All business fronting cases will be treated as criminal offences and penalised beginning January next year.

The Parliament classified the Act of business fronting as a criminal offence in the Penal Code (Amendment) Act of Bhutan 2021(PCAAB) earlier this year. Section 284 (G) of the Act defines fronting as leasing or subleasing, hiring or otherwise permitting another person to use or operate one’s license unless otherwise permitted by the law or policies.

If fronting occurs between Bhutanese nationals, the defendants will be charged for violation of the first conviction and petty misdemeanour and cancellation of license for the second conviction.

It would be a felony of the fourth degree or value-based sentencing, whichever is higher, if the fronting takes place between Bhutanese and a non-Bhutanese and between non-Bhutanese license holders.

The economic affairs ministry issued a notification on fronting in July this year to caution the businesses to refrain from engaging in fronting and asked for immediate termination of such arrangements.

The regional trade offices in the country are creating awareness in dzongkhags for the smooth implementation of the Act.

Thimphu regional office began the programme for the eight western dzongkhags from Paro on September 1.

Fifty selected business firms attended the programme. The business owners were briefed on new laws on fronting and ethical business practices, including impacts of fronting on the growth of the business sector and in preventing business people from facing criminal charges.

According to Department of Trade’s regional director, Sangay Phuntsho, the programme sought cooperation and discouraged people from engaging in illegal activities.

Fronting is prevalent even to these days. Some business owners at the meeting said that many had been doing business on rental and leased licenses for years. A few were skeptical about their stocks and the economic condition of those people who had been operating business on hired license.

Sangay Phuntsho said that there were around four months before the new law came into effect and those operating on leased licenses could apply for a new one.

Citing examples about the inconveniences caused during the implementation of the tobacco Act in the past, trade officers said that ignorance of the law was not accepted. “Educating the public on new laws is essential.”

Almost all the business owners were of the view that restriction on bar licenses was the main reason fronting was still thriving. They said that if the government could lift the restriction, those who cannot operate the business will never avail of the permit.

Officials said that their concerns were recorded and would be shared with the ministry for implementation and necessary amendments.