Tag: Customs

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Notification of the Department of Foreign Trade on Obtaining Import-Export Paperless SMART Licensing by Electronic Means

The Department of Foreign Trade (DFT) is pleased to announce a new notification aimed at streamlining the process of obtaining Import-Export Licenses through electronic means via the DFT SMART – 1 system. This innovative approach seeks to enhance efficiency and convenience for business operators while reducing the need for physical visits to government offices.

To initiate the process, business operators involved in importing or exporting goods falling within section 1 to 97 of the customs tariff must apply to the Department of Foreign Trade, Ministry of Commerce, to obtain a username and password for the DFT SMART – 1 system. By agreeing to the terms and conditions governing the use of the system, these operators can access a comprehensive one-stop-service platform for their licensing needs.

It is essential to highlight that the assigned username and password will serve as an electronic signature. Each login to the system will constitute an electronic signature, verifying the identity of the business operator. It is the responsibility of the operator to ensure the confidentiality and security of their login credentials. All transactions conducted under the account will be considered binding, making the operator accountable for their actions. In situations where power of attorney is granted, the authorized attorney must also be registered as a user of the system, ensuring a transparent and efficient process.

To ensure compliance and facilitate future audits, business operators are required to retain all supporting evidence and power of attorney documents submitted with Import-Export License requests for a minimum of 10 years from the date of filing. This requirement contributes to maintaining transparency and facilitating the verification of transactions, if necessary.

In the event that users encounter any challenges while utilizing the DFT SMART – 1 system, the Department of Foreign Trade encourages them to reach out for prompt assistance and guidance. The Department of Foreign Trade is committed to providing comprehensive support to business operators and ensuring a smooth transition to the new electronic process.

This updated notification signifies a significant advancement in import-export licensing procedures. By eliminating the need for physical visits to the Department of Foreign Trade or the appointment of attorneys for the application process, the DFT SMART – 1 system offers a seamless and efficient solution. It represents a significant step forward in digital transformation, enhancing the overall business environment and promoting economic growth.

The Department of Foreign Trade is confident that this paperless licensing system will contribute to a more streamlined and transparent import-export process, benefiting both business operators and the nation’s economy as a whole.

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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Digital Devices to Be Used to Locate and Track the Whereabouts of Goods under the Authorities of the Customs Department

Digital devices can be used to transmit information on the whereabouts of shipments of goods under the control of the Customs Department. GPS technology, for example, can be used to accurately track the shipment’s position in real-time, allowing for precise updates that can be monitored from a remote location. This technology provides customs officials with more efficient tracking capabilities and can reduce the physical time and labor associated with tracking shipments. Furthermore, digital devices can be used to manage customs paperwork and store valuable data that can be accessed for future reference. This enables customs officials to quickly process documents and identify discrepancies that could delay shipment clearance. Several countries are using blockchain technology. For example, the United Arab Emirates is using blockchain to track international shipments and China has started using blockchain-powered technology.

As for Thailand, for the first time, the Ministry of Finance has recently issued a ministerial regulation regarding controlling the transportation of goods held in customs custody which will affect cross-border transportation, transportation to the bonded warehouse or duty-free zone, transportation of goods between ports and depots, multimodal transportation and other types of transportation as prescribed by the Director of Customs Department.

The control of this ministerial regulation was divided into two types, namely controlling the transportation of goods with a specific device such as GPS and controlling the transportation of goods with digital technology such as blockchain, which can be explained below.

Controlling the transportation of goods with a specific device is about using equipment indicated on the package or cargo or using other equipment which may be different according to the container or vehicle of transportation.  Meanwhile, controlling the transportation of goods with digital technology is about using technology equipment to control, follow and verify the transportation of goods in customs custody. During transporting of goods, a customer has a right to access the information in order to track the status of transportation.

For using these services, a customer such as an importer needs to declare the intention of using this service and pay a service fee before customs clearance. Furthermore, this ministerial regulation was issued to control and monitor the transportation of goods in customs custody and also prevent avoidance of payment by modern technology.

Author: Panisa Suwanmatajarn – Managing Partner, The Legal Co., Ltd.

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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.

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Controlling of Exportation, Importation and Transit of Trademark and Copyright Infringing Goods

Following publication of the Announcement of Ministry of Commerce on Prohibition of Import, Export and Transit through the Kingdom of Trademark and Copyright Infringing Goods B.E.2565 (2022), Thai Customs Department (the “Customs”) has recently issued an Announcement in regard to Import, Export, and Transit Restriction on Trademark and Copyright Infringing Goods (the “Announcement on Trademark and Copyright Infringing Goods Restriction”) to lay down its rules, procedures and requirements. This allows trademark/copyright owners or agents to submit information of their registered trademark/copyright (the “Information”) to the Customs for recordation so that it can be used by the Enforcement Division of Customs to identify counterfeits among the ongoing exported goods, imported goods and goods in transit.

The key principles of submission of the Information are as follows:

  • The right-holders or the agents who submit the Information must either be a Thai national residing in Thailand or a Thai juristic person. In the case where the right holders or the agents are foreigners, they must appoint and authorize a representative who meets the aforementioned criteria.
  • The Information will be valid for 3 years or until the expiration of the underlying trademark/copyright protection whichever comes first. However, the validity can be extended for another 3 years or until the expiration of rights, by submitting a request to the Enforcement Division of Customs.
  • If the Information is charged, a notification of such change shall be submitted to the Enforcement Division of Customs as well.

When export, import, transit goods are subjected to reasonable suspicion of possibility of infringing trademark/copyright based on the Information submitted to the Customs, the Customs officers will proceed as follows:

  • Customs officers will detain goods in question and accordingly inform both the exporter/importer/transit operator and the right-holders/agents who submitted the Information.
  • In the case where the exporter/importer/ transit operator admits on the offence, Customs officers will prepare for a report on seizing of the goods or arresting the alleged offender and collaborate with the Legal Affair Division to proceed for further proceedings in accordance with its regulations.
  • In the case where the exporter/importer/transit operator would like to oppose, the exporter/importer/ transit operator can submit a petition together with supporting evidence to challenge the detention decision within 3 days after receiving a notification from the Customs officer in which the Customs officer shall notify this opposition to the right-holders/agents. If the exporter/importer/ transit operator cannot be contacted, goods in question are deemed to be infringing trademark/copyright according to the Information submitted by the right holders/agents.
  • The right-holders/agents will have 3 days to file a confirmation and petition to prosecute the case to the Customs officers. The Customs officer will prepare for a report on seizing of the goods or arresting the alleged offender and collaborate with the Legal Affair Division to proceed for further proceedings in accordance with its regulations. The right holders/agents is able to request for the extension of time to submit such confirmation and petition to prosecute the case under specified conditions but the extension of time shall not be more than 10 days from the date of receipt of notification from the Customs officers.
happy woman shopping online at home

In addition, if the goods are reasonably suspected to be the trademark/copyright infringing goods, the right holders/agents are able to request for inspection of such goods before the goods passing through custom clearance for exportation/importation. In this case, the Customs officers will detain goods in question, notify the exporter/importer/transit operator and the right holders/agents, who are also required to attend the inspection which should be held within 24 hours after receiving a notification.

These proactive measures offer trademark/copyright owners a cost and time efficient way to prevent the infringing goods for passing though the boarder and ensuring a quality customs control of their intellectual property rights. Overall, the Announcement on Trademark and Copyright Infringing Goods Restriction could be considered as a promising effort from the Customs to keep up with international standard in terms of tackling counterfeit and pirated goods at border crossing points as well as to provide security to the rights of trademark/copyright owners.

Author: Panisa Suwanmatajarn – Managing Partner, The Legal Co., Ltd.

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On 4 January 2022, The Cabinet has approved in principle the Draft Announcement of the Ministry of Commerce on the Stipulation of Trademark and Copyright Infringement Goods are Prohibited to be Exported, Imported, and Transited Through the Kingdom B.E.  .… (“the Draft Announcement of Trademark and Copyright Infringement Goods”).

business cargo cargo container city

The purpose of this Announcement of Trademark and Copyright Infringement Goods is to improve the mechanisms to prohibit exports, imports, as well as transits through the kingdom of goods infringing trademark and copyright in accordance with the current situation which seeks to prevent intellectual property infringement at border crossings more effectively. Also, this is consistent with relevant current situations, laws, and international obligations, i.e. the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the Reginal Comprehensive Economic Partnership (RCEP). The main points of this Announcement of Trademark and Copyright Infringement Goods are as follows:

  • Trademark and copyright infringement goods shall be prohibited from exporting, importing, and transiting through the kingdom, except in the case of carry-on items that are not unreasonably large amount and not for the purpose of commercial use.
  • The owner of a trademark or copyright is able to inform information on its trademark or copyright to a customs officer in accordance with the rules, procedure, and conditions prescribed by the Customs Department for the avail of inspection of goods which is under reasonable consideration that it infringes trademark or copyright of such owner.

Therefore, the Customs Department is able to take steps to improve the related procedures to comply with relevant international agreements as well as facilitate the operators who act in good faith to be able to pass customs clearance quickly.