Investment Protection Law with Russia Set to Pass Senate

A new law protecting investment from Russia and Belarus will help Cambodia diversify its export markets as well as encourage more investments from Russia and Eastern Europe, Senate spokesman Mam Bun Neang said yesterday.

He made the comments as the Senate prepares to pass the draft law on trade and investment protection between Cambodia and Russia and Belarus this morning.

Mr. Bun Neang said the law will not only reassure investors from Russia and Belarus but also other foreign investors running businesses in the Kingdom. “All investors who operate a business in Cambodia are protected by law so that they can invest more capital in Cambodia,” Mr. Bun Neang said.

He added that Cambodia has political stability, security, peace and a high annual rate of economic growth. These assets are attracting investors and these investments will generate more jobs for Cambodian workers, he said.

Chea Socheat, director of the Commerce Ministry’s department for Europe, the Middle East and Africa, said that the draft law will build more confidence among  Russian and other investors in Cambodia. “There will be more and more Russian investors coming to Cambodia after the draft law on trade and investment protection is approved and comes into force,” Mr. Socheat said.

Cambodia’s major exports to Russia are footwear, rice and textiles, he said. Russian exports to Cambodia range from paper and fertilizer to machinery and medicine, he added.

Economist Kang Chan Dararoath said the investment protection law is welcome, but added that it would be good if money invested from Russia is clean, alluding to speculation that Russian businesspeople have laundered money in Cambodia.

“We already have an investment protection law,” the economist noted, saying it was working effectively. He also said that investors are driven by the need to make a profit rather than hospitable laws. Building trust, however, is critical, he said.

Russian Minister of Communications and Mass Media Nikolay Nikiforov said in a meeting with Commerce Minster Sun Chanthol during a visit to Cambodia in July that Russia businesses are looking to invest in agriculture, food processing and tourism here. Following a request from Mr. Chanthol, Russia will consider giving Cambodia duty and quota free status for 3,000 export products in order to increase bilateral trade.

Bilateral trade between Cambodia and Russia fell from about $60.40 million in 2013 to $48.10 million last year. Cambodian exports to Russia totaled only about $10 million last year, according to figures from the Commerce Ministry.

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