ASEAN Regulatory Brief: Myanmar’s Internet, SIM Card Regulation, and Thailand’s Business Collateral Act

In this edition of ASEAN Regulatory Brief, ASEAN Briefing takes a closer look at regulations over Myanmar’s internet and mobile SIM cards, as well as Thailand’s new Business Collateral Act.

Myanmar: Internet usage increases; online laws unclear

Internet usage in Myanmar rose to 300 percent on November 8, 2015, when the country hosted its general election according to the Ministry of Communications and Information Technology. While the government has stated that it has no plans to switch off online access, civic groups are concerned about internet shutdowns during the country’s reform process. The last major communications shutdown occurred during the Saffron Revolution in 2007. While government officials have stated that there is no intention to shut down communication, the government retains the right to suspend telecom services in certain situations – basically when an emergency situation arises to operate for public interest. The ministry also further states that communication may be intercepted to obtain necessary information as per government requests.

The Myanmar Center for Responsible Business stated that the government should not disrupt or shut down communication services unless for the most extreme or clearly defined emergencies. The government however has not described these in any law. This vague rule can allow the government to impose shutdowns as it pleases. In the Freedom on the Net 2015 report published by the US based think-tank Freedom House, Myanmar had a score of 63 which is considered the ‘least free’ in internet freedom. Three of the telecom companies that were asked, stated that they would adhere to any directives in accordance to the laws with the country.

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Myanmar: Government likely to regulate unregistered SIM cards in coming months

In Ericsson’s Q3 2015 Mobility Report, 87 million new mobile subscribers were added, with nearly 6 percent coming from Myanmar. The country has around 36 million mobile subscribers up from 5 million the previous quarter. While the government has taken steps to modernize the telecom market, unregistered SIM cards remain a problem and the government is likely to ban these in the near term. SIMs are easily available by vendors in mobile shops and on streets. Customers are supposed to register their purchases but fail to do. A telecommunications department official stated that the government will educate customers and will give a time to register their SIMs again, otherwise it will deactivate SIMs that are not registered.

However, concerns have been raised as operators have stated that not every person has ID cards which will hamper them from registering. The government also plans on offering advances services such as mobile money and banking. These features will be unavailable for unregistered customers. The government further stated that unregistered SIMs could be used for crimes while opposing groups have stated that if the provide IDs, privacy of individuals will be hard to protect. While these concerns are valid, most countries require a customer to register their SIM. Myanmar’s government is likely to pass legislation in this regard soon.

Thailand: Government passes Business Collateral Act

The government passed the Business Collateral Act (BCA) on 5 November, and its provisions are set to come into effect on 1 July, 2016. The BCA aims to establish a legal system that allows borrowers to use their assets as collateral to secure their loans. This will thus allow greater access to credit, allowing for more investment in projects.

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Key points of the BCA are:

• The borrower retains the right to possess the collateral and can use the collateral for commercial use for the duration of the secured period unless otherwise agreed.
• The written agreement evidencing the secured transaction must be registered at the Department of Business Development, Ministry of Commerce.
• If a borrower defaults, the creditor may take title of the collateral or sell it at a public auction.
• The BCA introduces out-of-court enforcement mechanisms, including the appointment of a receiver when the collateral is a business venture or a project.
• Borrowers can be any natural or legal person, whereas creditors must have a license under the Financial Institution Businesses Act B.E. 2551 (2008).
• Projects, businesses, accounts receivable, inventory, immovable assets used directly in development projects, intellectual property, and other assets prescribed by ministerial regulation can be used as collateral.

Prior to the BCA, borrowers could not retain possession of movable assets which were pledged as collateral for the duration of the security period. The new act is expected to help small and medium-sized businesses to access more funds as they will be able to use their assets as collateral. The government expects loans to such businesses to grow by 10 percent next year. The developments are likely to improve the country’s system of secured transactions.

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