October 2018

President’s Newsletter – October 2018

Dear Members,

Greetings from Washington.  Fall has arrived in the nation’s capital and with it the cool weather.

The change in seasons, however, has not deterred Washington from keeping its focus on ASEAN.  Both Secretary of the Treasury Mnuchin and Secretary of Defense Mattis have traveled to the region in the last two weeks.  Secretary Mnuchin attended the World Bank-IMF Fall Meetings in Bali, Indonesia while Secretary Mattis visited Vietnam on his way to the ASEAN Ministers of Defense Meeting Plus in Singapore.  This continued engagement is a clear indication of the Trump Administration’s commitment to ASEAN Centrality and the IndoPacific Policy. 

Vice President Pence will travel next month to Singapore to attend the ASEAN-US Summit as well as participate in the East Asia Summit (he will then go on to attend the APEC Summit in nearby Papua New Guinea).  While we are not expecting any major speeches by the Vice President in Singapore, his attendance will further confirm America’s commitment to the region and to ASEAN. 

Another major move which will impact the IndoPacific and ASEAN, the U.S. Congress passed, and President Trump signed on October 5th, is the Build Act which will create a new super agency known as the U.S. International Development Finance Corporation (IDFC).  The IDFC will be able to support development particularly in infrastructure around the world with an investment budget of US$60 billion.   

In ASEAN earlier this week, Vietnam’s Nguyen Phu TRONG, became the first person since Ho Chi Minh to hold both the role of General Secretary of the Communist Party and of President of the Country at the same time.  The Council was honored to co-host a dinner for General Secretary Trong when he visited the United States for the first time in 2015.  We hope to engage him in his new role on a visit to the United States possibly next year as the President of Vietnam has traditionally come to the UN General Assembly meetings in New York in September.

The Council has been busy over the last month with a number of engagements across the region: 

- Cambodia Business Mission

On October 2-3, the Council brought a delegation of 10 leading U.S. companies on its annual Business Mission to Cambodia to engage the re-elected government led by Prime Minister Hun Sen. During the mission, the delegation met with Prime Minister Hun Sen and key members of his cabinet and discussed ways to promote US-Cambodia ties through enhanced economic cooperation.

- ASEAN Ministerial for Agriculture and Forestry Ministers

On October 9-13, the Council organized its annual Business Mission to the ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF).  This year, the 40th AMAF took place in Hanoi, Vietnam.  During the mission, the delegation gave two presentations to the SOM and AMAF, and held bilateral meetings with the U.S. Embassy, UN FAO, the National Assembly Committee on Science and Technology, as well as heads of delegations from Myanmar, the Philippines, Singapore, Malaysia, Cambodia, Laos, and Vietnam.

- Indonesia’s Journey Forward Business Roundtable and Gala Dinner in Bali

On October 10th, the Council co-hosted a business roundtable and gala dinner on the sidelines of the 2018 World Bank-IMF Fall Meetings in Bali.   The Council moderated the business roundtable with Coordinating Minister for Maritime Affairs, Natural Resources and the Environment Luhut Panjaitan and Minister of Finance Sri Mulyani Indrawati, which was followed by a gala dinner featuring a speech by Vice President Jusuf Kala and attended by Ministers Luhut, Sri Mulyani as well as Central Bank Governor Perry Warjiyo and Chairman of BKPM Tom Lembong.

- Malaysia Business Mission

On October 16-18, the Council organized its annual business mission to Malaysia with 28 leading U.S. companies.  The three-day mission was the first to engage the new government since the Pakatan Harapan’s historic election win in May.  During the mission, the delegation reaffirmed its commitment to supporting Malaysia’s dynamic growth and discussed the importance of continuing to create a business environment that encourages trade and investment with Prime Minister Tun Dr Mahathir Bin Mohamad, newly elected Member of Parliament from Port Dickson and leader of the People’s Justice Party Dato' Seri Anwar bin Ibrahim as well as Ministers including Minister of Finance Lim Guan Eng and newly appointed Central Bank Governor Nor Shamsiah Mohd Yunus.

Highlights

Looking Ahead

- ASEAN Ministers of Energy Meeting

On October 30-31, the Council will lead a delegation of senior-level energy executives on its annual business mission to the ASEAN Ministers of Energy Meeting (AMEM) in Singapore.  This year marks the eighth year that the Council has led a mission to AMEM.  As in past years, the mission will consist of bilateral meetings with ASEAN Energy Ministers and AMEM Dialogue Partners.  Officials with whom the delegation plans to meet are H.E. Yeo Bee Yin, Minister for Energy, Science, Technology, Environment and Climate Change of Malaysia; H.E. Tran Tuan Anh, Minister for Industry and Trade of Vietnam; H.E. Dr. Siri Jirapongphan, Minister of Energy of Thailand; and H.E. Arcandra Tahar, Vice Minister for Energy and Mineral Resources of Indonesia.

- ASEAN Transport Ministers Meeting

On November 8-9, the Council will lead a delegation of senior-level executives on its annual business mission to the ASEAN Transport Ministers’ Meeting (ATM) in Bangkok, Thailand. The dialogue will focus on regional connectivity priorities and ways to increase private sector support for the connectivity master plan. Please contact Sunita Kapoor at skapoor@usasean.org with any questions.

- ASEAN Business & Investment Summit

The Council is proud to support the ASEAN Business and Investment Summit (ABIS) 2018 which will be held in conjunction with the ASEAN Summit from November 12-13 at Sands Expo and Convention Centre, Marina Bay Sands, Singapore. ABIS is an annual signature platform organized by the Singapore Chair of the ASEAN Business and Advisory Council (ASEAN-BAC). ABIS brings together thought leaders from business and governments to discuss current economic issues and challenges in ASEAN such as ASEAN economic integration, urban development and smart city, digitalization, business women, sustainable business, family business, and view from ASEAN Dialogue Partners. ABIS is a fantastic opportunity for business community to engage with various senior executives from businesses and high-level key decision makers from ASEAN governments and its Dialogue Partners. Please contact Mario Masaya (mmasaya@usasean.org) for any questions.

Advocacy

• While the Council continues to engage the Government of Thailand on their proposed priorities in 2019 as the ASEAN Chair, we have also made advocacy efforts on behalf of members regarding Thailand’s Cybersecurity Law and Innovation List regulations.  Earlier this month the Council submitted industry comments to the Ministry of Digital Economy and Society on the GOT’s revised draft cybersecurity bill.  The comments acknowledged the positive dimension of the government’s use of a multi-stakeholder consultation process.  Our submission also noted that in order for the law to support both innovation, investment and greater security, its provisions should be practicable and realistic, globally relevant, embedded in public-private cooperation and respectful of privacy and rule of law.  The Council also initiated an effort to identify how Thailand’s Innovation List regulations impact the ability of Council members, particularly in the health and life sciences sector, to compete for government procurement opportunities. The Innovation List mandates that products developed through R&D done by Thai majority-owned companies be granted special government procurement status, which can include setting aside a percentage of government procurement spending for Thai majority-owned companies only.
• Following the Council’s recent business mission to Cambodia, we initiated a tangible multi-sector follow up advocacy effort with Cambodia’s Minister of Commerce.  At the request of the Minister, we are gathering inputs from Council members on current policies, rules and regulations which hinder their ability to expand their business activities with Cambodia.  Once transmitted, this comprehensive document will serve as the basis for developing advocacy priorities in the 2019 Work Plan of the Council’s Cambodia Committee.
• The Council is continuing its advocacy effort on behalf of members in Indonesia regarding a tax compliance challenge related to a new interpretation by Indonesia’s tax authorities of an insurance industry regulation (PMK 81/2009) which allowed expenses to be charged as deductible on income tax filings.  The Council both independently and in concert with other American and foreign insurance industry groups has transmitted letters to the Government of Indonesia proposing that the DG of Indonesia’s tax authority circulate a letter of clarification about the interpretation of the current regulation in addition to calling for changes to the regulation itself.  In addition to letters, Council personnel have held meetings with the tax authorities, and our Jakarta office is organizing a meeting with officials from the Financial Services Authority (OJK) to provide information on the tax related  insurance regulations of other Asia-Pacific nations.

Membership

We are pleased to welcome two new members to the Council this October:  AECOM as of October 1 and Stripe, Inc. as of October 15.  Both join the Council as Corporate members.  Additionally, Cisco has upgraded its membership to Chairman’s Council.  This brings our total membership to 156, with 71 Corporate members and 85 Chairman’s Council members.

AECOM is one of the world's top engineering and design groups.  The company provides planning, consulting and construction management services for civil and infrastructure construction to government and private clients in some 150 countries.  The company also provides facilities management and maintenance, logistics, IT services, and systems integration services.  AECOM projects include the Mall of Oman (scheduled to open in 2019), the Hyderabad Metro Rail in India, Mercedes-Benz Stadium (future home of the Atlanta Falcons), and New York City's Second Avenue Subway.  AECOM generates more than a quarter of its sales outside the United States.

Stripe is a technology company that builds economic infrastructure for the internet. Stripe’s mission is to increase the GDP of the internet. Businesses of every size—from new startups to public companies—use Stripe’s software to accept payments and manage their businesses online.

Regional Highlights

APEC

Major Developments

As part of the 2018 APEC CEO Summit, the U.S. APEC Business Coalition is arranging a number of opportunities for companies to engage with Leaders and Ministers from APEC economies. The meetings will take place between the afternoon of November 15 and the afternoon of November 17, with exact timing likely to be confirmed between one to two weeks before the event.

The meetings will take place in a private room aboard the Pacific Explorer cruise liner where the CEO Summit is taking place in Port Moresby, Papua New Guinea.  These meetings will be open to representatives of companies that are members of U.S. APEC Business Coalition partner organizations, including all US-ASEAN Business Council member companies.  If you are interested in participating in the Coalition meetings or receiving updates on meeting confirmations please click here and complete the form.

View the Council's latest APEC updates

ASEAN

Major Developments

• On November 11-15, the leaders of all 10 ASEAN Members States and its Dialogue Partners will gather in Singapore for the 33rd ASEAN Summit.  One of the key outcomes of the ASEAN Summit is the ASEAN Agreement on E-Commerce, which will be signed at the upcoming 33rd ASEAN Summit in November.  The Agreement calls on member states to enhance cooperation in e-commerce, improve cross border transactions, and strengthen trust in the use of e-commerce.  U.S. President Donald Trump will not attend the ASEAN Summit and is sending Vice President Mike Pence to attend the 6th ASEAN-US Summit and the 13th East Asia Summit.  This will be the first time a U.S. President will not attend the Summit since 2013.  The ASEAN-US Summit is expected to discuss the U.S.’ Indo-Pacific strategy that is meant to bolster the U.S.’ commitment to the region after President Trump withdrew from the Trans-Pacific Partnership trade deal.  VP Pence will “highlight the United States’ vision of free and open Indo-Pacific, based on respect for sovereignty, the rule of law and the principles of free, fair and reciprocal trade” according to the White House. 

Advocacy

On September 25, more than 180 Thailand SME (Small and Medium-sized Enterprises) owners and government officials from the travel and tourism industry in Bangkok participated in a full-day workshop in Bangkok entitled “SME Digital Transformation for the ASEAN Travel and Tourism Industry”. The workshop served as an implementation activity following the Council’s Business Mission to the Twenty-First Meeting of ASEAN Tourism Ministers (21st M-ATM) in Chiang Mai last January and was conducted in close collaboration with the Thailand Office of SMEs Promotion (OSMEP), Tourism Council of Thailand and Thammasat University. It also marked the first capacity-building workshop of the Council’s newly established Travel and Tourism Committee in support of the travel and tourism ecosystem in the region.

Looking Ahead

• ASEAN Business and Investment Summit (ABIS), November 12-13, Singapore: The Council is proud to support the ABIS 2018 which will be held in conjunction with the ASEAN Summit from November 12-13 at Sands Expo and Convention Centre, Marina Bay Sands, Singapore. ABIS is an annual signature platform organized by the Singapore Chair of ASEAN Business and Advisory Council (ASEAN-BAC).  ABIS brings together thought leaders from business and governments to discuss current economic issues and challenges in ASEAN such as ASEAN economic integration, urban development and smart city, digitalization, business women, sustainable business, family business, and view from ASEAN Dialogue Partners.  ABIS is a fantastic opportunity for business community to engage with various senior executives from businesses and high-level decision makers from ASEAN governments and its Dialogue Partners.  Please contact Mario Masaya (mmasaya@usasean.org) with any questions.
• November 21 (TBC), SME Workshop in Hai Phong, Vietnam: The Council is calling for members’ interest to participate in a full-day SME Workshop in Hai Phong, northern Vietnam’s biggest commercial and industrial hub and third most-populous city of the country.  The workshop will focus on SMEs’ utilization of digital tools, integration to the global value chain, and exposure to regional markets.  Information on members’ participation will follow.  Please contact Vinsensius Kangen (vkangen@usasean.org) with any questions.

View the Council's latest ASEAN updates

TPP

Major Developments

The ratification process for bringing the 11 nation CPTPP agreement into force continues to make progress.  The Government of Japan announced that it now expects the agreement to go into force in early 2019.  The new timetable reflects the progress being made by CPTPP members Canada (Canada’s House of Commons passed a CPTPP implementation bill last week) and Vietnam (Vietnam’s National Assembly is expected to ratify the agreement when it meets in November) in their national ratification processes.  

Advocacy

During the Council’s recent business mission to Malaysia, the Council advocated, along with a growing number of public statements by Malaysian business leaders, that the government move forward with its national ratification process as a way of strengthening Malaysia’s export and FDI attraction competitiveness in the current global environment.  

Looking ahead to 2019, the Council will explore opportunities to collaborate with CPTPP member governments and industry groups to support advocacy and capacity-building efforts which ensure that the ASEAN members of the CPTPP fully implement policy and regulatory reforms to be in compliance with their CPTPP obligations, commitments and disciplines.

View the Council's latest TPP updates

Industry Highlights

Customs

Major Developments

The Trade Ministers from the 16 RCEP Participating Countries held their 6th RCEP Ministerial Meeting at the end of August amid signs that the negotiations are gaining traction. During the meeting, the Ministers adopted a Package of Year-End Deliverables, putting more force behind the deadline for a "substantial conclusion."  They also assessed and backed the outcomes of the 23rd round of negotiations held July 17-27 in Bangkok where the chapters on Customs Procedures and Trade Facilitation and Government Procurement were completed.  The recent progress on these chapters and some apparent deals around tariff offers have raised the prospect that this year’s target of a “substantial conclusion” at the November Leaders’ Summit may be more realistic than past targets.  Though there certainly will not be full completion of the negotiations this year, it now appears that a 2019 completion may be feasible.  See our Update for more details on where the Council understands the negotiations currently stand.

Advocacy

• The ASEAN Secretariat and the ASEAN Customs Procedures and Trade Facilitation Working Group (CPTFWG) is currently surveying the private sector’s views on progress implementing the World Trade Organization–Trade Facilitation Agreement (WTO-TFA) in the ASEAN Member States, with support from US-ABC.  The survey was developed by Singapore Customs with advice from the Council and several member companies, and we strongly encourage all members engaged in cross-border goods trade to take the time to record their experiences in the survey for every country they do business in.  The data the Secretariat gathers will be used in ASEAN customs meetings to benchmark ASEAN's progress and develop trade facilitation policy responses.  Please enter your responses to the survey via this SurveyMonkey link by October 31.
• On October 22, the Council held a day-long workshop alongside the October meeting of the ASEAN Customs Procedures and Trade Facilitation Working Group (CPTFWG), covering the potential of transformative technologies to support customs solutions and ASEAN integration. The event explored the trade facilitation potential of emerging technologies, including blockchain, advanced data analytics, artificial intelligence, and global data standards through a series of panel discussions and breakout sessions.  In addition to Council members presenting their latest innovations and policy implications, the Australian Border Force, the Singapore Customs Networked Trade Platform Office, and the Customs Administration of the Netherlands joined the event to discuss their latest work with the CPTFWG.

Looking Ahead

The World Customs Organization is inviting Council members to present on intellectual property protection and product identification techniques at training session for the Lao Department of Customs.  The Joint Session with Rights Holders is currently scheduled for the afternoon of November 13 in Vientiane.  Please contact Ian Saccomanno at isaccomanno@usasean.org if you are interested in presenting at the event.

View the Council's latest Customs updates

Defense & Security

Major Developments

• On October 15-20, U.S. Secretary of Defense Jim Mattis traveled to Vietnam and Singapore. Secretary Mattis was in Vietnam for a goodwill visit (the second time this year) and in Singapore to attend the ASEAN Defense Ministers’ Plus Meeting (ADMM-Plus). To access a readout of Secretary Mattis’ meeting with Vietnam’s Minister of National Defense, Ngo Xuan Lich , please click here. To access a readout of Secretary Mattis’ ADMM-Plus meeting, please click here. The Secretary’s trip originally was to include a visit to Beijing, but that stop was canceled amid rising tensions between the United States and China over trade and defense issues.
• On October 22, the inaugural ASEAN-China Maritime Field Training Exercise was launched in Zhanjiang, China. The six-day exercise, co-organized by Singapore and China, involved more than 1,000 servicemen and is expected to involve simulated scenarios such as; helicopter cross-deck landings, a joint search and rescue mission, and medical evacuation. This important development emerges as a postlude to the ASEAN Defence Ministers' Meeting-Plus last year - which includes the United States, China, Russia and Japan – as a confidence-building mechanism between ASEAN and China in mutually promoting regional maritime security, while safeguarding trade routes across the Asia Pacific. In his opening speech, Vice-Admiral Yuan of China’s Southern Theatre Command said, “I am confident that the exercise will yield its expected outcomes, become a predominant platform for deepening mutual understanding and exchange, and set a new milestone for a community of a shared future between China and ASEAN.” Representing Singapore is the Formidable-class frigate RSS Stalwart, while China sent a destroyer ship, a frigate, and a supply ship. Brunei participated with a patrol vessel, Philippines sent a logistics support vessel, and Thailand and Vietnam each sent a frigate. Cambodia, Indonesia, Malaysia and Myanmar attended as observers

Advocacy

On October 3, Vietnam’s Ministry of Public Security completed the first draft decree to implement the Law on Cybersecurity.  It is uncertain when the official decree will be released. For more information, please contact Vu Tu Thanh (tvu@usasean.org ) and Ella Duangkaew (eduangkaew@usasean.org.

View the Council's latest Defense & Security updates

Energy

Major Developments

• The National Energy Reform Committee has said that the first stages of Thailand’s latest Energy Reform Plan (ERP) are expected to be rolled out before the end of the year.  The main focus of the latest ERP, which was originally issued in January 2018, is increasing energy production and security.  One way that the plan aims to do this is by deregulating peer-to-peer power trading.  Other additions in the latest ERP include the establishment of a one-stop shop for granting licenses to gas operators and power plants, a new building code that requires higher energy efficiency standards, and a shift towards the widespread use of compressed natural gas in the transport sector.  In the longer run, the new ERP includes a fourth phase of large-scale petrochemical investment in the Eastern Economic Corridor, a push for the utilization of electric vehicles, and encouraging the use of energy storage systems.  More information on the latest ERP can be found here.
• On September 10, in a bid to increase the competitiveness of Vietnam’s wind power industry, Prime Minister Nguyen Xuan Phuc approved the amendment and revision of the wind Feed-in-Tariff (FiT) in Decision No. 37/2011/QD-TTg.  The move will increase the tariff rates to 8.5 US cents/kWh for onshore and 9.8 US cents/kWh for offshore.  The FiT rates for wind power are still lower than those of other countries in the region, but the increase shows that the Government is attempting to address the commercial risks that, up to now, have caused foreign companies to hesitate when it comes to financing wind power projects in the country.  More information on this topic can be found here.
• Singapore’s Energy Market Authority (EMA) has more authority to act in the event of an imminent shortage under changes to the Gas Act and the Electricity Act.  EMA can now direct companies to take measures in the event of an emergency with approval from the Minister of Trade and Industry.  These measures include reallocating gas from users with alternative fuels and entering into, modifying or terminating contractual agreements. These additional powers come after Singapore experienced one of its worst blackouts in September when power-generating units tripped one after another.  More information on EMA’s new powers can be found here.
• On September 12, Lao Prime Minister Thongloun Sisolith announced at a World Economic Forum on ASEAN (WEF-ASEAN) panel that Laos will continue moving forward with its hydropower dam building, but with intensified scrutiny and greater study of wind and solar power.  The Prime Minister also said he did not agree with the “battery” of Southeast Asia label that has been widely used to describe the country’s ambitions to supply its neighbors’ growing energy needs and double its energy production by 2020.  The Prime Minister’s remarks follow the catastrophic dam collapse in the Attapeu Province on July 24 that caused widespread damage to 13 villages and killed at least 35 people.  The energy sector, seen as a growth driver for Laos, became particularly important following the historic signing of the tripartite electricity sharing agreement with Malaysia and Thailand.  More information on this topic can be found here.

Advocacy

The U.S. Department of State, through its Lower Mekong Initiative, is seeking industry feedback on proposed voluntary guidelines that outline best practices for conducting market surveillance for minimum energy performance standards (MEPS) and energy labeling requirements for residential air conditioners.  The final version of the document is meant to serve as a practical resource for ASEAN governments and compliance authorities to follow when designing and implementing a national market surveillance program, or when revising and strengthening existing programs related to energy efficiency standards.  Although the current draft guidelines focus on air conditioning, many of the best practices can apply to other appliances.  A draft of the guidelines, entitled "Market Surveillance for Air Conditioners: Voluntary Guidelines for ASEAN Member States," can be found here.  Please submit any feedback to Ana Maria Carreno (acarreno@clasp.ngo), Lena Kelpsaite (lkelpsaite@clasp.ngo), and Nicole Kearney (nkearney@clasp.ngo) by November 2.

Looking Ahead

The Council will lead a delegation of senior-level energy executives on its annual business mission to the ASEAN Ministers on Energy Meeting (AMEM) October 30-31 in Singapore.  This year marks the eighth year that the Council has led a mission to AMEM.  As with past years, the mission will consist of bilateral meetings with ASEAN Energy Ministers and AMEM Dialogue Partners.  Officials with whom the delegation plans to meet are H.E. Yeo Bee Yin, Minister for Energy, Science, Technology, Environment and Climate Change of Malaysia; H.E. Tran Tuan Anh, Minister for Industry and Trade of Vietnam; H.E. Dr. Siri Jirapongphan, Minister of Energy of Thailand; and H.E. Arcandra Tahar, Vice Minister for Energy and Mineral Resources of Indonesia.

View the Council's latest Energy updates

Financial Services

Major Developments

Thailand’s Fintech Act may be enacted by the end of the year according to industry groups that have been involved in drafting. The Fintech Act, which the Council first covered in 2017 in this update, will include measures on electronic transactions, know-your-customer rules, and due diligence.  It will also require the government to provide open data sources to entrepreneurs to support innovation.  This work to build the regulatory infrastructure of a digital financial services system will be critical to building a competitive digital financial ecosystem, which has been a priority of the Thai government and especially the Bank of Thailand in recent years.

Advocacy

In a significant move to update data governance and strengthen cybersecurity in the financial sector, Bank Negara Malaysia (BNM) recently released an updated Outsourcing Exposure Draft and a new Risk Management in Technology (RMiT) Exposure Draft for public feedback.  The new Outsourcing Draft updates the draft previously released in November 2017, which the Council has previously submitted comments on.  Some key additions in the update include the introduction of materiality thresholds to certain parts of the regulation, recognition and regulations covering cloud service providers, and additional details in the approval system. BNM’s preference for an approval regime and continued application of certain parts of the regulation to non-material outsourcing arrangements remain areas of significant concern.  Despite those challenges, which the Council continues to encourage BNM to address, implementation of the regulation would represent a significant improvement over the status quo.  The Council submitted a letter on behalf of members on October 19 raising these issues and other technical challenges in the regulation.  The RMiT Exposure Draft sets out extensive rules for financial institutions’ technology risk management frameworks.  The draft is very comprehensive and covers areas including cybersecurity management, cryptography, data center management and third-party service providers.  Some areas of concern in the RMiT include public cloud use and potential inconsistency with the Outsourcing Exposure Draft.  The Council is currently drafting comments on the RMiT.  Members can contact Ian Saccomanno at isaccomanno@usasean.org with feedback.

The Council, in coalition with other industry associations, is continuing to advocate for a resolution to a problematic change in tax policy affecting the insurance industry in Indonesia. Following early advocacy by the Council, the Indonesian Tax Directorate-General issued Circular Letter S-607/PJ.03/2018 to mitigate the problem.  However, the Letter did not fully solve the challenge.  The Council and other associations are continuing to work with the Tax DG and the Financial Services Authority (OJK) to fully resolve the issue.  The challenge emerged in early 2018 when a confidential tax court ruling changed how income taxes for insurance companies are calculated, significantly increasing their tax burden and leading to the charging of additional back taxes and penalties.  Early analysis indicated that the penalties and back taxes were so large that more than a dozen insurance companies would fall below mandatory risk-based capital levels if they were to pay them.

View the Council's latest Financial Services updates

Food & Agriculture

Major Developments

• In late September, Philippine President Rodrigo Duterte signed Administrative Order (AO 13) -Removing Non-Tariff Barriers and Streamlining Administrative Procedures on the Importation of Agricultural Products.  This action was taken to address one source of rising inflation in the Philippines, noting that there is an urgent need to tame price spikes of basic agricultural commodities by adopting measures that remove non-tariff barriers and streamline administrative procedures to allow importation that will address shortfall on supply and ensure stable prices of agricultural products in the domestic market.  Examples of such removals include allowing the importation of certain agricultural products beyond the authorized Minimum Access Volume (MAV) and reducing or removing fees to ensure their sufficient supply in the domestic market at more affordable prices.
• Amid the ongoing debate over Thailand’s proposed restrictions on the use of three farm chemicals (paraquat, glyphosate and chlorpyrifos), Deputy Agriculture and Cooperatives Minister Wiwat Salyakamthorn has set up a committee to conduct an in-depth study on the potential impact of imposing restrictions on these chemicals.  The committee is expected to present results to the prime minister in October.  Additionally, Minister Wiwat also signaled that the government in Bangkok would be pushing for organic farming on 5 million rai (approximately 800,000 hectares) to produce crops for public consumption that are free from crop protection technology.  Proponents of imposing restrictions on the use of these chemicals have cited the potential loss in crop yield and production efficiency, especially for Thailand’s smallholder farmers.  However, rather than calling for the complete ban of the chemicals, they have advocated for more responsible use.  Glyphosate for example is an important tool for Thailand farmers.  It represents 33 percent of all herbicide use in the country and is widely used in plantation crops such as oil palm, rubber, rice, corn, sugarcane, cassava and tropical fruit.  Without access to glyphosate, farmer’s weed control costs would increase by US$25.6/hectares, or US$54.2 million per year.  Although banned in some countries, glyphosate has been safely used for more than 40 years and is registered for use in 160 countries worldwide.  Should the ban go through, it is likely to reduce Thai farmers’ competitiveness and export opportunities due to a decrease in yield, efficiency and higher production costs.  It will also have negative implications on manufacturers and supply chains in the food and agriculture sector.

Advocacy

On October 11-13, the Council organized its annual Business Mission to the ASEAN Ministerial Meeting on Agriculture and Forestry (AMAF).  This year, the 40th AMAF took place in Hanoi, Vietnam.  During the mission, the delegation gave two presentations to the SOM and AMAF, and held bilateral meetings with the U.S. Embassy, UN FAO, the National Assembly Committee on Science and Technology, and heads of delegation from Myanmar, the Philippines, Singapore, Malaysia, Cambodia, Laos, and Vietnam.  In the coming days, the Council will release a mission report with follow-up action items.

View the Council's latest Food & Agriculture updates

Health & Life Sciences

Major Developments

In the last few years, the Government of Vietnam has been leveraging information and technology to support the growth of its healthcare sector by creating numerous initiatives to transform Vietnam’s healthcare system, via telemedicine, e-healthcare and smart healthcare initiatives.  Last year, the Ministry of Health (MOH) announced a plan to spend VND5 trillion (US$220 million) on creating a nationwide system of electronic medical records (EMR) and launched an EMR pilot project.  The project introduced software to compile citizens’ medical records in one electronic database in eight cities and provinces including Ho Chi Minh City and Hanoi.  After months of trial, experts have concluded that keeping medical records in an electronic database offers benefits to citizens and healthcare service providers.  Participating patients and hospitals were satisfied with the convenience of the system during this pilot project.  To expand the system nationwide in July next year in accordance with MOH’s plan, more equipment, training and resources are needed.

Deputy Minister of Health Nguyen Viet Tien said a nationwide system of electronic health records is important to the development of e-healthcare and smart healthcare in the era of Industry 4.0.  Vietnam’s healthcare system is dealing with many of the same challenges faced by other emerging markets, including rising demand and expectations from a hospital sector that is struggling with overcrowding, poor access, insufficient service and wide disparities of resource distribution between urban and rural areas. Fortunately, the digital economy can plug the healthcare gap in these markets on a mass scale and at a relatively low cost.  The healthcare services industry in Southeast Asia is growing rapidly and represents an area of opportunity for businesses and governments to work together to help improve the lives of citizens in Southeast Asia.

Advocacy

• The Council has been collecting feedback and recommendations from members on how Thailand’s Innovation List affects U.S. healthcare companies.  Introduced in 2015, the Innovation List includes products deemed to have been developed or improved through research and development by Thai majority-owned companies.  Companies with healthcare products on the Innovation List are granted special government procurement privileges.  For example, Thai public hospitals are mandated to spend at least 30 percent of their budget on Innovation List products without undergoing a public procurement process.  Members’ input has been used to update USTR and other stakeholders, and in our engagements with the Thai Government.  If you have any questions, please contact Lucius Lee at llee@usasean.org.
• On September 25 during “Uniting for Every Woman Every Child,” a high-level reception co-organized by the Every Woman Every Child Secretariat, the Government of India and the Partnership for Maternal, Newborn and Child Health (PMNCH) on the sidelines of the UN General Assembly meetings, the Council announced a new commitment to the Every Woman Every Child movement.  Under this initiative, the Council will commit to promoting the values and goals of the Every Woman Every Child Global Strategy for Women’s, Children’s and Adolescents’ Health (2016-2030) through mutual collaboration with ASEAN governments and the American Business Community.  The Council looks forward to working closely with its Health & Life Sciences members to help improve the health of women and children in ASEAN in the years to come.  For more information, please contact Hai Pham at hpham@usasean.org.

View the Council's latest Health & Life Sciences updates

ICT

Major Developments

• Thailand’s most recent draft of its Cybersecurity Bill was opened for public commentary until October 12, and Thailand’s National Cybersecurity Committee and Thailand Information Security Association (TISA) plan to urge the Prime Minister and the National Legislative Assembly (NLA) to amend the Bill’s more concerning points to avoid potential negative impacts on business and privacy.  For more information, see our Update here.
• As a response to the cyberattack on SingHealth’s database, the Singaporean government convened a Committee of Inquiry to investigate this incident.  For more information, see our Update here.
• The 2018 IMD World Competitiveness Ranking report showed a drop in rankings in digital competitiveness for nearly all five ASEAN economies listed.  For more information, see our Update here.
• To develop regional cybersecurity capacity, Singapore and Thailand have launched, or plan to launch, centers to train Southeast Asian cybersecurity professionals and to raise awareness of cybersecurity.  For more information, see our Update here.
• Thailand’s Cabinet recently approved a Digital Identification Bill in principle, which would set up a National Digital ID (NDID) platform and is expected to take effect by the middle of 2019. For more information, see our Thailand Update here.
• On September 19, ASEAN Ministers responsible for ICT and cybersecurity met in Singapore for the Third ASEAN Ministerial Conference on Cybersecurity (AMCC), as part of Singapore International Cyber Week 2018.  For more information, see our Update here.
• On September 15, the Thailand E-Commerce Transaction Reporting Bill closed its second hearing.  If enacted, the Bill, and several other bills being pushed, may introduce greater burdens on e-commerce entities operating in the Thai market.  For more information, see our Update here.
• On August 6, Philippines President Rodrigo Duterte signed the Philippine System Identification Act (PhilSys Act) into law, which aims to create a single, biometric-based official identification card for all Philippine residents and resident aliens.  For more information, see our Update here.

Advocacy

• On October 12, the Council submitted industry comments on Thailand's revised draft Cybersecurity Bill.  Please contact Praab Pianskool (praab@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org) with any questions, or for a copy of the submission.
• On October 3, Vietnam’s Ministry of Public Security completed the first draft decree to implement the Law on Cybersecurity.  It is uncertain when the official decree will be released.  For more information,  please contact Vu Tu Thanh (tvu@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org).
• On September 28, the Council submitted industry comments on the revised version of the Thailand Personal Data Protection Bill.  Please contact Praab Pianskool (praab@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org) with any questions, or for a copy of the submission.
• Updates on GR82 and OTT Regulations updates came from a recent Council engagement with Indonesia’s Minister Rudiantara.  Please see our Update here for more information, and contact Kim Yaeger (kyaeger@usasean.org) with any questions.
• On September 23, the Council submitted industry comments on Vietnam's Draft Decree to Amend Decree 06/2016, regulating Over the Top (OTT) services, to the Authority for Broadcasting and Electronic Information (ABEI).  On September 21, ABEI held a consultation workshop on the draft OTT regulations.  Please contact Vu Tu Thanh (tvu@usasean.org) or Ella Duangkaew (eduangkaew@usasean.org) for a readout on the workshop, to obtain a copy of the industry submission, and with any questions.

View the Council's latest ICT updates

Infrastructure

Major Developments

It goes without saying that China’s role in the Asia Infrastructure Investment Bank (AIIB) is part of its larger effort to enhance regional connectivity and a drive by Beijing to take on a bigger role in global affairs.  In its annual report, the AIIB highlighted some of the milestones reached in its second year of operation.  With membership consisting of 84 countries, the number of approved projects reached 23 and investments in projects and funds reached US$4.22 billion by the end of 2017.  It also received AAA ratings from Moody’s, Fitch, and Standard and Poor’s.  Yet not all is well with Chinese-led infrastructure financing initiatives in third countries.  The experience of Sri Lanka serves as a cautionary tale.  Saddled with high interest rate payments, it had to surrender the controlling share of the Chinese-financed large, and mostly empty, port of Hambantota to a Chinese company in a debt-to-equity deal.  In Southeast Asia, Chinese-funded projects have encountered bumpy roads.  For instance, Myanmar’s Planning and Finance Minister Soe Win has recommended that the new US$7.2 billion Kyauk Phyu port on the Bay of Bengal be “slimmed down” as it is “not recommendable” with the country owing 40 percent of its external debt to China.  Second, after its stunning election win, the Government of Malaysia has halted infrastructure projects worth US$23 billion, including the East Coast Rail Link, a questionable commercially viable project that would carry passengers and freight from the West Coast to the East Coast of Peninsular Malaysia.  The new administration in Kuala Lumpur’s position on many such projects is a result of its pledge to cut excessive spending, review all Chinese projects and their related “unequal treaties,” and probe potential links to graft with the 1MDB scandal.  In Indonesia, the Jakarta-Bandung high-speed train project has been hit with lawsuits from companies demanding compensation for their properties affected by the project.  Previously, State-Owned Enterprises Minister Rini Soemarno has said that the high-speed rail project’s target completion has already been delayed from 2019 due to land acquisition problems.

Looking Ahead

On November 8-9, the Council will lead a delegation of senior-level executives on its annual business mission to the ASEAN Transport Ministers’ Meeting (ATM) in Bangkok, Thailand. The dialogue will focus on regional connectivity priorities and ways to increase private sector support for the connectivity master plan. Please contact Sunita Kapoor at skapoor@usasean.org with any questions.

View the Council's latest Infrastructure updates

Country Highlights

Brunei

Major Developments

On September 19, Brunei announced the restructuring of its two key ministries and with it, the reshuffle of its key officials. The trade portfolio has been removed from the Ministry of Foreign Affairs and Trade, now known as the Ministry of Foreign Affairs.  Minister of Foreign Affairs II remains the Honorable Dato Seri Setia Haji Erywan.  In 2005, the International Relations and Trade Department of the Ministry of Industry and Primary Resources was merged with the Ministry of Foreign Affairs.

Meanwhile the Ministry of Finance is now the Ministry of Finance and Economy, which includes the international trade portfolio.  Minister of Finance and Economy II, the Honorable Dato Seri Setia Dr Awang Haji Mohammad Amin Liew, is assuming an additional role in the Prime Minister’s Office.  Liew is now the second cabinet-level minister at the PMO, alongside Dato Abdul Mokti.  The new appointment makes Liew, who added trade to his portfolio at the Ministry of Finance and Economy, one of Brunei’s most influential officials in both the international and domestic arenas.

View the Council's latest Brunei updates

Cambodia

Major Developments

On October 5, the European Union announced that it was launching a six-month review of Cambodia's "Everything but Arms" (EBA) status with the EU, meaning Cambodia could lose duty-free access to the trade bloc within 12 months, under EU rules. The review is in response to human rights concerns following Cambodia’s general election in July, which was widely criticized as unfair due to a crackdown on the political opposition ahead of the polls. The announcement came after the EU officially warned Cambodia that it would lose its special trade status following the re-election in July of Prime Minister Hun Sen, who has been in power for over three decades.  European Commissioner for Trade Cecilia Malmstrom did say that the EU would consider clear and demonstrable improvements before actually suspending trade preferences, but it is unclear what such improvements would include.

The EU’s announcement is a swift rebuke of Prime Minister Hun Sen and his Cambodian People’s Party-led government.  In the weeks prior to the announcement, Hun Sen had undertaken what analysts saw as an attempt to regain international legitimacy following the heavily criticized elections, even traveling to New York to make an official visit to the UN General Assembly on September 27.

The attempts by the Cambodian government to smooth things over with the EU, the United States and other countries that criticized the elections underscores the importance of these markets to the present economy of Cambodia, especially that of the EU.  Cambodia's exports to the EU went from negligible levels less than a decade ago to being worth approximately 5 billion euros (US$5.8 billion) last year.  Around 40 percent of Cambodia's foreign sales go to EU countries, and many of these exports are from the country's textile, garments, and footwear industry, which is vital to Cambodia's economy.

View the Council's latest Cambodia updates

Indonesia

Major Developments

• The Ministry of Communications and Information Technology issued Regulation No. 10 of 2018 which replaces Regulation No. 25 of 2015 on Universal Service Obligation for Telecommunications and Information Technology (KPU TIK).  KPU TIK sets out obligations to provide telecommunication services to rural, lesser developed regions, non-economically feasible areas and areas which require information technology facilities and infrastructure.  Funding for KPU TIK is sourced from KPU TIK contributions and other legal sources in accordance with prevailing laws and regulations.  As a first step, Indonesia began the tender process for a multifunction satellite project along the sidelines of the IMF-World Bank Annual Meetings in Bali this month.  According to the Indonesian Investment Coordinating Board (BKPM), the project has a concession period of 15 years with an investment value of IDR 6.7 trillion (US$ 440 million).  Once in operation, the satellite is expected to expand broadband functions to underserved areas. 
• Indonesia issued Ministry of Energy and Mineral Resources (MEMR) Regulation No. 43 of 2018 to amend the divestment procedures for foreign mining companies as previously regulated under MEMR Regulation No. 9 of 2017.  Foreign companies in possession of Production Operation Mining Business Permits (IUP OP) or Special Production Operation Mining Business Permits are required to divest their shares after their fifth year of production.  The minimum divestment percentage starts at 20 percent of the total shares during the sixth year and gradually increases to 51 percent by the tenth year.  The amendment will now allow issuance of new shares and transfer or sale of existing shares, either directly or indirectly to be considered towards the divestment percentage.  The amendment also affects procedures for the central government, state-owned enterprises (BUMN) and regionally owned enterprises (BUMD).  The central government will evaluate and negotiate an asking price for the divested shares.  In addition, the government can appoint an appraiser to evaluate the offer price.  The calculation of divestment prices based on results of government evaluations in the event of disagreements was dropped in the amendment.  The amendment also authorizes the central government to directly engage regional governments and BUMN/BUMD with regard to expressions of interest in the purchase of shares.

View the Council's latest Indonesia updates

Laos

Major Developments

• On October 4, Deputy Prime Minister Sonexay Siphandone announced that the search for victims of the July collapse of the Xe-Pian Dam in the Sanamxay District of the southern province of Attapeu has ceased.  For more information, see our Update. The Deputy Prime Minister’s comments come after Prime Minister Thongloun Sisolith announced on October 12 at a World Economic Forum on ASEAN (WEF-ASEAN) panel that Laos will continue moving forward with its hydropower dam building, but with intensified scrutiny and greater study of wind and solar power.  For more information on this topic, see our Update here.
• There have been major developments in the construction of the China-Laos high-speed rail, including progress on the critical Luang Prabang cross-Mekong River bridge.  For more information, see our Update.

View the Council's latest Laos updates

Malaysia

Major Developments

Malaysia’s Parliament faces a packed schedule as it reconvened on October 15, 2018 for its second session.  The first order of business was the swearing-in of Anwar Ibrahim who returns as the Member of Parliament (MP) for Port Dickson after his by-election victory.  With Anwar’s victory and the exit of three MPs from UMNO, Barisan Nasional (BN) is left with 51 seats in the Dewan Rakyat.  The first week of Parliament saw legislators tackle bills related to infrastructure, domestic trade and labor followed by a mid-term review of the 11th Malaysia Plan on October 18.  Other issues that Parliament will look to during this session include tabling the anti-tobacco bill, Ombudsman act, abolishment of the death penalty bill and the bill to restore the status of Sabah and Sarawak.  The highly anticipated tabling of Budget 2019 is slated for November 2.  Barisan Nasional’s Shadow Cabinet is expected to introduce its alternative budget.  Former Minister of Youth and Sports Khairy Jamaluddin oversees the Shadow Cabinet’s Finance portfolio.  Budget 2019 will be closely watched as the PH-led administration seeks to introduce a leaner budget with new tax measures to overcome Malaysia’s fiscal issues.

Advocacy

In a significant move to update data governance and strengthen cybersecurity in the financial sector, Bank Negara Malaysia (BNM) recently released an updated Outsourcing Exposure Draft and a new Risk Management in Technology (RMiT) Exposure Draft for public feedback.

The new Outsourcing Draft updates the draft previously released in November 2017, which the Council had submitted comments on.  Some key additions in the update include the introduction of materiality thresholds to certain parts of the regulation, recognition and regulations covering cloud service providers, and additional details in the approval system. BNM’s preference for an approval regime and continued application of certain parts of the regulation to non-material outsourcing arrangements remain areas of significant concern.  Despite those challenges, which the Council continues to encourage BNM to address, implementation of the regulation would represent a significant improvement over the status quo.  The Council submitted a letter on behalf of members on October 19 raising these issues and other technical challenges in the regulation.

The RMiT Exposure Draft sets out extensive rules for financial institutions’ technology risk management frameworks.  The draft is very comprehensive and covers areas including cybersecurity management, cryptography, data center management and third-party service providers. Some areas of concern in the RMiT include public cloud use and potential inconsistency with the Outsourcing Exposure Draft.  The Council is currently drafting comments on the RMiT, and members can contact Ian Saccomanno at isaccomanno@usasean.org with feedback.

View the Council's latest Malaysia updates

Myanmar

Major Developments

• On October 15, 10 ethnic groups, military (Tatmadaw) leaders and government officials began a five-day meeting in Nay Pyi Taw, with the aim of resolving issues that have thus far stalled the peace process. The meeting marks three years since the signing of the National Ceasefire Agreement (NCA).  Frontier Myanmar reports that this will be the first time State Counsellor Daw Aung San Suu Kyi and Senior General Min Aung Hlaing have met with all 10 NCA signatories to seek consensus on key issues holding up the peace process.  Main issues of discussion among the three groups include the topic of state and regional constitutions and the “non-secession” clause in the peace pact. According to the Myanmar Times, State Counsellor Daw Aung San Suu Kyi called for cooperation in reaching the dream of a democratic federal union.  Senior General Min Aung Hlaing stated that “non-secession” is necessary to the federal union and a guarantee of peace.
• Myanmar’s Hluttaw (Assembly of the Union) is drafting new regulations regarding intellectual property (IP) rights, copyright law, industrial law, patents and trademarks that will be discussed for enactment next month.  Currently, intellectual property rights in the country rely on laws passed in the early 1900s. The effort to update the IP laws signals Myanmar’s commitment to creating a business environment that fosters innovation and creativity and support to information and technology businesses.  IP protections remain a primary challenge to the survival of Myanmar’s startups and overall ability to keep up with the Fourth Industrial Revolution.  Stronger and more comprehensive IP protections also provide a more attractive environment for foreign investors and brands to enter into the market.  As part of the broader effort to improve IP rights in the country, Myanmar has taken several actions to develop a better business environment.  The Deputy Director General of the Intellectual Property Department under the Ministry of Education stated that the government has been working to train civil servants about IP matters and build public awareness of the importance of intellectual property in the country’s economic development.  The government also plans to set up an Intellectual Property Department under the Ministry of Education to oversee IP issues.  These IP initiatives follow other legislation designed to support economic development, including Investment Law 2016 and Companies Law in 2017, which had also been updated from century-old laws (for more information, see our Updates here and here).

View the Council's latest Myanmar updates

Philippines

Major Developments

• In a joint statement released October 22, USTR Robert E. Lighthizer and Philippine Secretary of Trade Ramon M. Lopez announced that progress in addressing the following trade irritants had been achieved under the bilateral Trade and Investment Framework Agreement (TIFA): Cold chain requirements; prohibition of reference pricing; U.S. interest in extension of Philippine tariff rates on certain agricultural products; geographical indications (GI); United States progress on market access for mango, young green coconuts, and carrageenan, and expansion of the Generalized System of Preferences Program to include travel goods; cooperation on automotive standards; technical dialogue on National Retail Payments System (NRPS) and other measures related to electronic payment services; and continued dialogue on relief from U.S. safeguard measures on solar cells and Section 232 tariffs on steel and aluminum. While previous news reports quoted Philippines Trade Secretary Ramon Lopez that upon addressing existing bilateral trade issues, the U.S. and the Philippines planned to announce the start of free trade negotiations by November of this year, that time frame no longer seems feasible. The USTR had planned to alert lawmakers of its intent to launch bilateral FTA talks with a number of trade partners. On October 16, USTR officially notified Congress that the Trump administration intends to negotiate three separate bilateral trade agreements with Japan, the European Union and the United Kingdom. Reports indicate that the Philippines was not included in the list of countries, because the Trump Administration received pushback from Democratic senators over the Philippines' human rights record at a meeting of the Senate Advisory Group on Negotiations. The Government of the Philippines is looking for a more permanent preferential trading arrangement with the United States, upgrading the current Generalized System of Preferences scheme wherein the U.S. reviews zero-tariff privileges given to more than 3,000 Philippine products every three years.  Manila also plans to push for duty free access to the U.S market for its exports of footwear and garments under the FTA, to help revive the country's garment industry, which was dealt a blow in 1995 by the phaseout of a quota system that guaranteed a market for Philippine exports.
• The World Bank revised the Philippines economic outlook in 2018 downward from 6.7 percent to 6.5 percent amid slower agricultural output, higher inflation and global monetary tightening.  But the investment outlook remained positive for this year and next.  The multilateral lender projected the Philippine economy to remain robust at 6.7 percent growth in 2019 and resilient, helped by its sound external payments position and relatively low national government debt.  The economy would benefit from the government’s “Build, Build, Build” infrastructure program, with infrastructure spending rising 47 percent year-on-year in the first seven months of 2018.  Forty-four of 75 projects began implementation this year.  The share of expenditure allocated to public works is set to increase from 13.3 percent in 2018 to 14.8 percent in 2019.
• Typhoon Mangkhut (local name Ompong), the world’s strongest tropical cyclone so far this year, battered the Philippines with four times the intensity of Hurricane Florence and raised importation needs in agriculture and fishery.  Thousands of hectares of corn and rice farms were damaged and agricultural production estimated losses reached US$418.40 million.  Fish farms and cages in Batangas, Iloilo, and parts of Mindanao were also destroyed.  To stave off food shortages, the Department of Agriculture has proposed a fresh round of importation of rice and fish.
• The Philippines leaves the short list of countries with no national ID system with the passage of the Philippine System Identification Act (PhilSys Act).  Under the 2018 national budget, the government allotted P2 billion for the initial implementation of the program, lodged under the Philippine Statistics Authority's budget.  Personal data and biographic information will be collected.  Aimed at efficient services delivery, administrative governance, less corruption and bureaucratic red tape, ease of doing business and financial inclusion, the new law mandates the government to create a single official identification card for all citizens and foreign residents that would serve as a de facto national identification number.

Advocacy

The Council, in partnership with Manila House, successfully launched the Innovation Series, a program composed of two talks on emerging, transformative and disruptive technologies.  The goal of the Series is to deepen levels of understanding between public and private sector stakeholders and increase public awareness of how technological innovations are driving changes in society.  The first talk on “Traditional Business Disrupted” was held on October 2, with 70 participants from business, civil society, academia and consumer groups attending and 20 Council members represented.  UPS Managing Director- Philippines Chris Buono spoke at the event which was moderated by Raul Gonzalez of Microsoft.  Philip Morris brought in Frost and Sullivan’s Rhenu Bhuller whose topic was “Leading and Winning in An Era of Unprecedented Change.”

View the Council's latest Philippines updates

Singapore

Major Developments

• Singapore and European Union leaders inked a landmark trade deal on October 19 during the sidelines of the 12th Asia-Europe Meeting (ASEM) Summit in Brussels.  Given that it is the first concluded trade deal between the EU and an ASEAN country, the EUSFTA has been touted as “the stepping stone” to a wider EU-ASEAN trade and investment agreement.  Described as an “ambitious” trade pact that is “very important” for the Singapore economy, the newly signed EUSFTA is expected to boost trade between Singapore and the EU by 10 per cent within five years of entering into force.  The deal includes flexible rules of origin for key exports such as automobiles, electronics and pharmaceuticals from Singapore and the EU into each other’s markets.  Notably, the EUSFTA will have the concept of “ASEAN cumulation” for key exports from Singapore.  Materials sourced from other ASEAN member countries may now be deemed as originating from Singapore and qualify for tariff concessions.  Singapore will eliminate tariffs on all EU products entering Singapore.  The EU will also remove tariffs on 84 percent of Singapore products and do so for the remaining 16 percent over the next three to five years.
• Singapore will fully fund the upcoming ASEAN-Singapore Cybersecurity Center of Excellence (ASCCE) at S$30 million over the next five years.  At the ASEAN Ministerial Conference on Cybersecurity, Minister-in-charge of Cybersecurity S. Iswaran said the center was organized to cover policy, strategy and legislation as well as operations to reflect the government’s conviction to the importance of aligning cyber diplomacy efforts with operational issues.  ASEAN member states and dialogue partners are welcome to contribute to the budget or to specific ASCCE programs and workshops by either co-funding or sending trainers.  The target launch date for the center is the second quarter of 2019.  As an extension of the ASEAN Cyber Capacity Program, ASCCE is aimed at helping develop the cybersecurity capabilities of Southeast Asian member states with three principal functions:  Cyber think-tank and training center, Computer Emergency Response Team (CERT) center, Cyber range training center.
• As a response to the cyberattack on SingHealth’s database, the Singaporean government convened a Committee of Inquiry to investigate this incident.  The inquiry revealed that there was absence of an escalation mechanism to deal with incident reporting, task coverage, and regular feedback to assess and respond to the severity of threat.  The SingHealth incident has led to a spillover effect on other industries.  The financial services sector has started efforts to tighten their verification processes.  Additionally, the CSA signed a Memorandum of Understanding (MoU) with the Financial Services Information Sharing and Analysis Center (FS-ISAC) to advance security threat intelligence-sharing and conduct joint exercises to protect the financial services sector.

Looking Ahead

October 29 - November 2: Singapore International Energy Week (SIEW) is an annual platform for energy professionals, policymakers and commentators to discuss and share best practices and solutions within the global energy space. SIEW aims to facilitate the exchange of ideas and discussions on pertinent energy-related issues, while simultaneously meeting the strategic objectives of Singapore’s commitment to becoming a global leader among energy companies converging on the event, as well as providing a platform to showcase innovative products and solutions in the energy marketplace. A calendar of SIEW 2018 events can be found here.

View the Council's latest Singapore updates

Thailand

Major Developments

• Thailand has imposed an election deadline and eased its ban on political parties’ activities, setting an election as early as February 24 and no later than May 5. For more information, see our Update here.
• Thailand’s National Cybersecurity Committee and Thailand Information Security Association (TISA) reportedly plan to urge Prime Minister Prayut Chan-o-cha and the National Legislative Assembly (NLA) to amend the most recent draft of Thailand’s Cybersecurity Bill.  Citing concerns that it could have a potentially negative impact on business and privacy, the National Cybersecurity Committee has said that changes should be made to strengthen the Bill’s protections for businesses and better clarify the regulatory powers granted to the proposed Cyber Security Agency (CSA).  For more information, see our Update here.
• Thailand’s Cabinet recently approved a Digital Identification Bill in principle, which would set up a National Digital ID (NDID) platform and is expected to take effect by the middle of 2019. For more information, see our Thailand Update here.
• Thailand’s Energy Reform Plan is expected to be rolled out by the end of year and aims to increase private sector participation in the energy sector, especially in renewable energy, and achieve full deregulation of the sector over the next two decades.  For more information, see our Thailand Update here.
• Thailand has set up a committee to conduct an in-depth study on the potential impact of restrictions on three farm chemicals.  For more information, see our Thailand Update here.
• On September 15, the Thailand E-Commerce Transaction Reporting Bill closed its second hearing.  If enacted, the Bill, and several other bills being pushed, may introduce greater burdens on e-commerce entities operating in the Thai market.  For more information, see our Update here.

Advocacy

• On October 12, the Council submitted industry comments on Thailand's revised draft Cybersecurity Bill.  Please contact Praab Pianskool (praab@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org) with any questions, or for a copy of the submission.
• On September 28, the Council submitted industry comments on the revised version of the Thailand Personal Data Protection Bill.  Please contact Praab Pianskool (praab@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org) with any questions, or for a copy of the submission.

View the Council's latest Thailand updates

Vietnam

Major Developments

On October 23, the National Assembly of Vietnam elected General Secretary of the Communist Party of Vietnam Nguyen Phu Trong as the next President of Vietnam with 99.8% of the vote – a month following the sudden passing of former President Tran Dai Quang in September. General Secretary Trong is also currently holding the most powerful position in the country and is now the country's first leader to be both head of state and head of the Communist Party since founding president Ho Chi Minh, who passed away while in power in 1969. The National Assembly of Vietnam voted on this decision as the first order of business at the start of its month-long session, which will run through mid-November. Currently, it is not clear if, moving forward, the two roles will officially merge.

Although the presidential post is viewed as largely ceremonial, this proposed move would reduce the number of power centers in Vietnam and strengthen Trong's position over the country after he emerged victorious in a 2016 political power clash against former Prime Minister Nguyen Tan Dung. The move is unlikely to change the country's course or signal significant changes to the economic policies currently in place. However, some cautioned that there should be a mechanism to supervise power to avoid abuse.

Looking Ahead

The Council is calling for members’ interest to participate in a full-day SME Workshop on November 21 in Hai Phong, northern Vietnam’s biggest commercial and industrial hub and third most-populous city of the country.  The workshop will focus on SMEs’ utilization of digital tools, integration to the global value chain, and exposure to regional markets.  Please contact Vinsensius Kangen (vkangen@usasean.org) with any questions

View the Council's latest Vietnam updates