E-Commerce in Thailand

 

 

 

September 2015

 

 

 

A l l r i g ht s r e s e r v e d © L o r e n z & P a r t ne r s  2 0 1 5

 

Obwohl Lorenz & Partners große Sorgfalt darauf verwenden, die in diesen Newslettern bereitgestellten Infor-mationen auf aktuellem Stand für Sie zur Verfügung zu stellen, möchten wir Sie darauf hinweisen, dass diese ei-ne individuelle Beratung nicht ersetzen können. Lorenz & Partners übernimmt keinerlei Gewähr für die Aktuali-tät, Korrektheit oder Vollständigkeit der bereitgestellten Informationen. Haftungsansprüche gegen Lorenz & Partners, welche sich auf Schäden materieller oder ideeller Art beziehen, die durch die Nutzung oder Nichtnut-zung der dargebotenen Informationen bzw. durch die Nutzung fehlerhafter und unvollständiger Informationen verursacht wurden, sind grundsätzlich ausgeschlossen, sofern seitens Lorenz & Partners kein vorsätzliches oder grob fahrlässiges Verschulden vorliegt.

 

 

  • Einleitung

 

In Thailand haben die Anstrengungen der Regierung, den Ausbau der Informations-und Kommunikationstechnik voranzutrei-ben, dazu geführt, dass einem großem Teil der Bevölkerung ein guter Zugang zum In-ternet zur Verfügung steht. Damit haben sich die Möglichkeiten zur Teilnahme am Onlinehandel entwickelt. Daneben spielen der Ausbau des 3G – und 4G-Netzes sowie die Verbreitung von Smartphones eine zent-rale Rolle für das Wachstum des Onlinehan-dels. Thailänder wickeln mittlerweile über-proportional viele Einkäufe über

 

Smartphones ab („M-Commerce“).

 

Dem thailändischen Onlinehandel wird bis zum Jahr 2017 ein Gesamtvolumen von 12-15 Mrd. USD prophezeit. Bis 2018 soll sich Thailand mit einem Gesamtumsatz von ca. 9 Mrd. USD zu einem der größten Märk-te in der Region im Bereich des M-Commerce entwickeln.

 

Vor diesem Hintergrund ist der Onlinehan-del für ausländische Investoren interessant. Der vorliegende Newsletter soll ein besseres Verständnis über diesbezügliche (investiti-ons-) rechtliche Rahmenbedingungen ver-mitteln.

 

  1. Formen des Onlinehandels a) „E-Commerce“

 

Als elektronischen Handel bzw. Onlinehan-del bezeichnet man die Abwicklung von Ge-schäftsvorgängen mittels Datenübertragung, in der Regel über das Internet, entweder zwischen Unternehmen und Verbrauchern („Business-to-Consumer“ – „B2C“) oder zwischen zwei Unternehmen („Business-to-Business“ – „B2B“). Beide Formen des On-

 

linehandels werden landläufig als „E-Commerce“ bezeichnet.

 

  1. b) Elektronischer Marktplatz

 

Eine weitere Erscheinung des Onlinehandels stellen sog. „E-Marketplaces“ oder elektro-nische Marktplätze („EMP“) dar. Hierbei handelt es sich um virtuelle Markträume, al-so durch Informations- und Kommunikati-onssysteme geschaffene virtuelle Plätze zur Leistungskoordination. Es werden in der Regel Waren von Dritten angeboten und verkauft, wobei der zugrundeliegende Kauf-vertrag unmittelbar zwischen dem Käufer und dem Verkäufer (nicht dem Betreiber des EMP) zustande kommt und der Verkäufer sich um den Versand der Ware und die übri-ge Abwicklung des Geschäfts kümmert. Der EMP-Betreiber verlangt für die Bereitstel-lung der Verkaufsplattform meist eine Ge-bühr oder Kommission. Prominenteste Bei-spiele für EMPs sind „eBay“ und „Rakuten“. „Rakuten“ ist in Thailand unter dem Namen „Tarad“ aktiv.

 

  1. c) Social Commerce

Daneben spielt in Thailand zunehmend der sog. „Social Commerce“ eine Rolle. Hierbei handelt es sich um den Vertrieb von Waren und Dienstleistungen über soziale Netzwer-ke (wie bspw. „Facebook“).

 

  1. Vor- und Nachteile a) „Online-Shop“

 

Die Einrichtung eines eigenen Online-Shops hat gegenüber der Nutzung einer Drittplatt-form (EMP) u. a. folgende Vorteile:

 

  • Es kann eine direkte Verbindung zwischen dem Hersteller und dem (End-)Kunden hergestellt werden, ohne von Zwischenhändlern abhän-gig zu sein.

 

 

 

 

 

Legal, Tax and Business Consultants

 

 

 

  • Der Hersteller erhält direkten Zu-griff auf die Kundendaten (u. a. Ad-ressen, Nutzungsverhalten, etc.) und kann diese unmittelbar nutzen, z. B. in Bezug auf Marketing, Werbung, Kundenservice und Gewährleistung.

 

  • Das eigene Produkt kann exklusiv angeboten werden und geht nicht neben einer Vielzahl anderer Ange-bote unter.
  • Ohne Zwischenhändler bzw. Dritt-plattformen (EMP) erhöht sich die Gewinnspanne, da entsprechende Gebühren von Zwischenhänd-lern/Drittplattformbetreibern entfal-len.

 

Zu den Nachteilen der Betreibung eines On-line-Shops gehören u. a.:

 

  • Es besteht kein Zugang zu einem bereits bestehenden Kundenpool.

 

  • Das Kundenvertrauen muss erst noch gewonnen werden (bspw. durch herausstechende Produkte, Marketingmaßnahmen, etc.).
  • Die Errichtung eines eigenen Onli-ne-Shops ist verhältnismäßig zeit-und kostenaufwendig (Installation von technischen Einrichtungen/ Schnittstellen, Kundenservice, Ein-richtung von und Anbindung an Zahl- und Liefersysteme, etc.).

 

Die Voraussetzungen für die Eröffnung ei-nes eigenen Online -Shops zum Vertrieb von Gütern in Thailand sind u. a.:

 

  • Gründung einer in Thailand regis-trierten (Tochter-) Gesellschaft, ggf auch mit eigener Produktion.

 

  • Erstellung einer Webseite, auf der ausschließlich eigene Produkte ange-boten werden.

 

  • Soweit Waren vertrieben werden, die nicht durch das Unternehmen in Thailand hergestellt wurden, muss

 

grundsätzlich ein Stammkapital in Höhe von 100 Mio. THB (ca. 2,5 Mio. EUR) eingezahlt oder

 

 

eine sog. Foreign Business Licence beantragt werden (siehe hierzu auch unter Ziff. II 1. d).

  • Einrichtung bzw. Nutzung von On-linezahlungssystemen wie bspw. PayPal, was mit entsprechenden Kosten verbunden ist. (z. B. Einrich-tungs- und Transaktionsgebühren).

 

  • Elektronischer Marktplatz

Die Nutzung eines EMP hat gegenüber der Einrichtung eines eigenen Online-Shops

 

  1. folgende Vorteile:

 

  • Es kann von bereits vorhandenen Strukturen profitiert werden, insbe-sondere von hohem Kundenverkehr, zentralen Marketingprogrammen, etc.

 

  • Die Einrichtung ist in der Regel rela-tiv einfach und ein Vertrieb kann kurzfristig erfolgen.

 

  • Es besteht nicht die Notwendigkeit, eine eigene Gesellschaft in Thailand zu gründen .

 

Die Nachteile sind jedoch u. a.:

 

  • Für die Nutzung bspw. des EMPs Tarad fallen verschiedene Kosten an, wie

 

  • Jahresgebühr (19.900 THB, ca. 500 EUR),

 

  • produktabhängige Kommission für jeden Verkauf.

 

  • Kundendaten bleiben im Besitz des Marktplatzes.

 

  • Die eigenen Waren werden unmit-telbar neben konkurrierenden Pro-dukten angeboten.

 

Für eine erfolgreiche Anmeldung bei Tarad müssen ausländische Unternehmen u. a. fol-gende Voraussetzungen erfüllen:

 

  1. Das ausländische Unternehmen muss ordnungsgemäß im Heimat-staat registriert sein.

 

 

 

 

 

Legal, Tax and Business Consultants

 

 

 

  • Das ausländische Unternehmen muss einen thailändischen An-sprechpartner benennen, über den Tarad Anfragen abwickeln kann.

 

  • Die Produkte müssen im Einklang mit thailändischem Recht (insbeson-dere Verbrauchschutzvorschriften) angeboten werden, Produktbe-schreibungen sind z. B. in thailändi-scher Sprache zu verfassen.

 

  • „Social Commerce“

Aktivitäten im Bereich des „Social Commer-ce“ bewegen sich oftmals im rechtlichen

Graubereich (bspw. Vertrieb von Grauim-porten) und spielen für den Bereich des ge-zielten Aufbaus eines E-Commerce für aus-ländische Investoren allenfalls eine unterge-ordnete Rolle. Der „Social Commerce“ ist im Rahmen dieser Darstellung daher ver-nachlässigbar.

 

  1. Rechtliche Rahmenbedingungen

 

  1. Investitionsrechtliche Rahmenbe-

 

dingungen

Grundsätzlich ist das thailändische Ausland-sinvestitionsrecht recht restriktiv und ver-langt von ausländischen Investoren, soweit diese sich mehrheitlich an einem thailändi-schen Unternehmen beteiligen, die Beantra-gung einer sog. Foreign Business Licence. Um ausländische Direktinvestitionen zu er-höhen, fördert das Königreich Thailand al-lerdings zukunftsträchtige Wirtschaftszwei-ge. Ziel ist es, ausländische Investoren an-zuwerben und die heimische Wirtschaft zu stärken. Hierfür werden insbesondere För-derungen durch das thailändische Board of Investment zur Verfügung gestellt.

 

  1. a) Foreign Business Act

Ausländische Investoren müssen die Be-stimmungen des Foreign Business Act B.E. 2542 (1999) („FBA“) beachten. Danach sind die folgenden Personen beschränkt, in Thai-land geschäftlich aktiv zu werden:

 

 

  • natürliche Personen ohne thailändische Staatsbürgerschaft,

 

  • juristische Personen, die nicht in Thai-land registriert sind, sowie

 

  • juristische Personen, die zwar in Thailand registriert sind, deren Kapital jedoch zu mindestens 50% in den Händen von aus-ländischen Staatsangehörigen oder aus-ländischen juristischen Personen liegt (unabhängig von der Anzahl der Partner, Teilhaber oder Mitglieder) oder von sol-chen investiert wurde.

 

Die vorgenannten Beschränkungen gelten ausnahmsweise nicht, wenn

 

  • für die betroffene Geschäftsaktivität eine Foreign Business Licence („FBL“) aus-gestellt worden ist, die es erlaubt, derarti-ge Aktivitäten auszuüben,

 

  • das Unternehmen unter eine Ausnahme-regelung des FBA fällt oder

 

  • die Geschäftsaktivität vom Anwendungs-bereich des FBA ausgenommen ist.

 

Der FBA unterteilt geschäftliche Aktivitäten in verschiedene Kategorien (Listen 1, 2 und 3 zum FBA). Ausländer können lediglich in nicht in diesen Listen geregelten Bereichen (z. B. Export und Produktion) auch ohne eine FBL tätig werden.

 

  1. b) Investitionsförderung durch das Board of Investment

Eine Möglichkeit, als ausländischer Investor in Thailand 100% der Anteile an einer Kapi-talgesellschaft zu halten, besteht im Rahmen der Investitionsförderung durch das Board of Investment („BOI“). Das BOI hält für bestimmte Geschäftszweige, die von der Re-gierung als förderlich für die Entwicklung der thailändischen Volkswirtschaft angese-hen werden, verschiedene Investitionsver-günstigungen bereit. Hierzu zählen u. a. In-vestitionen im Bereich „E-Commerce (Sec-tion 5.8, List of Activities Eligible for In-

 

 

 

 

 

Legal, Tax and Business Consultants

 

 

 

vestment Promotion, Announcement of the Board of Investment – No. 2 /2557 – Poli-cies and Criteria for Investment Promotion).

 

  1. aa) Investitionsvergünstigungen

Die BOI-Förderung für „ E-Commerce “ unter-liegt der Förderkategorie „B2“, für welche u. a. die folgenden nicht-steuerlichen Inves-titionsvergünstigungen vorgesehen sind:

 

  • Ausländer dürfen 100% der Gesell-schaftsanteile halten (100% foreign owned company),

 

  • Möglichkeit, Land zu erwerben,

 

  • erleichterter Erhalt von Visa und Ar-beitsgenehmigungen für ausländische Angestellte.

 

  1. bb) Beschränkung auf Elektronische Marktplätze

 

Die Verwaltungspraxis des BOI ist in der jüngeren Vergangenheit immer restriktiver geworden und erkennt mittlerweile – anders als der „weite“ Begriff des „E-Commerce“ na-helegen mag – nur noch Projekte an, die sich rein auf EMP-Modelle beziehen. Nach den

 

Vorstellungen des BOI fallen unter „E-Commerce“ insbesondere Internetportale bzw.

 

-markplätze, auf denen die Waren bzw. Dienstleistungen von Dritten (nicht vom In-ternetportal- bzw. Internetmarktplatzbetrei-ber selbst) angeboten werden. Soweit weite-re Dienstleistungen hinzutreten bzw. eigene Waren bzw. Dienstleistungen (bspw. Auslie-ferung von Waren an die Kunden, etc.) an-geboten werden, sind diese Aktivitäten grundsätzlich nicht von der BOI-Förderung umfasst und bedürfen daher gegebenenfalls einer gesonderten FBL.

 

  1. cc) Antragsverfahren

 

Das Antragsverfahren ist investorenfreund-lich und kann innerhalb kurzer Zeit durch-laufen werden, da das BOI darum bemüht ist, Investitionen nach Thailand zu lenken. Das Verfahren läuft im Wesentlichen wie folgt ab:

 

 

  • Einreichung des Antrags und der erfor-derlichen Begleitdokumente.

 

  • Vereinbarung eines Termins mit dem BOI zur Projektpräsentation (innerhalb von zehn Tagen nach Annahme des An-trages).

 

  • Präsentation des Projekts beim BOI.

 

  • Evaluierung des Projekts durch das BOI.

 

  • Mitteilung über die Gewährung der För-derung innerhalb von sieben Werktagen nach der Evaluierungssitzung.

 

  • Annahme der Förderung durch den An-tragsteller (binnen eines Monats nach Er-halt der Mitteilung).

 

  • Mittelung über die Unternehmensgrün-dung an das BOI (binnen sechs Monaten nach Annahme der Förderung).

 

  • Ausstellung des Förderungszertifikats binnen zehn Werktagen nach Mitteilung über die Unternehmensgründung.

 

  1. c) Foreign Business Licence

Ausländische Investoren, die über den EMP hinausgehende Leistungen, wie bspw.

 

  • Einzel-/Großhandel über das Internet und/oder

 

  • Lieferdienste,

 

anbieten möchten, müssen auf der Grundla-ge des FBA für jede Aktivität eine gesonder-te FBL beantragen.

 

  1. aa) Einzel-/Großhandel

Einzel-/Großhandelsaktivitäten unterliegen der Liste 3 zum FBA (3(14) und 3(15)). Eine Erlaubnis für Tätigkeiten der Liste 3 wird vom thailändischen Ministry of Commerce mit Zustimmung des Foreign Business Committee erteilt. Bei diesem Komitee han-delt es sich um eine Regulierungsbehörde,

 

 

 

 

 

 

Legal, Tax and Business Consultants

 

 

 

die aus 19 Vertretern von Ministerien und Wirtschaftsverbänden besteht.

 

Die Erfahrung zeigt, dass eine FBL für „Lis-te 3-Ativitäten“ nur erteilt wird, wenn es hinreichende Anhaltspunkte dafür gibt, dass die Art der beantragten geschäftlichen Betä-tigung nicht in Konkurrenz zu thailändi-schen Unternehmen steht. Dies ist, soweit es sich nicht um den B2B-Vertrieb von High-tech-Waren handelt, beim Einzel- und Großhandel in der Regel nicht gegeben. Folglich werden FBL-Anträge in diesen Tä-tigkeitsbereichen in den meisten Fällen nega-tiv beschieden.

 

  • Lieferdienste

Lieferdienste unterliegen der Liste 2 zum FBA (Gruppe 1(2)). Aktivitäten gemäß Lis-te 2 sind Ausländern ebenfalls grundsätzlich nicht gestattet. Auch für diese Tätigkeiten kann zwar eine FBL beantragt werden, die Erfolgsaussichten sind aber gering, weil in der Regel auch hier eine Konkurrenz zu thailändischen Unternehmen gefürchtet wird.

 

  • Ausnahmen (Mindestkapitalanforde-rungen)

 

Auf das Erfordernis einer FBL für die Be-reiche Einzel- und Großhandel kann aus-nahmsweise verzichtet werden, wenn ein Stammkapital in Höhe von 100 Mio. THB (ca. 2,5 Mio. EUR) pro Aktivität eingezahlt wird. Ist bspw. beabsichtigt, sowohl Einzel-als auch Großhandel zu betreiben, ist ein eingezahltes Stammkapital in Höhe von 200 Mio. THB (ca. 5 Mio. EUR) erforder-lich..

 

 

Für die Lieferung von eigenen Waren ist keine FBL erforderlich. Soweit hierfür je-doch Umsätze getätigt werden, muss wiede-rum eine FBL für den Service-Bereich bean-tragt werden, die ausländischen Unterneh-men aber in der Regel gewährt wird.

 

 

  1. Behördliche Genehmigungen

 

Je nach Ausgestaltung des Online-Geschäfts sind gegebenenfalls weitere Genehmigungen einzuholen:

 

  1. a) “E-Commerce”-Zertifikat

Auf der Grundlage der Regulation from the Ministry of Commerce Re: Entrepreneurs who shall obtain the E-Commerce Certificate (No. 11) B.E. 2553 (2010) und des Commercial Registration Act B.E. 2499 (1956) sollen Unternehmen, die Waren und Dienstleistungen über das In-ternet vertreiben, innerhalb von 30 Tagen nach Aufnahme der Tätigkeit ein sog. “E-Commerce”-Zertifikat beantragen.

 

Unternehmen, die im Online-Handel aktiv sind, können ferner in Betracht ziehen, eine

 

„Registered Trademark“ und/oder „Verified Trademark“ zu beantragen. Hierbei handelt es sich im Wesentlichen um eine Kenn-zeichnung, dass die Website ordnungsgemäß beim Ministry of Commerce registriert wor-den ist („Registered Trademark“), was in Form eines Quellcodes in die eigene Websi-te implementiert werden kann, bzw., dass das Unternehmen als ein verlässlicher Ge-schäftspartner gilt („Verified Trademark“). Um eine „Verified Mark“ zu erhalten, muss das Unternehmen u. a.

 

  • seit mindestens sechs Monaten eine „Re-gistered Mark“ tragen oder

 

  • seit mindestens zwei Jahren über ein “E-

Commerce”-Zertifikat verfügen.

 

Bei Einreichung vollständiger Antragsunter-lagen kann das „E-Commerce”-Zertifikat in der Regel innerhalb eines Tages ausgestellt werden. Die (optionale) Ausstellung der

„Registered Mark“ kann am selben Tag er-folgen.

 

Für den Fall des Vertriebs von Waren und

Dienstleistungen   im    Internet   ohne   „E-

 

Commerce”-Zertifikat kann ein Ordnungs-geld in Höhe von 2.000 THB (ca. 50 EUR) pro Tag verhängt werden.

 

 

 

  

Legal, Tax and Business Consultants

 

 

 

  1. b) Direktvermarktungsgenehmigung

 

Unternehmen, die Direktvermarktung (so-wohl Online-Shops als auch EMPs) betrei-ben, müssen auf der Grundlage des Direct Sales and Direct Marketing Act B.E. 2545 (2002) ferner eine sog. Direktver-marktungsgenehmigung einholen. Hierdurch soll ein gewisser Verbraucherschutz erreicht werden, weil Verbraucher im Rahmen des Onlinehandels keine Gelegenheit haben, sich die gehandelten Produkte vorher anzu-sehen und etwaige Abweichungen zum be-worbenen Produkt festzustellen. Direktver-marktungsgenehmigungen werden in der Regel innerhalb von 60 Tagen nach voll-ständiger Antragseinreichung ausgestellt.

 

Eine Direktvermarktung ohne entsprechen-de Genehmigung wird mit Freiheitsstrafe von bis zu einem Jahr oder Geldstrafe bis zu 100.000,00 THB (2.500 EUR) sowie 10.000,00 THB (250 EUR) für jeden Tag der Direktvermarktung ohne Genehmigung be-straft.

 

  1. c) Warenlieferungsgenehmigung

Für den Fall, dass Lieferungen von Waren, die nicht durch das Unternehmen verkauft wurden, erbracht werden, ist grundsätzlich eine Genehmigung vom Department of Land Transportation einzuholen (Land Transport Act B.E. 2522 (1979)). Warenlieferungsgenehmi-gungen werden herbei ausschließlich an thai-ländische Gesellschaften (d. h. mehr als 50% der Gesellschaftsanteile werden von Thai-ländern gehalten) erteilt. Ausnahmen von dem Genehmigungserfordernis bestehen für den Fall, dass die Warenlieferungen aus-schließlich per Motorrad erfolgen. In diesem Falle ist lediglich die FBL zu beachten. Soll-ten Lieferungsdienstleistungen Dritter in Anspruch genommen werden, entfällt eben-falls das Erfordernis eine Warenlieferungs-genehmigung für die eigene Gesellschaft einzuholen, allerdings darf die Lieferung dann grundsätzlich nicht offen als Leistung des Unternehmens ausgewiesen werden, da

 

 

andernfalls wiederum eine FBL erforderlich wäre.

 

  • Verbraucherschutz- und Produkthaf-tungsbestimmungen

 

Neben den investitionsrechtlichen Vorgaben und dem Erfordernis, bestimmte Genehmi-gungen einzuholen, sind schließlich die Ver-braucherschutz- und Produkthaftungsbe-stimmungen zu beachten. Diese ergeben sich im Einzelnen aus

 

  • dem Civil and Commercial Code,

 

  • dem Product Liability Act B.E. 2551 (2008) sowie

 

  • dem Consumer Protection Act, B.E. 2522 (1979).

 

III.   Zusammenfassung

Grundsätzlich gelten im Bereich des Onli-nehandels für ausländische Investoren die Vorgaben des thailändischen Investitions-rechts. Dieses lässt ausländische Investitio-nen nur in einem streng begrenzten Umfang zu. Das BOI sieht jedoch Ausnahmerege-lungen hierzu vor und bietet Investitions-vergünstigungen an. Diese beziehen sich derzeit allerdings ausschließlich auf Elektro-nische Marktplätze (EMP). Die Erfahrung zeigt allerdings, dass die meisten Geschäfts-modelle sich nicht vollständig mit den Vor-stellungen des BOI decken. Oftmals soll die Ware bspw. auch ausgeliefert werden. Hier werden ggf. weitere Lizenzen erforderlich. Angesichts des stark wachsendes Marktes für Onlinehandel, ist angeraten, den Setup von Anfang an richtig aufzusetzen, da die restriktiven Regelungen oft von thailändi-schen Mitbewerbern genutzt werden, um ausländischer Konkurrenz das Leben zu er-schweren.

 

 

 

Legal, Tax and Business Consultants

 

 

 

 

Firmengründung im Bereich E-Commerce in China

 

September 2015

 

 

 

 

A l l r i g h t s r e s e r v e d © L o r e n z & P a r t n e r s 2 0 1 5

 

Obwohl Lorenz & Partners große Sorgfalt darauf verwenden, die in diesen Newslettern bereitgestellten Informationen auf aktuellem Stand für Sie zur Verfügung zu stellen, möchten wir Sie darauf hinweisen, dass diese eine individuelle Beratung nicht ersetzen können. Lorenz & Partners übernimmt keinerlei Gewähr für die Aktualität, Korrektheit oder Vollständigkeit der bereitgestellten Informationen. Haftungsansprüche gegen Lorenz & Partners, welche sich auf Schäden materieller oder ideeller Art beziehen, die durch die Nutzung oder Nichtnutzung der dargebotenen Informationen bzw. durch die Nutzung fehlerhafter und unvollständiger Informationen verursacht wurden, sind grundsätzlich ausgeschlossen, sofern seitens Lorenz & Partners kein vorsätzliches oder grob fahrlässiges Verschulden vorliegt.

 

 

  1. Einleitung

 

Als elektronischen Handel bzw. Onlinehan-del bezeichnet man die Abwicklung von Ge-schäftsvorgängen mittels Datenübertragung, i.d.R. über das Internet, entweder zwischen Unternehmern und Verbrauchern („Busi-ness-to-Consumer“ oder „B2C“) oder zwi-schen zwei Unternehmern („Business-to-Business“ oder „B2B“). Zu Beginn des neu-en Jahrtausends entwickelte sich der chi-nesische Markt für Onlinehandel eher schleppend, da die chinesischen Verbraucher das Produkt gerne zuerst in der Hand halten und begutachten wollten und von daher der Einkauf im Internet zuerst Misstrauen aus-löste. Seit ca. 2010 ändert sich dies allerdings und der chinesische Markt für Onlinehandel ist seitdem jedes Jahr um 50 % gestiegen. Allein für 2015 werden Umsätze i.H.v. 520 Mrd. USD. erwartet. Bereits 2013 übertraf der Onlinehandel in China den Handel in den USA um mehr als 10 %. So macht die größte chinesische Onlinehandelsplattform Alibaba mehr Umsatz als Amazon und eBay zusammen. Grund hierfür ist u.a. die expo-nentiell steigende Zahl an Internetnutzern in China (2008: 298 Mio.; 2014: 649 Mio.) so-wie die steigende Popularität von Online Shopping.

 

  1. Formen des Onlinehandels

 

Aufgrund dieses Wachstums ist der chinesi-sche E-Commerce-Sektor auch für ausländi-sche Investoren von immer größerer Bedeu-tung. Hersteller können ihre Produkte über Online-Handelsplattformen Dritter oder durch Gründung eines eigenen Online-Shops in China vertreiben. Im Folgenden werden zunächst die Vor- und Nachteile sowie die praktische Umsetzung beider Al-ternativen dargestellt.

 

  1. Verkauf über Plattform Dritter

 

Ein leichterer, aber i.d.R. mit höheren Kos-ten verbundener Einstieg ausländischer Un-ternehmen in den chinesischen Onlinemarkt bietet die Nutzung einer bereits existieren-den Onlinehandelsplattform.

 

Die Vorteile hierbei sind u.a., dass

 

  • von bereits vorhandenen Struktu-ren profitiert werden kann, insbe-sondere vom hohen Kundenver-kehr sowie zentralen Marketing-Programmen etc. und

 

  • die Einrichtung relativ einfach ist und innerhalb von 2-3 Wochen er-folgen kann.

 

Die Nachteile sind jedoch u.a.:

 

  • Für die Nutzung von bspw. Tmall fallen verschiedene Kosten an, u.a. ein security deposit (25.000 USD), an-nual fee (5.000 USD) und eine com-mission fee für jeden Verkauf (0,5 – 5 %). Desweiteren muss ein Konto des Onlinebezahlsystems Alipay eingerichtet werden. Für jede Transaktion fällt eine Alipay Service Fee H.v. ca. 1 % an.

 

  • Das ausländische Unternehmen unterliegt strengen Preissetzungs-regelungen.

 

  • Kundendaten bleiben im Besitz des Marktplatzes.

 

  • Die eigenen Waren werden unmit-telbar neben konkurrierenden Pro-dukten angeboten.

 

Für eine erfolgreiche Anmeldung bei Tmall müssen ausländische Unternehmen u.a. fol-gende Voraussetzungen erfüllen:

 

 

 

  • Das ausländische Unternehmen muss ordnungsgemäß im Heimat-staat registriert sein.

 

  • Es muss bereits eine Handelstätigkeit im Heimatstaat existieren und nach-gewiesen werden. Tmall verlangt eine Markttätigkeit von mehr als 2 Jahren sowie jährliche Verkäufe im Umfang von über 10 Mio. USD.

 

  • Das Unternehmen muss Inhaber der der zu verkaufenden Marken oder autorisierter Vertragshändler sein.

 

  • Die Produkte müssen im Einklang mit chinesischem Recht (insb. Ver-braucherschutzvorschriften) angebo-ten werden; Produktbeschreibungen sind z.B. in chinesischer Sprache zu verfassen.

 

  • Lieferungen können direkt vom aus-ländischen Sitz oder über in China belegene Warenlager erfolgen.

 

  • Es muss jedoch ein fester Standort in China für die Abwicklung von Re-touren eingerichtet werden.

 

Die größte chinesische B2C-Plattform mit einem Marktanteil von über 50 % ist Tmall. Im September 2015 wurde bekannt, dass der deutsche Handelskonzern Metro neben sei-nen bereits bestehenden 80 Großmärkten in China einen Online-Shop bei Tmall einge-richtet hat und hierüber zunächst ca. 100 ei-gene Produkte vertreibt. Zudem ist eine en-ge Kooperation in den Bereichen Be-schaffung, Logistik und Datenanalyse ge-plant.

 

  1. Verkauf über eigenen Online-Shop

 

Die Einrichtung eines eigenen Online-Shops hat gegenüber der Anmeldung bei einer Drittplattform folgende Vorteile:

 

  • Es kann eine direkte Verbindung zwischen Hersteller und Endkunden hergestellt werden, ohne von Zwi-schenhändlern abhängig zu sein.

 

  • Der Hersteller kann unmittelbar über die Kundendaten verfügen und seine eigene Geschäftspolitik be-stimmen, z.B. in Bezug auf Wer-

 

bung, Kundenservice und Gewähr-leistung etc.

 

  • Das eigene Produkt kann exklusiv angeboten werden und geht nicht als eines von vielen Angeboten unter.

 

  • Ohne Zwischenhändler erhöht sich die Gewinnspanne.

 

  • Markenpiraterie kann eher vermie-den werden, da oft die Zwischen-händler die Marke in China für sich registrieren.

 

Zu den Nachteilen gehören:

 

  • Es besteht kein Zugang zu bereits vorhandenem Kundenverkehr.

 

  • Das Kundenvertrauen muss erst noch hergestellt werden (durch Mar-ketingmaßnahmen etc.).

 

  • Die Errichtung eines eigenen Onli-ne-Shops ist sehr aufwendig (Instal-lation von technischen Einrich-tungen, Zahlungssystem, Kunden-service/Live-Support, Lieferungssys-tem etc.).

 

Die Voraussetzungen für die Eröffnung eines eigenen Online-Shops sind u.a.:

 

  • Gründung einer in China belegenen Tochtergesellschaft mit physischem Ladengeschäft als sog. foreign-invested commercial enterprise (FICE).

 

  • Erstellung einer Webseite, auf der ausschließlich eigene Produkte ange-boten werden.

 

  • Anmeldung beim Ministerium für Industrie und Informations-technologie („MIIT“), die sog. „ICP

 

(Internet Content Provider) Registrati-on“.

 

  • Für die Lieferung muss entweder ei-ne weitere, separate Tochtergesell-schaft in China gegründet werden, welche wiederum eine besondere tranportation license zu beantragen hat, oder der Lieferprozess wird auf ex-terne Spediteure (wie EMS, TNT etc.) ausgelagert.

 

 

 

 

  • Onlinezahlungssysteme wie AliPay, TenPay oder PayPal müssen einge-richtet werden und sind mit entspre-chenden Kosten verbunden (z.B. se-tup fee, transaction fees).

 

  1. Rechtliche Entwicklung

 

Die chinesische Regierung möchte die Ent-wicklung des E-Commerce-Sektors fördern und ist bemüht, diesen effizienter zu gestal-ten sowie die erforderlichen rechtlichen Rahmenbedingungen hierfür zu schaffen. Dabei soll vor allem auch der Marktzugang für ausländische Investoren erleichtert wer-den.

 

Am 4. Mai 2015 hat das höchste Verwal-tungsorgan Chinas, der Staatsrat, ein neues Strategiepapier veröffentlicht, wonach die einzelnen Ministerien beauftragt werden, bis 2020 Richtlinien zur Optimierung, Auswei-tung und Liberalisierung des E-Commerce-Marktes zu entwickeln. Die Reformen sollen nicht nur den Handel selbst, sondern auch die damit verbunden Finanzdienstleistungen sowie die Logistiksteuerung etc. verbessern.

 

  1. Bisherige Regulierungen

 

Bisher unterlagen ausländische Investoren bestimmten Restriktionen, je nach Art ihres Investments:

 

  1. a) Eigener Online-Shop

 

Bezüglich der Gründung eines eigenen On-line-Shops in China können ausländische Investoren bereits seit 2010 ohne Ein-schränkung zu 100 % Anteilseigner eines solchen FICE werden, soweit dieses aus-schließlich eigene Waren vertreibt und eine ICP Registration erfordert (vgl. oben).

 

  1. b) Anteile an Plattformen Dritter

 

Beteiligungen an durch Dritte betriebene

 

Onlinehandelsplattformen unterlagen da-gegen strengen Restriktionen. So konnten sich ausländische Investoren bisher nur bis zu 50 % im Rahmen eines Joint Ventures an solchen Unternehmen beteiligen. Zudem handelt es sich hierbei um einen sog. Value Added Telecom Service (also einer Dienstleis-tung, die über bloße Telefonie-/Internetleistungen hinausgeht), für den eine besondere Genehmigung des MIIT (sog. “VATS Permit”) erforderlich ist, die bisher nur im Rahmen eines aufwendigen Verfah-rens erlangt werden konnte, welches nur sel-ten Erfolg hatte.

 

Daher suchten ausländische Investoren zur Erlangung voller Kontrolle über chinesische Online-Handelsunternehmen bisher Abhilfe über sog. VIE-Strukturen (variable interest en-tity) . Hierbei gründet der ausländische Inves-tor zunächst eine 100%ige Tochter-gesellschaft (z.B. im Bereich Unternehmens-beratung) in China. Um nun die gewünschte Beherrschung und Kontrolle über ein chine-sisches Online-Handelsunternehmen zu er-langen (welches zu 100 % von Chinesen ge-halten wird), begründet das Tochterunter-nehmen des Investors umfassende Vertragsver-hältnisse mit dem chinesischen Unternehmen (z.B. Lizenzverträge über Wirtschaftsgüter, Darlehens- und Serviceverträge, Verpfän-dung von Beteiligungsrechten etc.). So konnte der Investor unter Umgehung der gesetzlichen Restriktionen eine faktische Be-herrschung des chinesischen Online-Handelsunternehmens erreichen.

 

Diese Praxis war jedoch mit erheblichen Ri-siken für den ausländischen Investor ver-bunden, da im Falle von Rechtsstreitigkeiten die Anerkennung solcher Konstrukte durch chinesische Behörden und Gerichte unge-wiss blieb.

 

 

 

  1. Neuste Entwicklungen

 

  1. a) Wegfall der Restriktionen

 

Am 19. Juni 2015 machte das MIIT in seiner Notice No. 196 bekannt, dass ab sofort die Beteiligungs-Beschränkung für ausländische Investoren nicht mehr gilt, sodass ausländi-sche Unternehmen nunmehr 100%ige Toch-tergesellschaften im Bereich „E-Commerce Services“ gründen können, sog. wholly-foreign owned enterprises („WFOE“).

 

Diese Erleichterung wurde bereits zuvor seit Januar 2015 im Rahmen eines Modell-versuchs in der Shanghai Free Trade Zone ein-geführt.

 

  • Neue Anforderungen

 

  • Gemäß den neuen Regelungen müs-sen solche WFOEs als sog. foreign-invested telecommunication companies in China registriert werden.

 

  • Der Investor muss dazu nachweisen, dass er im Bereich E-Commerce be-reits über genügend praktische Erfah-rung im Ausland verfügt.

 

  • Unter diesen Voraussetzungen er-langt der Investor sodann die erfor-derliche VATS Permit (s.o.) in Form der sog. online data processing and trans-action services permit („OTPS Permit“).

 

Da diese Regelungen allerdings noch sehr neu sind, fehlt bisher die praktische Erfah-rung, wie chinesische Behörden bei der Li-zensierung und Registrierung von WFOEs in diesem Bereich vorgehen.

 

Oftmals mangelt es in China nicht am Wil-len des Gesetzgebers, sondern an der prakti-

 

schen Umsetzung durch die Behörden, die in der Anwendung von neuen Regeln eher zögernd vorgehen.

 

  1. Weitere Reformen

 

Der grenzüberschreitende Onlinehandel soll zudem u.a. durch die folgenden Maßnahmen gefördert werden:

 

  1. Traditionellen chinesischen Unter-nehmen soll finanzielle Unterstüt-zung für die Beteiligung am interna-tionalen Onlinehandel gewährt wer-den, um sich z.B. an Unternehmen in den USA oder Europa zu beteili-gen.

 

  1. Des Weiteren soll die Entwicklung des internationalen Onlinehandels durch Erleichterungen in den Berei-chen Zoll, Inspektion, Quarantäne und Steuern gefördert werden.

 

  1. Chinesische Banken werden dazu angehalten, Zahlungen im internati-onalen Onlinehandel zu unterstütz-ten. Dabei soll die Möglichkeit einer Geschäftsabwicklung in chinesischer Währung (RMB) flächendeckend eingeführt werden.

 

  1. Zusammenfassung

 

Zurzeit findet in China ein tiefgreifender Po-litikwechsel im Wirtschaftssektor des On-linehandels statt. Die chinesische Regierung hat mit den neuen Reformen deutlich ihren Willen zum Ausdruck gebracht, den E-Commerce-Markt weiter zu öffnen. Da-durch ergeben sich auch für deutsche Un-ternehmen und Investoren neue Möglichkei-ten, das Potential dieses boomenden Mark-tes zu nutzen.

 

 

 

 

 

Newsletter No. 200 (EN)

 

 

 

 

Registration of Trademarks in Hong Kong & Latest Legal Developments in Hong Kong

 

and Mainland China’s Trademark Law

 

 

 

September 2015

 

 

 

A l l r i g ht s r e s e r v e d © L o r e n z & P a r t ne r s  2 0 1 5

 

Newsletter No. 200 (EN)

 

L&P

 

 

Legal, Tax and Business Consultants

 

 

 

 

Although Lorenz & Partners always pays great attention on updating information provided in newsletters and brochures, we cannot take responsibility for the completeness, correctness or quality of the information pro-vided. None of the information contained in this newsletter is meant to replace a personal consultation with a qualified lawyer. Liability claims regarding damage caused by the use or disuse of any information provided, in-cluding any kind of information which is incomplete or incorrect, will therefore be rejected, if not generated de-liberately or grossly negligent.

 

 

  1. Introduction

 

In the following Newsletter, we would like to inform you about trademark registration in Hong Kong and the latest legal develop-ments in Hong Kong’s and Mainland China’s trademark law.

 

  1. Trademarks

 

Hong Kong’s trademark registration system provides territorial protection. In order to obtain protection as registered trademarks in Hong Kong, trademarks must be registered under

 

III. Period of Trademark Protection

 

The duration of trademark protection varies from country to country. Hong Kong stipu-lates a protection period of 10 years (Sec. 49

 

(1) TMO), whereas e.g. Macau has a protec-tion period of 7 years and Canada of 15 years.

 

The commencement of the protection pe-riod in Hong Kong takes effect from the fil-ing date of the application, whereas e.g. in China the protection period begins with the day of actual registration.

 

In Hong Kong, trademark protection is re-

 

 

  • the Trade  Marks  Ordinance  (Chapternewable (Sec. 49 (2) TMO). The application

 

559) (“TMO”); and                                        for renewal should be filed before the expi-

  • the Trade Marks Rules (Chapter 559A)ration of the registration, and a 6 month ad-

 

 

(“TMR”).

 

In Sec. 3 (1) and (2) TMO a trademark is de-fined as

 

“[…] any sign which is capable of distinguish-ing the goods or services of one undertaking from those of other undertakings and which is capable of being represented graphically.

 

[A] trademark may consist of words (including personal names), indications, designs, letters, characters, numerals, figurative elements, col-ours, sounds, smells, the shape of goods or their packaging and any combination of such signs.

 

Trademarks as referred to in the TMO in-clude

 

  • certification marks;

 

  • collective marks; and

 

  • defensive trademarks.

 

ditional period is provided for the renewal application. In theory, therefore, renewed trademark protection could be applied for without limitation, thus granting indefinite protection. This is one major difference of trademark protection in comparison to other intellectual property rights, as for example patents.

 

  1. Why register a Trademark?

 

There are three main reasons as to why to register trademarks:

 

  1. Avoiding of Lock-Up Situations

 

If a company’s trademark is not registered in a jurisdiction, another party, e.g. a competi-tor targeting the market, can register the trademark there and thereby legally prevent-ing anyone (especially the actual trademark owner) from using the trademark and ex-panding their business under that name (lock-up situation). A solution would be to change the company’s name and to create a new trademark, which comes at significant marketing efforts and high costs. Despite the costs and efforts that come with building up a new trademark, in most cases this is not feasible since European investors tend to en-ter foreign markets with long established trademarks which come with competitive advantages.

 

  1. Trademark Protection

 

Registering a trademark means having the exclusive right to use the trademark in rela-tion to the goods and services for which the mark is registered. Trademark certification provides prima facie proof of ownership. Other persons using the trademark in trade or business may be liable for trademark in-fringement. Legal action can be taken against them.

 

However, depending on the quality of the legal system of the respective jurisdiction, trademark registration may not give the pro-tection generally attributed to it: e.g. in China it might already be difficult to identify a trademark infringer and take legal steps. However, e.g. in Hong Kong – as a Com-mon Law jurisdiction – even unregistered trademarks may receive protection by the Common Law action of “passing off”: The original owner of an unregistered trademark must prove its reputation and that the other person’s misuse of the trademark will cause damage to the original owner. However, the action of “passing off” is generally a more dif-ficult action to bring forward than an action for trademark infringement of a registered trademark.

 

  1. Trademarks as Assets

 

Thirdly, registration might influence the per-ceived value of the business as (potential) investors look at the registered trademarks of a company and might sometimes even be a precondition of doing business, as is the case e.g. in China when wanting to do busi-ness on the online shopping portal “Taobao”.

 

 

  • Factors to be considered before an Application

 

Before filing an application with the Trade-mark Office (Trade Marks Registry), the fol-lowing points should be taken into consid-eration:

 

  1. Classes to be applied for

 

On the one hand, one must decide on the class(es) of goods and/or services to apply for. Different goods and services have been classified based on the Nice Agreement con-cerning the International Classification of Goods and Services for the Purposes of the Registration of Marks into 45 Trademark Classes, dated 15 June 1987 (34 classes of Goods, 11 classes of Services – “Nice Clas-sification”), used in Hong Kong with effect from 1 January 2015. The Nice Classifica-tion has been adapted in over 80 countries.

 

The problem remains, however, that the Nice Classification is interpreted differently, in particular the classes, in each country. Applications for multiple classes will usually result in more costs, so in order to keep the registration costs low, it may be feasible to limit the classes to the core products. How-ever, trademarks will only be protected in the applied classes, so a broader protection can be enjoyed when registering for more classes. In Hong Kong, an application runs the risk of being objected on the grounds of unfair competition if filed for registration in a multitude of classes. Furthermore, before applying it should be taken into considera-tion that a later expansion of the business may require more or different protection.

 

  1. Distinctiveness of the Trademark

 

On the other hand, the distinctiveness of the trademark is of central importance. Accord-ing to Sec. 11 (1b) TMO, absolute grounds for refusing the registration of trademarks include the lack of any distinctive character. Therefore, before applying, it should be as-sessed whether the trademark is special enough in order to be distinctive. E.g. a trademark that merely describes goods and services or shows the quality, purpose, quan-tity or value of them is most likely not to be considered distinctive.

 

Important indications for distinctiveness are:

 

 

according to Sec. 38 TMO and Rule 6 et seq. TMR.

 

(2) Deficiencies Check

 

After the application, the Trade Marks Reg-istry will check whether the information provided (including the name of the appli-cant, its address, the representation of the

 

 

  • whether a trademark stands out from mark, a statement of the goods and services) the crowd and clearly sets goods and is complete and correct. If the registration is services apart from those of competi- duly filed, the filing date will later serve as

 

 

tors;

 

  • invented words that are in no way asso-ciated with the line of business it stands for;

 

  • if words are combined with graphics.

 

Points to be avoided include:

 

  • usage of words that are associated with the goods and/or services;

 

  • usage of a well-known terms or repre-sentations in the respective line of busi-ness.

 

There is no clear line when a trademark is devoid of distinctive characters. The experi-ence, however, shows that the Hong Kong Trade Marks Registry is particularly strict with regards to what is distinctive and what is not. Therefore, the aforementioned points should be considered carefully.

 

  1. Trademark Registration

 

  1. Application Process

 

In Hong Kong the application process is as follows:

 

(0) Trademark Search

Trademark search is optional. It serves to find out if there are any trademarks regis-tered already in the desired class(es).

 

(1) Application

The application for the registration of a trademark has to be filed with the Registrar

 

the date of registration.

 

(3) Search & Examination

Initially, the Trade Marks Registry will con-duct a search of the trademark records in order to assess whether the same or a similar trademark has already been registered or ap-plied for registration by another person in respect of the same or similar class(es) of goods or services. Furthermore, the Trade Marks Registry will check if the trademark satisfies the registration requirements as laid out in the TMO, in particular whether the trademark is distinctive (see above).

 

If the requirements for registration are not met, the Trade Marks Registry will object the application and issue an opinion how to overcome the objection. If the applicant fails to meet the Registry’s requirements and the objection remains, the applicant has three more months from the date of the further issued opinion to satisfy the registration re-quirements or to call for a hearing. In the hearing the evidence for and against the trademark registration will be considered. The hearing officer will take a decision at the end of the hearing.

 

(5) Publication for Opposition (3 months)

If there is no objection or the suggestions were implemented, the trademark will be published in the Hong Kong Intellectual Property Journal. An opposition notice can be filed within three months. Approximately 95% of publications in Hong Kong go un-opposed, mainly due to the high costs for opposing.

 

 

(6) Registration

 

The Registrar of Trade Marks will enter the details of the trademark into the trademark register, a certificate of registration will be is-sued and notice of the registration will be published in the Hong Kong Intellectual Property Journal. As mentioned above, the registration of the trademark will date back to the application’s filing date.

 

  1. Revocation and Invalidation

 

Once a trademark is registered, there are dif-ferent possibilities to remove it from the trademark register:

 

It is possible to request to have a registered trademark removed from the register in whole or in part on the grounds of “non-use” (Sec. 52 (2a) TMO): Among other things, this requires that the trademark has not been used for at least 3 years. The burden of proof in this respect lies with the party seek-ing removal. Experience has shown that it is close to impossible to furnish evidence that a trademark has not been used. Therefore, it is advisable to take such measures only where respective proof may be easily ob-tained, e.g. where a company has been de-registered for more than 3 years.

 

It is also possible to file for an “invalidation” on the grounds that a trademark should not have been registered in the first place. In particular, this is the case where the re-quirements of Sec. 53 TMO are met, e.g. if there was an earlier trademark application that should have been registered earlier.

 

VII. Latest Legal Developments


 

shops under their business. The Tsit Wing Group has been conducting business in Hong Kong since 1932 and has, among other things, in 2006 obtained registrations for two figurative trademarks in Hong Kong, incorporating the letters TWG (standing for ‘Tsit Wing Group’) for coffee and tea.

 

 

The defendant operates under the acronym

‘TWG’, standing for ‘The Wellness Group’, a group from Singapore operating tea salons in various cities since 2008. In 2011 the de-fendant opened a tea salon in Hong Kong, with full knowledge of the plaintiffs’ trade-marks, using similar signs incorporating the letters TWG. A short time after the defen-dant’s entry into the Hong Kong market, the plaintiffs sought an interlocutory injunction against the defendants to restrain them from using the TWG sign in Hong Kong.

 

There is a long litigation history in this case,

 

  1. beginning with the plaintiff’s successful sought of an interlocutory injunction be-fore the Court of First Instance for trademark infringement and “passing off” of trademarks under Sec. 19 (1) and (3) TMO,

 

  1. followed by an unsuccessful appeal by the defendants to the Court of Appeal and

 

  1. a further application to Hong Kong’s Court of Final Appeal, which now has been granted.

 

  1. b) The Decision


 

  1. Hong Kong:

Tsit Wing (Hong Kong) Co Ltd v TWG Tea Company Pte Ltd (FAMV 6/2015)

 

  1. a) The Case

 

The plaintiffs belong to the Tsit Wing Group, whose principal business is wholesal-ing and retailing of coffee and tea products. They had also expanded to include coffee

 

The permission to appeal the injunction was granted, since the defendant was able to show that he had a reasonable prospect of success. The judge granted the defendant’s leave on appeal, taking into consideration that the interim injunction would result in substantial consequences, such as the defen-dant having to pull out of the Hong Kong market completely. The injunction was lifted under the condition that the defendant would limit his business geographically to Hong Kong’s International Financial Centre.

 

The Court of First Instance later decided in favour of the plaintiff. The judgement was later upheld by the Court of Appeal. With regards to the trademark infringement, the question of similarity between the plaintiffs’ registered TWG trademarks and the defen-dant’s TWG sign and whether there was a likelihood for confusion had to be answered. Both courts decided the two marks were similar and therefore a likelihood of confu-sion and the requirements for passing off were met. The courts found that:

 

  • The plaintiffs had established goodwill in Hong Kong.

 

  • There was a misrepresentation or a like-lihood of deception of the public by the defendant’s use of its TWG sign in Hong Kong, because of a high degree of similarity between the plaintiffs’ trade-marks on the one hand and the defen-dant’s signs on the other hand. The courts also took into consideration that there was a high degree of similarity be-tween the goods for which the marks were registered and the goods and ser-vices offered by the defendant in using the signs.

 

  • By the defendant’s use of the similar marks, damages would be caused to the plaintiffs’ business.

 

The defendant’s right to appeal was granted by the Appeal Committee after the defen-dant applied to the Appeal Committee of the Court of Final Appeal, submitting nine ques-tions for consideration concerning the inter-pretation of Hong Kong’s trademark law and the tort of “passing off”, of which six were considered of requisite importance and should be submitted to the Court of Final Appeal (pursuant to Sec. 22 (1) b of the Court of Final Appeal Ordinance). The final appeal hearing is to be held in January 2016.

 

 

  1. c) Comment

 

Even though the case is not concluded yet, it shows that for the legal assessment of trademark infringement the first impression and the overall impression of the marks and signs are crucial factors taken into considera-tion by the courts.

 

  1. China:

“New Balance” – RMB 98 million

Trademark Verdict

 

  1. a) The Case

 

On 24 April 2014, the Guangzhou Interme-diate People’s Court condemned New Bal-ance Trading (China) Co., Ltd., the local sales company for the U.S. sports brand “New Balance” to pay RMB 98 million (approx. EUR 14 million) for the violation of trademark rights of a Chinese individual, Mr. Zhou Yuelun, the plaintiff.

 

New Balance distributed its products in China through its local sales company pro-nounced “Xin Bai Lun”, whereas in Chinese “Xin” meaning “New” and “Bai Lun” being a phonetic translation of “Balance”.

 

The plaintiff lawfully registered trademarks for “Bai Lun” in 1996 and “Xin Bai Lun” in 2008. New Balance tried to oppose the reg-istration on the grounds that it had been us-ing an identical version of the mark „Xin Bai Lun” since 2003. However, the claims were rejected in 2011. New Balance continued us-ing the mark in China. In 2013, the plaintiff brought a trademark infringement procedure against New Balance on the basis of an in-fringement of the “Xin Bai Lun” trademark.

 

In this context it is important to note that Chinese law does not recognize or protect trademarks unless they are registered with the Chinese Trade Mark Office (“first-to-file-system”).

 

  1. b) The Decision

 

The Guangzhou Intermediate People’s Court decided that both marks were sub-stantially similar, thereby providing a basis for the trademark infringement claim. The court stated that because of New Balance’s opposition to the trademark’s registration, it was aware of the plaintiff’s registered trade-marks. By continuing trading under the plaintiff’s trademark, New Balance acted in bad faith. The Court dismissed New Bal-ance’s reasoning that “Xin Bai Lun” was a direct Mandarin translation of its company’s name. The Court declared that New Balance had committed a malicious trademark in-fringement and set the damages at RMB 98 million (approx. EUR 14 million)

 

  1. c) Comment

 

The case shows the importance of applying early for trademarks in China, as China’s trademark system is based on the “first-to-file-system”. Further, the case highlights the im-portance of applying for trademarks in Eng-lish and Chinese characters, taking into con-sideration the cultural and linguistic incon-sistencies between Mandarin and other lan-guages. To find a translation of the trade-mark which properly reflects the company’s brand, a consultation with an experienced translator is advisable.

 

  1. China:

Protection of geographical indication

‘Champagne’ and ‘香槟’ (Champagne in

 

Chinese)

 

  1. a) The Case

 

On 10 February 2015, the Beijing Number 1 Intermediate People’s Court rendered a judgement in which it held that although

 

‘Champagne’ was not a registered trademark in China at the time the case was filed, the mark must be protected as an appellation of origin.

 

The Comité Interprofessionnel du Vin de Champagne (plaintiff) was founded in 1941 in France and established by statute to rep-resent the common interests of growers in the region in France called Champagne. Ac-cording to the plaintiff’s rules only sparkling

 

 

wines produced in the Champagne region of France using particular grapes and certain processes are allowed to be called ‘Cham-pagne’.

 

In 2011, the plaintiff had discovered that the defendant, Beijing Sheng Yan Yi Mei Trad-ing Co., Ltd., was selling soft drinks using the name ‘Champagne’ and ‘香槟’.

 

  1. b) The Decision

 

The Court decided that although ‘Cham-pagne’ was not registered as a trademark in China (at the time of filing the case), it had been established that ‘Champagne’ is the de-nomination for an alcoholic beverage and therefore must be protected as an appella-tion of origin. The court was convinced by the evidence submitted by the plaintiff that

 

‘Champagne’ had gained a high popularity and was recognized by the relevant public as a geographical indication, identifying spar-kling wines from the Champagne region in France.

 

Further, the court emphasized that China was committed to provide legal protection for geographical indications since joining the World Trade Organization (WTO) in 2001 and becoming a party of the Agreement on Trade-Related Aspects of Intellectual Prop-erty Rights (TRIPS) in 2007. The court found that obtaining trademark registration therefore is not a precondition for legal pro-tection.

 

  1. c) Comment

 

This is the first case where a Chinese court decided on a geographical indication to be protected in China without registration. Nonetheless, registration of geographical in-dication in China is strongly recommended. There are mainly three ways to achieve this:

 

  1. Registration of certifications or collec-tive marks at the Trademark Office;

 

  1. Registration of sui generis geographical indications at the General Administra-tion of Quality Supervision, Inspection and Quarantine; or

      1. Registration of agricultural products with the Ministry of Agriculture.

 

 

 

 

 

 

Newsletter No. 202 (EN)

 

 

 

 

 

Current Legal Developments

 

in Hong Kong

 

December 2015

 

 

 

A l l r i g ht s r e s e r v e d © L o r e n z & P a r t ne r s  2 0 1 5

 

Although Lorenz & Partners always pays great attention on updating information provided in newsletters and brochures, we cannot take responsibility for the completeness, correctness or quality of the information provided. None of the information contained in this newsletter is meant to replace a personal consultation with a qualified lawyer. Liability claims regarding damage caused by the use or disuse of any information provided, including any kind of information which is incomplete or incorrect, will therefore be rejected, if not generated deliberately or grossly negligent.

 

 

In the following newsletter, we would like to inform you about the latest legal develop-ments in Hong Kong. The main focus of this newsletter is on recent decisions regard-ing tax and arbitration law.

Hong Kong

 

  • Tax

 

Tax Haven Hong Kong – Blacklist Pub-lished

 

In June 2015, the European Commission (“EC”) listed Hong Kong as a non-cooperative tax jurisdiction (“Blacklist”). The Blacklist currently names 30 countries and is part of the EC’s “Action Plan” to reform corporate taxation in the European Union. Key objectives are to tackle tax avoidance and to enhance tax transparency.

 

On 18 June 2015, the Hong Kong govern-ment expressed its disappointment and re-jected the allegations. It named specific rea-sons as to why Hong Kong is a cooperative tax jurisdiction:

 

  • Hong Kong is a member of the “Global Forum on Transparency and Exchange of Information for Tax Purposes”, and the peer reviews (completed in 2011 and 2013 respec-tively) recognise Hong Kong’s commitment to meeting the interna-tional standards on tax transparency;

 

  • Hong Kong has made serious efforts to expand its networks on “Com-prehensive Avoidance of Double Tax Agreements” (“CDTA”) and “Tax Information Exchange Agree-ments” (“TIEA”). It has signed 13 CDTAs and two TIEAs with EU


member states, and negotiations with five other member states are ongoing.

 

  • Arbitration

 

  • Limited Rights to Appeal in Arbitra-tion Cases upheld by Court of Appeal

[China International Fund Ltd v Dennis Lau & Ng Chun Man Architects & Engineers (HK) Ltd [2015] HKEC 1626]

 

  1. a) The Case

 

The Hong Kong Court of Appeal (“CA”) decided that the limitation on rights of ap-peal in arbitration cases under sec. 81 (4) of Hong Kong’s Arbitration Ordinance [Cap. 609] (“AO”) is constitutional.

 

The unsuccessful party of an arbitration ap-plied to the Court of First Instance (“CFI”) to set aside the award. The CFI ruled against the Applicant. Subsequently, the Applicant sought leave to appeal from the CFI to the CA. According to sec. 81 (4) AO, the leave of the CFI is required for any appeal from a decision of the court regarding decisions of an arbitral tribunal. The CFI rejected the application.

 

Therefore, the Applicant applied to the CA for leave to appeal to the CA, claiming sec. 81 (4) AO would violate the constitution.

 

  1. b) The Decision

 

The CA ruled that sec. 81 (4) AO is constitutional. The provision is necessary to preserve the goals of arbitration: a fast and final decision due to the swiftness of arbitration. It falls within the sole jurisdiction of the CFI to rule on applications for leave to appeal against decisions regarding enforcement of arbitrational awards.

 

The CA highlighted that the actual goal of arbitration proceedings (swift, final and less expensive) would be thwarted by allowing multiple leave applications. Therefore, the limitations on rights to appeal are consistent with the purpose of arbitrational proceed-ings. However, the CA also emphasized that it does retain jurisdiction to supervise the process in the CFI, but this jurisdiction will be invoked extremely rarely.

 

  • Comment

 

The decision underlines Hong Kong’s posi-tive approach towards arbitration. Hong Kong’s courts recognise and protect the benefits of arbitration: fast, final and binding decisions that shall not be subject to endless appeals.

 

  • CPC Construction Hong Kong Lim-ited vs. Harvest Engineering (HK) Limited and another [HCA 2096/2013]

 

  1. a) The Case


 

nify the 1st Defendant’s obligations under the agreements.

 

The loan agreements and the 2nd Defen-dant’s guarantees did not include an arbitra-tion clause but contained a jurisdiction clause referring to the non-exclusive jurisdic-tion of the courts of Hong Kong.

 

However, the Plaintiff recalled the loans in accordance with the loan agreements. The 1st Defendant did not comply, stating that the sums advanced by the Plaintiff were spe-cial payments.

 

The Plaintiff then applied for a summary judgement against the Defendants. The De-fendants applied for a cross-summon to stay the proceedings in favour of arbitration and submitted a counterclaim regarding pay-ments resulting from the subcontract.

 

  1. b) The Decision

 

As the counterclaim arose directly out of the subcontract, the Court stayed the counter-claim’s procedures in favour of arbitration.

 

 

“CPC Construction Hong Kong Limited” (“Plaintiff“) subcontracted a construction project to “Harvest Engineering (HK) Lim-ited” (”1st Defendant”). Mr. Lau (“2nd Defendant”- together: “the Defendants”) was shareholder and director of the 1st De-fendant. The subcontract between the Plain-tiff and the 1st Defendant stipulated that all disputes were to be resolved by arbitration:

 

„All disagreements or disputes arising from this subcontract agreement shall be resolved by arbi-tration between the parties in accordance with the Arbitration Ordinance Cap. 341, after the com-pletion of CPC’s main Contractor after the ter-mination of this subcontract agreement.“

 

After some time, the Plaintiff agreed to grant various loans to the 1st Defendant. The 2nd Defendant agreed to guarantee and indem-

 

Regarding the claim for repayment of the loans, the Court decided that it was not connected to the subcontract and therefore not subject to the arbitration clause.

 

However, this result would lead to court-based litigation regarding the repayment if the loans and arbitration regarding the coun-terclaim even though the issues overlap. Considering this, the Court asked the Plain-tiff whether he would like the court to order a suspension of the court proceedings as long as the arbitration proceedings lasted to avoid duplication of time and resources and possible inconsistent results. The Court made clear that this would not mean staying the claim in favour of arbitration completely, i.e. the Court would not abandon the pro-ceedings completely and let the arbitration decision stand in its place.

 

 

 

  1. c) Comment

 

This case is another example of a Hong Kong court taking a proactive approach to try to avoid related arbitration and litigation proceedings in favour of arbitration.

 

  • Construction Industry

 

  1. Proposed Security of Payment Legisla-tion for the Construction Industry

 

  1. a) Background

 

In the construction industry, unfair payment terms, payment delays and disputes are caus-ing widespread problems and disputes be-tween contractors, sub-contractors, suppliers and consultants.

 

Since 1996, “Security of Payment Legisla-tion” („SOPL“) has been introduced in the

 

United Kingdom, Australia, New Zealand, Singapore, Malaysia and Ireland.

 

Hong Kong, considering similar legislation, published a consultation document on SOPL. The consultation period ended on 31 August 2015.

 

  1. b) Contracts covered

 

According to the proposal, the SOPL will apply to written and oral contracts regarding construction works, consultancy services and the supply of materials for purposes in Hong Kong. The SOPL shall also apply to contracts between non- Hong Kong parties, and even if foreign laws govern the contract.

 

Coverage will be different in the public and private sector.

 

Public Sector – SOPL will apply to

 

  • all contracts and subcontracts includ-ing maintenance and renovation notwithstanding the value of the contract.


 

Private Sector – SOPL will only cover

 

  1. construction contracts  regarding  a

 

“new building”, where the main con-tract has an original value of the costs of services of more than HKD 0.5 million;

 

  1. all subcontracts regardless of value when SOPL applies to the main contract

 

SOPL does not apply

 

  1. to the private sector procuring main-tenance, repair, renovation and res-toration works.

 

Therefore, the majority of individuals and small businesses procuring routine construc-tion works will remain unaffected by SOPL.

 

  1. Key Statutory Provisions

 

  1. a) Removal of Unfair Payment Terms

 

Payment terms generally considered unfair, (in particular „pay when paid“) will be prohibited. Payment periods

 

  • of more than 60 calendar days (in-terim payments) or

 

  • 120 calendar days (final payments) after a claim can be made

 

will be prohibited.

 

  1. Right to make Statutory Payment Claims

 

The SOPL allows statutory “Payment Claims”. If these are ignored or disputed, they can be taken to adjudication for a bind-ing decision.

 

  1. c) Adjudication of Disputes

 

Adjudication is a process where a third party adjudicator (comparable to arbitration) ren-ders a binding decision without the delays and formalities of ordinary proceedings in court or arbitration.

 

Under SOPL, adjudication must be commenced within 28 calendar days of the dispute arising and concluded 55 working days from the day of appointment of the ad-judicator unless both parties agree to a longer period.

 

The adjudication dispute may be taken to court (“fresh start”) but the adjudicator’s deci-sion stands in the interim and can be en-forced in court immediately.

 

  1. d) Right to Suspend

 

A winning party of adjudication has the right to slow down work if the awarded amount is not being paid.

 

  1. Intellectual Property – Trademark

Rights

 

„Sushi“ or a Director’s Fiduciary Duties

[Poon Ka Man Jason and Cheng Wai Tao [2015] HKEC 1600 / FAMV 22 of 2015]

 

  1. a) The Case

 

Ricky Cheng, the siblings Jason and Daisy Poon and others were shareholders in the “Ajisen Group” which operated several Japanese restaurants in Hong Kong.

 

In 2004, Chen, the Poons and others founded “Smart Wave Limited” to manage the first “Itamae Sushi” restaurant in Kow-loon. Cheng and the Poons were the three major shareholders of “Smart Wave Lim-ited” and Cheng became the sole director.

 

Within the next two years, Cheng estab-lished six more companies operating six more “Itamae Sushi” restaurants in Hong Kong with Cheng being the sole director and shareholder of each company. These activities led to disputes between Cheng and the other shareholders at “Smart Wave”.

 

 

Cheng and the Poons agreed on setting up “Hero Elegant Ltd.”. Their rights as share-holders were outlined in a shareholder agreement. This company and its subsidiar-ies were founded to manage and operate the restaurants. However, Cheng did not trans-fer the shares to the company as agreed upon in the shareholder agreement and con-tinued to run the restaurants mentioned above. Furthermore, Cheng established ad-ditional sushi restaurants named and marked “ITACHO SUSHI”. The other shareholders sued Cheng for damages and breach of his fiduciary duties as director of the common company.

 

  1. b) The Decision

 

The case has a long litigation history with the CFI ruling in favour of Cheng regarding the six “Itamae” restaurants but awarded damages to the Plaintiffs regarding the “ITACHO” restaurants. The court ruled that operating these competing and similarly named restaurants constituted a breach of the Defendant’s fiduciary duties.

 

The CA, however, ruled that Cheng was in breach of his fiduciary duties regarding all restaurants (ITACHO and ITAMAE) and, therefore, allowed the appeal. It found that it was Cheng’s fiduciary duty as a sole director to act in Smart Wave’s best interest. Operating competing sushi businesses was not.

 

The CA refused the permission to appeal, so Cheng sought permission to appeal from the Court of Final Appeal which was granted to appeal two of the six submitted questions concerning the scope of a director’s fiduci-ary duties.

 

  1. c) Comment

 

The case demonstrates the difficulties re-garding the scope of directors’ fiduciary du-ties.

The new Hong Kong Companies’ Ordi-nance (“CO”) codifies various directors’ du-ties. However, such duties remain subject to the established common law rules in Hong Kong. Among the director’s fiduciary duties are

 

  • the duty to act in good faith, i.e. a director has to act in the company’s best interests;


 

  • the duty to exercise powers for the purposes for which they are conferred;

 

  • the duty to avoid conflicts of inter-est; and

 

  • the duty not to make any personal profit out of their directorship.


 

 

Newsletter No. 203 (EN)

 

 

 

 

 

Current Legal Developments

 

in China, Myanmar and Cambodia

 

December 2015

 

 

 

A l l r i g ht s r e s e r v e d ©  L o r e n z & P a r t ne r s  2 0 1 5

 

Although Lorenz & Partners always pays great attention on updating information provided in newsletters and brochures, we cannot take responsibility for the completeness, correctness or quality of the information provided. None of the information contained in this newsletter is meant to replace a personal consultation with a qualified lawyer. Liability claims regarding damage caused by the use or disuse of any information provided, including any kind of information which is incomplete or incorrect, will therefore be rejected, if not generated deliberately or grossly negligent.

 

 

In the following newsletter, we would like to inform you about the latest legal develop-ments in Mainland China, Myanmar and Cambodia. The main focus of this newsletter is on recent decisions regarding tax and arbi-tration law.

 

China

  • Tax

 

Special Tax Treatment on Intra-Group Transfers

 

On 27 May 2015, the State Administration of Taxation (“SAT”) issued an Announce-ment on “Levy and Administration of En-terprise Income Tax on Assets (Equity) Transfer” (Announcement [2015] No. 40,

 

Circular 40”). Circular 40 follows Circular

109 on “Enterprise Income Tax Treatments for Promotion of Enterprise Restructurings” issued in December 2014 jointly by the SAT and the Ministry of Finance. Circular 40 provides further guidance on certain provi-sions of Circular 109.

 

Key points of Circular 40 are special tax treatments for intra-group share/asset trans-fers conducted between either resident en-terprises under 100% direct control of and/or directly owned by the same enter-prise. The following conditions need to be met:

 

  • If both parties’ original substantial business activities regarding the transferred share/asset have not changed within 12 months after the completion of the transfer, the par-ties shall submit an according written statement (together with their annual


income tax report) following the transfer date.

 

  • If one party’s business activity changes within 12 months after the transfer date and these changes dis-qualify this party for special tax treatments, the party has to report to the competent tax authorities. The report has to be filed within 30 days after the change of business. The re-porting party has to notify the other party in writing. The other party likewise has 30 days to report to the competent tax authorities. Both par-ties have to amend their tax returns within 60 days of the change.

 

  • Arbitration

 

  1. Disputes between CIETAC and SHIAC settled [PRC Supreme People’s

Court, Decision of 15 July 2015]

 

  1. a) Background

 

The China International Economic Trade and Arbitration Commission (“CIETAC”) is one of the world’s largest arbitration or-ganisations. In the case of contracts with Chinese parties, the CIETAC is often cho-sen as the competent arbitration body. The

 

CIETAC’s main office is in Beijing with sub-commissions in Shanghai and Shenzhen.

 

In 2012, CIETAC Shanghai and CIETAC Shenzhen declared its dissociation from the CIETAC Beijing whereupon the latter de-clared the CIETAC Shanghai and CIETAC Shenzhen not competent to perform arbitra-tion procedures according to the CIETAC Beijing rules any longer.

 

 

As a consequence, two new arbitration bod-ies came into existence:

 

  • The Shanghai International Arbitra-tion Centre (“SHIAC”), previously CIETAC Shanghai Sub-Com-mission, was established on 11 April 2013;

 

  • The Shenzhen Court of International Arbitration (“SCIA”), previously CIETAC South China Sub-

 

Commission, was established on 22 October 2012.

 

The secession led to problems regarding the validity of arbitration clauses in contracts that opted for CIETAC Shanghai or CIETAC Shenzhen as the competent arbi-tration body. This, in consequence, led to problems regarding the enforceability of the awards. On 15 July 2015, the Supreme Peo-ple’s Court (“SPC”) finally decided on a guidance note on how to solve cases, and the note took effect on 17 July 2015.

 

  1. b) Decision

 

First scenario:

 

The   arbitration   agreement    foresees   the

“CIETAC Shanghai Sub-Commission” or the “CIETAC South China Sub-Com-mission” as competent tribunal, and the ar-bitration agreement was signed

 

  • before the former CIETAC Shang-hai Sub-Commission was renamed to SHIAC (i.e. before 11 April 2013) or

 

  • before the former CIETAC South China Sub-Commission was re-named to SCIA (i.e. before 22 Octo-ber 2012).

 

In this scenario, SHIAC or SCIA, respec-tively, shall have jurisdiction.

 

 

Second scenario:

The arbitration agreement was signed

 

 

  • after the CIETAC sub-commissions were renamed to SHIAC or SCIA, and

 

Ø before the note took effect on 17 July 2015.

 

CIETAC Beijing shall have jurisdiction over these cases.

 

Third scenario:

If the arbitration agreement was signed after the note took effect on 17 July 2015, CIETAC Beijing shall have jurisdiction over these arbitration cases.

 

  1. c) Impacts

 

This uncertainty led to odd results, for example two opposing awards in the same matter. The SPC’s guidelines finally settled the dispute. However, a problem remains if two arbitration awards have been rendered in the same issue by different arbitration in-stitutions. The SPC note does not give any guidance for this scenario.

 

  • Advertisement Law

 

China’s amended Advertising Law

 

The amended PRC Advertising Law came into force on 1 September 2015, following 20 years of no changes to the existing adver-tising law. Given the economic changes of the last 20 years, the amendment was over-due. One of the new legislation’s objectives is to reduce existing grey areas.

 

The law of 1995 stipulates that advertise-ments must

 

  1. be true and must not contain false or misleading information;

 

  1. act according to the rules of fairness and trustworthiness;

 

  1. not be harmful to the physical health of the people of China and not im-pair the physical and mental health of minors or disabled persons;


 

  • only contain data, statistics and find-ings that are factually true;

 

  • not discredit the product or services of third parties;

 

  • safeguard the dignity and interest of the state and be compliant with so-cial morality and professional ethics.

 

Specific restrictions apply regarding adver-tisement of pharmaceutical and medical de-vices, agricultural chemicals, tobacco and health food.

 

The amendment’s key provisions are as fol-lows:

 

  1. It broadens the definition of false advertising by expressly prohibiting both false and misleading advertising contents and gives specific examples as to what is deemed misleading;

 

  1. It introduces additional regulations of advertising aimed at children, for example, a ban on advertising in schools and kindergartens;

 

  1. Without prior consent, advertise-ment must not be sent to home ad-dresses; other forms of direct mar-keting are also prohibited unless consented to by an individual, e.g. normal usages of the internet must not be inferred by advertisement (pop-ups must closable with one click);

 

  1. Electronic advertisement must con-tain the sender’s true identity, con-tact information, and information on how to unsubscribe;

 

  1. Celebrities or other people endorsing a product or service may be held li-able if they know or ought to know that the advertisement amounts to false advertising. Also, the amend-ment imposes a ban on further en-gaging endorsers who were held li-


 

able of endorsing false advertising for a 3-year period;

 

  1. It contains restrictions on advertising healthcare, food and breast milk substitutes;

 

  1. It prohibits the advertising of healthcare food, pharmaceutical products, medical equipment and the like under the disguise of “health in-formation” programmes or columns on radio or TV stations, printed me-dia or the internet;

 

  1. It introduces specific requirements when promoting investment prod-ucts and tobacco products.

 

The sanctions are wider ranging and include fines up to RMB 1,000,000 and the imposi-tion of criminal liability and revocation of business licenses for serious instances of in-fringement.

 

China seeks to send a signal that it is keen to strengthen consumer protection by clamping down on undesirable advertising activities. As the new law has a wide scope, it is to be expected that further implementing meas-ures or interpretations may be issued in the future. For brand owners, it is advisable to ensure compliance with the new law.

 

  1. Myanmar

 

New Minimum Wage Law

 

  1. a) Background

 

Myanmar is undergoing a period of rapid change and in particular, Myanmar’s legal framework has been significantly improved in recent years, but a lot of challenges re-main. Recently, a new minimum wage rate was proposed, and the Ministry of Labour published Notification 84/2915, introducing increased severance payments for the termi-nation of a labour contract by the employer, which came into effect on 3 July 2015.

 

 

  1. b) The Minimum Wage Law

 

In 2013, a Minimum Wage Law was enacted. The National Committee was authorised to determine the rates of minimum wage for different industries taking into consideration the specific criteria in the determination of the rate provided by the Law.

 

An extensive debate regarding the actual minimum wage rates ensued and the gar-ment industry threatened to close their fac-tories if the minimum wage was set too high. On 29 June 2015, the National Minimum Wage Committee of Myanmar released a no-tification proposing the following rules:

 

Ø  A  minimum  wage  of  MMK  3,600

 

 

  1. Cambodia
  • Cambodia’s current trademark regis-tration procedures

 

Cambodia joined the “Madrid Protocol for the International Registration of Marks” on 5 March 2015, thus becoming its 95th mem-ber. Its accession entered into force on 5 June 2015.

 

Currently, 55 countries are party to the Ma-drid Agreement, and 96 countries are party to the Madrid Protocol, with Cambodia be-ing the fourth ASEAN country to join the Madrid Protocol, following Vietnam, Singa-pore and the Philippines.

 

 

(ca. EUR 2.50) for an eight hour day;

 

  1. MMK 450 (ca. EUR 0.30) as basic hourly wage for all workers across the country;

 

  1. Different rates shall apply to a training and probationary period of up to three months each, during which only 50% and 75%, respec-tively, of the foresaid amounts has to be paid;

 

  1. Small businesses with less than 15 workers and businesses qualified as


The “Madrid System” is the primary interna-tional system for facilitating the registration of trademarks in multiple jurisdictions around the world. Its legal basis is a multilat-eral treaty (Madrid Agreement concerning the International Registration of Marks of 1891), as well as the Protocol Relating to the Madrid Agreement (1989).

 

The Madrid System provides a simple way for the international registration of trade-marks by one application that can cover more than one country.

 

 

family run-businesses are to be exempted from the regulation.

 

The Minimum Wage Law stipulated a con-sultation period of sixty days after the rate had been released. The public had two weeks to file objections. By Notification No. 2/2015 (Announcement of Stipulation of Minimum Wage) dated 28 August 2015, the Minimum Wage Law entered into force.

 

  1. The first patent granted in Cambodia

 

In 2003, Cambodia, as part of its WTO obligations introduced a patent law but was not able to process patent applications due to a lack of internal mechanisms required for processing.

 

However, recently the first successful Cam-bodian patent was granted.

 

 

 

Newsletter No. 204 (EN)

 

 

 

 

 

 

 

How to issue Warning Letters in Thailand

 

 

 

January 2016

 

 

 

 

A l l r i g ht s r e s e r v e d © L o r e n z & P a r t ne r s  2 0 1 6

 

Although Lorenz & Partners always pay great attention on updating information provided in newsletters and brochures, we cannot take responsibility for the completeness, correctness or quality of the information pro-vided. None of the information contained in this newsletter is meant to replace a personal consultation with a qualified lawyer. Liability claims regarding damage caused by the use or disuse of any information provided, in-cluding any kind of information which is incomplete or incorrect, will therefore be rejected, if not generated de-liberately or grossly negligent.

 

 

  • Introduction

 

Employees’ misconduct may harm the commercial success of a company. In these cases, the employer has to decide how to re-act to the employees’ behaviour. In general, there are three options, depending on the severity of the misconduct:

 

  • Oral warning in the case of minor misconduct;

 

  • Written warning in the case of more than minor but less than severe misconduct; and

 

  • Termination in the case of severe misconduct (“serious case”).

 

The major laws regulating warning and ter-mination of employment agreements in Thailand are the Civil and Commercial Code, the Labour Relations Act, the Labour Protection Act (“LPA”) and the Labour Court and Labour Procedure Law (“LCP”).

 

This newsletter will lay out the legal re-quirements and consequences of reactions to an employee’s misconduct, in particular how to properly issue warning letters.

 

  • Legal Requirements

 

  • Oral Warning

 

In minor cases, an employer may choose to warn an employee orally for the misconduct. Oral warnings should lay out the employee’s misconduct and warn not to repeat the violation. Unlike other instruments, oral warnings have – even if repeated several times – no legal consequence.

 

  • Written Warning

 

Employers should issue warning letters in cases where the employee has breached working rules, regulations or orders.

 

  • Breach of Working Rules, Regulations or Orders

 

A company’s working rules are contained in a document issued by the employer and an-nounced to the employees. A copy of the working rules has to be registered with the Labour Department, Sec. 108 LPA.

 

Regulations are guidelines given by the em-ployer – either verbal or in writing – to an employee for his everyday use.

 

Orders are instructions given by the em-ployer to the employee regarding the em-ployee’s work. They can be verbal or in writing.

 

  1. b) Necessary Content

 

The LPA neither defines the term “written warning”, nor lays out any requirements concerning its content. Sec. 119 (4) LPA only mentions that the employer is not re-quired to pay severance pay if the employ-ment was terminated because the employee was

 

“[…] violating working rules or regulations or orders of the Employer which are lawful and just, and after a written warning has been given by the Employer […].”

 

In the absence of statutory provisions, the jurisprudence has developed the following bare minimum content requirements:

 

  • Employee’s name and position;

 

 

  1. Warning letter’s issuance date;

 

  1. Detailed description of the em-ployee’s misconduct, including:

 

  • The date of the violation;

 

  • A comprehensive account of the events; and

 

  • An exact reference to working rules, regulations and /or orders violated by this misconduct.

 

  1. Warning that the employment agreement will be terminated if the employee repeats the violation; and

 

  1. Employer’s (representative(s)) signa-ture(s)

 

The warning letter is valid for one year from the date of the violation.

 

  1. c) Delivery

 

Warning letters have to be duly received by employees. Ideally, the respective employee signs the warning letter (indicating that he physically received the warning letter).

 

However, experience shows that employees often refuse to give their signature when the warning letter is handed over. For these cases, the employer should take the follow-ing precautions:

 

  • Bring along a witness (preferentially uninvolved and, if possible, an external witness to limit the “loss of face”);

 

  • Read the warning letter out loud to the employee in front of a witness and have the witness sign the warn-ing letter, adding the date and re-mark that the letter was read out loud to the employee; and

 

  • Send a (scanned) copy of this warning letter via email and via registered mail with return receipt to the em-ployee.

 

 

  1. Termination

 

From Sec. 119 (4) LPA can be derived that employees may terminate employment agreements without giving prior written warning in “serious cases”. However, the LPA remains quiet about the exact definition and nature of a “serious case”. According to the jurisprudence, “serious cases” are to be de-termined on a case-by- case basis. However, based on the Supreme Court’s various rul-ings on this matter, a “serious case” may be seen in a violation of working rules, regula-tions or orders that:

 

  1. May cause serious damage to the employer;

 

  1. Constitutes a violation of criminal law (serious criminal offence); and

 

  1. Constitutes a severe breach of the relationship of trust (dishonesty).

 

Among other things, courts will take into consideration the misconduct’s nature, the employee’s position, working place and place of misconduct, and the consequences (e.g. damages, injuries, reputation loss, etc.).

 

  • Legal Consequence

 

After a termination, there are, generally, two options:

 

  1. Termination after warning / imme-diate termination was lawful: Then, the employee has no additional (payment) claims against the em-ployer.

 

  1. Termination after warning / imme-diate termination was unlawful: Then, the employee can claim addi-tional payment from the employer.

 

 

 

 

  1. Potential Claims

 

  1. a) Severance Pay

 

Employees under an indefinite employment agreement are, in the case of termination, generally entitled to severance pay.

 

Employees under a fixed-term employment agreement are generally not entitled to sev-erance pay. Fixed-term contracts may be used under certain conditions:

 

  • Special projects, not under the ordi-nary scope of the employer’s activi-ties; and

 

  • The work is of temporary or sea-sonal nature.

 

However, if the Labour Court finds that these criteria are not fulfilled (e.g. the work is not temporary because it lasts longer than 120 days), the employee will be entitled to severance pay.

 

The rate of severance pay depends on the period of the employment, Sec. 118 LPA.

 

 

Period of

 

 

Rate of severance

 

 

 

 

 

 

employment

 

 

 

 

 

 

 

 

 

less than 120 days

 

no severance pay

 

 

 

 

 

120 days until 1 year

 

30 days

 

 

 

 

 

1 year until 3 years

 

90 days

 

 

 

 

 

3 years until 6 years

 

180 days

 

 

 

 

 

6 years until 10 years

 

240 days

 

 

 

 

 

more than 10 years

 

300 days

 

 

 

 

 

 

 

The first THB 300,000 of severance pay are exempted from the employee’s personal in-come tax if not exceeding 300 days of paid wages (Clause 2 (51) Ministerial Regulation 126).

 

 

Any payment subsequent to a letter of resignation is, however, not subject to such exemption.

 

  1. b) Payment in Lieu

 

Sec. 17 LPA stipulates that the employer has to give advance notification to the em-ployee

 

“[…] at or before any due date of wage payment in order to take effect on the follow-ing due date of wage payment […].”

 

The employer has to notify the employee one payment cycle in advance of the termi-nation. Alternatively, the employer may pay wages for the outstanding period of em-ployment and dismiss the employee imme-diately (“payment in lieu of advance notice”).

 

  1. c) Holiday and other Claims

 

The employee may claim payment for un-used annual leave, Sec. 67 LPA. Addition-ally, the employee may also claim payment for overtime work or work on holidays.

 

  1. d) Payment for Unfair Termination

 

According to Sec. 49 LPC, employees may also claim damages for unfair termination. Even though it is hard to make general statements in this regards, it can be ob-served that Labour Courts tend to give one salary per year of employment if the termi-nation was unfair.

 

  1. No Payment to Employee

 

The employee is not entitled to any of the claims mentioned above if the employment agreement has been terminated for reasons stipulated in Sec. 119 LPA:

 

  • If the employee violates working rules, regulations or orders after he has received a written warning. In a serious case, no warning has to be given by the employer.

 

  • If the employee performs his duty dishonestly or intentionally commits a criminal offence against the em-ployer.

 

  • If the employee willfully causes dam-age to the employer.

 

  • If the employee commits negligent acts causing serious damage to the employer.

 

  • If the employee is absent from duty without a justifiable reason for three consecutive working days.

 

  • If the employee is sentenced to im-prisonment by a final court judge-ment.

 

  1. Termination

 

We recommend getting legal advice before terminating an employment agreement. There are several (formal and material) re-quirements to be met, otherwise the termi-nation might be ruled unfair.

 

The termination letter has to be in writing, Sec. 17 LPA. It has to state the reason for the termination. These reasons should be specific and provable.

 

The delivery of termination letters should follow the procedure mentioned above for delivery of warning letters.

 

  • Documentation

 

In case an employee violates working rules, regulations or orders, the employer should start gathering evidence with regards to this misconduct. This evidence will be necessary or, at least, useful to negotiate a better set-

 

 

tlement agreement. Therefore: File any emails or documents proving the violations.

 

  1. Settlement Agreement

 

It may be advisable to enter into a settle-ment agreement to comprehensively and fi-nally settle all and any claims the parties may have subsequent to the termination of the employment. Such agreements provide legal certainty for both parties and avoid ex-tensive and expensive litigation.

 

It is important that the termination or the resignation of the employment precedes the settlement agreement. Otherwise, the courts may decide that the employee was still bound by the right of the employer to issue orders and give instructions.

 

Such agreements should include provisions as to the settlement of all and any claims, compensation paid to the employee and the return of company assets, documents and passwords. However, the contents of the agreements may vary on a case-by-case ba-sis. Employers should seek legal advice be-fore entering into settlement agreements. Otherwise, the settlement might have an expensive aftermath.

 

VII.       Conclusion

 

Employers should handle warning letters carefully. Otherwise, subsequent termina-tions may be ruled as “unfair”. In that case, the courts may order to reinstate the em-ployment or grant compensation. It is ad-visable to keep a template that complies with the legal requirements and amend it according to the latest developments in la-bour law.

 

 

 

Minor

Misconduct

 

 

 

Verbal Warning

 

 

 

No legal consequence

 

 

 

 

 

 

Yes


 

Appendix

Employee violates Working Rules, Regulations, or Orders

(Sec. 119 (4) of the Labour Protection Act)

 

 

 

 

Serious Case

  • Case-by-case basis

 

  • Breach of particular duties defined in the employment agreement

 

Warning letter

  • Date of issuance

 

  • Name of employee and position held by employee

–    Detailed description of misconduct (date)                    compulsory content

  • Reference to violated working rule, regulation, etc

 

  • Statement that termination if violation recurs

 

 

 

 

 

Employee willing to sign

 

 

 

No

Warning Letter?

 

 

 

 

 

 

 

 

 

 

 

Do the following:

  • Bring along witness when warning letter is handed over to employee

 

  • Read warning letter out loud in front of employee and witness

 

  • Have witness sign the warning letter with remark: “Warning was read out load to [insert employee’s name]

 

 

 

 

 

 

 

 

Within one year employee violates the same rule/regulation/order again

è Has to be the violation the employee was already warned about

 

 

 

 

Termination letter

 

 

no Severance Pay

 

 

 

–   no Payment in Lieu

 

 

 

 

  • Purpose: This flowchart shall serve as a guideline for issuing warning letters. If a proper warning letter was issued, a dismissed employee is not entitled to severance pay, payment in lieu or other damages. Please note that the law stipulates various other cases in which a dismissed employee is not entitled to severance pay (Sec. 119 of the Labour Protection Act). Also, remember that employer and employee can contractually agree on a different disciplinary procedure (g., two warning letters).

 

  • Documentation: Always provide sufficient documentation with regards to every aspect of the employment and misconduct. File all emails, documents, and other evidence that are suitable to show your employee’s misconduct.

 

  • Warning Letter: The warning letter has to include all the contents mentioned above, otherwise it will be considered void. If considered void, a court may either decide to rein-state the employment agreement or grant compensation to the employee.

 

Therefore: Please use the provided template and follow the given explanations.

 

  • Repeated Violation: The warning letter is valid for one year from the date the offence was committed: If the employee repeats the violation he was warned for within one year, the employment agreement may be terminated.

 

If the employee violates a different working rule, regulation, or order, the employment contract cannot be terminated without severance pay.

 

  • Signing: The employee should sign the warning letter. If he refuses to do so, the warning letter should be read out loud to him in front of a witness, and the witness has to confirm in writing on the warning letter that it has been read out loud to the employee.

 

  • Serious Case: The law does not define the term. Therefore, whether a certain misconduct constitutes a “serious case” is up to the courts’ discretion. E.g. smoking may be a serious violation of working rules when working at a gas station. However, smoking in an office may not be considered a “serious case”.

 

Therefore: Whenever you assume a “serious case”, please consult with a lawyer before issuing a termination letter since you may be liable for damages (unfair termination).

 

  • Termination Letter: We strongly suggest that you consult with a lawyer when you choose to terminate the employment agreement, as the wording and the right reasoning is imperative for the legality of termination.

 

 

 

 

Newsletter No. 205 (EN)

 

error: Sorry, this information cannot be copied / printed. If you would like to received the text as pdf, please send us an e-mail.