Tag: Consumer Protection

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Department of Intellectual Property’s Ongoing Efforts to Tackle Intellectual Property Infringements

Introduction

Thailand’s status on the United States Trade Representative’s (USTR) Watch List has prompted the Department of Intellectual Property (DIP) to take significant measures to minimize intellectual property (IP) infringements in the country. While recognizing Thailand’s progress in enhancing IP protection and enforcement, the DIP has implemented various initiatives throughout 2023. This article highlights the key actions undertaken by the DIP, including educational campaigns, collaboration with e-commerce platforms, and enforcement efforts.

Educating and Raising Awareness

In an effort to promote understanding and awareness of IP protections, the DIP has organized a series of seminars and conferences targeted at different stakeholders. These events catered to small and medium-sized businesses, lawyers, intellectual property owners, and the general public. Topics covered during these engagements encompassed a wide range of subjects, such as “Seminars on Promoting Locals and Community Products with IP, Creating Sustainable Trade Opportunities,” “How to manage IP, to allow Thai Inventions and Innovations into the Global Market,” and “Digital Transformation and IP.” Additionally, the DIP developed straightforward guidelines, concise articles, and visually appealing graphics to engage teenagers and encourage learning about IP protections. These educational materials were disseminated through various platforms, including popular social media platforms like Facebook, Instagram, and TikTok.

Coordination with E-Commerce Platforms

In an effort to combat piracy and strengthen IP protection, the DIP has collaborated with prominent e-commerce platforms, namely Lazada, Shopee, and TikTok Shop. Through these partnerships, the DIP has established direct channels for reporting IP infringements while actively removing thousands of copyright-infringing items from these platforms. This collaboration has proven instrumental in curbing IP violations and safeguarding the rights of content creators.

black android smartphone on top of white book

Enforcement Actions

To address the pressing issue of IP infringement, the DIP, in collaboration with the International Security Operations Command (ISOC), formed a “Working Group to Suppress IP Violations.” This dedicated task force has demonstrated its commitment to tackling IP infringement cases in Thailand. In the year 2022, the Working Group successfully arrested and prosecuted over 5,827 individuals involved in IP infringement, resulting in the seizure of 2,308,176 infringing items. These actions amounted to a total damage value of 1,058,201,923 THB. Although the statistical report for 2023 is not yet available, as of August 2023, the DIP reported the seizure of over 1,253,529 infringing items, with a total damage value of 605,813,800 THB.

Conclusion

The Department of Intellectual Property’s unwavering commitment to minimizing intellectual property infringements in Thailand is evident through its multifaceted approach. By actively engaging the public through educational campaigns, collaborating with e-commerce platforms, and enforcing stringent measures, the DIP strives to create a culture of respect for intellectual property rights. These proactive measures not only enhance public understanding of IP but also serve as a deterrent for future infringements, fostering an environment conducive to the growth and development of innovation in Thailand.

Author: Panisa Suwanmatajarn, Managing Partner.

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Streamlining Processes: Electronic Submission for Bonded Warehouses, Free Zones, and Free Zone Operations

Introduction: This article discusses the implementation of electronic means for the submission of applications related to bonded warehouses, free zones, and free zone operations. This initiative aims to expedite and streamline the process, adhering to the authority granted by Sections 112, 136, and 146 of the Customs Act B.E. 2560 (2017). The Customs Department drafts the notification outlining the procedures and requirements for electronic submission, ensuring the correctness and completeness of applications and supporting documents.

Application and Documentation Submission: To establish bonded warehouses, apply for operational licenses, and notify changes in information related to customs-free zones, the following guidelines must be adhered to:

  • Electronic Submission: All requests for permission and notifications must be processed electronically, in accordance with the criteria, methods, and conditions specified in the proclamation.
  • Required Documents: Applications and supporting documents must be provided in PDF format, with a resolution of no less than 300 DPI.

Electronic Application Submission: To facilitate a seamless electronic submission process, the following steps must be followed:

  • Registration: Applicants must register at the National Single Window System using a digital signature certified by a certification authority.
  • Submission Procedure: Applications and documents should be submitted through the “System for Receiving Applications and Issuing Licenses for Secure Warehouses, Ports, Bonded Warehouses, and Customs-Free Zones,” following the prescribed procedures and usage guidelines.
  • Fee Payment: Applicants are required to pay the necessary fees as per the law and provide proof of payment along with the application and supporting documents.

Application Review: The Customs Department will meticulously review all submitted applications and documents to ensure correctness and completeness, in line with the criteria and conditions specified in the proclamation.Conclusion: The implementation of electronic submission for applications related to bonded warehouses, free zones, and free zone operations is a significant step toward streamlining and expediting the process. By embracing the digital platform, the Customs Department aims to enhance efficiency and accuracy while ensuring compliance with relevant regulations. This initiative is expected to bring about a more seamless and user-friendly experience for individuals and businesses involved in these operations within customs-free zones.

Author: Panisa Suwanmatajarn, Managing Partner.

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Strengthening Consumer Rights: An In-depth Look at the Defective Products Bill

Introduction:

The Defective Products Bill emerges as a crucial legislative initiative in the ever-changing landscape of consumerism. This Defective Products Bill aims to fortify the rights of consumers who face the risk of purchasing defective products. By extending the protection provided by the existing framework outlined in the Civil and Commercial Code, the bill seeks to ensure that buyers are shielded beyond the point of product delivery. Through its focus on sales contracts, liability, and consumer remedies, the Defective Products Bill promises comprehensive protection against the pitfalls of defective goods.

Acknowledging Consumer Vulnerabilities:

The Defective Products Bill is grounded in the recognition of the inherent vulnerabilities faced by consumers in the marketplace. Currently, the Civil and Commercial Code protects buyers only until the moment of product delivery, shifting the burden of proof regarding defects to the buyer afterward. This proposed bill aims to rectify this imbalance by extending the seller’s liability to a period of six months post-purchase. This temporal extension acknowledges the possibility of latent defects that may surface over time and places a significant responsibility on sellers to ensure the enduring quality of their products.

Empowering Buyers:

One of the pivotal aspects of the Defective Products Bill is the empowerment it bestows upon buyers in terms of their rights and options. In the event of a defective product, buyers gain the authority to demand redress through various channels. These options include requesting the seller to repair the product, seeking a replacement, negotiating a discount, or even terminating the contract entirely. This multi-faceted approach caters to the diverse needs and expectations of consumers, ensuring that they are not unduly burdened by the consequences of a defective purchase.

happy woman shopping online at home

Recognizing Consequential Damages:

The Defective Products Bill goes beyond the immediate realm of product exchange and considers the broader impact of defects on consumers’ lives. By entitling buyers to demand compensation for any consequential damages resulting from a defective product, the Defective Products Bill recognizes the ripple effect that substandard goods can have on various aspects of a consumer’s life. This encompassing approach ensures that the legislation is not solely concerned with the physical product but also with the overall well-being of the consumers.

Balancing Interests:

In addition to the rights afforded to buyers, the Defective Products Bill introduces a mechanism for sellers to protect their interests. In the event of a contract termination initiated by the buyers, the Defective Products Bill allows sellers to demand depreciation costs. This provision strikes a balance between consumer protection and the need for sellers to mitigate potential financial losses, fostering a fair and equitable resolution to defective product disputes.

Tailored Approach for Different Products:

The Defective Products Bill exhibits a nuanced understanding of the diverse nature of products by delineating specific procedures for different product categories. For example, it outlines distinct processes for handling defects in motor vehicles and electronics, recognizing the unique challenges posed by each product type. This specificity enhances the bill’s practicality and underscores its commitment to addressing the intricacies of modern consumer markets.

woman wearing black sweater holding fleece cloth

Current stage of the legislation:

The legislation is currently undergoing public hearings, marking a pivotal stage before it advances to the cabinet’s review. During this phase, the Bill is subject to potential amendments to better align with the needs and values of Thai society. Upon approval by the cabinet, the Bill will then proceed to the Parliament for further consideration and final approval.

Conclusion:

The Defective Products Bill represents a commendable stride toward fortifying consumer rights in the face of potential product defects. By extending the sellers’ liability, empowering buyers with a range of options, and considering the broader ramifications of defective products, the Defective Products Bill establishes a robust framework for safeguarding consumers in an evolving marketplace. Striking a delicate balance between buyer protection and seller interests, this legislation heralds a new era of accountability and fairness in the realm of consumer transactions.

Author: Panisa Suwanmatajarn, Managing Partner.

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Tax Exempted to Increase the Use of Electric Cars and Electric Motorcycles

The Ministry of Finance has proposed the draft decree in accordance with the Revenue Code regarding Corporate Income Tax Exemption for Subsidies under Measures to Support the Use of Electric Cars and Electric Motorcycles. The motive of this draft decree originated from the cabinet resolutions regarding the measures for increasing the use of electric cars and electric motorcycles by subsidy to the domestic automotive industry operators who manufacture and assemble automobiles and battery electric vehicles (BEV) including pickups and motorcycles. The draft aim to provide incentives for those who are subsidized by exempting corporate income tax to reduce the cost of BEVs, resulting in higher demand and more trust from investors, leading to an increase in electric cars and motorcycles, hiring, and labor skills.

white car charging

Before proposing this draft decree, the Ministry of Finance has released two announcements of the Excise Department as follows:

  1. The announcement regarding terms, conditions, and methods to exercise rights and measures to support the use of electric cars and electric motorcycles; The operators must meet the qualifications such as having the manufacturer located in the freezone, free-trade zone, or being the officially appointed distributors, etc.
  2. The announcement regarding the terms and conditions for subsidy as follows:
    • The government will provide a subsidy of 70,000 baht for cars with a retail price of fewer than 2 million bath and battery size of 10 kWh to less than 30 kWh and subsidy of 150,000 baht for cars with a battery size of 30 kWh or more. In exchange to the subsidy for compensation of imports of Completely Built-Up (CBU) electric battery car, industrial operators obtaining such subsidy are required to build any car models by 2024.
    • The government will provide a subsidy of 150,000 baht for BEV pickup trucks with a battery size of 30 kWh or more.
    • The government will provide a subsidy of 18,000 for motorcycles with a retail price of less than 150,000 bath. That must be domestically produced, completely knock down (CKD) and completely built-up (CBU). In exchange to the subsidy for compensation of imports of completely built-up (CBU) electric battery motorcycles, industrial operators obtaining such subsidy are required to build any motorcycle models by 2024.
black car in a garage

According to the subsidy above, the Ministry of Finance then proposed this draft decree to exempt tax from the income that limited company and limited partnership receive from the subsidy. It is an exempt income tax that must not be included in the calculation of net profit for corporate income tax purposes. However, such limited company and limited partnership must comply with Excise Department’s rules, otherwise the income from such subsidy must be included in tax’s calculation.

The draft decree will be effective from the date of publication in the Official Gazette onwards.

Author: Ms. Panisa Suwanmatajarn, Managing Director.

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Changes in Corporate Law: Easier to Operate Businesses in Thailand

The Amendment to the Civil and Commercial Code Act (No. 23), B.E. 2565 (2022) (“CCC Amendment Act“), came into force on February 7th, 2566 (2023). It amended various sections of the Partnerships and Companies Title of the Civil and Commercial Code in order to reduce the difficulty to operate a business, be up-to-date, and increase the country’s competitiveness. Significant amendments are such as:

  1. Referring to Section 1016, before the CCC Amendment Act, the registrations of partnerships or companies must be made at the Registration Office as prescribed by the Minister responsible for the registration of partnerships and companies. By virtue of the CCC Amendment Act, the registrations of partnerships or companies can also be made at the Registration Office where the principal business office of the partnership or company is situated.
  2. Referring to Section 1097, before the CCC Amendment Act, any three or more persons may promote and form a limited company by subscribing their names to a memorandum and otherwise complying with the provisions of the Civil and Commercial Code. By virtue of the CCC Amendment Act, any two or more persons are now enough to promote and form a limited company by the same procedures before the CCC Amendment Act;
  3. Referring to Section 1099, by virtue of the CCC Amendment Act, if the registration of the company is not made within three years from the date of registration of the Memorandum of Association, such the Memorandum of Association is invalid;
  4. Referring to Section 1162/1, by virtue of the CCC Amendment Act, a Board of Directors meeting can be possibly held electronically rather than only an on-site meeting except it is prohibited by the Articles of Association;
  5. Referring to Section 1128, before the CCC Amendment Act, every share certificate shall be signed by at least one of the directors. By virtue of the CCC Amendment Act, every share certificate shall now be signed by at least one of the directors and also bear the seal of the company (if any).
  6. Referring to Section 1175, before the CCC Amendment Act, a notice of summoning of every general meeting shall be published at least once in a local newspaper. By the virtue of the CCC Amendment Act, a notice of summoning of every general meeting is no longer required to be published in a local newspaper anymore unless a company has any share certificate to bearer then such a company is obliged to publish such a notice in a local newspaper or electronically according to the rules and procedures prescribed in the ministerial regulations.
  7. Referring to Section 1201 paragraph 4, before the CCC Amendment Act, distribution of dividends shall be made within one month from the date of the resolution of the general meeting or of the board of directors. By virtue of the CCC Amendment Act, distribution of dividends shall be completely made within one month from the date of the resolution of the general meeting or of the board of directors.
  8. Referring to Part 9: Amalgamation of Limited Companies. The key change in this part is that before the CCC Amendment Act, a limited company formed by the amalgamation of two or more companies will be a new company, howsoever by virtue of the CCC Amendment Act, the company amalgamation will result in any of the following:
    • Amalgamate to a new company and the amalgamated companies cease to be a juristic person. (A+B=C)
    • Amalgamate to one of the amalgamated companies, one company retains the juristic person’s status and the other one ceases to be a juristic person. (A+B=A or B)
low angle photography of high rise building

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Thailand – New Rules for Company and Partnership

The Civil and Commercial Code Amendment Act (No. 23) B.E. 2565 (2022) will come into force and effect on 16 February 2023. The objectives of this amendment are to reduce career barriers and increase competitiveness of the country.

Key changes are as follows:

close up photo of a wooden gavel
SectionsAmendments
Section 1097: Any three or more persons may, by subscribing their names to a memorandum and otherwise complying with the provisions of this Civil and Commercial Code, promote and form a limited companyTwo (2) persons may  form a limited company
Enacting Section 1162/1Directors are able to remotely attend meetings via video conference
Section 1237: A limited company may also be dissolved by the court on the following grounds: (4) the numbers of shareholders are reduced to less than threeMinimized shareholders from less than three (3) to only one person
Section 1238: Amalgamation and merger1) After amalgamating, a new company may only exist and others are dissolved or 2) A merging company exists and others are dissolved
Enacting Section 1239/1 A new mechanism was established to deal with shareholders who do not agree with amalgamation/merger
Section 1240: The company must publish once at least in a local newspaper and send to all creditors known to the company a notice indicating the particulars of the proposed amalgamation and requiring the creditors to present, within sixty days from the date of the notice, any objections they may have to it. If no objection is raised during such period, none is deemed to exist. If an objection is raised by any creditor, the company may not proceed with the amalgamation unless it has satisfied the claim or given security for it.Protecting the company’s creditors and minimizing the time to make the process faster
Enacting Section 1240/1Holding a shareholders’ meeting shall be completed within six (6) months from the amalgamation
Section 1243: The new company is entitled to the rights and is subject to the liabilities of the amalgamated companies.Revised wording to be more specific in regard to rights and liabilities
Section 1246/1: A registered partnership or limited partnership having at least three partners may be transformed into a limited company upon having consent of all partners and upon following actions being taken: (1) notifying, in writing, the partners’ consent to  transformation of a partnership into a limited company to the Registrar within fourteen days as from the date of all partners’ consent; (2) publishing once at least in a local newspaper and sending to all creditors known to the partnership a notice, in writing, indicating particulars of the proposed transformation of the partnership into a company and requiring the creditors to present, within thirty days as from the date of the notice, any objections they may have to it. If an objection is raised by any creditor, the partnership may not proceed with transformation unless it has satisfied the claim or given security for itAll partners, instead of having at least three partners, must agree  to transform a registered partnership into a limited company.

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Thailand – New Regulation over the Defective Products

Nowadays consumers may face problems with defective products which the consumers find out about them later as the products never show any malfunction at the time of delivery. A draft Liability of Defective Product Act (“Act”), which was approved in principle by the cabinet on 22 November 2022, has been proposed to keep up with the problems and for the benefit of protecting the rights of consumers.

The draft Act will cover manufacturing for sale, hiring for manufacturing for sale and ordering or importing products into the kingdom for sale. This also includes a seller or a hire-purchaser where a manufacturer or an importer of such products cannot be identified. The products fallen under this draft Act are in the categories of electric and electronic types of equipment, vehicles, motorcycles, including other products prescribed by the Royal Decree.

This draft Act is requiring for the business operators to be liable for defect in products that cause depreciation expenses or deterioration of products within 2 years from the date of delivery regardless of whether the business operators are aware of the defect of the products or not. In case that the products are defective within 1 year from the delivery date, it is presumed that the products are defective at the time of delivery.

Moreover, the business operators are responsible for any defect in the case that the business operators install or assemble the products or where the consumers assemble the products or install the same according to the manual provided by the business operators, but the manual does not specify how to install or assemble the products correctly or completely.

The draft Act prescribes the rights of consumers against the business operators who are liable for defect as follows:

  1. Claiming the business operators to repair the products;
  2. Asking the business operators to exchange the products;
  3. Asking for a price reduction; and
  4. Terminating the agreement.

If there is an agreement in advance excluding liabilities of the business operators for any defect, such agreement is voided.

Under this draft Act, the statute of limitation for claiming under this draft Act is 2 years from the date that the defect is found or business operators refuse to be responsible for the defect. However, it does not extinguish the consumer’s rights to demand the business operators being liable for such defect by virtue of rights under other laws.

This draft Act will need to be processed through several steps before becoming into effect. It will possibly take a few years.

Hire Purchase Agreement for Vehicle and Motorcycle is Now Regulated

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Hire Purchase Agreement for Vehicle and Motorcycle is Now Regulated

On 12 October 2022, the Committee on Contract (“Committee”) set up by virtue of the Consumer Protection Act B.E. 2522 (1979) (“Act”) issued an announcement regarding updated rules, conditions and particulars of vehicle and motorcycle hire purchase agreement (“Announcement”), which is a contract-controlled business under the Act, in order to protect consumers’ rights from being taken advantage by business operators. This Announcement will become effective after 90 days from the date of publication, which will be on 10 January 2023.

This Announcement only applies to a hire purchase agreement for a vehicle or motorcycle (“vehicle”) between a business operator and a consumer. The vehicle must be used solely for personal purposes, not for transportation or commercial purposes. The following are examples of requirements that must be specified in the agreement which have changed from the previous announcement issued in 2018.

  1. The hire purchase interest will be charged in the effective interest rate method of no more than 10% per year for a new car, no more than 15% per year for a used car and up to 20% per year for a motorcycle.
  2. When the hire purchase provider terminates the agreement because of the hirer’s failure to pay debts in three consecutive installments or by any legitimate reason and hire purchase provider proceeds to sell the vehicle at private or public auction, the hire purchase provider must notify the hirer and the guarantor (if any) in writing at least thirty days in advance so that the hirer can exercise the right to purchase such vehicle within twenty days at the price of outstanding debt under the agreement. If the hirer wishes to do so and pay off all debts at once, the hire purchase provider must provide the hirer with the discount. However, if the hirer ignores or fails to exercise such rights, the guarantor may do so instead. The hirer and guarantor have the right to assign this right to any third party.
  3. The debt as mentioned above shall refer to and include the default payment, the installment that has not yet been due and any fee or charge spent by the hire purchase provider to collect hire purchase installment(s) that has been due prior to the termination of the agreement.
  4. The Hire Purchase provider must notify the hirer and the guarantor (if any) of the details of the seller, the date and time of the auction, and the selling price at least fifteen days before the auction date. Once the vehicle has been sold at auction, the hire purchase provider shall deduct the net proceeds of the auction from the debt owed by the hirer, any surplus shall be refunded to the hirer. However, if the net proceeds are less than the debt, the hirer shall be responsible for the remaining amount of such debt. Furthermore, the hire purchase provider must notify the hirer within fifteen days from the date the vehicle is sold with all details of the auction and the amount of debt as well.
man inside vehicle in front of opened door

In light of this, the aforementioned is only a partial requirement of the agreement that the hire Purchase provider must follow. There are still many details that the hire purchaser should know in order to prepare a legally binding agreement.  Any business operator who fails to deliver the agreement containing terms and conditions to the consumer in accordance with the Announcement shall be liable to imprisonment for a term not exceeding one year or to a fine not exceeding one hundred thousand Baht or both. Plus, the consumer should also be aware of this Announcement because it directly affects his or her rights. If a consumer sees that any business operator fails to comply with the Announcement, a consumer can file a complaint to Consumer Protection Board respectively.