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24 April 2003

Witness Protection Bill

An amended version of the Witness Protection Bill was passed by the House of representatives and is pending approval be the Senate.

Under the bill, witnesses in serious cases, such as money laundering, drugs, child prostitution , corruption and organized crime may be eligible for special protection entitlements, including: (1) Special protection for witnesses and family members, (2) Relocation and stipends for up to one year, (3) Witness information will be protected by the Justice Ministry, (4) compensation t witnesses and families in cases if death, injury, loss of freedom and loss of rights, (5) witnesses have right to appeal package provided for their protection, and (6) penalties for persons disclosing confidential witness protection information. The program would operate under the Ministry of Justice.


Human Trafficking Act

A preliminary draft of the Human Trafficking Act was reviewed in public hearing yesterday, The Act is intended to amend the earlier 1997 Act. The Act was drafted by a committee comprised of experts on children and woman's rights. The present committee criticized the earlier Act for focusing solely on trafficking for sexual purposes while ignoring trafficking for other purposes. The Act would attempt to correct inequities that were failed to be addressed by the earlier Act such as victims of human trafficking being charged with criminal offenses themselves such as illegal entry and or fake passports. Other changes to the Act include increased penalty and the banning of publication of names and pictures of the victims.


Restructuring of Cooperatives

The director general of the Co-operatives Promotion Department announced that the Kingdom's 5,900 co-operatives shall be restructured under stricter regulations in an attempt to curb abuse. The director general has cited problems with the co-operative system stemming from poor management and accounting systems. The new legislation is intended to tighten requirements on o-operative boards in order to rectify management problems. The theory behind cooperatives is that the members work together for their joint benefit but there have been abuses wherein individuals have exploited government promotion benefits offered cooperatives.


April 2003

Amendment to the Trademark Act

On 4 April 2003, an amendment to the Trademark Act changed the requirements for proof of a specific description as referred to in paragraph 3 of Section 7 of the Trademark Act. Section 7 refers to those criteria that would amount to a "significant description" that amounts to a "specific indication" for a trademark to be registered.

The amendment defines the "proof of specific description" for trade-, certification- , and joint marks and requires the following: (1) the goods or services must have been continuously distributed, published or advertised for a considerable time to the public in the field in Thailand that would have knowledge that such goods and services are different from others, (2) That the distribution, publishing or advertisement of goods or services to the extent that such trademark is well known in Thailand shall be regarded as being a specific description, and (3) the trademark subject to the requirements of the specific description is the same as the mark filed for registration.

In order to prove the relevant facts for the showing of specific description the applicant must file documents and evidence in support thereof that may include: copies of receipts for goods and services, copy of receipt for advertising fees, delivery notes, purchase orders, licenses, published advertisements, samples of goods and witness may also be presented.

If the applicant does not provide the evidence as aforementioned the registrar shall notify the applicant to file said proof within 60 days.

31 March 2003

Security Checks for SEC

New Rules have been announced by the Stock Exchange of Thailand in order to curb security issues and "staff poaching". A "history check" involving liabilities owed to their employers will be checked prior to issuing new identification cards to traders. "Staff Poaching" wherein one brokerage house buys out key personnel or even whole departments of competing firms in order to gain their client base is being targeted. Currently market regulations impose a strict minimum commission of .25% on transactions and marketing officers compensations packages as well.


25 March 2003

Anti Money Laundering

In order to facilitate the seizure of assets related to terrorism the government is amending of the criminal and anti-money laundering laws. The criminal law may be broadened o to recognize terrorism as a criminal act, and requiring confiscation of assets. Additional clauses have also been added to assist in the seizure of assets of co-conspirators. Stiffer penalties include up to 20 years, life imprisonment or execution.


20 March 2003

House Rejects Geographical Indications Bill

The house yesterday rejected the Geographical Indications Act (GI Act) based on its failure to protect Animal and plant varieties native to Thailand. Geographical indications are those that identify the place of origin of a product where a specific quality, reputation or other characteristic of a product can be attributed to the geographical origin. The EU has already enforced a GI bill to protect products with unique geographical connections such as French Champagne and Scotch Whiskey.

The existing bill was drafted buy the Commerce Ministry Intellectual department to meet its obligation under the WTO's trade related aspects of intellectual rights (TRIPS).

The House rejected the existing bill stating that it did not include plant and animal strains and food and agricultural products on its list, thus allowing competitors to make use of Thai products.

Agricultural groups have protested over the GI act and cited US lobbying efforts intent on excluding Thailand agricultural products from the protected products list. Fruit and rice strains such as Jasmine rice,(along with non-agricultural products: Thai traditional massage and medical treatments) were excluded from the Bill. An American firm has already reportedly used the name "Jasmine" in their rice.


18 March 2003

Clarification on Consumer Credit Law

Controversy has surrounded the enactment of the new credit data law. Financial institutions or credit bureau executives who violated the disclosure rule laws face fines up to 500,000 baht and imprisonment of five to ten years. The two areas that have created controversy are (1) the requirement that banks notify borrowers within 30 days if information is submitted to the credit bureau and (2) financial institutions would have to submit borrowers an update on their payment information once a year.
Credit agencies and banks were uncertain whether the notification requirement applied retroactively and temporarily ceased operations until clarification was provided.


Gem Scam Fund

He Commerce Ministry has ordered some 2,000 shops to set up a fund to compensate buyers who have been overcharged when making purchases in Thailand. In addition to existing penalties, shops will risk a loss of their license and penalties including fines of up to 140,000 baht and up to seven years in jail. Under the new measure , members of the Thai Gem and Jewelry Association members of the Thai Gem and Jewelry will be required to set up a fund to compensate for customers who have overcharged, Non-member shops must set up a bank guarantee with the Department.


14 March 2003

WTO Ruling Affects BOI

Deputy Prime Minister Dr, Somkid Jatusripitak has issued a statement clarifying the effects of a recent WTO (World Trade Organization) ruling that may affect BOI (Board of Investment) benefits. Projects that are not involved in export and project that were approved by the BOI subsequent to August 1, 2000 would not be affected by the WTO ruling. The only BOI project affected by the WTO ruling would therefore be those who received tax privileges and whose 10 year export condition has not yet expired. Further the WTO has allowed the BOI a one year period to implement new restrictions and there is an additional 2 year grace period.

Exports currently drive about 55% of gross domestic product, which is much higher than it has been in the past. The BOI has been actively involved in the establishment and promotion of export industries and the BOI tax holidays and waivers have been a key force in this development.

Pursuant to the WTO's agreement on Subsidies and Counterfeiting measures, Thailand had been ordered to cease benefits by the end of 2002. Thailand had requested a ten year exemption, but this was turned down by the WTO which will now only allow a one year extension.

According to the BOI, 532 projects will be affected. Extensions on privileges after the close of 2003 (during the two year grace period) will be considered on a yearly basis.

The BOI is currently considering options to compensate investors and prevent the relocation of industries to competitor countries.


6 February 2003

Fraudulent Borrowing Act

On 8 December 2002, the Act regarding Fraudulent Borrowing was signed into law. The Act replaces a previously issued Royal Proclamation. The Act states that whoever advertises to the public that, they will pay a rate of interest that higher than the maximum rate allowed to financial institutions on money loaned to them, when he knows that such money will be used to make payments to (other) Lenders and realizes that it would not be possible to operate a legitimate business under the offered rate of interest shall be guilty of an offense of fraudulent borrowing.

Additionally, any person who does not hold a valid license to operate a business involving payment by means of foreign currency and who makes an announcement or advertisement to the Public that offers either (10 buying or selling of foreign currencies, or (2) speculating profits regarding the rate of exchange of different currencies, shall also be guilty of Fraudulent Borrowing.

The person reporting the offense shall be entitled to a reward if an arrest has been made. The reward shall be computed at 25% of the fines imposed on the offender.


1 February 2003

VAT Update

According to a new ruling of the Revenue Department, (Por 116/2545), global internet services provided to Thai companies are liable for value added tax (VAT) in Thailand. The Thai company must remit 7 % VAT to the Revenue Department even though the global internet services may be provided by a company outside of Thailand. Provided that the services are "used in Thailand" some services that may be included are: (1) the use of ISP's that provide internet access to Thailand (2) sales of space on a server located outside of Thailand, (3) storage of data services.

The departmental instruction is retroactive to 7 February 2001. Companies that have not paid the VA on these services are likely to be charged penalties and surcharges. Since he directive is not considered a new law, but rather an interpretation of any existing law, retroactive application is permitted.


13 January 2003

Draft Elephant Law

Although there is current legislation protecting elephants, namely the Wildlife Preservation Act of 1992 (2535), draft law would further protect elephants and declare the elephant as Thailand's national animal. The new act would provide for registration of all domestic elephants, import and export regulations, the establishment of conservation funds and penalties for violation of the Act.


BOI Filmmaker Incentives

Board of Investment official are considering offering greater incentives to foreign film-makers establishing projects within Thailand, Among the benefits being considered are: Waiving outerlying areas. The corporate income tax for such businesses (currently 30%). Foreign actors may be taxed a flat rate of 10% rather than the existing progressive taxation of a maximum of 37%. Another consideration is an exemption to the BOI's zoning requirements which favors businesses in outer-lying regions rather than Bangkok. This is due to the fact that Bangkok locations are more favorable for filmmakers.


January 2003

Cabinet Approves Excise Tax

Under a new tax framework approved yesterday, massage parlors, nigh clubs, karaoke lounges, movie theatres, telecommunications companies and race tracks among other businesses shall be liable to pay excise tax. The law was intended to allow the imposition of taxes on services. Three main sectors are affected: entertainment venues, gambling venues and businesses affecting the environment. A 50% maximum tax rate would be applied to telecom services under state concessions or licenses.


January 2003

New International School Regulations

New Regulations may impose limits on the minimum amount of land required for international schools as well as raising the minimum required credentials of teachers. The regulations are expected to take effect later this year. He minimum land requirements for international primary and secondary schools will be raised to five rai form the existing 2 rai. Other new requirements are that international land established on leased land must have leases of at least 15 years (ten years for kindergartens) and the reservation of one third of the schools lands for ":green zones" and another one third for recreational zones. One period a week must be devoted to Thai language and culture classes for foreign students. Head masters must hold at least a bachelor's degree in education management or the equivalent. Teachers shall hold at least a bachelor's degree with at least 15 teaching credits, a teaching license of at least three years teaching experience.

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