Tag: Patent

on by

Generative AI and Music: Copyright Risks Highlighted by the DIP

The growing use of generative artificial intelligence (AI) to create music is raising increasingly important copyright questions. AI tools can now generate songs, modify voices, create remixes and produce new musical content by reference to existing works, making the boundary between technological creation and the use of protected material increasingly significant.

The Department of Intellectual Property (DIP) has recently highlighted the copyright implications of using generative AI in music. While the DIP’s comments do not introduce new legislation or a separate legal regime for AI-generated content, they provide a useful practical signal: the use of AI does not remove the need to consider copyright in the material used as part of the creative process.

For businesses using generative AI for music, advertising and other commercial content, this has implications not only for copyright clearance but also for contracts with AI providers, internal policies and the management of infringement risk.

Existing copyright rules continue to apply:

The starting point is that generative AI does not operate outside the existing copyright framework. Under the Copyright Act, copyright owners have exclusive rights in relation to protected works, subject to applicable limitations and exceptions. Depending on the circumstances, reproducing, adapting or otherwise using a protected work without authorization may therefore constitute infringement.

The DIP has emphasized that where copyrighted material is used in connection with generative AI, users should consider whether they have the necessary rights and obtain permission where required. This is particularly relevant where an AI workflow involves identifiable existing material—for example, where a user supplies an existing song, recording or other protected content to an AI system to generate or modify musical content. The fact that AI technology performs part of the transformation does not, by itself, provide authorization to use the underlying copyrighted work.

AI-assisted music can involve several layers of rights:

Music-related AI applications can be legally complex because a single piece of music may involve multiple protected elements. A song may involve rights in the musical composition and lyrics, while a particular recording may involve separate rights in the sound recording. Depending on how an AI tool is used, more than one category of rights may therefore need to be considered.

For example, using an existing recording as an input for an AI-generated remix may raise different questions from merely instructing an AI system through text to create music of a particular genre. Similarly, an AI voice-conversion tool that processes an existing recording may involve different copyright considerations from a system generating an entirely new recording without the user supplying an existing protected work. Businesses should therefore avoid treating “AI-generated music” as a single legal category. The relevant copyright analysis depends significantly on what material enters the AI workflow, what the system does with that material and how the resulting content is subsequently used.

Copyright clearance should begin with the input:

For businesses, one of the most immediate implications of the DIP’s position is the importance of reviewing the material supplied to AI systems. Before employees, agencies or contractors upload music, recordings or other content to a generative AI platform, businesses should consider whether they own the relevant rights, have obtained an appropriate license or can otherwise lawfully make the intended use.

This is particularly important in advertising and marketing, where AI tools may be used to generate background music, modify existing tracks or rapidly produce multiple versions of creative content. A business may ultimately be responsible for content distributed under its name even where an external advertising agency, production company or AI provider performed much of the underlying creative work. Copyright clearance should therefore form part of the AI-content production process rather than being addressed only after the content has been generated.

AI provider contracts deserve closer scrutiny:

The copyright analysis should not stop with the underlying content. Businesses should also review the contractual terms governing the AI tools they use. Terms of service can differ considerably between platforms, particularly in relation to material uploaded to the platform, the provider’s ability to use customer content and the rights granted in generated outputs.

For commercial use, relevant contractual issues include rights and permissions relating to material submitted to the AI system, permitted use of customer-provided content by the AI provider, rights to use and commercialize generated outputs, intellectual property representations and warranties, indemnification for infringement claims, and procedures for responding to copyright complaints. Similar protections may be appropriate in agreements with advertising agencies, production companies and other contractors creating AI-assisted content.

Internal AI policies should address copyrighted content:

Businesses increasingly permit employees to use generative AI tools without necessarily treating that use as a formal intellectual property process. This can create risk where employees upload commercially released music or other third-party content to an AI platform, use copyrighted material as a reference, or use AI to modify content without considering whether the business has the necessary rights.

Internal AI policies should therefore address intellectual property alongside confidentiality, personal data and cybersecurity concerns. Organizations should consider establishing rules governing the types of third-party content that may be uploaded to AI systems, when copyright clearance is required and which AI platforms may be used for commercial content creation. For higher-risk uses, an internal approval process may also be appropriate before AI-generated material is released publicly or incorporated into a commercial campaign.

What the DIP’s position does—and does not—resolve:

The significance of the DIP’s comments should not be overstated. They provide a useful indication of how existing copyright principles should be approached when generative AI is used to create or modify music and reinforce the practical importance of obtaining authorization before using copyrighted works where permission is required.

However, the comments should not, without further legal or regulatory authority, be treated as establishing a definitive position on whether and under what circumstances copyrighted works may be used to train generative AI models. Nor should they be treated as conclusively determining whether, or under what circumstances, AI-generated output qualifies for copyright protection or who may own rights in such output. Those questions involve distinct legal issues concerning reproduction, exceptions to copyright, authorship, originality and the degree of human creative contribution.

Practical implications for businesses:

Companies using generative AI to create music or other commercial content should consider incorporating copyright review into their AI governance framework. A risk-based approach may be appropriate: generating content from text instructions without supplying identifiable third-party works may present a different risk profile from uploading existing songs or recordings, generating remixes or adaptations, or using protected material as a direct input or reference in the generation process.

Particular caution is appropriate where AI-generated content will be used in advertising, distributed commercially or incorporated into products. Businesses should also consider the complete contractual chain. An organization commissioning AI-generated music from an agency or contractor may wish to require appropriate warranties concerning the lawful use of source material rather than assuming that copyright compliance rests exclusively with the creator.

Key Takeaways:

  • Generative AI does not displace copyright law: Using an AI tool does not, by itself, authorize the reproduction, adaptation or other use of copyrighted material.
  • Inputs matter: Businesses should understand what copyrighted material is being supplied to an AI system and whether the necessary rights or permissions have been obtained.
  • Music can involve multiple rights: Compositions, lyrics and sound recordings may involve separate rights and require separate analysis.
  • Contracts should allocate AI-related copyright risk: Businesses should review AI-provider and agency agreements for input rights, output rights, warranties, indemnities and restrictions on the provider’s use of uploaded material.
  • Internal AI policies should cover intellectual property: Rules governing employee use of generative AI should address copyrighted inputs and commercial use of AI-generated content.
  • Important questions remain unresolved: The DIP’s comments should not be interpreted more broadly than their stated scope, particularly regarding AI training and copyright ownership of AI-generated output.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Thailand’s Response to the 12.5% U.S. Section 301 and the request for Further Exemptions

Introduction

On July 23, 2026, the Office of the United States Trade Representative (“USTR”) issued its final action under Section 301 of the Trade Act of 1974 in the Forced Labor Investigation, covering approximately 60 trading partners. Thailand was placed in the higher 12.5% tariff band, effective July 24, 2026, alongside Vietnam, the Philippines, and Singapore. Thailand received this rate because the United States found it had not adopted, committed to, or partially implemented a prohibition on the import of goods produced with forced labor, unlike a smaller group of trading partners assigned a 10% rate.

A separate and still-ongoing USTR proceeding, the Excess Capacity Investigation, covers 16 trading partners, including Thailand, and examines alleged structural excess capacity in manufacturing sectors. This investigation has not concluded and no tariff has yet been imposed under it. If the United States ultimately takes action on this second track as well, Thai exporters could face a further tariff, with some commentators estimating a combined exposure of up to 25% across both proceedings.

Domestically, Prime Minister Anutin Charnvirakul has directed six ministries and the Royal Thai Police to address both issues. Externally, the Ministry of Commerce (“MOC”) continues to negotiate an Agreement on Reciprocal Trade (“ART”) with the United States and has requested exemptions for a further 78 tariff lines, while stating that its negotiating position will not compromise the interests of farmers, the public, or businesses.

Key Concerns and Thailand’s Response

Following the Cabinet meeting of July 27, 2026, the Cabinet Secretariat issued an urgent instruction to the Ministries of Finance, Foreign Affairs, Agriculture and Cooperatives, Commerce, Labor, and Industry, and to the Commissioner-General of the Royal Thai Police. Each agency has been directed to prepare supporting data and response measures, identify the units responsible for each task, and set clear implementation timeframes.

1. Forced Labor

The United States has emphasized the need for stronger measures against goods produced with forced labor, including enhanced Human Rights Due Diligence (“HRDD”) and supply-chain traceability. The Ministry of Labor leads this response, together with the Ministries of Commerce and Industry. Their tasks are to accelerate enforcement of existing laws and regulations, compile lists of at-risk products and industries, and develop origin-certification and traceability systems covering the full production chain, so that Thailand can substantiate its position in discussions with the United States and other trading partners.

Thailand does not yet have directly enforceable legislation on this point. Thailand’s Ministry of Justice has been developing a draft Act on the Promotion of Responsible Business Conduct (also referred to as the mandatory Human Rights and Environmental Due Diligence, or “HRDD/mHREDD,” bill) since 2025, intended to align with the UN Guiding Principles on Business and Human Rights. The bill remains under development, and its legislative timeline, including submission to Parliament, has not been firmly fixed as of this update. Businesses should not wait for enactment before building supply-chain records.

2. Structural Excess Capacity

This issue is the subject of the separate, ongoing USTR Excess Capacity Investigation described above. It did not itself determine Thailand’s placement in the 12.5% forced-labor tariff band, though it could result in additional measures. The MOC leads Thailand’s response, with the Ministries of Industry, Agriculture and Cooperatives, and Finance. The agencies must compile risk lists at the product and industry level, integrating data on production capacity, inventory levels, government subsidies, price structures, export volumes, and country of origin. They must also investigate false origin claims and the use of Thailand as a trans-shipment point to evade trade measures imposed by importing countries.

Government support policy is also shifting direction. Future assistance is intended to target productivity, cost reduction, technology adoption, value addition, and greater use of local content. Subsidies that expand production capacity or increase supply beyond market demand are to be avoided, as they could themselves be cited as evidence of excess capacity. In discussions with USTR, Thailand has represented that domestic capacity utilization in the targeted industries generally runs between 70% and 90%, with no industry operating below 60%.

Exposure and Exemptions Secured

Thailand has obtained exemptions for 2,120 tariff lines under Annex II, Part A, representing approximately 61.6% of tariff lines and US$56.2 billion in exports, or roughly half the value of Thai goods exported to the United States. This is a substantial increase from the 471 items exempted under an earlier, preliminary list. Goods already subject to duties under Section 232 of the Trade Expansion Act of 1962 (for example, automobiles, steel, aluminum, and copper) are not subject to duplicate Section 301 duties. This overlap covers roughly US$7 billion of the remaining non-exempt goods.

Taking both the exemption list and the Section 232 overlap into account, the MOC estimates that approximately 28% of Thai exports to the United States remain exposed to the additional 12.5% tariff. Leading non-exempt industrial products include car and truck tires, machinery, cameras, air conditioners, and vehicle wheels and rims. Products such as jewelry, milled rice, pet food, canned tuna, and processed shrimp likewise remain outside the current exemption list and are among the items for which Thailand is now seeking relief (see below).

Solar cells and modules face particularly high cumulative exposure. In addition to the Section 301 tariff, U.S. antidumping duties on Thai-origin solar cells have been assessed at rates of up to approximately 203%, and countervailing duties at rates of up to approximately 800%, reflecting separate U.S. Commerce Department determinations on dumping and subsidization. Combined with the Section 301 tariff, total cumulative duties on affected solar shipments can substantially exceed 800%, and in the highest cases run well over 1,000%.

The Request for 78 Additional Tariff Lines

The MOC has submitted a proposal covering seven product groups and 78 tariff lines, which are agriculture and food security, consumer and household goods, medical and public-health products, electronics and semiconductors, vehicles and parts, machinery components and industrial equipment, and handicrafts and value-added products. Illustrative items include rice and Thai hom mali (jasmine) rice, maize, coconuts, orchids, cassava and cassava starch products, and fishery products, alongside jewelry, dog and cat food, milled rice, medical rubber gloves, tuna, processed bonito, fresh and cooked shrimp, and sauces and seasonings. The Commerce Ministry has separately referenced a further proposal covering 13 additional items, though it has not clarified whether these form part of the 78-line request or a distinct submission.

Thailand’s negotiating position is subject to three limits. It will not cross the interests of farmers, the interests of the public, or the rights of businesses. Thailand has indicated it is prepared for technical-level ART talks and is awaiting a determination from USTR, after which the MOC has suggested negotiations could conclude within a matter of weeks.

Key Takeaways

  • Solar cells are a particular outlier, combined Section 301, antidumping, and countervailing duties can push cumulative exposure well above 800%, in some cases exceeding 1,000%.
  • The 12.5% tariff under Section 301 currently in effect stems from the Forced Labor Investigation only. The separate Excess Capacity Investigation remains open and could result in an additional tariff if concluded against Thailand.
  • After accounting for the Annex II exemption list and the Section 232 overlap, approximately 28% of Thai exports to the United States remain exposed to the 12.5% tariff.
  • Six ministries and the Royal Thai Police have been directed to address forced labor and excess capacity concerns, with traceability and origin certification central to the response.
  • A mandatory human rights and environmental due diligence bill is under development by the Ministry of Justice, and its legislative timeline is not yet fixed. Businesses should not wait for enactment before building supply-chain records.
  • A request for 78 further exemption lines across seven product groups remains pending, and technical-level ART talks await a USTR determination.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

United States Finalizes Section 301 Tariff Framework Based on Forced Labor Enforcement: Thailand Subject to a 12.5% Tariff

In our previous article (USTR Section 301 Forced-Labor Determinations: Implications for Thailand – The Legal Co., Ltd.), we discussed the U.S. Section 301 investigation involving approximately 60 trading partners, including Thailand, and Thailand’s response to the proposed tariff measures through trade negotiations and domestic regulatory reforms.

The Office of the United States Trade Representative (“USTR“) has now concluded that review, announcing the final tariff framework under Section 301 of the Trade Act of 1974 on 23 July 2026. The framework imposes additional tariffs ranging from 10% to 12.5% on imports from approximately 60 trading partners, effective from 24 July 2026.

Although Thailand actively participated in the consultation process and sought both a reduction in the proposed tariff rate and additional product-specific exemptions, it remains subject to the higher 12.5% tariff, which took effect immediately upon the expiry of the preceding tariff measures.

The final framework is significant not only for the additional tariffs it introduces, but also for what it signals: the United States’ continued use of trade policy as a lever to address forced labor concerns and to encourage stronger labor standards and supply chain governance among its trading partners.

Overview of the Final Tariff Framework

The final framework adopts a tiered approach, with tariff rates determined by the USTR’s assessment of each trading partner’s efforts to prevent goods produced using forced labor from entering the U.S. market.

  • 10% tariff — applies to countries that (i) already prohibit imports of goods produced using forced labor, (ii) have committed to implementing such measures through reciprocal trade arrangements, or (iii) have introduced measures offering some protection against such imports. Countries in this category include Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.
  • 12.5% tariff — applies to countries the United States considers not to have implemented sufficiently effective measures to prevent goods produced using forced labor from entering U.S. supply chains. Thailand falls within this category, alongside China, Hong Kong, Japan, the Philippines, Singapore, and Vietnam, among other trading partners.

According to the USTR, the final framework applies to trading partners representing approximately 99.4% of total U.S. imports. Certain products remain exempt, including oil, natural gas, and goods that cannot be sourced domestically in the United States.

Legal Significance

Beyond the tariff rates themselves, the legal basis for the framework carries equal significance.

According to publicly available reports, the United States introduced the final tariff framework after the U.S. Supreme Court ruled that tariffs previously imposed under emergency powers were unlawful. Rather than relying on those emergency powers, the U.S. government has instead invoked Section 301 of the Trade Act of 1974, which authorizes the USTR to act against foreign government policies or practices considered unfair or burdensome to U.S. commerce.

This development demonstrates that, notwithstanding new limits on the use of emergency powers, the United States continues to rely on existing trade legislation to pursue its broader trade policy objectives. It also reflects a growing trend in which labor standards, human rights, and supply chain governance are increasingly treated as matters of international trade compliance, rather than solely as corporate social responsibility or ESG considerations.

Business Implications

The practical implications of the final tariff framework extend beyond the tariffs themselves.

Businesses exporting to the United States — including manufacturers, suppliers, and other participants in global supply chains — should expect increased requests from customers and business partners to demonstrate that their products are free from forced labor and that appropriate due diligence has been conducted throughout the supply chain.

Businesses should therefore consider:

  • reviewing supplier due diligence procedures;
  • strengthening supply chain traceability;
  • maintaining documentation on product origin and manufacturing processes; and
  • monitoring developments in U.S. trade policy, as well as Thailand’s proposed Human Rights Due Diligence (HRDD) framework.

Taking these steps early may help businesses respond more effectively to evolving customer expectations, reduce compliance risk, and minimize disruption to cross-border trade.

Key Considerations for Businesses

The final tariff framework reinforces the growing convergence between international trade policy, labor standards, and supply chain governance. While the immediate consequence is the additional 12.5% tariff imposed on imports from Thailand, the broader implication is that businesses should expect increasing scrutiny of their supply chains and rising expectations around responsible sourcing and human rights due diligence.

Businesses with operations or supply chains connected to the United States should review their existing compliance programmers, strengthen supplier due diligence and traceability measures, and continue monitoring regulatory developments in both the United States and Thailand to remain prepared for evolving trade compliance requirements.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Thailand Responds to U.S. Section 301 Review: Trade Negotiations, Regulatory Reforms and Business Implications

The United States has conducted a trade investigation under Section 301 of the Trade Act of 1974 into approximately 60 trading partners, including Thailand, concerning whether goods produced using forced labour are entering the U.S. market. Following its preliminary determination in June 2026, the United States proposed imposing an additional 12.5% tariff on certain imports from Thailand and invited affected trading partners to submit comments on the proposed tariff rate, product coverage and potential tariff exemptions. Thailand submitted its written response by the 6 July 2026 deadline.

Following a public consultation process, the United States issued its final determination on 23 July 2026, confirming a 12.5% Section 301 tariff on imports from Thailand that are not otherwise exempt. The measures took effect on 24 July 2026.

Prior to the final determination, Thailand’s negotiating team, led by Minister of Commerce Ms. Suphajee Suthumpun, travelled to the United States from 15 to 17 July 2026 to continue discussions with U.S. officials regarding the proposed tariff rate, revisions to the tariff list, product-specific exemptions, and U.S. concerns relating to labour standards, agricultural exports and sanitary and phytosanitary (SPS) measures.*

Key Issues Under the U.S. Review

The U.S. investigation focused on two principal concerns:

  • Forced labour – whether Thailand has an adequate legal and regulatory framework to prevent the use of forced labour throughout its supply chains; and
  • Trade circumvention – whether goods originating in China are being routed through, or undergo only minimal processing in, Thailand before being exported to the United States.

Thailand has rejected these allegations, maintaining that the products under review are genuinely manufactured in Thailand and contain between 70% and 90% local content, with no product containing less than 60% Thai content. At the same time, the Government has sought to address U.S. concerns through both ongoing negotiations and proposed domestic regulatory reforms.

The products reportedly under review are primarily drawn from the following sectors:

  • machinery;
  • automotive products; and
  • rubber products.

Proposed Tariff Exemptions

As part of the review, the United States proposed tariff exemptions covering 1,655 products across four categories:*

  • agricultural and food products;
  • electronics;
  • energy and mineral products; and
  • aircraft parts.

Thai exports expected to benefit include cassava products, natural rubber, hard disk drives, smartphones, integrated circuits, processed pineapple, coconut products, durian, other tropical fruits and aircraft components.

For textile products, the United States also proposed a quota-based mechanism under which reduced tariff rates would be linked to the volume of textile raw materials imported from the United States.

Thailand’s Negotiating Position

Thailand sought to reduce the proposed tariff rate from 12.5% to 10%, bringing it into line with the rate applied to certain neighboring countries that had committed to implementing stronger forced labor import prohibitions.

As part of the proposed Agreement on Reciprocal Trade (ART), Thailand also emphasized that more than 30% of its trade surplus with the United States is generated by U.S. companies operating manufacturing facilities in Thailand and exporting their products back to the U.S. market. Thailand further requested additional tariff exemptions, including for Thai jasmine rice, while explaining that higher tariffs on certain Thai exports could increase costs for U.S. consumers where comparable products cannot readily be produced domestically or sourced from alternative suppliers.

The Government also reaffirmed several key negotiating positions, including:

  • maintaining Thailand’s existing beta-agonist standards for meat products; and
  • preserving Thailand’s ability to maintain trade relations with all countries, including China, without accepting conditions that could undermine Thailand’s economic sovereignty.

Regulatory and Policy Developments

In parallel with the negotiations, Thailand is advancing a proposed Human Rights Due Diligence (HRDD) framework under the proposed Act on Support Business Operation with Responsibility.

If enacted, the legislation is expected to require businesses to identify, assess and manage human rights risks throughout their operations and supply chains. Depending on the final form of the legislation, businesses may also be required to implement appropriate governance measures, maintain records demonstrating compliance and strengthen supply chain traceability.

Thailand is also developing clearer procedures to verify that exported goods are manufactured without the use of forced labor. Collectively, these initiatives are intended to strengthen confidence in Thai exports, enhance supply chain transparency and align Thailand’s regulatory framework more closely with internationally recognized human rights and labor standards.

Key Takeaways

  • Businesses with operations or supply chains connected to Thailand should review their supply chain governance frameworks, strengthen traceability measures and monitor further developments in Thailand’s proposed HRDD legislation.
  • The United States has completed its Section 301 investigation into approximately 60 trading partners, including Thailand, concerning forced labor and supply chain enforcement.
  • Thailand submitted its written comments by the 6 July 2026 deadline. The United States issued its final determination on 23 July 2026, imposing a 12.5% tariff on most Thai imports that are not otherwise exempt.
  • During the consultation process, Thailand sought to reduce the proposed tariff rate to 10% and requested additional product-specific exemptions, including for Thai jasmine rice.
  • The U.S. investigation has accelerated Thailand’s efforts to strengthen its human rights due diligence framework and supply chain governance.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Thailand and China Strengthen Cooperation on IP Enforcement

The Thai Cabinet has approved a draft Memorandum of Understanding (MOU) between the Ministry of Commerce of Thailand and China’s market regulatory authority to strengthen cooperation on intellectual property enforcement.

The proposed cooperation framework includes information sharing, coordination on IP enforcement, and cooperation in training and capacity building for enforcement officials. The MOU is intended to facilitate closer administrative cooperation between the two authorities and enhance enforcement effectiveness against IP infringement.

Practical implications for businesses:

The MOU does not create a mechanism allowing rights holders to file cross-border enforcement requests directly or alter existing enforcement procedures in either jurisdiction. Nevertheless, it reflects a policy direction toward closer administrative cooperation between Thailand and China.

Businesses that manufacture, distribute, or sell products in China, particularly through e-commerce platforms, should consider strengthening their cross-border IP enforcement strategy by:

  • ensuring that trademarks, patents, and other IP rights are separately registered in China, as protection in Thailand does not extend automatically to China;
  • maintaining evidence of ownership and use of IP rights, distribution channels, and suspected counterfeit products;
  • reviewing agreements with manufacturers, distributors, and online platform operators to ensure adequate IP protection and enforcement provisions; and
  • considering customs recordation and online takedown procedures as part of an integrated enforcement strategy, alongside civil or administrative actions where appropriate.

The development is particularly relevant for brand owners in consumer goods, fashion, cosmetics, food and beverage, and businesses that rely heavily on cross-border e-commerce.

Key takeaways:

Although the proposed MOU does not introduce new legal remedies for rights holders, it signals stronger institutional cooperation between Thai and Chinese enforcement authorities. Businesses with commercial activities in China should ensure that their IP portfolios and enforcement strategies are prepared to take advantage of enhanced cross-border administrative coordination as it develops

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

USTR Section 301 Forced-Labor Determinations: Implications for Thailand

Introduction

The Office of the United States Trade Representative (USTR) has determined that 60 economies, including Thailand, have failed to impose and effectively enforce prohibitions on the importation of goods produced with forced labor. The USTR concluded that these failures are unreasonable and burden or restrict U.S. commerce, making them actionable under Section 301(b) of the Trade Act of 1974.

The determination signals a significant shift in U.S. trade policy and global supply-chain governance. The USTR has emphasized that the U.S. will no longer tolerate conditions that allow foreign producers to gain cost advantages through the use of forced labor, thereby placing American workers and businesses at a competitive disadvantage. Increasingly, access to the U.S. market is being linked to compliance with internationally recognized labor standards.

Forced-Labor Determinations

The USTR’s Section 301 investigations found that permitting goods made with forced labor to enter global supply chains undermines efforts to eradicate forced labor and creates artificial cost advantages for non-compliant producers. According to the USTR, such practices distort market conditions, reduce the profitability of businesses that comply with labor standards, and expose U.S. producers to unfair competition in both domestic and export markets.

The USTR also rejected arguments that domestic labor laws alone are sufficient to address the issue, noting that such laws typically regulate production within a country’s borders but may not prevent the importation of foreign goods produced with forced labor. Consistent with this position, Thailand was identified as one of the economies that failed to impose and effectively enforce a prohibition on imports produced with forced labor. The USTR concluded that this failure undermines global efforts to eliminate forced labor and provides unfair competitive advantages to producers that rely on such practices.

Proposed Additional Duties (Import Tariffs)

To address these concerns, the USTR has proposed imposing additional ad valorem duties on imports from the investigated economies. The proposed tariff structure consists of two fixed rates:

• Tier 1 – 10% Additional Duty Rate

Applicable to economies that have implemented a forced-labor import prohibition, committed to doing so through reciprocal trade agreements, or established a partial regime aimed at preventing the importation of forced-labor goods. Examples include Canada, the European Union, Mexico, Indonesia, Malaysia, Taiwan, and the United Kingdom.

• Tier 2 – 12.5% Additional Duty Rate

Applicable to economies that have neither imposed nor effectively enforced a comprehensive forced-labor import prohibition. Thailand falls within this category, alongside several major U.S. trading partners, including China, Japan, South Korea, Switzerland, and Singapore.

Limitation of Duties

To mitigate unintended economic consequences, the USTR has proposed a number of exclusions and limitations under Annex A of the Federal Register notice. These include:

• Articles and components already subject to Section 232 of the Trade Expansion Act of 1962 relative to tariffs on steel and aluminum, thereby avoiding duplicate tariff treatment;
• USMCA-compliant goods originating from Canada and Mexico;
• Textiles and apparel eligible for duty-free treatment under CAFTA-DR;
• Informational materials, charitable donations, and accompanied personal baggage;
• Raw materials for which alternative domestic or non-U.S. sources are not reasonably available;
• Products whose inclusion could cause significant economic disruption or that cannot be produced in sufficient quantities within, or sourced outside, the U.S.; and
• Products for which additional duties would not materially advance the objectives of the investigation.

Opportunities for Stakeholder Participation

As the proposed duties have not yet been finalized, affected businesses and industry groups may participate in the rulemaking process through several procedural mechanisms:

• Hearing Requests – Submission of requests to appear as witnesses at the public hearings, accompanied by summaries of proposed testimony;
• Written Comments – Submission of detailed comments supporting product-specific exclusions or modifications to Annex A of the Federal Register notice;
• Public Hearings – Participation in hearings conducted by the Section 301 Committee at the U.S. International Trade Commission in Washington, D.C.; and
• Post-Hearing Rebuttals – Submission of rebuttal comments responding to positions advanced by other stakeholders during the hearing process.

Key Takeaways

• The USTR has determined that 60 economies, including Thailand, failed to impose and effectively enforce prohibitions on imports produced with forced labor, and these findings are actionable under Section 301(b) of the Trade Act.

• The USTR has proposed a two-tier tariff framework consisting of a 10% additional duty for economies with existing or partial forced-labor import prohibitions and a 12.5% additional duty for all other investigated economies.

• Thailand falls within the proposed 12.5% tariff category, potentially placing Thai exports at a competitive disadvantage relative to exports from economies subject to the lower rate.

• Annex A proposes several exclusions, including products already covered by Section 232 of the Trade Expansion Act measures, USMCA-compliant goods, CAFTA-DR textiles and apparel, certain scarce raw materials, and non-commercial articles such as books, donations, and accompanied baggage.

• The proposed measures are not yet legally effective. Interested parties may participate in the public comment and hearing process before any final action is adopted.

• The USTR has also proposed a textile mechanism that could permit certain volumes of apparel and textile imports from qualifying economies to enter the United States at reduced tariff rates. It remains unclear whether Thailand will qualify for this mechanism.

• Exporters should anticipate heightened supply-chain due diligence requirements, increased scrutiny from U.S. buyers, and potential shifts in sourcing strategies as companies seek to mitigate tariff exposure.

• U.S. consumers may experience higher prices if additional import costs are passed through the supply chain.

• The final scope, exclusions, and tariff rates remain subject to revision following the completion of the public consultation and hearing process.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Asia IP – Lesson from Taylor Swift

“Taylor Swift’s extensive trademark portfolio is a best-practice strategy and not overprotection. It complements her copyright ownership by protecting brand elements (name, lyrics, tour titles, cats’ names) for indefinite renewal in commerce.”

Said by Panisa Suwanmatajarn, Managing Partner.

ASIA IP Magazine, Volume 18, Issue 3.

Read Full Articles

Other Articles

on by

Asia IP – Cartoons and characters on merchandise: All about character licensing and IP protection

“Character licensing has become an increasingly important component of the consumer products and entertainment industries across Asia. The region’s large consumer base and strong demand for branded merchandise have created a highly dynamic market for licensed characters.”

Said by Panisa Suwanmatajarn, Managing Partner.

Source: Cartoons and characters on merchandise: All about character licensing and IP protection | Asia IP

Other Articles

on by

Thailand Tightens Trade and Transshipment Regulations Amid Global Pressure

The Intersection of Global Trade Tensions and National Sovereignty

Thailand is currently navigating a delicate regulatory balance. As the economic and technological rivalry between the United States and China intensifies, smaller export-driven nations are increasingly caught in the crossfire. In response, Thailand has begun tightening its investment policies, customs oversight mechanisms, and regulatory frameworks to reduce the risk of its territory being used as a conduit for trade circumvention or unauthorized transshipment. Through these measures, the government seeks to safeguard its economic interests, preserve its international trade credibility, and reinforce confidence among global trading partners.

Deconstructing the Section 301 Legal Challenge

At the heart of Thailand’s immediate bilateral trade agenda is the mitigation of legal risks associated with a Section 301 investigation initiated by the United States Trade Representative (USTR). Section 301 of the U.S. Trade Act of 1974 grants the U.S. government broad authority to investigate foreign government practices or policies that burden or restrict U.S. commerce. Thailand’s Minister of Commerce, leading a technical delegation to the United States, addressed key legal concerns raised by the U.S. government, focusing primarily on the following:

  • Industrial overcapacity;
  • Forced labor compliance; and
  • Thailand’s widening trade surplus with the United States.

The Truth Behind the Trade Surplus

From a legal and economic standpoint, Thailand’s defense against U.S. trade scrutiny hinges significantly on the corporate origin of its exports. Thai trade negotiators clarified to the USTR that at least 30% of the goods contributing to Thailand’s trade surplus are manufactured by U.S.-owned multinational corporations that have legally established manufacturing bases within Thailand. Under international trade law and bilateral agreements such as the Trade and Investment Framework Agreement (TIFA), these transactions reflect legitimate corporate supply-chain integration rather than predatory trade practices. By framing the trade surplus as a mutually beneficial outcome of American foreign direct investment, Thailand aims to legally insulate itself from the punitive tariffs or retaliatory quotas typically triggered by Section 301 findings.

Eradicating Origin-Tagging Fraud and Transshipment

Parallel to its defensive trade diplomacy, Thailand has launched a domestic enforcement campaign to combat origin-tagging fraud and the circumvention of export control regulations, amid heightened global scrutiny over technology supply chains. Following stringent U.S. restrictions on the export of high-end semiconductors and advanced processing components — including Nvidia microchips — to China and other designated jurisdictions, reports emerged suggesting that illicit actors may have attempted to utilize Thai territory as a transit hub for unauthorized transshipment. Under both international customs law and domestic statutes, transshipment fraud — whereby restricted goods are imported into a neutral third country solely to alter country-of-origin labels and be re-exported in evasion of sanctions — poses a severe threat to a nation’s regulatory credibility.

Mitigating Transshipment Risks and Origin-Tagging Fraud

In response, Thailand’s Board of Investment (BOI) has forged a strategic enforcement alliance with the Customs Department to enhance regulatory oversight of all incoming and outgoing high-technology electronic shipments. This inter-agency directive mandates full regulatory oversight and physical inspection protocols across all such shipments. By implementing these rigorous monitoring mechanisms, the Thai government aims to secure its borders against trade non-compliance, protect international corporate partnerships, and reinforce Thailand’s standing as a transparent and legally compliant hub for global commerce.

Rewriting the Legal Framework for Investment Incentives

To institutionalize this enforcement drive, the BOI has undertaken a significant policy overhaul, revising the eligibility criteria for state-backed corporate incentives and tax privileges. Historically, Thailand’s investment promotion regime prioritized attracting rapid foreign capital inflows and export-oriented manufacturing activity. Under the revised framework, however, pass-through or simple assembly business structures are no longer eligible for promotional privileges. Projects seeking corporate tax exemptions and BOI promotional status must now demonstrate that they facilitate a substantive manufacturing process that contributes genuine innovation and local value-added benefits to the Thai economy. Labor-intensive operations that neither transform the product nor generate verifiable intellectual or technical development within Thailand’s borders are expressly excluded from the promotional framework. Through these revised standards, the government aims to strengthen the integrity of its investment promotion regime while reinforcing compliance with international trade and rules-of-origin requirements.

Enhanced Audits and Statutory Compliance Measures

The implementation of these tightened regulations introduces rigorous administrative and supply-chain auditing mechanisms. The BOI and the Customs Department have deployed an integrated verification framework centered on two distinct legal compliance metrics:

  • Traceability Regimes: A comprehensive, legally binding audit trail tracking the precise provenance of raw materials and sub-components utilized throughout the production cycle.
  • Harmonized System (HS) Code Scrutiny: Detailed algorithmic and physical verification of customs classifications to confirm that goods exported from Thailand have undergone a “substantial transformation” in accordance with international trade standards.

Under this strict regulatory regime, any corporation found to have misrepresented the origin of its exports or facilitated illicit transshipments faces the immediate revocation of all BOI investment privileges, as well as severe legal prosecution under Thai customs and trade statutes. Through the combined application of international diplomacy and rigorous domestic enforcement, Thailand is legally fortifying its trade infrastructure, preserving its partnerships with Western technology markets, and ensuring sustained compliance with global regulatory norms.

Key Takeaways

Companies involved in origin fraud or illegal transshipment face loss of BOI privileges and prosecution under Thai law.

Thailand is tightening regulations to prevent its territory from being used for the illegal transshipment of restricted goods, particularly advanced semiconductors.

The U.S. Section 301 investigation focuses on Thailand’s trade surplus, industrial overcapacity, and labor compliance issues.

The BOI and Customs Department now mandate stricter inspections, supply-chain traceability, and HS code verification for high-technology exports.

BOI incentives are now limited to businesses that demonstrate substantial manufacturing activity and local value-added contributions.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

The 2026 Special 301 Report: Modernizing Thailand’s IP Framework Amid Ongoing Challenges

Introduction

The Office of the United States Trade Representative (“USTR”) has released its 2026 Special 301 Report (“Report”), an annual assessment of the global state of intellectual property (“IP”) protection and enforcement among United States trading partners. The Report examines systemic issues ranging from counterfeit goods and online piracy to trade secret protection and concerns regarding forced technology transfer.

For the tenth consecutive year, Thailand remains designated on the Watch List. While the USTR commends Thailand’s legislative progress and specific enforcement successes, the Report underscores persistent systemic vulnerabilities that continue to prevent Thailand’s elevation to a more favorable designation.

Legislative Modernization and Systemic Evolution

The USTR formally acknowledged Thailand’s sustained commitment to harmonizing its domestic laws with international standards. Central to this recognition are the ongoing efforts to amend the Patent Act B.E. 2522 (1979) and the Copyright Act B.E. 2537 (1994). These reforms represent more than mere administrative updates; they serve as the foundational infrastructure for Thailand’s planned accession to the following major international treaties:

  • The Hague Agreement — Streamlining the international registration of industrial designs.
  • The WIPO Performances and Phonograms Treaty (WPPT) — Enhancing digital-era protections for performers and producers.

This Trade Plus policy, championed by the Department of Intellectual Property (“DIP”) under the Ministry of Commerce, signals a strategic intent to foster a transparent, innovation-friendly environment aimed at attracting high-value foreign investment.

Enforcement Successes and the Deterrence Gap

Operational coordination among Thai law enforcement agencies, including the Royal Thai Police and Customs authorities, has yielded notable enforcement successes. The USTR highlighted the successful dismantling of major Internet Protocol Television (IPTV) piracy networks, as well as targeted interventions in notorious physical markets.

A landmark development was recorded at the MBK Center, where authorities moved beyond mere seizures to enforce the termination of lease agreements with tenants found to be engaged in IP violations. This approach signals a meaningful shift in enforcement strategy.

Notwithstanding these achievements, the Report identifies a significant deterrence gap. U.S. stakeholders have expressed concern that enforcement actions continue to focus disproportionately on end-of-line retail operators rather than on upstream manufacturers and large-scale distribution networks. This reactive approach is considered insufficient to permanently disrupt the supply chains of counterfeit goods.

Persistent Challenges

Despite Thailand’s legislative progress, the 2026 assessment identifies several areas of continued concern:

·       The Digital Frontier

Online platforms and illicit streaming applications remain the primary vectors for IP infringement. The USTR noted that, while physical markets in tourist areas have become comparatively cleaner, the volume of pirated content available through digital channels has returned to pre-enforcement levels. Further concerns relate to the protracted length of criminal proceedings and the relative inadequacy of penalties imposed by the judiciary.

·       Pharmaceutical Patent Backlogs

A significant point of friction is the substantial backlog in patent examinations, particularly in the agricultural and pharmaceutical sectors. The United States continues to urge Thailand to provide effective protection against the unfair commercial use and unauthorized disclosure of undisclosed test data for pharmaceutical and agricultural chemical products.

·       Judicial and Regulatory Frameworks

Stakeholders have identified low civil damages as a primary impediment to effective deterrence. In addition, the USTR remains cautious regarding Thailand’s geographical indication (GI) framework, particularly in the context of ongoing trade negotiations with the European Union, which could affect United States market access.

Conclusion

Thailand’s continued designation on the Watch List reflects consistent, if incremental, progress rather than a failure to engage. The transition to the Clear List will require Thailand to move decisively from legislative drafting to deterrent-level enforcement.

For the legal community and rights holders, attention now turns to two critical questions: first, how the Thai judiciary will manage the rising volume of digital piracy cases; and second, whether the DIP can successfully clear the pharmaceutical patent backlog to meet the rigorous expectations of Thailand’s primary trading partners.

The path forward demands a coordinated and sustained response targeting the upstream sources of infringement, strengthening judicial deterrence, and delivering on the legislative commitments that Thailand has already undertaken.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles