MoEA recommends new clauses for fronting
The Ministry of Economic Affairs (MoEA) has recommended that new clauses dealing with fronting be added to the Penal Code of Bhutan.
Fronting is currently not categorized as a criminal offence under the Penal Code of Bhutan or any other law. The penalty for engaging in fronting is a mere cancellation of the license and immediate closure of the business.
Education Minister Norbu Wangchuk said fronting is a crime and it happens mainly due to leasing business licences.
If fronting is covered in the Penal Code of Bhutan, it will be considered a crime and a person will be guilty of the offence of fronting if he or she leases, hires or permits a business as well as contract license registered in his or her name to another person.
Panbang MP Dorji Wangdi said out of three recommendations the ministry had made, only the amendment of fronting in the Penal Code of Bhutan was important. He said everything could be changed based on it.
Another recommendation was to revise the procedures for Liberation of Trade and Services License in Phuntsholing, Gelephu and Samdrupongkhar towns. The ministry found that this procedure was inappropriate and not effective as fronting is prevalent in all other dzongkhags.
A revised procedure will be issued and implemented in all the dzongkhags.
The MoEA allows the transfer of license from parents to children only if they produce certification of a court of law.
The recommendation to provide new clauses for fronting in the penal code will be forwarded to the legislative committee for further discussion and approval.
The word fronting was coined in Bhutan. It means unlicensed person coming in front to operate a business licensed to another person.
The 7th session of the National Assembly ( NA) has resolved to amend the relevant laws to define fronting as a criminal offence. The MoEA was mandated to carry out a study in consultation with relevant agencies and to submit a report to the house.
The MoEA submitted three recommendations based on their findings and observations with relevant agencies during the 8th session of the NA.
The three recommendations was to amend section 3 of 1995 rule, provide new clauses for fronting in the Penal Code of Bhutan and to revise the procedure for liberalization of Trade and Services Licenses in Phuntsholing, Gelephu and Samdrupongkhar towns.