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Tag: regulation

  • BMW Korea fined $13M over emissions

    BMW Korea fined $13M over emissions

    A Seoul court fined BMW Korea 14.5 billion won ($12.9 million) for manipulating documents on emissions to sell some 29,000 vehicles in Korea. The Seoul Central District Court announced Thursday that the local unit of BMW is guilty of violating customs law. The automaker was found guilty of forging emissions test papers from 2011 to obtain certification from the National Institute of Environmental Research under the Environment Ministry that its cars meet local emissions standards. Roughly 29,000 cars were certified this way, according to the court.

    “The automaker has undermined government efforts to improve air quality in Korea,” the court said in a statement. “This also damaged local customers’ trust in BMW.”

    The court also added that BMW Korea took substantial profits over the years due to the manipulation, showing no effort to abide by local laws.

    “The reason for making [carmakers go through] a stringent certification process is because car emissions have substantial impact on air quality,” the court said.

    The Seoul court also found six former and current executives of the automaker involved in the case guilty. Three executives were sentenced to eight to 10 months in jail, with three others given a four to six month suspended sentence with probation.

    On Thursday’s ruling, BMW Korea said in its official statement that the company “will respond following an appropriate legal process after thoroughly reviewing the case,” adding that it cannot give a “detailed answer yet.”

    Last month, the Korean unit of rival German automaker Mercedes-Benz was also found guilty of violating the emissions certification process. The court gave Mercedes a 2.81 billion won fine and handed down an eight-month jail sentence to the executive in charge of emissions certifications. The carmaker was charged for failing to get new certifications after changing some emissions-related parts. Mercedes said it will appeal the ruling.

    In its official statement last month, Mercedes said it was an administrative mistake, adding that it was unintentional.

  • Indonesia’s Go-Jek rejected in the Philippines

    Indonesia’s Go-Jek rejected in the Philippines

    Indonesia’s Go-Jek suffered a setback to its expansion plans on Wednesday after the transportation regulator in the Philippines rejected its application to launch a ride-hailing service, saying its domestic unit did not meet local ownership criteria. However, the setback may only be temporary as the firm, whose backers include Google, could appeal the decision or team up with Philippine investors.

    “Go-Jek can get a local partner that will own at least 60 percent of the ride-hailing entity to comply with the law,” said January Sabale, head of communications at the Land Transportation Franchising and Regulatory Board (LTFRB).

    The decision comes as Go-Jek seeks to expand in Southeast Asia, having evolved from a ride-hailing service founded in 2011 to provide a one-stop app through which users can order food and services such as massages and make payments online.

    The firm has raised billions of dollars from investors such as Tencent Holdings, JD.com and Temasek Holdings to challenge market leader Grab.

    Several Philippine ride-hailing firms have been operating in the capital Manila and in major provinces since March 2017, but have had limited success in wresting domestic market share away from Singapore-based Grab, which stands at over 90 percent.

    “Homegrown firms are not making a dent on early player Grab, because the cars they can enroll now have to go through the LTFRB’s filtering hurdles,” said Rene Santiago, a transportation expert and president of Bellwether Advisory in Manila.

    Go-Jek applied for a license to operate in Manila in August through wholly owned subsidiary Velox Technology Philippines. Later the same month, ride-hailing was added to a list of industries where foreign ownership is limited to 40 percent.

    Velox “did not meet the citizenship requirement and the application was not verified in accordance with our rules,” regulator chairman Martin Delgra said

    A spokesman for Go-Jek said: “We continue to engage positively with the LTFRB and other government agencies, as we seek to provide a much-needed transportation solution for the people of the Philippines.”

    There are around 37,000 registered ride-hailing vehicles across eight accredited firms, Delgra said. The Department of Transportation has capped the total at 65,000.

  • Limited share price upside seen for Malaysian property sector

    Limited share price upside seen for Malaysian property sector

    Rising interest rates, Malaysia’s slowing gross domestic product growth and unfavourable government policies will limit share price upside for Malaysian property development companies, said CGS-CIMB.Although it expects the property companies in its coverage universe to post positive earnings growth this year, CGS-CIMB said share price upside will be limited and the sector is unlikely to re-rate to peak levels last seen in 2014.

    “The property sector has garnered more interest lately due to its attractive valuations, but we believe the sector is cheap for a reason and this could be a false dawn. We believe developers could miss their new property sales targets for 2018, and are likely to set lower new sales targets for 2019. We think it’s a signal that the 2019 property market is likely to see lower new property sales and weaker buying sentiment,” it said in its report.

    According to its analysis, the medium 40% and bottom 40% (B40) households face difficulty in buying properties as the average house price is above both groups’ affordability range and despite government incentives and policies to address this issue, the oversupply in the property market has continued to rise since 2012.

    “Likewise, property stocks have fallen from their peak valuations in 2014, some to the trough levels in 2008, making them attractively priced at the moment, in our opinion,” it added.

    CGS-CIMB does not see much room for housing loan growth given the existing low interest rate environment, limited buyer’s affordability and possible interest rate hike.

    In addition, restrictive government policies are still in place and it does not see any incentive for consumers to purchase property given the weak rental market and subdued property market.

    Given the limited domestic affordability, higher real property gains tax and restrictive policies on foreigners, the property oversupply issue is expected to persist. Note that in 1H2018, properties priced below RM1 million accounted for 93% of total unsold residential property inventory.

    “We expect the housing market to remain challenging in the near term, unless there is a meaningful surge in household income, decline in house prices or more positive measures are introduced,” it said.

    Although lower property prices are possible, developers would be at the losing end if they were to lower prices at the expense of profit margins to spur new property sales demand or remove rebates/freebies to protect margins, which could result in weaker new sales.

    “Even if new house prices are cut by 20%, we think the prices would still be unaffordable for the B40 households. Instead of focusing on increasing affordable housing supply and ownership, we believe a better way to approach the housing glut is to increase Malaysians’ household income in a meaningful way,” it said.

    CGS-CIMB maintained its “neutral” call on the sector with an estimated dividend yield of 3% on average in 2019.

    Sime Darby Property Bhd remains its top pick as the company has shown continuous improvement in its property development division and new property sales since its demerger in November 2017.

    “We believe the group’s healthy balance sheet and massive land bank are advantages in addressing the change in future product demand,” it said.

  • Domestic, foreign e-commerce players should be treated alike: CUTS India

    Domestic, foreign e-commerce players should be treated alike: CUTS India

    The Government needs to create a level-playing field for both domestic and foreign e-commerce platforms through a comprehensive e-commerce policy, said Pradeep S. Mehta, Secretary General, CUTS International on Sunday. He noted that the current norms for the segment are applicable to foreign online retailers and this might create a discriminatory environment towards the domestic players.

    “The Government may not be wrong in its clarificatory policy on Foreign Direct Investment (FDI) in e-commerce, as it was a case of backdoor entry in multi-brand retail trade. But vital issues remain to be resolved to promote healthy economic democracy”, said Pradeep S Mehta, Secretary General, CUTS International.

    “However, the issue of creating a level-playing field between domestic and foreign players in retail sector is yet to be resolved, for which a comprehensive National E-Commerce Policy is need of the hour”, he said.

    The Department of Industrial Policy and Promotion (DIPP) recently had said that 100 percent FDI is permitted in the market place model of e-commerce and not in the inventory-based model or the multi-brand retail segment.

    The Commerce Ministry in December revised the FDI policy for e-commerce players whereby it barred online retail firms such as Amazon and Flipkart from selling products of companies in which they have stakes. It also prohibited e-tailers from mandating any company to sell its products exclusively on its platform only.

    Mehta said: “The new guidelines are stricter for e-commerce companies with FDI providing marketplace, but there are no such restrictions for companies without FDI.”

    He also observed that there is no need for a separate regulator for the e-commerce segment.

    “India does not need a separate regulator for e-commerce, which would be yet another parking place for retired babus who are generalists and turn into controllers.

    Most of the malpractices adopted by e-commerce platforms, for instance, discrimination among its vendors, deep discounts etc, can be dealt by the Competition Commission of India. If need be, the Competition Act, 2002 can be tweaked for which the process is going on,” he said.

    The Consumer Protection Bill, 2018, which is likely to be passed soon by the Rajya Sabha, also has specific provisions on e-commerce, he added.

  • Indonesian Consumers Face Harassment by Fintech Debt Collectors

    Indonesian Consumers Face Harassment by Fintech Debt Collectors

    As a result, she faces constant harassment by debt collectors who call her, wait outside her home, and even go as far as contacting her parents, family members, friends and acquaintances. “I was not expecting these fintech firms to subject their customers to such dreadful practices. They accessed my contact list and messages [on my mobile phone]. They even called my current bosses,” Cintia said.

    “My friends even told me that these fintech firms were defaming and harassing them, sending my friends’ personal photos to their bosses and some of the people in their contact lists, calling my friends imposters,” she added.

    The trouble started a few months ago after she borrowed Rp 1 million each from Uang Kita, Kantong Darurat and Perdana (previously known as Rupiah Plus).

    Risks Associated With Collateral-Free Loans

    Each fintech firm has a different set of requirements borrowers must meet, but most of them do not ask for any collateral, which comes with one major drawback: high interest rates.Despite customers only needing an identity card and a cellphone number to borrow emergency cash, these loans carry interest rates of 1 percent per day for a maximum tenor of 14 days. This exceeds by far the already steep interest rates of 29.9 percent per year that credit card companies charge their customers.

    Customers must also be prepared for some unpleasant treatment from these fintech firms if they fall behind on their repayments.

    “At first, I started borrowing money just for fun but I ended up with these debts and I’m making one debt to pay another debt. I want to pay it off in installments, but they refuse to accept it. They want me to settle the loans in full,” Cintia said.

    Misna Wati, who works for an undisclosed company in Jakarta, has owed money to 25 fintech firms since May last year. She said she regularly receives harassing phone calls and WhatsApp messages from debt collectors and representatives of the firms.

    “We are worried all the time. We did not expect them to be able to access our contacts, call logs, even messages,” said Misna, who declined to state her age and occupation.

    Misna and Cintia are now both seeking assistance from the Jakarta Legal Aid Institute (LBH).

    Need for Strong Data Protection

    With numerous reports about breaches of data privacy by the financial industry, the House of Representatives must accelerate the process involved in passing the data protection bill.The bill, which was supposed to be enacted last year, has now been included in the 2019 priority list of the National Legislation Program, which means that the House might deliberate it sometime this year.

    While Ministerial Regulation No. 20 of 2016 is intended to protects users’ personal data on the electronic system, it is deemed insufficient in preventing large-scale data breaches.

    The regulation only stipulates administrative penalties for violations or the settling of disputes between offenders and system providers or data owners, but does not allow for the recovery of damages related to customer data breaches.

    The bill, if it is passed into law, would apply both in Indonesia and abroad, but only to Indonesian citizens and Indonesia-based business entities.

    The regulation is very important as Indonesia has more than 143 million internet users, which is more than half of the country’s population, according to data compiled by the Internet Service Providers Association (APJII) in 2017.

    Fintech’s Popularity

    Fintech services have gained popularity in Indonesia over the past few years due to their seamless technology systems, innovation, customer-focused approach and simplicity. Fintech companies also offer payment systems, financial assistance and fundraising options.According to a joint study by global technology giant Google and Singaporean wealth fund Temasek, Indonesia’s internet economy – the financial value of all digital services – could exceed $100 billion by 2025, compared with $27 billion last year.

    But despite numerous benefits, the microcredit industry is still poorly regulated in Indonesia and the government is currently dealing with a rising number of illegal or unlicensed fintech firms operating in the country.

    The government banned 738 illegal financial technology websites and applications last year in a bid to protect consumers.

    As Indonesia is now one of the centers of the digital financial industry in the region, it attracts numerous companies from neighboring countries that establish a presence in the country, but which often choose not to obtain licenses from industry regulator, the Financial Services Authority (OJK).

    Most of the unlicensed fintech apps and websites are from China, Malaysia and Thailand. These fintech firms do not have registered offices, either in Indonesia or in their home countries.

    “The OJK has instructed us to ban unlicensed fintech websites and apps,” Ferdinandus Setu, acting head of public relations and communication at the Ministry of Communication and Information Technology, said in a statement last week.

    He said the ban so far applies to 211 websites and 527 smartphone apps, which seemed to have been increasing since August last year.

    There were 171 illegal fintech apps available for download on Google Play in November last year, compared with 144 in August. The ministry also recorded 77 illegal fintech websites in September.

    The ministry said no illegal fintech websites and apps were recorded between January and July last year.

    Ferdinandus said besides the OJK’s instruction, the communication ministry’s actions were also carried out after collecting public reports through a web crawler known as AIS, which filters out content deemed illegal under Indonesian law, such as pornography, the spreading of false news and the promotion of terrorism and radicalism.

    The ministry encouraged members of the public to report websites offering financial services that may be deemed illegal, or fintech companies that are not registered with the OJK.

    Reports can be submitted to aduankonten.id, or @aduankonten on Twitter. A task force comprising more than 13 ministries and agencies will investigate the reports.

  • Korea to ban single-use plastic bags

    Korea to ban single-use plastic bags

    South Korea is to ban big-time supermarkets and retailers nationwide from selling single-use plastic bags in an attempt to conserve natural resources and reduce recyclable waste. The ban will come into effect on Tuesday as part of a revised law on conserving resources and encouraging the reuse of recyclable waste. Subject to the ban are 2000 outlets of major discount chains and 11,000 supermarkets with sales floor spaces of 165sqm or more where handing out free plastic bags are currently prohibited.

    Stores that violate the ban could face fines of up to 3 million won (around US$2683). Instead, those shops are required to offer customers recyclable containers, cloth shopping bags or paper bags.

    Plastic containers for wet goods, such as meat and fish, will still be used.

    Under the revised law, 18,000 bakeries nationwide will be barred from handing out free disposable plastic bags.

    In cooperation with local governments, the Environment Ministry plans to encourage the affected stores to observe the ban from January through March.

    The ministry is also pushing ahead with a plan to reduce the use of plastic garment bags at laundry shops.

  • Vietnam wants urban residents to pay bills without cash

    Vietnam wants urban residents to pay bills without cash

    The Vietnamese government wants cashless transactions made viable for all household bill payments by the end of this year. A recent government resolution on changing the business environment to improve competitiveness and labor productivity contains a push to accelerate use of cashless transactions. Provincial and municipal leaders have accordingly been tasked with instructing all schools and hospitals, as well as electricity, water, sanitation, telecommunications and postal companies in urban areas to coordinate with banks and intermediary payment service providers in collecting bills and fees via cashless transactions.

    The government has recommended that establishments prioritize mobile payments and payment via card readers, and requested that the task be completed before December this year.

    Vietnam Electricity, the national utility, has been asked to ensure power companies work with banks and intermediary payment service providers to collect electricity bills via cashless methods and promote the use of electronic and mobile payments. The target for the year is to double the number of customers using e-payments to pay their electricity bills.

    The State Bank of Vietnam has been asked to come up with solutions that would promote the use of electronic wallets, wherein users can deposit cash into their e-wallets without the need for a bank account. The central bank has also been asked to find ways to remove imitations on e-transactions before the third quarter of this year.

    The State Bank must also require commercial banks and intermediary payment service providers to implement the QR code standard, and work with the Ministry of Finance to come up with a list of types of transactions that have to be done through banks, as well as make amendments to existing regulations to promote cashless payments for real estate transactions.

    According to the World Bank’s statistics released last July, Vietnam was the country with the lowest percentage of cashless transactions in the region with only 4.9 percent, while this value for China and Thailand were 26.1 percent and 59.7 percent respectively.

    While Vietnam rolled out an e-payment system for taxes in 2014 with 95 percent of companies registered, currently only 70 percent of tax money is collected via this method and many businesses still prefer paying their tax directly with cash.

    Similarly, while Vietnam has had policies to encourage consumers to pay electricity bills through banks and intermediary payment service providers, currently only 4.5 million people, or 20 percent of electricity consumers, pay their bills through these channels.

    The government’s resolution does not include rural and remote areas as the majority of Vietnamese living in such areas still lack access to modern payment methods.

  • FastGo can’t go, say Vietnamese authorities

    FastGo can’t go, say Vietnamese authorities

    Vietnamese ride-hailing firm FastGo, at odds with authorities over its legal status, asserts it is going by the book. According to the Ministry of Transport and the Ministry of Industry and Trade, FastGo is not yet eligible to be approved for a pilot phase, nor is it registered as a tech platform.

    In a written reply to the Da Nang Department of Transport’s proposal to permit FastGo to operate, the Ministry of Transport has said that the application falls under the category of “electronic contract service based – management support platform.”

    But, the ministry adds, it is yet to receive a proposal to launch the app directly from FastGo Vietnam JSC, which means the application is not yet ready to be approved for a pilot phase.

    The ministry has also requested the Da Nang Department of Transport to inform cab companies not to use FastGo if the app is offered to them. Furthermore, FastGo is not allowed to provide its services directly to taxi drivers, it says.

    However, Nguyen Huu Tuat, FastGo CEO, is adamant that the app is not violating any law. He said that he has not received a written response the ministry or from the Da Nang Department of Transportation.

    Tuat clarified that FastGo does not provide transport support management services to individual drivers in Da Nang. It only services drivers of local transport cooperatives.

    “FastGo has filed the information and sent a request for approval for a pilot phase, but has not received a response from the Ministry of Transport,” said Tuat.

    He said Fastgo is neither defined as a transport service provider nor is it a transport cooperative. It is merely an application connecting drivers with customers. Tuat said that he was waiting for new transport regulations on this issue, following which the company will determine the specific business category for registering its app.

    FastGo has been functioning in Vietnam’s major cities since June. It is only after six months that regulators have backtracked and declared that its registration is incomplete.

    A representative of the Department of E-Commerce and Digital Economy under the Ministry of Industry and Trade said: “FastGo has not registered its tech platform with the Ministry of Industry and Trade. Therefore, it is unlawful for FastGo to engage with drivers or operate a transport management platform.”

    In response to this comment, Tuat asserted that he has submitted this proposal, but is yet to receive a reply.

    Launched in June 2018, FastGo now operates in Hanoi, Ho Chi Minh City and Da Nang with more than 30,000 drivers. At the end of August, the local company received funding from VinaCapital, and is planning to mobilize up to $50 million for a second expansion phase that will target Indonesia and Myanmar.

    FastGo Vietnam Joint Stock Company was established in April 2018 with its headquarters in Hanoi. The company belongs to a wide network of services provided by Nextech, a leading tech firm in Vietnam.

    A Nikkei Asian Review report quoted the company as saying it hopes to make its service available in 20 cities in Vietnam and five other Southeast Asian markets, including the Philippines, Cambodia and Thailand, by the end of next year.

  • Vietnam’s peer-to-peer shopping and delivery platform gets South Korea license

    Vietnam’s peer-to-peer shopping and delivery platform gets South Korea license

    Vietnamese peer-to-peer delivery service XTayPro has been licensed in South Korea and expects this to be a stepping stone into East Asia. The app is a platform connecting people travelling by air with those who wish to buy or send products overseas.

    It creates a community of travelers who can make a little extra cash by buying and carrying stuff for others.

    Less than four months ago XTayPro had participated in the K-Startup Grand Challenge, a start-up accelerator program supported by the South Korean government.

    It has since signed 10 memoranda of understanding and letters of intent with funds and technology investment companies in South Korea.

    The K-Startup Grand Challenge has been held annually since 2016 to help start-ups grow and expand into Asian markets. It has so far supported 40 startups and solicited $26 million for them.

    At this year’s event Vietnam had 8 representatives who overcame 1,700 other start-ups from 100 countries to join a group of 80 in the 4-month Acceleration Program.

  • Snapdeal unveils ‘Brand Shield’ to help firms fight counterfeits

    Snapdeal unveils ‘Brand Shield’ to help firms fight counterfeits

    India’s e-commerce major Snapdeal Monday said it has launched ‘Brand Shield’, an anti-counterfeiting programme to help brands report counterfeit products being sold on its platform. The programme has been designed based on the inputs received from various brand owners, Snapdeal said in a statement.

    The programme is aimed at enabling a structured interaction between the platform and brands with regard to any intellectual property (IP) issues flagged by the brand, it added.

    Under Brand Shield, there will be an online, triple-check point process for brands to report any violation of their IP rights in terms of trademark, copyright, patent or concerns related to design.

    Brands can also list specific issues relating to unlawful copying of logos, brand images, design features and packaging by sellers listed on Snapdeal’s platform. Brands will be required to establish their ownership of the IP, identify the listing of concern through proof and state their claim of infringement.

    The statement said designated teams at Snapdeal will review every report of IP infringement submitted through Brand Shield. Upon verification of the accuracy and adequacy of the information provided by the brand, Snapdeal will take down the listing within one business day, it added.

    In continuation of current practice, Snapdeal will also continue to de-list products/ listings in compliance with any directions or orders passed by the courts and other relevant authorities, the statement said.

    “The issue of unscrupulous sellers misusing online marketplaces to sell fake goods is a global problem. Brand Shield is part of our ongoing initiatives to collaborate with brands owners to combat counterfeits and infringement offences,” a Snapdeal spokesperson said.

    Snapdeal, an online marketplace, acts as an intermediary connecting buyers and independent third party sellers. It also prohibits the sale of counterfeit products on its marketplace and any sellers found in violation are penalised as per the terms of agreements with the sellers, the statement said.

  • Start-ups in Korea challenged by overregulation and lack of exits

    Start-ups in Korea challenged by overregulation and lack of exits

    Park Jong-hwan is a Korean start-up success story. Twenty years ago, he was living in a basement room with a friend. In 2015, he became a legendary figure after selling his Kim Gisa navigation service to Kakao for 62.6 billion won ($56.0 million).

    The co-CEO of Kim Gisa Company, who now also runs co-working space company Work&All and a start-up accelerator, met with JoongAng Ilbo on Nov. 2 to discuss the challenges faced by start-ups in Korea.

    During the interview, he expressed the need for a change in government regulations.

    “It is difficult for a second Kim Gisa to emerge in this regulatory environment,” said Park. “When I meet start-ups these days, they don’t have the confidence to start new things but instead worry about facing legal or social problems.”

    “In an environment that first regards new ideas or businesses as illegal, start-ups lose confidence and creativity,” complained the Kim Gisa Company founder.

    Park has struggled with regulations and a negative attitude towards the industry since his early start-up years. When nominated for an award, it was almost rescinded as his service didn’t provide location services inside buildings. When Kakao tried to implement Kim Gisa’s technology to match rides, it was met with government opposition. The government’s strong stance against the growing carpool and ridesharing industries is an issue that particularly frustrates the start-up pioneer.

    Park, whose father is a veteran taxi driver of 40 years, said he understands the opposition from the taxi industry but explained that the carsharing service provides a better alternative for taxi drivers.

    “If a company-owned taxi driver opts to operate on a car-sharing platform, the driver will pay two to three percent in fees instead of the payment to the taxi company, leading to increased income,” said Park. “If we set aside a partial fee for every service and provide it to the taxi industry, as it is done in Australia, private taxi drivers will be less opposed.”

    “The government should be a mediator in the changing times,” he added. Park also argued that Korea’s business environment, which make start-ups mergers and acquisitions (M&A) difficult, pose as an unseen stumbling block for tech-based start-ups.

    A positive cycle of investment, growth, profit return and reinvestment can only occur when there are numerous success stories of start-up exits. But complex tax-related regulations, difficult conditions for initial public offerings and a negative attitude toward start-up exits all prevent M&A from taking place, said Park.

    “If start-ups grow and are bought out by large corporations, they then fall under new regulations as they are considered an affiliate company of a large corporation, even if they maintain the same workforce and business structure,” explained Park. “M&A can only be undertaken by large corporations with enough cash, but the reality is that it’s difficult because of such regulations.”

    The start-up founder lamented the lack of successful exits since Kim Gisa, “There hasn’t been a large-scale M&A in the three years since Kim Gisa,” he notes. “Promising local start-ups are leaving to countries abroad.”

    Park’s co-working sharing company aims to ease some of the burdens faced by start-ups and provide an accommodating environment in the country’s tech hub in Pangyo, Gyeonggi. While tech giants such as NHN, Nexon and AhnLab are able to afford the high rent in Pangyo, it is difficult for start-ups.

    Park argues that acquisition of start-ups by tech giants will become more common if start-ups settle down in Pangyo and create an environment similar to Silicon Valley.

    “I would like to provide a mentoring space to help others reduce the time spent on trial and error,” said Park. “I am looking at two to three start-ups in which to make investments.”

    The start-up mentor said that updating regulations that stand in the way of start-up development could help create new jobs – one of the main promises of the government.

    “When the number of start-ups increases and their businesses grow, there will naturally be more recruitment. The quality of jobs will increase as the number of them rises.”

  • Genting Malaysia will act to mitigate impact of higher casino licence fee, duties

    Genting Malaysia will act to mitigate impact of higher casino licence fee, duties

    Genting Malaysia Bhd is assessing the full implications of additional taxes announced in Budget 2019 and will take appropriate action to mitigate their impact. The action includes a review of its marketing expenditure as well as cost structure, it told the stock exchange.

    Genting Malaysia said it has been advised by the Finance Ministry that the annual casino licence fee will be revised from RM120 million to RM150 million and casino duties will be revised to up to 35% of gross collection.

    “The increase in casino duties represents a 10 percentage point increase over existing duty rates. The amendments will take effect from Jan 1, 2019,” it added.

    On Bursa Malaysia today, Genting Malaysia closed 3 sen or 0.83% higher at RM3.64 after hitting limit down on Monday.

  • Is it the end of cosmetics testing on animals for China?

    Is it the end of cosmetics testing on animals for China?

    It has been little more than a year since French cosmetics firm NARS’ controversial decision to sell its make-up in China caused a major rift in the global cruelty-free beauty scene.

    Fans of the brand and animal-lovers may soon be able to make peace. China is mooting a change in its policy of testing cosmetics on animals which could pave the way for cruelty-free brands to tap into the country’s US$33 billion cosmetics market.

    China’s National Institute for Food and Drug Control (NIFDC) recently issued a statement about its commitment to overhauling testing in the cosmetics industry and exploring viable alternatives to animal tests that are commonly used in countries where the practice is banned. The NIFDC emphasised that research, development, and the standardisation of testing methods that don’t use animals are its top priorities.

    Animal-protection organisations have been working closely with Chinese stakeholders to replace animal testing – which, for cosmetics alone, requires the use of an estimated 500,000 animals per year around the world – with more modern and predictive technologies.

    Notable progress has been made in recent months.

    Troy Seidle, vice-president of research and toxicology for Humane Society International, said that the recent NIFDC statement, published on its official WeChat account last week, is particularly promising.

    “It would be the first time the authority has publicised its view towards cosmetic alternatives with a future strategy so clearly articulated,” Seidle says. “Chinese authorities and stakeholders are actively working to embrace validated alternatives to strengthen international regulatory alignment and trade in the cosmetic sector.”

    China’s cosmetics testing laws require all foreign cosmetics products to be tested on animals before they can be sold in the country. In 2014, China began to soften its stance, allowing domestic cosmetic brands to sell products not for “special use” (make-up, skincare, and fragrances) without the need to test them on animals, but only so long as they adhered to strict standards and a list of pre-approved and tested ingredients. This also applied to foreign cosmetics brand that chose to manufacture products in China for sale locally.

    However, the 2014 rule change was not enough to convince organisations campaigning for cruelty-free cosmetics that selling in China was acceptable. They objected because companies that manufacture in China still face a risk that animals could be harmed via post-market testing – under which brands can have products taken off the shelves and tested on animals.

    In 2017, Nudestix was taken off the cruelty-free brands list of animal welfare website Cruelty-Free Kitty after the UK brand announced it would be producing its products domestically and selling in China.

    “Even though Nudestix does not test on animals, and has successfully bypassed any required pre-market animal testing in China, this is not enough for a “cruelty-free” claim,” Cruelty-Free Kitty author Suzana Rose wrote in a blog post last month. “Any brand that sells cosmetics in physical stores in China can potentially have their products taken down from the shelves and tested on animals.”

    Mette Knudsen, CEO of KnudsenCRC, a Shanghai-based consultancy that helps companies seeking to sell in China, wanted to help brands understand just how serious the risk was of cosmetics companies encountering these post-market tests, as they remain the “biggest barrier” to receiving cruelty-free certification.

    Usually, the post-market tests take place in response to a consumer complaint, though research commissioned by consultants Reach24H found that some Chinese municipal governments would sometimes implement mandatory post-market testing.

    Through research and talks with Chinese officials, laboratories, and UK charity Cruelty-Free International, KnudsenCRC determined that post-market testing rarely involved animals. This is because animal testing is expensive – it costs five to 10 times more than other safety assessments – and also time-consuming, taking about three months to complete.

    “If you have a product with a safety risk on the shelves, you obviously don’t have three months to see if it poses a safety risk or not; you have to react immediately,” Knudsen said.

    SEE ALSO : Makeup brand Nudestix enters China

    KnudsenCRC is teaming up with Cruelty-Free International on a pilot project designed to help cosmetics brands ensure no animal testing has occurred throughout their supply chain, and is working closely with authorities in Shanghai to eliminate the risk of post-market tests.

    “Although we have a lot of assurance from the Shanghai authorities,” Knudsen says, “it’s important to have the pilot because we need to be able to say this is a route we can recommend.” Knudsen says that many brands have already expressed interest and sent in applications for the pilot. Five brands will take part in the first stage of the project, due for completion in early spring 2019.

    It could take years to implement a complete shift away from cosmetics testing using animals. But some milestones towards ending the practice have already been attained.

    The Institute for In Vitro Sciences, a globally recognised organisation working to advance non-animal testing methods in China, announced this year that a lab it was working with in Hangzhou had officially adopted a test on artificial skin. The NIFDC has also adopted alternative tests for skin corrosion and eye irritation, as well as phytotoxicity (testing on plants), with more alternative methods to be introduced in the near future.

    “A crucial first step toward transitioning to non-animal testing approaches for cosmetics in China is for the national authority responsible for this sector to officially recognise the validated test methods as acceptable,” Seidle says. “Until this happens, companies and labs have little incentive to invest money or time to establish the infrastructures and competency necessary to carry out these tests on a regular basis, or for the industry as a whole to commission such tests within China.”

    There is pressure to move quickly. The 28-nation European Union became the first region to ban cosmetic testing on animals in 2013, prompting other countries to follow suit; and the California State Assembly has just passed a bill that will make it illegal for make-up or personal care brands tested on animals, or including ingredients that have been tested on animals, to be sold in the state. If the California governor signs the bill, the law could go into effect as soon as 2020.

    China faces a juggling act on consumer safety. Given numerous food and drug scandals in recent years, safety clearly remains the government’s top priority.

    “To balance consumer safety at a time when the market is developing at 500 kilometres an hour is a very difficult task. Getting the industry up to cruelty-free standards is not something they do overnight,” Knudsen says. “I’d say the minute they can make absolutely sure that consumer safety is not in danger, obviously they would allow these alternative methods.”

    It’s not just the government that is showing movement on the matter. A new generation of Chinese consumers is demanding higher levels of social responsibility from brands – the same consumers who lavish cash on their pets as if they were their children.

    “This is where the speed at which China is moving is a very good illustration because in just 10 years, pets are everywhere. It’s a completely new mindset,” Knudsen says. “Pets have definitely spurred an interest in everything in regards to cruelty-free. This is where you see a deeper and sincere interest in not harming animals.”

    Animal-rights organisations and beauty brands such as Lush have taken the opportunity to educate consumers about cruelty-free practices to inspire more ethical choices. Humane Society International provided funding to the Dalian Vshine Animal Protection Association in China to carry out an extensive public awareness campaign, as part of the organisation’s global #BeCrueltyFree effort. Its initiatives included a lecture tour of 50 universities in 34 provinces, awareness videos on animal testing and alternative technologies screened at shopping centres.

    While there are no official channels for purchasing cruelty-free products in China, such brands already have a presence on direct-to-consumer commerce platforms like Taobao and WeChat.

    There’s also little doubt that there are conscious Chinese shoppers seeking out animal-friendly beauty products through travel abroad as they become more educated about their options.

  • Vietnam’s U18 liquor sales ban impractical, experts say

    Vietnam’s U18 liquor sales ban impractical, experts say

    Experts say it will be difficult to implement an age-based ban on selling liquor, better options are needed.

    They are also saying that an emphasis on education and raising awareness will have greater impact in dealing with the problem of liquor abuse.

    A draft bill on the prevention of dangers of alcohol being compiled by the Ministry of Health proposes a number of prohibitions, including: promotion in any manner of liquor with alcohol content of 15 degrees or above; usage of positive phrases like “medicinal alcohol”, “nutritious alcohol” on product labels; advertising of alcohol during television prime time (6-9 p.m.); sale of alcohol to persons under 18; and sale of alcohol on the internet.

    Kieu Anh Vu of law firm KAV Lawyers said it was very necessary to bring legal measures against the dangers of alcohol, because the harm it was causing was indisputable.

    Vu said he supported the draft bill’s ban on alcohol consumption by government officials, civil servants, and employees during working hours or between shifts during the working day; by operators of motorized vehicles; and by people under 18.

    “These regulations are appropriate to ensure social order, safety and health of the community,” he said.

    However, Vu was concerned about how age checks would be carried out. “Will vendors have the right to check people’s age by looking at their identity cards, or just by asking questions?”

    Psychologist Nguyen An Chat, on the same page as Vu, also questioned how alcohol sellers could correctly verify the age of each individual.

    “Some 15 year olds look very mature while some 20 year olds can look underage. Would everyone wishing to purchase alcohol have to produce identity documents?” he wondered.

    An online right?

    Lawyer Vu Tien Vinh, director of Bao An Law Firm, said: “Buying alcohol over the Internet is more convenient than going to shops or supermarkets. If online sale is prohibited, people can and will continue to buy alcohol through traditional channels.

    Vinh said that in reality, it was too easy for buyers to obtain alcohol via traditional channels such as supermarkets and other dealers. When consumers can buy alcohol anytime, anywhere, the ban on online sales will not have much of an impact on its consumption, he said.

    “Detecting online transactions on the sale of alcohol to punish with fines is very difficult. It will not be hard for consumers to get around this regulation,” Vinh added.

    Sociologist Trinh Hoa Binh concurred, saying identification of illegal alcohol sales online was very hard to do.

    “Internet sales are the current trend. Will the prohibition of selling alcohol online go against this?” asked psychologist researcher Nguyen An Chat.

    Given the implementation difficulties, Binh proposed that instead of prohibitive regulations, authorities should instead start with education, build a set of cultural values for the modern Vietnamese society that discourages alcohol abuse.

    Chat supported this. He said education should begin at home and continue in schools so that each person was aware of the danger of drinking, so that people would exercise restraint and control their consumption.

    Psychologist Khuat Thu Hong said many countries have faced difficulties in implementing regulations prohibiting or restricting the sale/use of alcohol, but over time, strict compliance has become the norm.

    “In Vietnam, for these regulations to be implemented well, close monitoring and regular communication on the harms of alcohol will be essential for the people to understand and co-operate,” said Hong.

    In Vietnam, about 800 deaths per year are related to the use of alcohol, including beer. Almost 30 percent of social order disruption cases are also related to alcohol consumption.

    In 2017, Vietnamese people spent close to $4 billion on alcohol. The cost of dealing with alcohol-related traffic accidents was  estimated at about one percent of the GDP the same year.

    The alcohol industry contributes about VND50 trillion ($2.17 billion) to the state budget a year and provides about 220,000 jobs directly or indirectly.

  • Vietnam startups lack government support when it matters most

    Vietnam startups lack government support when it matters most

    Vietnamese startups do not get the financial support they need from the government at the discovery and validation stages.

    The lack of institutional support is one of major factors behind the failure of many startups to take off and thrive, experts say.

    “80-90 percent of startups fail in the early stages because they don’t have enough funding to move on to the expansion stage,” said Phan Hoang Lan, head of the Financial Planning Division under the Ministry of Science and Technology’s Market Development Department.

    Funding for startups mostly comes from venture capital funds, businesses and angel investors, not from the government, experts said at a recent conference.

    There are three periods in the development of a startup – discovery, validation and expansion, said Lan.

    It is in the first two periods that startups need funding the most, Lan said, adding that they end up raising money from family and friends or spending their own.

    This situation is very different from other countries like Singapore, where the government offers a variety of grants that can support up to 70 percent of a company’s costs.

    The U.S. News and World ranks Singapore as the 8th best country for starting a business in its 2018 Best Countries Rankings.

    Vietnam was ranked 52nd, behind other countries in Asia like Japan (2nd), South Korea (12th), Malaysia (34th), Thailand (38th) and the Philippines (45th).

    Since 2015, the government has only been investing in startups in the middle stage of their development, not in the earlier ones, said Lan, who is also the head researcher of the Vietnam-Finland Innovation Partnership Program (IPP2), which seeks to improve local support mechanisms for new innovative companies.

    “Government funding for startups should start in the early period. The government needs to be willing to accept failures in their investments, which could also bring a lot of benefits,” she said.

    IPP2 research shows that early government funding will reduce the “crowding out effects,” which is when the government’s involvement in a sector substantially affects private companies by reducing their investment spending.

    When a business has overcome the difficult period, it will no longer be dependent on the government’s capital and can source investment from other private companies.

    Echoing Lan, Nguyen Tri Hieu, an economist with over 30 years of experience working in the U.S. and Vietnam, said startups in Vietnam mostly receive funding from family and friends in their earlier stages, not from the government.

    In the U.S., startups can find financial support from the Small Business Administration (SBA), which has an annual budget approved by Congress to enable their establishment, Hieu said.

    “But this is not the case in Vietnam, where they get very limited government budget support in some cities and provinces like Hanoi, Ho Chi Minh City, Da Nang and Can Tho,” he said.

    Jouko Ahvenainen, CEO of digital finance firm Grow VC Group, affirmed the vital role of the government in supporting startups.

    The government needs to build an ecosystem to help local and international investors connect with entrepreneurs and help them expand internationally, he said.

    There should be good database of local startups so that investors can make their choices with greater ease, he added.

    The number of startups in Vietnam has seen an increasing trend in recent years, reaching 92 last year, a 45 percent increase over 2016, according to the Topica Founder Institute (TFI), which has an annual program that trains and connects startups with potential investors.

    These startups raised $291 million last year, up 42 percent from 2016, TFI said.

    Startups in Southeast Asia attracted $7.86 billion in total last year, a threefold plus increase over 2016, Tech in Asia data shows.

    Vietnam accounted for only 0.7 percent of that figure, lower than Thailand (2.2 percent), Malaysia (3.1) and Indonesia (22).

    Without government support, some potential economic development will be weakened, said economist Hieu.

    About 90 percent of Vietnamese businesses are of small and medium scale, but they create jobs for a majority of the labor force, he said.

    “The future of the economy depends on the success of startups.”