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27 December 2002

TAMC Restructuring

The Thai Asset Management Corporation (TAMC) expects to finish restructuring activities the end of 2003. The TAMC was established in 2001 to administer the restructuring of debts resulting the financial crises of 1997 and had about 780 billion baht in debts in its portfolio. The powers to expedite restructuring , including the consolidation of borrowers. The new focus will be on small and medium enterprises.

21 December 2002

BOI Promotion for Electronic Industry

The BOI has introduced a new promotional package for the Electronics Industry that applied to businesses having sales of at least 2.5 billion per year. Benefits including tax and import duty exemptions would be similar to those offered other businesses. Requirements for eligibility include technology transfer programs for Thai entrepreneurs. Further, qualifying projects would not be restricted to current investment zones.

12 December 2002

Regional Operating Center Defined

The scope of activities of "Regional Operating headquarters" has been replaced with a new definition. Under the new notice of the Board of Investment the following activities would be within the scope of activities of a Regional Operating headquarters, regardless of whether the office is located in Thailand or abroad: (1) general Administration business planning, business coordination, (2) Procurement of raw materials and parts, (3) Research and development of products, (4) Technical support, (5) Marketing and sales promotion, (6) regional Management and Training, (7) Financial Advice, (8) Analysis and research on economic and investment, (9) Provision of Control on credits, (10) Rendering of other supporting services as deemed suitable by the office in each individual case.

11 December 2002

All Tax Services Online in January 2003

According to a Revenue Department spokesman, all tax services will be able to be performed online beginning in January 2003. The first service to go online was e-VAT payment. This was soon followed by other tax payment services, downloads of forms, and a downloadable tax calculation program. While the public has not yet begun to fully utilize the new technology, the Revenue Department is hoping to increase confidence in the system and thereby make it more popular with the public; the newest addition to online tax services will be an automatic tax number generation program to issue tracking numbers to online submissions.


7 December 2002

Social Security Contributions Must Increase in January 2003

In order to extend the life of the social security fund both employers and employees will be required to increase the levels of their contributions. Increasing the rate of contributions from 2 to 3 % of basic monthly pay should allow the fund to provide benefits for the next 15 years according to experts. The rate hike follows passage of a new regulation that will lead to increased membership in the system. Previously, mandatory contribution was reserved for companies with more than 10 employees. The new rules require businesses with one or more employee to create a social security fund. As a result, government contributions, currently fixed at 1%, will also need to be increased in order to match the increase in social security membership.


29 November 2002

Tariffs on Imported Luxury Items to be Reduced

In an effort to promote Thailand as a destination for tourist shoppers and to prevent locals from shopping abroad, the Finance Ministry has proposed slashing tariffs on 20 categories of luxury goods. Imported watches, perfumes, clothing, and leather goods are some of the articles mentioned for duty reductions. It is hoped that reducing import taxes on such items would make Thailand a viable competitor with tourist shopper destinations Singapore and Hong Kong. Retailers argue that attracting high end shoppers and preventing locals from shopping in other markets would increase sales and thus offset any losses of tax revenue.


28 November 2002

Thailand Continues Battle with US Rice Grower Over Jasmati Brand Rice

Is American Jasmati rice confusingly similar in name with jasmine rice grown only in the northern areas of Thailand? While the United States Federal Trade Commission (FTC) says "no", Thailand believes so. The United States imports about 20,000 tons of Thai jasmine rice and Thai growers believe that the name Jasmati will mislead consumers into thinking the product is the same as the Thai grown jasmine rice. The FTC based its decision on the argument that jasmine rice is not unique to Thailand. If they wish to continue their claim, the Thai Intellectual Property Department may attempt to show that Jasmati has caused a decrease in US imports of Thai jasmine rice. Another less likely alternative is to have jasmine rice added to the Geographic Indications Bill which provides protection to the reputation of a product from a particular geographic area, such as has been done for Champagne.


23 November 2002

Monopoly Definition Refined and Applied

The Trade Competition Board has abandoned their blanket definition of monopoly control in order to evaluate businesses on a sector by sector basis. The previous definition considered a company in an unfairly dominant position when it had more than one third market share and one billion baht in annual sales. A committee is expected to meet before the end of the year in order to create new definitions of market dominance for the individual sectors. As over 100 Thai businesses currently exceed 1/3 market share, the new standard may be set at 50%, the level reportedly specified by similar Japan and Europe legislation. Opponents to the new definitions are concerned about influence by interested parties in the definition making process; a position validated by the lobbying done by major businesses prior to the ruling affecting of the original market share definitions.


20 November 2002

New Organization to Promote ".th" Domain

A new agency, the Thailand Internet Domain-name Association (Thida) has been created in an effort to encourage online organizations to register themselves with the domain name ".th" which is the "top level" country domain name for Thailand. The new, public, non-governmental organization aims to encourage persons in Thailand to register their sites in Thailand and thus keep more money in the country. Registration will be handled by commercial providers with guidelines and oversight by the association to ensure fair pricing. The new organization will allow for domain registration much like it is conducted in Australia and Japan.


5 November 2002

Proposed Changes to Bankruptcy Law

A drafting committee is currently proposing changes to the bankruptcy law which would the time for creditors to seize debtor assets from 3 years after a court ruling to up to 10 years.

Financial institutions have complained that certain debtors have transferred assets prior to filing bankruptcy and then reclaimed the assets after the bankruptcy proceeding concluded. If the amendment is approved, creditors could seize such assets for a period up to 10 years (from the court judgement).

Another change, has already approved by the drafting committee, allows for appeals on a bankruptcy case to go directly from the trial court to the Supreme Court. Such direct appeals are currently allowed in rehabilitation cases.

Other proposed changes include: (1) extending protection of the bankruptcy code to include partnerships (it now only applies to companies) (2) subjecting planning fees charged by planners and administrators to court imposed limits and reviews (remarkably, current plan administrator fees are negotiated privately by the creditors and the plan administrators) and (3) requiring 50% or greater than nationality of plan administrators.


22 October 2002

New Credit Card Regulations in Development

An increase in credit cards issued by institutions other than banks has spawned new consumer protection regulations and a proposed new credit card bill. The increase in credit cards has been attributed to deregulation by the central bank and has led to an increase in the number of credit cards now being issued by non-bank issuers over the past yeard. Complaints from credit card holders about high interest rates and fees, as well as governmental concern about excessive consumer debt and credit card fraud has led to a need for new ministerial regulations officials claim. Among other things, new regulations may require applicants to meet minimum salary requirements.


7 October 2002

BOI Relaxes Business Site Requirements

The Board of Investment issued a notice relaxing the geographical requirements for certain businesses eligible for promotion. Previously said businesses were required to be located in zones 2 or 3, which are more outerlying regions of the country. Now, said businesses may also be located in more developed areas, such as Bangkok and still be eligible for promotion. The businesses benefited from this notice include: iron parts, production molds and devices and industrial machine making, metal cutting equipment and vehicle part making, among others.


26 September 2002

Arbitration Act in Effect

The Arbitration Act of 2002 was signed into law on 23 April 2002 and repealed the Arbitration Act of 1987.

The comprehensive act provides for the mandatory arbitration of disputes which are governed by "arbitration contracts", which are defined as contracts in writing where parties have agreed to settle all or certain disputes pursuant to arbitration. The Act provides for specific provisions for the selection, appointment and disqualification of arbitrators. The Act grants immunity from civil liability to arbitrators and provides for arbitral panels to use the Civil Procedural Rules in regard to evidence. Section 41 of the Act provides for judicial enforcement of arbitral awards, "regardless of the country in which it was made".

However, for an award granted in a foreign country, the Act requires that there be a treaty, convention treaty between Thailand and that country for the award to be enforceable. Further, there are a numbers of exceptions noted for denial of enforcement, one of which is when enforcement of the award "would be against the peace and order or the good morals of the public".

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