Tag: e-transaction

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Brief Notification for the Digital Platform Services

The Notification of the Electronic Transactions Commission regarding the Nature of the Digital Platform Services Requiring a Notification of the Brief List (“Notification”) was published in the Royal Gazette on 18 August 2023 by virtue of Section 8 of the Royal Decree on the Operation of Digital Platform Service Business that are Subject to Prior Notification B.E. 2565 (2022) (“Royal Decree”) and it will be enforced on 21 August 2023 onwards.

This Notification is aimed to prescribe details of the qualification of the digital platform service providers under Section 8 of the Royal Decree  which is  (1) earning a yearly gross income in Thailand of not more than 1,800,000 Baht as a natural person, or not more than50,000,000 Baht as a juristic person, and (2) Digital platform service providers with no more than 5,000 monthly average users (“Digital Platform Service Providers”) to notify information listed below (a brief list) to ETDA prior to operating their platforms:

  • Platform operator’s information, i.e., natural person’s name-surname or juristic person’s name, national identification number or juristic person registration number, address, juristic person’s accounting period, and contact channel which can be URL or application.
  • Digital Platform Service Providers’ information, i.e., name, type, and channel of the Digital Platform Service Providers.
  • Digital Platform Service Providers’ point of contact in Thailand.

In the Notification, we noticed that there are additional qualifications of the Digital Platform Service Providers specified therein which we view that those are in conflict with the principle of definition of the term “digital platform services” and Section 8 of the Royal Decree as it shall not include a digital platform service that is intended for offering goods or services of a single digital platform service operator or an affiliated company which is an agent of such operator, irrespective of whether the goods or services are offered to third persons or to affiliated companies.

Furthermore, the aforementioned Digital Platform Service Providers must notify the ETDA of the following information on an annual basis, i.e., (1) within 60 days of the end of the calendar year in the case of a natural person’s platform operator or (2) at the end of the fiscal year in the case of a juristic person platform operator:

  • Value of transactions incurred on the service platforms (if any)
  • Gross income from providing the service platform in Thailand (if any)

This Notification is only applicable to smaller size Digital Platform Service Providers. However, Digital Platform Service Providers in general are still obligated to comply with. The sanction for failure to notify the required information would be subject to the competent official issuing of an order prohibiting the Digital Platform Service Providers from providing the digital platform services.

Author: Panisa Suwanmatajarn, Managing Partner.

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Details of Terms and Conditions for the Digital Platform Service Businesses

On 21 August 2023, the Royal Decree on the Operation of Digital Platform Service Businesses that are Subject to Prior Notification B.E. 2565 (2022) (“Royal Decree”) has come into force. In this regard, Section 17 of the Royal Degree requires the digital platform service and the search engine Providers that meet certain requirements to prepare and publish the terms and conditions with minimum information as prescribed in the Royal Decree (“Terms and Conditions”). The Royal Decree itself, however, did not provide details or clarifications in regard to such minimum requirements. As such, the Electronic Transaction Development Agency (“ETDA”) has issued a Notification of ETDA number Thor.Por.Dor. 4/2566 on the Details on the Publication of Terms and Conditions of Services for Users’ Knowledge (“Notification”).

person marking check on opened book
Photo by Pixabay on Pexels.com

The Notification consisted of various details important for the digital platform service providers to comply with. The key provisions can be categorized as provisions that further clarify Section 17 of the Royal Decree and provisions that assign additional obligations to the digital platform service providers. Some of the key provisions are summarized as follows:

  1. The Terms and Conditions must be in Thai, easily understandable by the platform’s users, made easy in terms of accessibility, and composed of enough details for the user to make an informed decision whether to use the platform or not. The digital platform service providers must also notify the ETDA and provide evidence showing that they have published the Terms and Conditions for the users’ knowledge.
  2. Where the digital platform service providers treat each of the products, services, or contents of the business users differently, the digital platform service providers must clearly specify the differences in the Terms and Conditions.
  3. In addition to the prescribed minimum requirement in Section 17 of the Royal Decree, the digital platform service providers that meet the requirement of Section 16 (1) of the Royal Decree must also prescribe an additional item, such as an additional distribution channel, the ownership or entitlement in intellectual property after entering into the Terms and Conditions, ancillary or complementary goods and services that is offered to the users before the transaction is concluded, conditions for suspending or terminating the provision of services, etc.
  4. The Notification further provides an example, easing the digital platform service providers to comply with Section 17 of the Royal Decree, that is, the example of algorithms required to be included in the Terms and Conditions are given, for example, price, keywords, user demographic, quality of products, quality of seller, users’ review towards the goods or services.  
  5. Where Section 17 (8) of the Royal Decree requires the digital platform service providers to include in the Terms and Conditions, “an actions to be taken to illegal goods, services, or contents”, the Royal Decree further clarifies that the digital platform service providers must specify if the processes, measures, or mechanism used by the digital platform service providers in determining if a good, service, or contents are illegal or not, are done by an algorithm decision-making, or by human review. The Notification further requires the digital platform service providers to have in place a notice-and-takedown mechanism and details thereof.
man in black suit sitting on chair beside buildings

Please be reminded that the aforementioned information is only a brief detail prescribed under the Notification. Terms and Conditions to be prepared in accordance with the Notification are said to be of complex structures and details. Digital platform service providers must pay attention to the details to avoid any incompliance with the law.

Author: Panisa Suwanmatajarn, Managing Partner.

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ETDA’s Recommendation for an Online Merchant Management System with Cash on Delivery Service

The Electronic Development Transactions Agency (ETDA) has recently proposed a draft of ICT Standards for Electronic Transactions, specifically recommending guidelines for an online merchant management system that offers cash-on-delivery (COD) services. The purpose of this recommendation is to establish consistent practices for service providers in this field, addressing emerging challenges and mitigating potential risks associated with COD transactions. Ultimately, the goal is to enhance customer confidence and trust in the process of buying and selling products through COD.

The recommendation is structured into four main sections: scope, definition, introduction of COD, and conditions for online merchant delivery management services. Key points from each section are summarized as follows:

  • Authentication of COD online merchant service providers are required to authenticate online merchants before allowing them to activate their services on the platform. This includes notifying the merchants about the authentication criteria and the information that needs to be collected, such as their names, identification numbers, and bank account numbers, to be in compliance with relevant laws.
  • Online merchant delivery information must be maintained. Such information includes tracking numbers and recipient details. Additionally, any unusual behavior exhibited by online merchant service providers must be monitored.
laptop technology ipad tablet
  • Provisions of recipient information on parcel cover sheets
    • Information on parcel cover sheets: service providers are obligated to include clear and visible information on the parcel cover sheets. This includes the service provider’s names, contact information, websites or communication channels, and details related to recipients’ support.
    • Information for assisting recipients: service providers must provide information on how the system assists recipients. This includes details on scenarios where the system can assist, channels for reporting problems, and any evidence that recipients may need to submit for investigation.
  • Monitoring and addressing online merchant delivery behavior to prevent scams related to COD transactions: service providers must continuously monitor and track incidents involving online merchants. They should establish procedures for addressing suspicious behavior, which include the following steps:
    • Suspected scammers: if more than 10% of recipients report unexpected deliveries or parcels, they did not purchase from a specific merchant. In this case, the service providers must permanently terminate that merchant’s account.
    • Non-compliant items: if the items received by recipients do not meet the specifications as specified, service providers should notify the online merchants and request information to investigate and resolve the issue for both the merchants and the recipients.
    • Incident recording for future analysis: service providers are required to maintain records of incidents involving online merchant behaviors, which can be analyzed in the future for further insights.
    • Gathering evidence and reporting wrongdoings: if evidence related to scams or other wrongdoings is gathered, service providers should report the findings to the relevant authorities.

It is important to note that the above conditions and procedures are recommendations with no legal enforcement. They serve as guidance for service providers in the industry to establish best practices and maintain a high level of service quality and protection to the customers.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Effectiveness of Chat Messages and Thumbs-Up Emojis as Approval Signals

Thailand is now entering the digital era, and electronic transactions are more common than ever. Thai people, in particular those who lend and borrow money, frequently enter into loan agreements using chat messages or even a thumbs-up emoji via online platforms. It is arguable whether chat messages via these internet communications will be deemed as evidence in a lawsuit for prosecution and legal action.  

According to Civil and Commercial Code (“CCC”), Section 653 paragraph one, “A loan of money for a sum exceeding two thousand baht in capital is not enforceable by action unless there is some written evidence of the loan signed by the borrower,” so the loan agreement requires written evidence signed by the borrower to enforce in legal prosecution. Considering the CCC alone, chat messages or a thumps-up emoji seem to be an issue as no signature is affixed.

person holding white android smartphone

Without a signature in this regard, will a loan agreement not be formed? Electronic Transaction Act B.E. 2544 (the “Act”) enables online conversations to be used as proof of loan agreements under Sections 7, 8, and 9. Section 7 states that information shall not be denied legal effect and enforceability solely because it is in the form of a data message. Section 8 states that, subject to Section 9, if the law requires that any transaction be made in writing or evidenced by writing, and if the information is generated in the form of a data message that is accessible and usable for subsequent reference without its meaning being altered, it shall be deemed that such information is already made in writing or evidenced by writing. Section 9 specifies that when a person enters a signature in any writing, it is regarded that a data message carries a signature if it is identifiable and demonstrable, and such a method is reliable and meets the requirements of Section 9.  

photo of man in white hoodie standing near brown wall while using his smartphone

As a result, online conversations between the borrower and the lender are deemed as signed and written evidence. Even the Supreme Court recently rendered a judgment in accordance with the Act, as stated in the judgement number 6757/2560, in which the plaintiff sent an online chat message releasing the defendant from the debt, this case had been rendered in accordance with the Act that the debt release via online message deemed as written evidence of debt releasing. Thus, debt under the loan agreement was extinguished. Accordingly, the thumps-up should be interpreted as it is.  

According to the aforementioned Act and the subsequent judgment, it is clear that Thai law encourages electronic transactions, and even the civil court accepts the existence of electronic transactions, indicating an important beginning of the evolution of usage and interpretation to be more modern and efficient.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand – 2023 Updates on Company Registration

Currently, company registration can be done via 2 channels, one being the normal regime (physically submitting applications at the Department of Business Development (“DBD”)) and the other through the online system, DBD e-Registration. As people may not be familiar with the online registration system yet, this memo is then intended to give you a summary of steps for online company registration, and a summarized differences between the 2 channels of company registration.

Steps for Company Incorporation via e-Registration System shall be as follows:

  1. Name Reservation: Any of the promoters may reserve the company name on DBD’s website in which English and Thai names are required.
  2. Username and Account Creation:
    • Account creation can be done via DBD e-Registration’s website.
    • After accepting the terms and conditions, the system would proceed to the authentication and verification page. Fill in, submit the necessary information, and complete the authentication and verification process.
  3. Authentication and Verification Process: Users’ authentication and verification can be done by either of the following methods:
    • e-KYC;
    • Self-authenticating with the officials at DBD;
    • Giving power to other person to submit authentication on behalf of the user; or
    • Using personal certificates (a document certifying identity of an individual for the purposes of digital signature, encryption, and decryption) instead of self-authenticating with the officials.
    • Once the authentication and verification process is completed, an activation link will be provided to the user’s email. Click the link to activate the user.
  4. Memorandum of Association Registration and Company Incorporation: Registration of Memorandum of Association (“MoA”) can be done via the e-Registration system, by filling in the necessary information and attaching relevant documents (e.g. picture file of the company’s seal, minutes of company incorporation meeting, map, etc.)
  5. Documents Status Tracking: The status of documents review can be tracked through the online system.
  6. e-Signatures:
    • Once the application has been approved, the applicant will be notified by email, and promoters can proceed with the application signing.
    • The applications can be electronically signed using the e-Signature portal. Each promoter shall log-in with their own account and e-sign the document by clicking and confirming with an OTP passcode.
  7. Documents Confirmation and Fees Payment:
    • The application that has been signed by the promoters shall appear for confirmation.
    • Once the application is confirmed, the applicant can proceed to the fees payment page.
    • The applicant can either pay the fees through transfer, debit or credit card.
    • Once the payment is completed, the proof of registration (i.e. company affidavit) will be available for download as a PDF file.

Differences

TopicPhysical Registratione-Registration
1. Registration FeeThe normal regime registration shall be of the normal registration rate, which is:     Totaling: Baht 5,500  

Remark: The fee for amendment of MOA is Baht 500		Generally, the fee for online registration is the same as physical registration. However, there is a Ministry of Commerce (“MoC”)’s Notification providing discounts on the registration fee for a certain period.  

From January 1st, 2021, until December 31st, 2023, the online registration fee for company registration is discounted by 50%, totaling Baht 2,750

Remark: The fee for amendment of MOA is also discounted, totaling Baht 250
2. TimelineRegistration and incorporation can be completed in 1 day2-5 Working days, depending on the number of other applications submitted at the time
3. QueuingApplicants can either:
– Walk-in; or
– Reserve physical queue through MoC’s website

Remark: In case of walk-in, the process of registration may not be done in 1 day		No queuing is required for e-Registration
4. Amendment of Company Registration ApplicationsIn the event that there is a typo or mistake on the submitted applications, the said applications shall either be replaced with a new form, or amended and signed by the promotersThe amendment of applications can be done through the e-Registration system itself, which is easier and faster than the normal regime

In summary, the e-Registration system is intended to aid businesses’ incorporation process, including negating the necessity of back-and-forth documents signing process, revision of applications, and others. Moreover, the fee for company incorporation via the e-Registration system is discounted. Should you have any questions, or require our assistance, feel free to contact us.  

Author: Panisa Suwanmatajarn, Managing Partner.

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Digital Transformation in Enforcement Measures of Capital Market

As the laws under the supervision of the Securities and Exchange Commission (“SEC”) do not respond to practical, (1) the technological changes, as some procedures cannot be fully utilized electronically, (2) the legal proceedings are not fully effective under current law, and (3) the penalties are inconsistent with statutory penalties and the legal supervision is unclear and inconsistent. Thus, they resulted in the following law amendments, including transforming services into digital systems, increasing the country’s competitiveness, and ensuring that the public has easy access. The following regulations have been approved in principle and recently acknowledged by the cabinet:

  1. The bill of the Securities and Exchange Act as amended No. .. B.E. …. (“Item 1”)
  2. The bill of the Derivatives Act as amended No. .. B.E. …. (“Item 2”)
  3. The bill of the Trust for Transactions in Capital Market Act B.E. 2550 (2007) as amended No. .. B.E. …. (“Item 3”)
  4. The bill of the Emergency Decree on Digital Asset Business B.E. 2561 (2018) as amended No. .. B.E. …. (“Item 4”)

The essence of these 4 amendments is to guarantee the use of appropriate technology for proceeding with the various transactions in the capital market, creating clarity in supervision, and increasing efficiency in law enforcement. The subjects of the four bills mentioned above that have been amended and stipulated are as follows:

  1. Increasing support for electronic processes in capital markets (e.g. requesting permission, reporting, submitting, or filing documents shall be performed only via electronic channels.)
  2. Specifying additional witness protection in inspection and gathering the evidence by competent officials according to the agreement between the Witness Protection Office and the Securities and Exchange Commission under the same guidelines as the Witness Protection Act B.E. 2546 (2003).

Further amendment of each bill are as follows:

  1. Amending the authority of the competent officer of the office of the Securities and Exchange Commission to have the power as same as that of an inquiry officer so that such officer will be able to investigate certain offenses in Item 1, Item 2, and Item 4.
  2. Amending the penalties in Item 1 and Item 2.
  3. Amending the supervision of secondary market securities business operators and authorities related to the securities business in Item 1.
  4. Improving the fundraising system and supervision of auditors and capital market professionals in Item 1.
  5. Adding the principles regarding collecting fees for business operation, professional practice, and other services as approved by the Securities and Exchange Commission in Item 1.
  6. Improving the supervision of derivatives business operators, secondary markets, and related organizations and persons in Item 2.

Also, the cabinet has acknowledged in regard to the preparation of the subordinate legislation which will be issued by virtue of the aforementioned 4 bills as proposed by the Ministry of Finance.

In conclusion, these four bills will support the promotion of the digital capital market. Investors and business operators will be easier to access the capital market. At the same time, the authorities will be easier to monitor business operators in the secondary market and capital market.

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Embracing the Use of Digital ID Card

Thai people can now access government services with their digital ID. Thanks to Section 14 of the Digital Public Service Act B.E. 2565 (2022). To use this service, you are required to present a physical ID card to the registrar at any registration division of district office for verifying the information and then you need to download the application namely “D. DOPA”. The following is required to do:

  1. Select “self-registration” and accept the terms and conditions of the service;
  2. Submit a front and back of a physical ID card, verify the information and confirm;
  3. Take a selfie of your full face and confirm;
  4. Set the password; and
  5. Consent to upload the information and fill out a consent form under Personal Data Protection Act B.E. 2562(2019.).
code projected over woman

The digital ID card is a useful and innovative way to verify a person’s identity quickly and securely. It eliminates the need for physical identification cards, which can easily be lost or stolen and keeps personal information safe from unauthorized access. With the digital ID card, users can authenticate their identity with a simple scan of their phones or other devices using biometric authentication such as facial recognition or fingerprint scanning. The system is also secure and reliable with data stored in an encrypted format that prevents tampering or manipulation. With this technology, businesses can quickly and efficiently verify one’s identity and streamline their operations. Additionally, the digital ID card can be used to improve customer services by providing quick and seamless access to information.

Author: Panisa Suwanmatajarn, Managing Partner.

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Digital Platform Service Operation to Be Regulated

With the rise of modern technology and the spread of COVID-19, businesses are increasingly turning to online platforms as a way to operate without needing to travel. These platforms cover a wide range of services, such as online marketplaces, social commerce and food delivery. In general, terms of use imposed by service operators should be transparent with their users. They should provide clear information about their policies, pricing, data usage and other relevant information. They should also give users the opportunity to make decisions about how their data is used and how they are served by the service. This will ensure that users are aware of how their data is being used and that they are not being taken advantage of.

The regulation of digital platform services to be imposed by the government should be based on a set of fair and transparent rules that are applicable to all parties. These rules should ensure the safety of users, ensure data privacy and security, protect against anti-competitive practices and ensure that the user experience is not compromised. Additionally, government should take an active role in monitoring the digital platform services and enforcing these regulations, as well as providing a framework for dispute resolution between users, companies and government.

The regulation should also consider the innovative nature of digital platform services and allow room for experimentation and innovation. Additionally, the government should also provide incentives for companies to innovate and create new services. This will ensure that digital platform services remain competitive and continue to innovate in order to provide the best user experience possible.

As for Thailand, the Royal Decree on Supervision of Digital Platform Services Operation Requiring a Notification (“Royal Decree”) was announced on 23 December 2022 and will be effective 240 days after the announcement (i.e., 20 August 2023) in order to govern this matter.

person holding white android smartphone

Digital Platform Services shall refer to the provision of electronic platform services as a medium with data management that connects Digital Platform Service Operators (“Platform Operator”), consumers or users via a computer network in order to enable electronic transactions, whether or not a service charge is charged. Digital Platform Service under this Royal Decree excludes the Digital Platform Services that are intended to be used to offer such Platform Operator’s or its affiliates’ goods or services, regardless of whether such goods or services are offered to third parties or its affiliates.

The Platform Operator under the Royal Decree must report its operations to the Electronic Transactions Development Agency (“ETDA”) and examples of qualifications are as follows:

  1. A natural person who operates digital platform service in Thailand and earns more than 1,800,000 THB per year or more than 50,000,000 THB if the Platform Operator is a legal entity; and
  2. Digital platform service with average monthly users in Thailand over 5,000 users.

As the Royal Decree’s main objective is to protect consumers within Thailand, regardless of Platform Operators operating outside of Thailand, this Royal Decree determines that the digital platform services that operate outside Thailand and provide services with one of the following characteristics shall be deemed to provide services to users in Thailand, namely, (1) Thai language digital platforms,  (2) digital platforms with the domain name “.th” or “.ไทย” (3) digital platforms that accept payment in Thai baht, (4) Digital platforms governed by laws of Thailand and subject to the exclusive jurisdiction of the courts of Thailand and others as specified in this Royal decree.

Platform Operators who will operate digital platform services must report the following information and evidence to ETDA:

  1. Platform Operator’s information such as name, surname or legal entity’s name, identification number or company registration number, address, accounting period and contact channel;
  2. Digital platform service information such as platform’s name, type of the platform, platform service channel (i.e., URL or application), value of transaction made on digital platform service (if any), etc.; and
  3. Users’ information such as user type (i.e. person who offers goods or services to consumer through digital platform service, customers and etc.), the total number of user and the total amount for each type of user, service provider’s information (i.e. freight forwarder and warehouse service provider), the total number of service provider and the total amount for each type of service provider, information and type of complaint, along with the handling of the complaint and the settlement of such dispute, the information of representative in Thailand (for the Platform Operator who operates inside Thailand) and the Platform Operator’s consent to for ETDA to access such reported information.

The Platform Operator will be issued a registered receipt and will be able to begin operating the digital platform services once ETDA receives the aforementioned report and evidence. Any major change must be reported to ETDA within 30 days as specified in this Royal Decree. Furthermore, ETDA will provide a channel for publicizing the digital platform services’ list and status (for example, the current list of Platform Operators and those whose receipt has been revoked). Please note that the information and evidence listed above must be reported annually within 60 days from the end of the calendar year (Natural Person Platform Operator) or fiscal year (Legal Entity Platform Operator).

Platform Operators may also be required to provide users with terms and conditions of service, assess risk, prepare risk management measure, system security measure, mitigation measure and other duties as specified in the Royal Decree in order to compensate or remedy those damaged by the use of digital platform services. Plus, the ETDA shall consider announcing the rules, procedures and conditions governing the period for business termination, the transfer of digital platform services to another licensee, the management and collection of data relating to digital identity proofing and authentication and any other matters deemed appropriate in order to prevent damage, protect users and ensure that users can use the services continuously.

laptop technology ipad tablet

Platform Operators whose qualifications are required to report ETDA may continue to operate their businesses only if they report their digital platform business operations to ETDA within 90 days of the Royal Decree’s effective date. On the other hand, those who wish to discontinue such operations must notify ETDA within 90 days of the Royal Decree’s effective date as well.

There are also other details regarding the types of digital platform services, duties and various procedures which should be studied further by Platform Operators. Please note that if any law specifically governs over a specific type of digital platform services, the Platform Operator must comply with such law only if it practices in accordance with and in a manner that does not fall below the provisions of this Royal Decree.

Author: Panisa Suwanmatajarn, Managing Partner.

Supervision of Financial Business Groups of Commercial Banks that Operate Business and Transact on Digital Asset

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Supervision of Financial Business Groups of Commercial Banks that Operate Business and Transact on Digital Asset

Digital Asset plays a significant role in contributing to the development of innovative financial services which is beneficial to consumers and the economy as a whole. However, Digital Asset exposed to risks in many forms, especially in cases where consumers have an insufficient understanding of Digital Asset, and is also at risk of being used as a tool for money laundering or terrorist financing.

In order to balance between supporting innovations related to Digital Asset of the financial business groups of commercial banks for benefits and managing risks that may arise, it is an important concept for the Bank of Thailand to improve and defines relevant rules for business operation and transaction related to Digital Asset to be more flexible and to allow discreet investment and business relevant to Digital Asset under the rules and investment ratio in Digital Asset Business as required.

Therefore, the Bank of Thailand has issued the Notification of the Bank of Thailand No. SorNorSor. 6/2565 on Regulations on the Supervision of Financial Business Groups of Commercial Banks that Operate Business and Transact on Digital Asset (“Notification”) which comes to force on October 22, 2022,  and applies to commercial banks, parent companies, subsidiaries, and affiliated companies of commercial banks in financial business groups according to the financial institutions business law with key principles such as: (1) to allow companies in financial business groups except commercial banks to discreetly operate a Digital Asset business under flexible regulations, and support technologies or development of financial services to increase financial system’s efficiency for the benefit of the people, business and economy; (2) to supervise and manage the risks from transactions in relation to Digital Asset; (3) to protect consumers and for consumers to receive fair services; and (4) to raise the Digital Asset business standard.

This Notification stipulates that commercial banks can transact on Digital Asset but cannot operate a Digital Asset business, and companies in financial business groups can operate businesses and transact in Digital Asset as prescribed in this Notification without contravening the key principles of this Notification and other relevant laws of Thailand and internationally such as prohibiting the use of Digital Asset as a means of payment or encouraging the general public to hold Digital Asset. However, such transactions are subject to the purpose of developing innovations to increase the efficiency and quality of providing financial business.

Furthermore, this Notification also specifies the principles of risk management governance in the following subjects:

  1. Limiting the amount of credit, investing, creating contingent liabilities, or conducting transactions similar to lending to businesses related to digital assets (Digital Asset Related Business Limit)
  2. Good Governance Supervision
  3. Capital maintenance
  4. Liquid assets maintenance
  5. Classification and provisioning
  6. Supervision of large debtors
  7. Intragroup Contagion Risk
  8. Official supervision (Supervisory Review Process)
  9. Disclosure
  10. Know Your Customer: KYC
  11. Consumer Protection

Author: Panisa Suwanmatajarn, Managing Partner

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Thailand – Royal Decree on Controlling the Online Service Platform Business

Thailand faces the similar problems as EU due to COVID-19 pandemic where people shift from physical sale to online sale. Throughout the operation of online platform for business, both producers and customers counter several troubles such as details of the product, ambiguous service terms, limited choices of delivery, delay in delivery, damages, products are not as advertised, fraud, unable to track the orders of products, unfair prices, or the problems of complaint system and their quality to tackle the complaint sent in. On the service providers’ side, they are in need of certain standard or guideline to a clearer operation from the governmental units. Another issue is the foreign or international online service platforms that have not registered their identity in Thailand making it harder to follow up of feedback or dispute arise in which sometimes create bias or unfair treatment and protection of international service providers and Thai service providers.

As such the regulator introduces legal instrument to govern this online platform and digital service business especially such as the EU implement platform to business regulation (P2B) to attend operation of online intermediation services and business users. Leads to process of commencing a guideline to govern the online platform in Thailand, currently there is no rule or regulation issued to attend this matter but only a drafting of Royal Decree on Controlling the Online Service Platform Business that Must Be Registered B.E. …. (“Royal Decree”) as a scope of controlling to ensure security, safety, creditability in giving service to the customer which can develop a certain standard or qualification in giving fair and quality service.

Before introduction of this draft, the service provider must register under Business Registration Act B.E. 2499 (1956) as certified of legal existence where the noncompliance result is in a form of fine. Under the Direct Sale and Direct Marketing Act B.E. 2560 (2017), online sellers with sales over 1.8 million baht per year must register the business as noncompliance result is in a form of fine and imprisonment. Not only the registration compliance, but the providers must also display the products or services in an appropriate manner as stated under Rule 4 of Announcement of the Central Committee on the Price of Goods and Services No. 70 B.E. 2563 (2020). However, the mentioned existing laws cannot solve the current problems, therefore, the new draft will come up to assist these existing laws.

The draft royal decree introduces similar but new and different contents with clearer and wider range of definition and information of the business conducting on the digital platform, for instance define the term of online service platform, service providers on the online platform, users of the online platform. The draft emphasis clearer details of the types and characters of online service platform that need to notify Electronic Transactions Development Agency (ETDA) before operating the business of the details regarding the businesses and services or products display, relative data of users, complaint mechanisms, terms and conditions of services and products offer to the users, service terms and conditions, suspension or ban from using services of service providers. All these clauses introduce to endorse and support transparency and fairness.

The essence of this draft Royal Decree is to create standard of service that ensure fairness, transparency and protection to the customers. The service providers governed under this draft Royal Decree will be depending on their gross income and numbers of platform users under Section 8 and the foreign service providers for Thai user in Thailand will be under Section 9. The service providers notify the ETDA of the details and information regarding the operation of online platform business will be under Section 11. The service providers under Section 15 must notify the users of service agreement and conditions in accordance with Section 16. Where the service providers do not hold Thai nationality but give services to consumers in Thailand, there must be a Thai representative acting in compliance with this regulation to ensure no bias treatment measures implemented such as complaint channels, dispute resolutions, compensation measures, conditions of displaying, advertising, and categorising products and services.

The P2B and the draft Royal Decree set to promote fair, transparent, and predictable business environment for smaller businesses and traders on online platforms. The P2B applies to the providers of online intermediation services and search engines with certain set of rules. Providers subjected under the P2B is obliged to the conditions and qualifications set forth such as languages of terms and conditions and their informative characters, procedures in amend or change of terms and conditions of services, rights and obligations of the providers under the P2B, voluntary actions that could be done by the providers and notifying to the service providers and customers.

Both P2B and draft Royal Decree have similar purposes and directions. Both oblige the platforms to implement conditions and terms regarding suspension or band of using the services from the platforms. But the P2B provides more details and specifications by categorising providers and conditions for each provider. It also concerns the users of services and contribute provisions to notify them of their rights and obligations.