Vehicle Imports Under Trade Agreement

Importers and distributors in Cambodia may import new vehicles from China by claiming preferential tariff treatment under ASEAN – China Free Trade Agreement (ACFTA) with presenting a valid Certificate of Origin (Form E). This practice creates opportunities for unauthorised distributors to import vehicles from unreliable sources in China for sale in the Cambodian market. In some cases, these vehicles are originally designed for the domestic Chinese market only, and yet are exported to Cambodia without alignment with local regulatory, safety, or market requirements.  

Furthermore, there have been instances where vehicles are exported to Cambodia after being declared as used vehicles in the exporting country, while subsequently being registered as new vehicles in the importing country. This practice is used to facilitate export in cases where the exporter does not hold license to export new vehicles from China. 

According to the latest policy issued by the Government of the People’s Republic of China in November 2025, effective from 1 January 2026, trading companies will no longer be permitted to export vehicles. Under the new regulation, any vehicle with a registration date of less than 180 days will not be eligible for an export license unless the vehicle manufacturer or a formally authorised entity issues an official After-Sales Service Confirmation bearing the factory seal. 

This policy tightens export controls by restricting vehicle exports to manufacturers and their officially authorised export partners only, effectively excluding independent trading companies from the export of vehicles. The objective of the policy is to strengthen after-sales accountability, ensure product quality and safety, and prevent market distortions caused by unauthorised exports. 

The current practice of preferential tariff treatment under ACFTA, with some gaps in export and import management, has caused concerns on the automotive sector in Cambodia. First, authorised distributors face an uneven competitive environment. Companies that invest in official distribution agreements, regulatory compliance, homologation, after-sales infrastructure, and consumer protection are placed at a disadvantage compared to unauthorised importers who can access preferential tariffs without meeting equivalent obligations. This distorts market competition and weakens incentives for long-term, compliant investment. 

Second, the influx of vehicles imported through parallel or unauthorised channels creates uncertainty for business planning and brand development. Vehicles not designed for the Cambodian market may lack compatibility with local safety standards, emissions requirements, and warranty systems, increasing reputational risk for authorised brands and undermining consumer confidence in the automotive market as a whole. 

Finally, the persistence of such practices discourages further investment in higher-value activities, including local assembly, skills development, and technology transfer. Investors may delay or reconsider expansion plans due to concerns over policy predictability, market fairness, and the effective enforcement of regulatory standards.