the Labor Department of the Ministry of Home Affairs and the Energy and Industry Department of the Prime Minister’s Office jointly released, the current level of wages in Brunei ensures competitive wages and considers the affordability of companies to employ workers while sustaining their business at the same time.  However, the government is also aware of rising concerns regarding the wellbeing of citizens working in the private sector earning insufficient wages given current costs of living in the country.  As such, the labor department is in discussion with relevant stakeholders to establish a minimum wage that will be balanced and well-received.

Looking Ahead

The Council is currently reviewing October 18 for the 2017 Brunei Business Mission, a one-day mission seeking to meet with the Minister of Foreign Affairs and Trade II and the Minister of Energy and Industry, among others.  Please contact Artha Sirait at asirait@usasean.org with any questions.

View the Council's latest Brunei updates

Cambodia

Major Developments

In July, Cambodian Economy and Finance Minister Aun Pornmoniroth announced a 10-year plan to achieve a “Financial Sector Development Strategy.”  Although revealed in vague terms for the purpose of “being flexible to respond to changing conditions,” the plan announced a social security fund, the selling of government securities, an early-warning system for external market shocks, a new national strategy for microfinance institutions, and initiatives to promote financial literacy.  The plan also seeks to establish a consumer protection agency and commercial court chamber as well as to list domestic small and medium enterprises on the Cambodian stock exchange.  Chief among the new proposals is a national pension fund, which will require the private sector to place a percentage of employees’ salaries into pension funds, and is expected within the next two years.  With ambitious and currently vague proposals being laid out for a 10-year plan, the Council will pay close attention as further details develop regarding each of these proposals, with particular attention to the requirements that will be asked of private companies in establishing a national pension fund.

Advocacy

On August 9, the Council hosted an intimate, off-the-record working luncheon with Cambodian Minister of Commerce H.E. Pan Sorasak during his official visit to Washington, D.C. as part of the U.S.-Cambodia Trade and Investment Framework Agreement (TIFA) talks.  The luncheon was a unique opportunity to hear Minister Sorasak discuss the current landscape and future trajectory of the economic and strategic partnership between the United States and Cambodia.  It also served as an excellent avenue for members to discuss follow-up action items from this year's Cambodia Business Mission and the overall 2017 advocacy agenda for Cambodia. 

View the Council's latest Cambodia updates

Indonesia

Major Developments

• Bank Indonesia recently issued Regulation No. 19 of 2017 (available here in Bahasa Indonesia) on the National Payment Gateway (NPG).  The scope of the NPG encompasses interconnected switching; interconnected and interoperable payment channels (e.g. ATM channels, electronic data captured (EDC), etc.); and interoperable payment instruments (e.g. ATM cards, debit cards, credit card, e-money, etc.).  Under the conditions established in this regulation, transactions with interoperable payment instruments will be required to be processed on-shore, with the implementation on debit cards aimed for mid-2018 onwards, and credit cards the following year.  Head of Bank Indonesia Transformation Program Onny Widjanarko stated that “…international service providers have the choice of partnering with existing companies or forming joint ventures with 20 percent caps on their shareholdings.”  Separately, Bank Indonesia’s Head of Payment Systems Eni Panggabean stated that the NPG will resemble Singapore's NETS, Malaysia's MyCard, China's UnionPay and Japan's JCB. It has been reported that seven major banks in Indonesia are ready to embrace the NPG in 2017. A new institution to oversee the NPG implementation will be established in the next few months.
• In early July, Deputy Minister of Energy and Mineral Resources Arcandra Tahar stated that the government is currently formulating a government regulation on the gross split scheme. This structure, which was introduced earlier this year, is centered on dividing gross production between the state and PSC Contractors without providing a mechanism for the PSC Contractors to recover sunk costs.  Deputy Minister Arcandra reiterated during a meeting with our delegates in the context of the Indonesia Business Mission that unlike previous PSCs, under this structure, all operation costs and risks of operation are to be carried by the PSC Contractors.  While the regulation implements changes for new PSCs, all existing PSCs (including those whose extensions have already been approved) shall remain in effect on their current terms and conditions until their expiry date.  The regulation, however, will automatically apply to all new PSCs awarded by the Government of Indonesia after January 16.

Advocacy

On August 1-3, the Council held its annual Indonesia Business Mission.  The Mission included meetings with Vice President Jusuf Kalla, Coordinating Minister for Maritime Affairs Luhut Pandjaitan and Coordinating Minister for Political, Legal and Security Affairs Wiranto, and other key officials.

Looking Ahead

Please join the Council and the U.S. Chamber of Commerce in Washington, DC, on August 24 from 10:00-11:00 a.m. for a pre-trip briefing with Diane Farrell, Deputy Assistant Secretary for Asia at the U.S. Department of Commerce, International Trade Administration.  DAS Farrell will be visiting Indonesia and Vietnam in mid-September, and this meeting will be an opportunity for members to discuss the priorities and challenges they face in each market.  To register, please click here.

View the Council's latest Indonesia updates

Laos

Major Developments

• On July 25, the U.S. and Lao governments held their 8th annual Comprehensive Bilateral Dialogue in Washington, DC.  The dialogue, led on the U.S. side by Acting Assistant Secretary of State for East Asia and Pacific Affairs Susan Thornton and on the Lao side by Vice Minister of Foreign Affairs Thongphane Savanphet, covered a range of issues, including bilateral trade and investment.  According to the State Department report, the delegations discussed unexploded ordnance clearance; development cooperation in health, nutrition, and education; human rights issues; and opportunities for increased business between the two countries.  The inaugural U.S.-Laos Trade and Investment Framework Agreement talks transpired in March.
• The construction of Laos’ first oil refinery is approximately 40 percent complete, with an expected finish date of mid-2018.  Located in the Saysettha Comprehensive Development Zone, the refinery is expected to have an annual production capacity of 800,000 tons of oil.  The project is a joint venture of China's Yunnan Dongyan Industrial, the Lao State Fuel Company, and the Lao-China Joint Investment.
• Laos has signaled plans to sign a tripartite electricity trade agreement with Thailand and Malaysia at the next ASEAN Energy Ministers’ Meeting in late September in Manila.  Under the agreement, Laos will sell up to 100MW of electricity to Malaysia using Thailand’s transmission system.  Thai Ministry of Energy Permanent Secretary Areepong Bhoocha-Oom explained that “Laos will generate and sell electricity to Malaysia under the agreement.  Laos will get paid for electricity while Thailand will get paid for its transmission.”  Permanent Secretary Areepong also suggested that, in the future, Malaysia may sell Laos-generated electricity to Singapore.  For more information click here.
• Laos and the World Bank Office in Vientiane have begun the implementation of a five-year development framework. Launched in late May, the new framework focuses on sustainable green growth, infrastructure improvements, and access to human services.  The World Bank will provide US$240-270 million in loans from the International Development Association (IDA).  This comes after years of World Bank consultations with government officials, academics, and private sector officials.  The plan is designed to work with the Lao government’s 8th National Socio-Economic Development Plan, which has similar objectives.  World Bank Director for Southeast Asia Ulrich Zachau explained that “Laos has recorded impressive economic growth and achieved significant development gains,” and the World Bank, “seeks to support the country’s fundamental strategic shift toward greener and more resilient growth.”

Looking Ahead

The Council is currently registering executives for its annual Laos Business Mission, taking place August 31-September 1 in Vientiane. Click here to register by August 17.  Contact Matt Solomon at msolomon@usasean.org with any questions.

View the Council's latest Laos updates

Malaysia

Major Developments

• The United States and Malaysia resumed Trade and Investment Framework Agreement (TIFA) discussions on July 17 to seek ways to further strengthen and deepen trade relations between the two nations, according to a statement released by USTR.  A key outcome from the discussions was the decision to establish working groups on goods, intellectual property, financial services, labor and the environment. The establishment of working groups will play an important role in further allowing for such discussions with the Government of Malaysia, especially following the loss of a platform for dialogue due to the U.S.’s withdrawal from the TPP earlier this year.  Prior to the TIFA discussion, the Council held a pre-roundtable with Deputy Assistant USTR for Southeast Asia Karl Ehlers that allowed member companies to offer input on key issues they are experiencing.
• A draft cybersecurity law has been prepared by the Malaysian government. According to Malaysian Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, the draft law aims to protect Malaysians from online threats including money laundering, and recruitment and financial sourcing by terrorist groups. While details of the bill have yet to be publicized, Communications and Multimedia Minister Datuk Seri Dr Salleh Said Keruak revealed that the law would cover serious cybercrimes perpetuated by extremist groups such as online transactions and member-recruiting. With enforcement agencies relying on minimal existing legislation such as the Communications and Multimedia Act 1998 and the Computer Crime Act 1997 as the main laws pertaining to cyberspace, the introduction of the new cyber security act is expected to more adequately address the needs of the current digital threat landscape. The bill was expected to go before Parliament in the last session, July 24-August 10. The Council will continue to monitor the bill’s progress.

Looking Ahead

The Council is exploring holding a Financial Services industry mission to Malaysia during the fourth quarter of this year. For more information or to express interest in attending, please contact Ezani Mansor at emansor@usasean.org and Kim Yaeger at kyaeger@usasean.org

View the Council's latest Malaysia updates

Myanmar

Major Developments

• On August 2, Myanmar Electricity and Energy Minister U Pe Zin Tun formally resigned, citing health reasons, and was replaced by incumbent Minister of Construction, U Win Khaing, who has now absorbed the responsibilities of both the Ministry of Construction and the Ministry of Electricity and Energy.  U Win Khaing is expected to focus on electrification and the building of roads to drive growth and jobs in line with the NLD government’s development agenda.
• On  August 1, U Set Aung was appointed as Deputy Minister of Planning and Finance, resuming his former responsibilities under the previous Thein Sein administration. The ministry, which merged with the finance ministry to become the Ministry of Planning and Finance, will now have two deputy ministers – U Set Aung, who will handle the planning side and U Maung Maung Win, who will handle the finance side.
• In late August, Myanmar’s Department of Civil Aviation (DCA) will call for tenders to upgrade Kawthaung Airport in the Tanintharyi Region, Mawlamyine Airport in Mon State, and Heho Airport in Shan State.  The tenders will invite private companies to participate in Public Private Partnerships (PPPs) to upgrade these airports.  The DCA will put the tender submission date and details in state owned newspapers and in the Myanmar Gazette.  The government plans to make Kawthaung airport an international hub with Mawlamyine and Heho airports as domestic hubs. 

Advocacy

On July 14, the Central Bank of Myanmar (CBM) published updates to its bank regulations to conform with Basel II standards and the 2016 Financial Institutions Law.  Senior Advisor from Kanbawza Bank U Than Lwin explained that compliance with Basel II should reduce domestic risk.  “Without such controls, if there are large amounts of loans, the risk is high for our banks.  This is a good regulation as it is in line with international standards,” he added.  The new regulation stipulates that all banks must maintain a liquidity ratio above 20 percent.  In addition, a single loan cannot be more than 20 percent of shareholder equity, but state owned-banks can be exempted.  Unsecured transactions will be limited to 100 percent of core capital. Private banks will be given six months to comply with these regulations and in 2018 will be required to file monthly performance reports with CBM.  The banking sector was previously regulated by provisions issued by the former military government in 1990.  Weekly and monthly reports mandated under these reforms should improve transparency and diminish risk in the banking sector while the regulation brings the banking system more in line with international risk management practices.

View the Council's latest Myanmar updates

Philippines

Major Developments

• On July 24, President Rodrigo Duterte delivered his State of the Nation Address (SONA) to a joint session of the Philippine Congress.  The equivalent of the State of the Union address in the United States, the SONA offers insight into the priorities of an administration for the coming year.  With the speech coming just over one year after Duterte took office, he did not stray too much from the issues on which he is most comfortable focusing, namely law and order.  Duterte has long argued that law and order are essential to improving the business environment so that the Philippines can reach its potential in terms of inclusive economic growth.  He has framed his controversial and violent crackdown on drugs in this manner, and the attempt by the radical Islamist Maute group to take over the city of Marawi in northern Mindanao in May offers a new law and order challenge for the administration.  In addition to law and order issues, Duterte also focused on issues surrounding the provision of government services in the country.  The Council will be releasing a more thorough analysis of this year’s SONA soon.
• Immediately following his State of the Nation Address on July 24, President Rodrigo Duterte submitted his proposed budget for 2018 to the Philippine Congress.  The P3.767 trillion (US$74 billion) is an increase of more than 12 percent from the 2017 budget.  As with last year’s budget, the largest allocation goes to the education sector, which would receive P691.1 billion (US$13.64 billion), according to the draft budget.  To support the administration’s ambitious “Build, Build, Build” infrastructure development program, the Department of Public Works and Highways would receive P643.3 billion (US$12.70 billion), an increase of 37.5% over last year’s budget.  The departments with law and order responsibilities will also be receiving budget increases.
• An updated version of the Philippine Government’s Regular Foreign Investment Negative List (RFINL) is slated to be released this month.  The RFINL covers industries and professions for which foreign ownership and participation is limited.  Socioeconomic Planning Secretary Ernesto Pernia has said that the revised RFINL could include increases in the foreign ownership cap for telecommunications and public utilities, which would be in line with President Duterte’s aims to improve the provision of services by attracting more foreign investment.

Advocacy

 On July 25-27, the Council led a delegation of 14 U.S. companies on its annual Business Mission to the Philippines.  The mission focused on how U.S. companies could work with the Government of the Philippines to achieve the economic development goals of the Philippine Development Plan (PDP) 2017-2022.  The Government of the Philippines intends for the PDP 2017-2022 to underpin economic policy through the entirety of President Rodrigo Duterte’s term and serve as a roadmap for reducing poverty and spurring inclusive economic growth.  The delegation also received updates on key Government initiatives, including efforts towards comprehensive tax reform and earlier pledges to loosen restrictive economic provisions in the Philippine Constitution.  The delegation was received by senior government officials, including:

• President of the Senate, Mr. Aquilino Pimentel III;
• Secretary of Finance, Mr. Carlos Dominguez III;
• Secretary of Budget and Management, Mr. Benjamin Diokno;
• Secretary of Information and Communications Technology, Atty. Rodolfo Salalima;
• Secretary of Science and Technology, Dr. Fortunato de la Peña;
• Governor of the Bangko Sentral ng Pilipinas, Mr. Nestor Espenilla, Jr.

With regard to tax reform, one of the main advocacy points for the Council during the Mission was to emphasize that the Government take into account the adverse effect that a proposed sugar-sweetened beverage (SSB) tax could have on low-income and impoverished consumers, as well as those working in the sugar and beverage industries.  

View the Council's latest Philippines updates

Singapore

Major Developments

• The Personal Data Protection Commission (PDPC) has proposed amendments to the Personal Data Protection Act (PDPA) to keep pace with the rapidly digitizing global economy and to better facilitate Singapore’s ambition of becoming a trusted global hub for innovative data usage.  The amendments include two key proposals: the introduction of an enhanced framework for the collection, usage and disclosure of personal data and the introduction of a mandatory data breach notification framework.  The public consultation is open from July 27 to September 21.  More information on the public consultation for the PDPA, including a link to the public consultation document, can be found here.
• In a July 27 speech at the Personal Data Protection Seminar 2017, Minister for Communications and Information Dr. Yaacob Ibrahim announced that Singapore had submitted its Notice of Intent to participate in two APEC initiatives – the APEC Cross-Border Privacy Rules (CBPR) System and the APEC Privacy Recognition for Processors (PRP) System.  According to Minister Ibrahim, the “APEC CBPR system harmonizes data standards across participating economies, allowing businesses to share data responsibly across borders more seamlessly.”

Advocacy

• The Personal Data Protection Commission of Singapore announced that it will be conducting a public consultation on its proposed amendments to the Personal Data Protection Act (PDPA) from 27 July to 21 September 2017. The amendments would introduce: (1) a mandatory data breach notification framework; and (2) two new bases for data collection, use and disclosure.  The Council will be working with BSA | The Software Alliance and members to provide input to the Commission. We will be circulating a draft submission for member review within the next two weeks. If you have any preliminary input to offer, please contact Shay Wester at swester@usasean.org.
• On June 10, Singapore’s Ministry of Communications and Information (MCI) released a new Draft Cybersecurity Bill, which is currently open for public consultation.  The public consultation period has been extended until August 24.  The Council, along with BSA | The Software Alliance and AmCham Singapore, have requested a meeting with Mr. David Koh, Chief Executive of the CSA.  The meeting will afford Members the opportunity to provide CSA with a better understanding of their priorities and concerns with respect to the bill, and also to understand CSA's policy position.  The Council will be submitting recommendations to the draft Bill as part of a joint association submission. On July 28, the Council sent out this draft letter to members as a call for input. Comments were due August 4, and are being incorporated into the letter. The letter will be circulated once again for members’ review. If you have any questions about the public consultation on the Draft Cybersecurity Bill, please contact Shay Wester at swester@usasean.org.

View the Council's latest Singapore updates

Thailand

Major Developments

• On August 8, U.S. Secretary of State Rex W. Tillerson took part in the highest-level visit to Thailand by a U.S. official since the 2014 change in government caused a dip in diplomatic relations between the two countries.  Secretary Tillerson took the opportunity to encourage Thai leaders toward greater action regarding North Korea, especially regarding efforts to cut local revenue and funding streams to the regime. According to Acting Assistant Secretary for East Asian and Pacific Affairs Susan Thornton, the United States believes North Korean front companies are active in Thailand and using Bangkok as a regional hub.  Prior to his meeting with Secretary Tillerson, Prime Minister Prayut Chan-o-cha made a commitment to support a U.N. resolution on new sanctions on Pyongyang over its missile tests, but gave no specific details as to what that might entail.  However, Thailand’s foreign minister, Don Pramudwinai, highlighted a 94 percent drop in trade between Thailand and North Korea over the past year, ascribing it to Thailand’s commitment to being an upstanding member of the international community.
• A 2017 global assessment of nations’ vulnerability to cyber-attacks by the U.N.’s International Telecommunication Union (ITU) agency ranked Thailand 22 out of 165 countries worldwide, National Broadcasting and Telecommunications Commission (NBTC) chairman ACM Thares Punsri announced at a cyberwarfare forum at the NBTC Expo Thailand 2017.  The Global Cybersecurity Index (GCI) is a multi-stakeholder initiative to measure the commitment of countries to cybersecurity; it takes into account a list of five benchmarks, including a country’s technical proficiency, organizational ability, capacity building, and cooperation. In Thailand’s case, its weak points were poor organizational ability and weak cooperation.  The National Reform Steering Assembly (NRSA) has proposed a cyber security bill, but it is still being considered by the Council of State.  The new bill will establish a national cyber security protection committee that will regulate information technology security and address threats to national defense under the leadership of the Prime Minister and with the cooperation of all three branches of the armed forces.  Thailand’s military has already begun training a new class of “cyberwarriors” to implement measures aimed at protecting the Kingdom from ICT threats.

Advocacy

Thailand’s National Broadcasting and Telecommunications Commission (NBTC) has indicated it will not categorize Over-the-Top (OTT) video services as broadcasting businesses—a reversal of its previous position.  While its updated OTT regulation is yet to be released, the announcement from NBTC Chairman Thares Punsri that "OTT is a digital application or service that is operated on an internet network, similar to the add-on digital application, and it's unjustified to be included in broadcast business," is an encouraging development for Thailand’s digital economy sector.  In June, the Council submitted a letter urging the Thai government to adopt forward-looking OTT regulations, and have engaged NBTC and other agencies regularly on the topic.  The Thai press has credited the Council in part for the positive change in approach.

View the Council's latest Thailand updates

Vietnam

Major Developments

• U.S. President Donald Trump has nominated Daniel Kritenbrink to be the next U.S. Ambassador to Vietnam. Kritenbrink, a career member of the Senior Foreign Service with a focus on Asian affairs, is currently a senior adviser for North Korea policy at the State Department. Prior to that, he was senior director for Asian Affairs at the National Security Council, and previously served as Deputy Chief of Mission in Beijing.  The State Department will look to expedite the Senate’s hearing and voting process, so that he is in position before President Trump’s visit to Hanoi in November.
• During an August 2 meeting in Hanoi, the Ministry of Industry and Trade (MOIT) passed Circular No. 08/2017/TT-BCT, which allows producers and importers of milk products to set their retail prices.  This Circular, which will go into effect on August 10, removes the price cap on milk products for children under 6 years old, which was implemented under Decision 1079/QĐ-BTC (20, to protect consumers against price fluctuations.  However, under this new Circular, milk producers and importers must consult with MOIT regulatory authorities and undergo a registration process to establish pricing guidelines for their goods. Proposed retail prices must not exceed registered, recommended retail prices.  The MOIT will make final retail milk product prices available to the public in hopes of creating a transparent market and to establish pricing guidelines for milk products that have not yet been registered.  The Council has long advocated to the GOV to end the use of price caps as a policy tool on behalf of several Council members. In addition, implementation of this Circular allows Vietnam to move closer to being recognized as a full market economy.

Advocacy

• The Council, along with partner associations AmCham Hanoi, BSA, CompTIA, DIGITALEUROPE, ITI, JEITA, SIA, and the U.S. Chamber of Commerce, shared a detailed submission on Vietnam's draft Law on Cybersecurity with the Ministry of Public Security (MPS) on August 8. It is available here: (English | Vietnamese). MPS has now issued an updated version of the draft law, available here in English (clean), English (track changes), and Vietnamese. Among its changes, the updated Draft Law: (1) Removes the criminal liability section; (2) Removes licensing requirements for "cybersecurity assurance services" (though certification requirements may still apply to entities providing products/services to state bodies and critical information systems); and (3) Maintains provisions on data localization, content restrictions, and other key issues highlighted in the recent industry submission. The Council and its partner associations will update the joint submission in response to the new Draft. Please send any comments to Matt Solomon at msolomon@usasean.org by COB Friday, August 18. On August 8 the Council organized a meeting with MPS officials in Hanoi to raise concerns on the previous version of the Draft Law. Meeting notes are available here. During the meeting, MPS indicated they would submit the Draft Law to the Legal Committee of the National Assembly in September.
• Vietnam’s Ministry of Industry and Trade recently drafted a decree to amend Decree 37/20056/ND-CP of April 4, 2006, which regulates the details of the Trade Law for activities on trade promotion, registration regulations, notification, state management of trade promotion activities, among others.  Members are currently able to submit comments – the draft decree is available here (Vietnamese).  Please submit any comments to Vu Tu Thanh at tvu@usasean.org.

Looking Ahead

Please join the Council and the U.S. Chamber of Commerce in Washington, D.C.,on August 24 from 10:00-11:00 a.m. for a pre-trip briefing with Diane Farrell, Deputy Assistant Secretary for Asia at the U.S. Department of Commerce, International Trade Administration.  DAS Farrell will be visiting Indonesia and Vietnam in mid-September, and this meeting will be an opportunity for members to discuss the priorities and challenges they face in each market. Please click here to register.

View the Council's latest Vietnam updates