A/HRC/45/51 widespread informal lending.66 The Cambodia Microfinance Association, which represents more than 100 regulated lenders, indicated that in May 2020, a total of 196,307 customers had applied for restructuring of their loans, with 180,301 of those approved. 67 The sum involved was around $817 million. The reasons for the restructuring were primarily linked to the impact of the COVID-19 pandemic on the socioeconomic situation of the Cambodian people. It is noted that loan restructuring is also occurring in banks that are under the regulation of the National Bank of Cambodia. 70. The Special Rapporteur is concerned that for many families, loan payments now represent a threat to their future, their savings and even their land. On 28 April 2020, representatives of 141 urban and rural communities submitted petitions to the Government, requesting that it limit the impact of the COVID-19 pandemic on urban and rural poor communities, including by easing or suspending debts to microfinance institutions, banks and private moneylenders. Such microfinance debt may leave Cambodians landless, with lenders using their land as collateral.68 Land is vital to the livelihoods and identity of the Cambodian population. It is an important source of income and security. As the Committee on the Elimination of Discrimination against Women noted in its concluding observations in 2019, rural Cambodian women face particular challenges with microfinancing. 69 71. Adding to the challenges to the economy, the European Union indicated its intent to partially withdraw free access for Cambodian goods to the European Union market, owing to the country’s serious and systematic violations of human rights. 70 A period of enhanced engagement preceded the European Commission’s decision to withdraw some of the trade preferences, allowing for dialogue between the Government and the European Union. 72. As one in a group of least-developed countries, Cambodia enjoys the most preferential trade arrangement with the European Union under the “Everything But Arms” tariff, which offers quota and duty-free access to the European Union’s single market for all goods except arms. Cambodia currently exports goods worth more than 5 billion euros per year to the European Union, primarily from its garment sector. Almost a fifth of those sales are scheduled to be affected by the partial withdrawal of preferences, which are planned to take effect in August 2020.71 73. The impact on the garment and footwear sectors is yet to be seen given that the intimation of withdrawal of some trade preferences by the European Union was contemporaneous with the global spread of COVID-19. Responses to the pandemic in Cambodian export destination countries, including in Europe, were swift and dramatic. Many overseas businesses sought to withdraw from contractual agreements as textiles could no longer be sold; other businesses withdrew from discussions on future contracts. International trade almost ceased as a result of entry restrictions, and textile manufacturing was replaced 66 67 68 69 70 71 for the Promotion and Defense of Human Rights (LICADHO), “Collateral damage: land loss and abuses in Cambodia’s microfinance sector”, August 2019). According to a recent report issued by two local non-governmental organizations, microloan growth has outpaced income growth in the country. The penetration rate of microfinance loans in some provinces exceeds 80 per cent of households, and many borrowers take additional formal or informal loans to pay back other debts. (Cambodian League for the Promotion and Defense of Human Rights (LICADHO), “Collateral damage: land loss and abuses in Cambodia’s microfinance sector”, August 2019). Sorn Sarath, “Microfinance: $817 million of loans approved for restructure”, Khmer Times, 8 June 2020. LICADHO, “Collateral damage: land loss and abuses in Cambodia’s microfinance sector”, August 2019. CEDAW/C/KHM/CO/6, para. 40. https://trade.ec.europa.eu/doclib/docs/2020/february/tradoc_158631.pdf. European Commission, document C(2020) 673 final of 12 February 2020 amending Annexes II and IV to Regulation (EU) No 978/2012 as regards the temporary withdrawal of the arrangements referred to in Article 1(2) of Regulation (EU) No. 978/2012 in respect of certain products originating in Cambodia. Available at https://ec.europa.eu/transparency/regdoc/rep/3/2020/EN/C-2020-673-F1-ENMAIN-PART-1.PDF. On 18 March 2020, the Council of the European Union indicated no intention to raise an objection (https://data.consilium.europa.eu/doc/document/ST-6843-2020-REV-3/en/pdf). The European Parliament has also been supportive of the European Commission process. 15