Logo of Phnom Penh Post newspaper Phnom Penh Post - Kamsab removed from ports as Kingdom braces for loss of preferential trade access

Kamsab removed from ports as Kingdom braces for loss of preferential trade access

Content image - Phnom Penh Post
A transport truck prepares to receive shipping containers at the Sihanoukville Autonomous Port on the Kingdom’s coast. Heng Chivoan

Kamsab removed from ports as Kingdom braces for loss of preferential trade access

The Cambodian government has begun a series of reforms intended to strengthen economic independence and promote business in the Kingdom, as they prepare for the possible loss of preferential trade access to the EU and US in the coming months.

Prime Minister Hun Sen on Friday announced one such measure, with the removal of the Kampuchea Shipping Agency and Brokers (Kamsab) – a state agency established in 1979 to facilitate trading by ship – officers from ports.

The announcement was made one day after the prime minister signed a sub-decree to terminate Camcontrol operations from all border checkpoints.

The prime minister said the actions were taken to reduce the difficulties and complexities in doing business and to facilitate the import and export of Cambodian goods to international markets.

“The removal of Kamsab is in part a response to investors who are coming to do business in Cambodia and for the survival of the national economy and its competitiveness,” he said.

In the past, Kamsab earned about $2 million per year, of which some $500,000 went to the national budget, while the remaining amount was used for the unit’s own expenditure, according to Hun Sen.

Kamsab is headquartered in Phnom Penh, with branches in Preah Sihanouk province, Koh Kong province’s Sre Ambel district and at Okhna Mong Port. The agency is under the supervision of two ministries – the Ministry of Economy and Finance and the Ministry of Public Works and Transport.

The prime minister said the disbanding of Kamsab will not result in staff losing their jobs as they will be transferred to the Ministry of Public Works and Transport.

This type of state agency currently exists in only two Asean countries – Cambodia and Myanmar – according to the prime minister.

Although the removal of Kamsab will not significantly contribute to cost reduction for investors, it is a positive sign for the private sector where high electricity prices remain a problem.

Cambodia Freight Forwarders Association (Camffa) president Sin Chanthy said the prime minister’s initiative will help the private sector and will further reduce the cost of goods transportation in Cambodia.

“The decision to remove Kamsab will further serve to encourage and attract more investment into Cambodia,” Chanthy said, adding that he previously heard a lot of complaints from investors about the high cost of Cambodian transportation compared to neighbouring countries.

Recently, the EU decided to re-impose tariffs on rice imports from Cambodia to protect European farmers’ interests. The tariffs will start at €175 ($199.51) per tonne in the first year, before being reduced slightly in the second and third years.

The Kingdom is also at risk of losing the EU’s Everything But Arms (EBA) preferential scheme and the US’ Generalised System of Preferences.

Chanthy argued that the Kingdom’s economy and Cambodians’ incomes continue to increase, therefore the loss of trade preferences from the international community is inevitable.

“The decision made by the government to help cut production costs at this time is the correct direction, done at the correct time as Cambodia has to strengthen and prepare itself for possible EBA removal by the EU."

“But, while the government takes measures, the private sector should try to develop their products and services to have a competitive advantage over other countries,” he said.

Centre for Policy Studies director Chan Sophal said the removal of Kamsab and other unnecessary institutions is the right thing to do as there are currently too many authorities in the Kingdom responsible for overlapping tasks.

He said that normally, the General Department of Customs and Excise is tasked with the inspection of goods transported across air, land and water borders, so the removal will not negatively impact the inspection of goods.

“[The removal of Kamsab] is a good thing. It helps facilitate imports and exports at the ports due to the fact that we [the department] have plenty of authority already and Kamsab is unnecessary,” he said.

He added that the government should help the private sector with more measures, especially reducing electricity prices for important enterprises such as rice millers.

Shortly after the EU decided to impose its duty on rice imported from Cambodia, China agreed to increase its rice import quota from Cambodia by 100,000 tonnes more per year, bring its total to 400,000 tonnes this year.

If Cambodia can meet Chinese demand, then this market alone would account for 63 per cent of Cambodian rice sold abroad, based on last year’s 626,225 tonnes in exports.

MOST VIEWED

  • ‘Pesticide-laden cucumbers’ kill two, poison 150 in Banteay Meanchey

    At least two youths have died and 243 others are being treated for vomiting, diarrhoea, breathing difficulties, dizziness and muscle weakness after they ate cucumbers suspected to consist of pesticides. The incident happened on Saturday, said Banteay Meanchey provincial police chief Ath Khem. He told The

  • Three dead, 13 injured in collapse at Siem Reap pagoda

    At least three people were killed and more than 10 others injured on Monday after a dining hall under construction collapsed at Prasat Kokchak pagoda in Kokchak commune, Siem Reap province. Provincial police chief Tith Narong said Military Police, soldiers and local volunteers had successfully recovered 16

  • China Unicom enters Cambodia

    China Unicom, the country’s largest telecoms operator, has expanded into Cambodia to build optical telecommunication pathways in the Kingdom as part of the Belt and Road Initiative (BRI). The Hong Kong-listed company officially opened its China Unicom (Cambodia) subsidiary on Monday to become the

  • PP-SHV Expressway on track for completion in early 2023

    The construction of the $1.9 billion Phnom Penh-Sihanoukville Expressway, which broke ground at the end of March, is on track to be completed by early 2023, Ministry of Public Works and Transport spokesman Vasim Sorya said on Monday. The 190km high-speed highway linking the capital to the

  • Dealer charged with artefact smuggling

    Antiquities dealer Douglas Latchford has been charged by the Southern District of New York with several counts of smuggling looted Cambodian artefacts. US attorney for the Southern District of New York Geoffey Berman and special agent in charge of the New York field office of

  • Kingdom’s domestic milk still cannot compete with imports

    Price competition and a lack of confidence by consumers are the main reasons the dairy market cannot compete with imports, said domestic milk producers. The large displays of imported fresh milk at the Kingdom’s supermarkets present a cumbersome obstacle for local producers, they said.