WT/TPR/S/123 Trade Policy Review
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) INTRODUCTION
1. Since its previous Trade Policy Review, the general thrust of Thailand’s trade and investment
policy has remained liberal, and new efforts have been made to improve market access and facilitate
trade.  Such efforts have been particularly noticeable in customs valuation and foreign direct
investment.
2. The tariff is rather complex owing to the multip licity of rates applicable to each of the
5,505 tariff lines.  It remains one of the main instruments of trade policy;  with a simple average
applied MFN rate of 14.7% in 2003, it affords a relatively high level of protection.  Moreover, about a
quarter of all tariff lines are unbound and bound rates often considerably exceed applied MFN rates,
thus affording the authorities considerable scope to  raise (or lower) tariffs at any time, by means of
Royal decrees or ministerial regulations and notifications, with cabinet approval.  During the period
under Review, Thailand raised tariffs in only a few instances.  However, it has taken several anti-
dumping actions.
3. Import licensing on various items remains opaque and appears in some cases to correspond to
quantitative restriction.  Most of the import licensing requirements are for national security and healthand environment reasons.  A number of other non-tariff border measures remain for economic
reasons, such as infant industry protection;  the effectiveness of these measures is questionable.
4. Thailand has not acceded to the Agreement on Government Procurement.  Government
procurement continues to be used as an instrument of economic policy, with preferences being
accorded to domestic suppliers.
5. The authorities recognize a need to remove impediments to investment rather than relying on
tax-based incentives, which have been widely used.  Thus, various subsidies tied to exports have beenremoved and investment incentives have been streamlined.  On the other hand, the Government
appears to be taking a more proactive approach to industrial policy and the pursuit of competitiveness,
with measures apparently targeted at industries,  such as agri-industry, automobiles, textiles,
electronics, and high-valued services.  Most local-content and export-performance requirements,
including those attached to incentives for new investments, were abolished during the period underreview.
6. While privatization seems behind schedule, considerable progress has been made to
corporatize state-owned enterprises in preparation for their eventual privatization.
7. Since 1999, the number of Thai industrial standards based on international standards has
increased.  Thailand has also introduced various amendments to its laws related to quarantinerequirements.  Various laws have been introduced to strengthen the protection of intellectual property
rights, and the Government has taken actions to enforce IPR protection.
8. The implementation of competition policy appears to be weak;  the Office of Trade
Competition Commission has made decisions on only three cases since its inauguration in 1999.  The
apparently weak enforcement of the competition legislation may be attributable to institutional,procedural, legal or resource limitations.  However, effective enforcement of the Trade Competition
Act could be envisaged through continuous institutional and human resource development as well as
experience gained from international cooperation.Thailand WT/TPR/S/123
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9. An efficient capital market capable of mobilizing savings and channelling them into the most
productive uses is essential for Thailand's successful economic restructuring and long-term
development.  Good governance is considered es sential for the establishment of such a market.
Accordingly, improving corporate governance across  sectors has also become a government priority
in the face of various corporations' weak balance sheets.  Thus, efforts have been made to increase the
level of transparency and disclosure, and to enforce accountancy rules.
(2) MEASURES DIRECTLY AFFECTING IMPORTS
(i) Customs procedures
(a) Recent developments
10. Thailand considers improvements to its customs procedures as one of the crucial elements of
trade facilitation.1  Since 1999, the authorities have adopted various measures, such as an EDI
(electronic data interchange) system, with a view to expediting customs clearance of imports into
Thailand;  the authorities indicate that about 85% of declaration forms are currently processed through
the EDI system.  The time required for the collection of duties and taxes as well as physical inspection
averages less than an hour, compared with three to four hours through non-EDI (manual document)
processing.  Furthermore, in November 2002, the Customs Department introduced an internet-baseddeclaration system mainly for small and medium-sized enterprises.  In addition, companies that
belong to the BOI’s Investor Club Association are eligible to use the raw materials tracking system;
customs clearance for raw materials can be done in three hours or less for users of the system.
2
11. Thailand is not a contracting party to the International Convention on the Simplification and
Harmonization of Customs Procedures (Kyoto Convention) and the International Convention on the
Harmonization of Frontier Controls on Goods.  Nevertheless, the authorities state that the current
customs procedures applied to cargo clearance in Thailand are, by and large, consistent with theGeneral Annex of the revised Kyoto Convention.  The Customs Department is currently studying the
details of these conventions with a view to deciding whether to become party.
(b) Registration
12. All importers except natural persons and government agencies are required to register and
receive a customs card.  Preferential treatment is provided for companies that meet certain criteriaspecified under a "gold card" system, which replaced the former "categorized" importer system in
1999.  For example, under the new system, gold card holders are exempted from all but random cargo
inspection.  Gold-card importer qualifications includ e:  being a licensed customs broker, an EDI user,
or an EDI-using broker, and a member of the Fede ration of Thai Industries or the Thai Chamber of
Commerce;  paid-up registered capital of not less than B 5 million;  and being engaged in the importbusiness for not less than three years.  Government agencies, state enterprises, and companies granted
duty exemptions by the BOI may also be granted gold card holder status.  Data provided by the
authorities indicate that about a quarter of all imports take place under the gold card system.
(c) Customs inspection and valuation procedures
13. Thailand amended two laws, i.e. the General Provision of the Custom Tariff Decree
B.E. 2530 (1987) and the Custom Act (No.17) B.E. 2543 (2000), with a view to implementing the
                                                     
1 APEC (2002), Chapter 6.
2 Board of Investment online information.  Av ailable at:  http://www.boi.go.th/english/business/
taxation.html.WT/TPR/S/123 Trade Policy Review
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WTO Agreement on Customs Valuation;  the former entered into force on 17 February 2000 and the
latter 8 March 2000.  According to the authorities, the new procedures have been applied retroactively
since 1 January 2000.  However, some of Thailand's trading partners are concerned about the proper
implementation of the Agreement.3
14. Under the new procedures, details on invoices and other related documents (including country
of origin, quantity, composition of value, and description of goods) are taken into consideration forvaluation purposes.  Thailand uses the c.i.f. (cost, insurance and freight) prices of imports as the basis
for customs valuation.  The Customs Department accepts the declared value shown in the invoice as
transaction value unless they have reason to believ e that this is inappropriate;  in the event that
transaction value cannot be applied, the Department follows other methods in sequential order;  that
is, transaction value of identical goods, similar goods, deductive value, computed value, and fallbackvalue method.
4  The authorities state that, under the new system, the Customs Department no longer
applies minimum import prices for customs valuation purposes.
15. Revised rules and regulations regarding appeal provisions entered into force on
1 January 2000.5  Where a dispute arises regarding the value of a product or article, the importer may
file an appeal to the Customs Department within 30 days of receiving valuation notification fromcustoms officers.  The Customs Appeal Committee, established under Section 112 of the Customs
Act, is responsible for decisions concerning any valuation discrepancy between Customs and the
importer.
6  If the decision of the Committee is not satisfactory, parties may raise their concerns in the
Tax Court, where a judicial process is initiated if the State Attorney considers that there is sufficient
evidence to warrant consideration of the case.
16. The Customs Department collects fees for customs services;  these include fees for
documentation, and charges for attendance at Customs House on holidays or after office hours.
17. Thailand does not require preshipment inspection for imports.
(d) Rules of origin
18. Thailand does not have specific laws, judicial decisions or administrative rulings of general
application relating to non-preferential rules of origin.  Preferential rules of origin regarding the GSTP
are specified in Annex II of the GSTP Agreement.  Imports from ASEAN countries are subject to the
rules of origin for the ASEAN CEPT Scheme.  A certi ficate of origin is required for GSTP or ASEAN
preferential imports.7  Thailand has established a Committee and a Subcommittee on Rules of Origin,
under the Customs Department, to review the progress of harmonization, improvement, and
simplification of non-preferential rules of origin.8
                                                     
3 See, for example, APEC (2003a).
4 The Valuation and Standard Formality Group, established in the Customs Department, deals with
valuation issues, and the Tax Examination Unit, established in 2002, is in charge of the post-clearanceverification process.
5 APEC (2002), Chapter 6.
6 APEC (2002), Chapter 6.
7 For a product to be eligible for ASEAN preferential duties, at least 40% of its content must originate
from an ASEAN member state (APEC, 2002, Chapter 11).
8 APEC (2002), Chapter 11.Thailand WT/TPR/S/123
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(ii) Tariffs
(a) Main features
19. Thailand's 2003 tariff schedule, which consists of 5,505 tariff lines at the Harmonized System
(HS) 7-digit level, is relatively complex, involving a multiplicity of rates for each tariff line.9  The
main features of the schedule concerning MFN ta riffs are captured by the summary indicators for
1999, 2002, 2003, and the full implementation of the Uruguay Round (and the ITA) reported inTable III.1.
20. Thailand's tariff system is stipulated in the Customs Tariff Decree B.E. 2530 (1987).  The
Customs Department is responsible for the application of the Harmonized System;  the details of tariff
classification are decided by the Customs Tariff Group within the Department.
21. During the period under review, there was no fundamental change in Thailand's tariff
legislation.  Whereas changes to statutory rates require legislative approval
10, applied rates (or
adjusted rates) may be modified by the Minister of Finance without Parliament's approval, subject to
Cabinet consent, as provided in Section 12 of the Customs Tariff Decree B.E. 2530 (1987);  the
Minister of Finance, with the approval of the Cabinet, may additionally charge "special duty" for any
goods at a rate not exceeding 50% of the rate specified in the Tariff Schedule for such goods.
Table III.1
Structure of MFN tariffs in Thailand(Per cent)
1999 2002 2003 U.R.a
1.Bound tariff lines (% of all tariff lines)b71.6 72.1 72.1 72.1
2. Duty free tariff lines (% of all tariff lines) 3.5 4.0 4.0 2.6
3. Non- ad valorem  tariffs (% of all tariff lines) 21.5 23.1 23.0 25.5c
4. Tariff quotas (% of all tariff lines) 0.9 1.0 1.0 1.0
5. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 20.8 22.1 22.0 25.5c
6.Simple average bound rate 33.1 29.6 28.4 27.1
Agricultural products (HS01-24) 38.6 34.3 33.1 31.8
Industrial products (HS25-97) 32.0 28.4 27.2 25.9
WTO agricultural products 41.5 37.0 35.7 34.4
WTO non-agricultural products 31.4 27.8 26.6 25.4
Textiles and clothing 51.9 38.4 33.6 28.9
7."Nuisance" bound rates (% of all tariff lines)d0.1 0.2 0.2 0.2
Table III.1 (cont'd)
                                                     
9 Thailand's 2003 tariff schedule is based on HS Nomenclature 2002. The Thai tariff schedule has four
distinct sets of rates:  (i) statutory rates, (ii) applied (adjusted) rates, (iii) WTO bound rates, and (iv) concession
rates (these include CEPT (AFTA) rates, AISP (ASEAN Integrated System of Preferences) rates, and GSTP(Global System of Trade Preferences) rates).  Applied (adjusted) rates may be increased above WTO boundrates;  however, if the imports originate in a WTO Member country, the importer may ask to be taxed at WTO
bound rates.  If a customs territory is eligible for more than one concession rate, the lowest one applies.  If the
concession rate for a tariff line is higher than the statutory or applied rate, the latter applies.  Under a tariff line,there may be multiple temporary rates for a particular year ;  for the purposes of this Report, the Secretariat used
an average of rates in each line for the calculation of tariff averages for each year.
10 There has been no change to statutory rates since the previous Review of Thailand.WT/TPR/S/123 Trade Policy Review
Page 36
1999 2002 2003 U.R.a
8.Simple average applied rate 17.0 15.0 14.7 ..
Agricultural products (HS01-24) 32.7 26.0 25.4 ..
Industrial products (HS25-97) 14.6 13.1 12.9 ..
WTO agricultural products 33.1 26.3 25.7 ..
WTO non-agricultural products 14.7 13.1 13.0 ..
Textiles and clothing 24.7 22.5 21.7 ..
9.Domestic tariff "spikes" (% of all tariff lines)e3.6 1.6 1.6 ..
10.International tariff "spikes" (% of all tariff lines)f45.5 43.6 43.5 ..
11. Overall standard deviation (SD) of tariff rates 16.3 13.6 13.2 ..
12."Nuisance" applied rates (% of all tariff lines)d7.1 16.1 16.2 ..
.. Not available.
a Final bound calculations are based on the 2003 tariff schedule.  Including ITA.
b Representing fully bound rates.  Partially bound rates also exist, representing 1.8% for 2003 and 2002, and 1.6% for 1999.
c Based on fully and partially bound lines only.
d "Nuisance" rates are those greater than zero, but less than or equal to 2%.e Domestic tariff spikes are defined as those exceeding three times the overall simple applied rate (indicator 8).
f International tariff spikes are defined as those exceeding 15%.
Note: Excludes in-quota rates and includes AVEs provided by the authorities for specific rates, as available.  The  ad valorem  part of
alternate rates are taken into account for the calculations.  The 1999 tariff is based on 8-digit HS96 nomenclature;  the 2002 and
2003 tariff is based on 7-digit HS02 nomenclature.
Source: WTO Secretariat calculations, based on data provided by the Thai authorities.
(b) MFN tariff bindings
22. Currently, 26.1% of Thailand's HS seven-digit tariff lines are unbound.11 These lines involve
salt, mineral fuels, fertilizers, pulp of wood, transport equipment, rubber products, and iron and steel.
In agriculture (WTO definition), all tariff lines are bound.  With about a quarter of all tariff lines
unbound, and bound rates often considerably in excess of applied MFN rates, tariffs can be changed at
any time, up to the statutory/bound rates, with the consent of only the Cabinet;  this imparts a highdegree of unpredictability to the tariff.  In 2003, a sizable number of applied rates exceeded bound
rates;  the lower of bound and applied rates are applicable to imports from WTO Members.
(c) Duty-free items
23. About 4% of Thai tariff lines (at HS 7-digit level) bear a zero rate.  This proportion is equal to
that at Uruguay Round full implementation.
12
(d) Non- ad valorem  duties
24. Non- ad valorem  duties account for 23.0% (1,268 lines) of all Thai tariff lines (21.5% in
1999), at the HS 7-digit level.  Non- ad valorem  duties consist of specific duties and alternative
                                                     
11 Unbound tariff lines are defined here as lines that are neither fully nor partially bound.
12 Current applied MFN tariffs reflect Thailand's scheduled reductions under the WTO Agreement and
its voluntary tariff reductions;  they also reflect the results of the Information Technology Agreement (ITA).  In
June 2002, applied MFN rates for a number of raw materials (HS chapters 1, 4-6, 12, 13, 17, 19, 25, 27, 32, 39,
47, 48, 51, 68, 70-76, 78, 80, and 81) were voluntarily reduced.  With certain exceptions, Thailand's agriculturaltariff reductions under the Uruguay Round were to be  completed by 2004 and industrial tariff reductions by
2000 (except for textiles and clothing, which was to be completed by 2004), and tariff reductions under the ITAby 2005.Thailand WT/TPR/S/123
Page 37
duties.13  The authorities maintain that such duties are generally intended to provide consistent levels
of protection to domestic products facing fluctuations in import prices.
25. Thailand's non- ad valorem  duties apply mainly to agricultural and food products, plastic and
rubber, pulp and paper, textiles, leather products, and articles of stone (Chart III.1).  Non- ad valorem
duties are indicated clearly in Thailand's tariff schedule and the Thai authorities have ensured the
transparency of roughly two thirds of specific duties by providing estimates of their AVEs.14  These
official estimates show that three of the top 25 tariff lines entailed non- ad valorem  duties with AVEs
that ranged from 140.3% (palm oil) to 81.0% (certain ethyl alcohol), indicating that specific duties
can result in high ad valorem  equivalents.  The simple average of all specific tariff rates with
available AVEs is 13.5%;  the simple average of purely ad valorem  tariff rates is 12.3%.  It should be
noted that every method of calculating AVEs is subject to bias and that AVEs can vary widely
depending on the import price of the product involved;  this tends to be partly determined by
exchange rate changes.  As a result of overall increase in Thai import prices during the period under
review (1999-03), real protection for some products subject to specific duties may have decreased.15
(e) Special duties (or import surcharges)
26. Certain product-specific surcharges continue to be imposed by Thailand;  for example, a
surcharge is levied on out-of-quota imports of corn  and certain fish-meals (see Table III.3).  Details of
import surcharges currently imposed by Thailand were not available to the Secretariat.
(f) Tariff quotas
27. In 2003, tariff quotas covered 1.0% of all tariff lines (at HS 7-digit level).16  About 60% of the
out-of-quota rates were ad valorem , compared with about 75% of the in-quota rates.  The simple
average in-quota MFN tariff rate is estimated to be 22.6%;  the corresponding average out-of-quota
MFN tariff is 40.3% (including AVEs of specific duties).  Tariff quotas do not apply to imports fromASEAN countries, which may, in principle, supply unlimited quantities at preferential AFTA rates,
unless they are excluded from the AFTA scheme;  this is the case, for example, with palm oil.  As of
1 January 2000, all products were, in principle, to be included into the AFTA scheme, with maximum
duties of 20%.  Import licences are required in order to apply for tariff quotas;  quota allocations may
not be transferred.
17  Quotas are underfilled, for several products (Table III.2).
28. Since 1996, all importers of soybean meal face an in-quota rate of 5%, subject to future
changes;  however, it would appear that import licences continue to be issued only to selected animal
and poultry producers.
                                                     
13 An alternative duty involves either an ad valorem  or specific rate;  the higher of the two is applied.
14 The lack of estimates for the remaining one third of specific duties is seemingly due in some
instances to the absence of imports;  this may suggest that the specific rates in question may be prohibitive.  Themost recent estimates of AVEs available were for 2002.
15 For example, average import price was 149.45 (1995=100) in the fourth quarter of 1999 and 184.6 in
the same quarter of 2002.  (BOT online data.  Available at:  http://www.bot.or.th/BOTHomepage/
databank/EconData/Econ&Finance/download/tab45.xls).
16 Existing tariff quotas relate to the 23 agricultural product groups.
17 Procedures for the allocation of quotas are described in a WTO document G/AG/N/THA/38/Add.1,
8 February 2002.WT/TPR/S/123 Trade Policy Review
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Table III.2
Tariff quota commitments, actual imports under tariff quotas, and MFN/bound tariffs, 1999-03
Tariff quota (tonnes)In-quota tariff
(2003)Out-of-quota rate
(2003)
Quota level Actual importsDescription(HS Code)
2000 2000 2001 2002WTO
boundMFN
appliedWTO
boundMFN
applied
Minimum access commitments
Longans, dried (0813.40) 6.67  0.00  0.00 0.00 30% 30% 53.6% 53.6%
Copra (1203.00.0005)  951.22  0.00  0.00 0.00 20% 0.65 B/kg 36.4% 0.65 B/kg
Current access commitments
Milk and cream, not concentrated, notcontaining added sugar or othermatters (including flavoured milk)
(0401, 2202.90)2,349.33  0.00  0.00 0.00 20% 20% 41.5%;
84.9%40%;
3 B/kg
or 60%
a
Milk and cream, concentrated or
containing added sugar or othersweetening matter, in powder,granules or other solid forms, or a fat
content, by weight not exceeding
1.5% (0402.10.0007) 50,555.56 45,617.55
(55,440.65)49,905.89 61,548.55 5% 5% 218.4% 5%
Table III.2 (cont'd)(0)(8)
(0)(1,268)
(9)(343)(124)
(8)(28)(163)
(41)(27)(143)(69)
(167)
(9)(56)
(4)(0)(18)(0)(51)
020406080100120Chart III.1
Share of non- ad valorem  duties, by HS section, 2003
Per cent
Note:
Source :Each bar in the chart depicts the percentage of tariff lines out of the total within each HS section that are non-
ad valorem  duties.  The figure in parentheses above each bar shows the number of tariff lines in each HS 
section involving non- ad valorem rates.  Excluding in-quota rates.  
WTO Secretariat estimates, based on data provided by Thai authorities.Thailand WT/TPR/S/123
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Tariff quota (tonnes)In-quota tariff
(2003)Out-of-quota rate
(2003)
Quota level Actual importsDescription(HS Code)
2000 2000 2001 2002WTO
boundMFN
appliedWTO
boundMFN
applied
Potatoes, fresh or chilled (0701)  295.78 10,084.609
(6,124.425)5,132.440 6,267.500 27% 27% 126.4% 6.25 B/kg
or 60%a
Onions, fresh, chilled, dried, whole,
cut, sliced, broken or in powder, butnot further prepared, mixed(0703.10.0005, 0712.20 0104,0712.20.0200, 0712.40.0304) 357.44 355.572 358.760 346.220 27% 27% 143.6% 6.25 B/kg
or 60%
a;
60%
Garlic, fresh or chilled, whether or not
in powder (0703.20.0007,0712.90.0115, 0712.90.0128)63.67 43.822
(0.00)33.200 22.489 27% 27% 57.6%,
42%57.6%;
42%
Coconut, fresh or dried, whether ornot chilled or peeled includingdesiccated (0801.10.0106,0801.10.0207)2,375.89 61.236  73.487 97.979 20% 20% 54.6% 54.6%
Coffee, whether or not roasted or
decaffeinated; coffee husks and skins:coffee substitutes containing anyportion of coffee(0901) 5.14 3.230 4.151 3.003 30% 30% 91% 4 B/kg
or 40%
a
Tea (0902) 612.11 129.370
(84.286)238.600 447.440 30% 30% 91% 60%;30%
Pepper, dried, whether or not crushed
or ground (0904.11.0003,0904.12.0004)44.11 0.00
(14.735) 0.00 0.00 27% 27% 51.6% 4.2 B/kg
or 30%a
Maize, for feedstuff (Ex. 1005.90) 53,542.67 50,689.00  0.00 0.00 20% 2.75 B/kg 73.8% 2.75 B/kg
Rice (including paddy, broken) (1006) 244,470.78 474.826
(422.8)104.775 399.557 30% 2.75 B/kg;
30%52.6% 2.75 B/kg
Soya beans, edible and inedible
whether or not broken (1201.00.1000,
1201.00.9001)10,690.89 1,370,480.876 1,423,056.368 1,476,708.759 0% 0% 80.9% 0.3 B/kg
or 6%a;
35%
Onion seeds (1209.91.0106) 3.08 6.305
(6.28)6.212 6.275 0% 0% 220.4% 1%
Soya bean oil and its fractions,
whether or not refined, but notchemically modified (1507.10.0001,1507.90.0006) 2,233.00 75.264  0.00 0.00 20% 1.32 B/l;
20%147.6% 1.32 B/l;
2.5 B/l
Palm oil and its fractions, whether or
not refined, but not chemically
modified (1511, 1513.21.0004,1513.29.0007)4,757.33 0.00  0.00 0.00 20% 20%;
2.5 B/l;
1.32 B/l144.6% 2.5 B/l;
1.32 B/l
Coconut oil and its fractions, whetheror not refined, but not chemically
modified (1513.11.0008,1513.19.0005)392.56 0.00  0.00 0.00 20% 2.5 B/l;
1.32 B/l52.6% 2.5 B/l;
1.32 B/l
Cane or beet sugar and chemicallypure sucrose in solid form (1701)13,468.89 0.00  0.00 5.364 65% 3.5 B/l;
65%95% 3.5 B/l;
65%
Instant coffee and other extracts,
essences and concentrates, of coffee,and preparations with a basis of these
extracts, essences or concentrates or
with a basis of coffee (2101.1)131.33 50.393 28.532 68.074 40% 40% 49.6% 49.6%
Soya bean cake (2304.00.0008) 225,679.44 1,309,868.642 1,573,960.284 1,723,215.334 20% 5% 119% 6%
Unmanufactured tobacco;  tobacco
leaves (2401) 6,299.00 4,911.817 .. .. 30% 30% 72% 35 B/kg
or 60%a;
17.5 B/kg
or 30%a;
Raw silk (5002.00.0003)  472.78 0.00  0.00 0.00 20% 10% 229.1% 10%
.. Not available.
a Whichever is higher.Note: Figures in parenthesis for 2000 were retrieved from WTO documents.
Source: WTO Document G/AG/N/THA/39, G/AG/N/THA/40, G/AG/N/THA/45;  and data provided by the Thai
authorities.WT/TPR/S/123 Trade Policy Review
Page 40
(g) Tariff averages
29. The overall simple applied MFN tariff average is 14.7%, down from 17.0% in 1999.  HS
categories of products with the highest simple tari ff averages were vegetable products, prepared food,
transport equipment, footwear and headgear, and arms and ammunition (Chart III.2).18
(h) Tariff dispersion
30. In addition to the 4.0% of tariff lines that are duty free, 34.3% of lines are subject to applied
tariff rates of 5% or less (Chart III.3).  Domestic tariff spikes, that is rates exceeding three times the
simple applied MFN average, affect 1.6% of all tari ff lines, while international tariff peaks, or those
with rates exceeding 15%, affect 43.5% (2003).
                                                     
18 Once the Japan–Singapore Economic Agreement for a New Age Partnership enters into force, the
overall simple applied preferential tariff average will be 4.7% including AVEs, and 2.6% excluding AVEs.051015202530354045Chart III.2
Simple average applied MFN tariff rates, by HS section, 1999 and 2003
Per cent
Excluding in-quota rates.  Including AVEs provided by the authorities for specific rates, as available.   The       ad valorem  part of alternate rates are taken into account fo r the calculations.  The 1999 tariff is based on HS96 
and the 2003 tariff on HS02 nomenclature.  
WTO Secretariat calculations, based on data provided by the Thai authorities.Note:
Source :1999 
2003Thailand WT/TPR/S/123
Page 41
(i) Tariff escalation
31. Tariff escalation is present in a number of subsectors, most notably food products, textiles,
leather products, wood products, paper products, petroleum and coal products, non-metallic mineral
products, iron and steel, and non-ferrous metal (Table AIII.1).  Tariff escalation means that the levelof effective tariff protection increases as goods in these sectors undergo further processing; it thus
tends to deter imports of semi-finished and finished goods.
(j) Tariff reduction and exemptions
32. Thailand continues to use extensive border tax exemptions to encourage investment in remote
areas and production for export (data on the amount of customs duty reductions and exemptions werenot available to the Secretariat).  The granting of these concessions is generally the responsibility of
the Board of Investment (BOI).
Board of Investment and other location-related provisions
33. Developments since 1999 in the BOI's provis ions include the abolition in August 2000 of
local-content requirements and export requirements.(2.5%)
(0.8%)(20.6%)
(3.7%)(13.9%)
(4.0%)(34.3%)
(13.8%)
(2.4%)(1.9%) (1.5%)
02004006008001,0001,2001,4001,6001,8002,0002,200
Duty free >0- 5 >5-10 >10-15 >15-20 > 20-25 >25-30 >30-35 >35-40 >40-45 >450102030405060708090100Chart III.3
Frequency distribution of MFN tariff rates, 2003
Number of tariff lines Per cent
Cumulative per cent
Number of lines (% of total)
Excluding in-quota rates.  Including AVEs provided by the authorities for specific rates, as available.                            
The  ad valorem  part of alternate rates are taken into account fo r the calculations.  Total does not add to 100% as 
for 0.5% (representing 29 lines) no tariff rate is available.  Where several rates exist for a tariff line the average has been taken into account.
WTO Secretariat calculations, based on data provided by the Thai authorities.Note:
Source :WT/TPR/S/123 Trade Policy Review
Page 42
34. Projects located in the most remote (zone 3) areas continue to be entitled to duty-free imports
of machinery, irrespective of the share of exports in output.19 These exemptions resulted in revenue
losses of US$1,775 million in 2002.  Imports of machinery, equipment, and materials for use by oil
and gas concessionaires and their contractors are exempted from import duties.20
Duty exemptions for production in export processing zones and other special zones
35. The export processing zones provide exemptions from import duty and VAT for all imported
machinery and raw materials used for production of exports, and from export taxes on exported
goods.21  On 1 January 2003, the authorities abolished export requirements (previously, producers
located in EPZs had to export at least 40% of their annual sales) as an approval criteria22;  firms
located in EPZs may supply the local market, provided import duty, excise tax, and VAT are paid in
full.
36. Non-tax incentives include:  permission for fo reign investors to own land for carrying out
promoted activities;  permission to bring in foreign technicians and experts to work on promoted
projects;  and permission to remit foreign currencies.23  Currently, the main exports out of Thailand's
ten EPZs are electrical appliances and parts, electronic and scientific equipment, optical equipment,
and jewellery.  Exports from EPZs accounted for approximately 7% of total merchandise exportsin 2002.
37. The Customs Department introduced a new programme, the free zone (FZ) in 2000, in
accordance with Article 97 of the Customs Act 1926,
 with a view to promoting investment in and
exports from these zones.  The establishment of an FZ is allowed if the zone is used for industrial or
commercial operations or other operations deemed  beneficial to national economy.  Goods imported
and taken into an FZ and for industrial or commercial operations qualify for exemption from import
duties, VAT, and excise tax.  To date, one free zone, consisting of ten industrial (electronics,machines, tool and jewellery) plants, has been established.
Bonded warehouse and other provisions for tariff refunds
38. Goods may be imported into a bonded warehouse without payment of import tariffs when the
materials are to be used as an input in products destined for export or are themselves re-exported;
these imports must be stored and used in a production process for exportation within two years fromthe date of importation.  In FY 2002, customs revenue losses from this measure amounted to
B 21.5 billion.
39. Exporters can also choose to use the duty drawback scheme administered by the Customs
Department in order to import inputs duty free for export production.  Importers are entitled to a
refund of import duties already paid on imported raw materials if they are used for production andexported within one year; claims for drawback must be made within six months after exportation.  In
FY 2002, customs revenue forgone as a result of this measure amounted to B 14.8 billion.
                                                     
19 For projects located in either zone 1 or zone  2, 50% reduction of import duties are accorded.
20 BOI online information.  Available at:  http://www.boi.go.th/english/business/taxation.html.
21 Goods sold or services provided among industrial operators, whether in the same or a different EPZ,
are treated as exports and thus are subject to neither VAT nor export taxes.  EPZs currently in operation are
industrial estates at Ladkrabang, Laemchabang, Northern region, Southern region, Bangpoo, Chonburi (Bo-
win), Ban-wa, Bangpa-in, Plangyaol, and Pichit.
22 WTO document G/SCM/101/Suppl.1, 2 April 2003.
23 These measures, while generally granted in practice, are guaranteed under the legislation covering
EPZs, but not otherwise.Thailand WT/TPR/S/123
Page 43
End-use provisions
40. According to the authorities, some end-use prov isions remain in Thailand's tariff, whereby the
tariff on an item varies according to the use made of the product;  however, detailed information
regarding end-use provisions was not available to the Secretariat.
(k) Tariff adjustments
41. Since 1999, the Government has implemented four sets of tariff reductions based on
recommendations of the Tariff Restructuring Committee, established in 1998.  In this regard, on
10 August 1999, the Government reduced tariffs on 638 items of capital goods, raw materials, and
other items such as machinery, chemical products, plastics, and cotton;  on 1 January 2000, 153 items
covered in the ITA became duty free;  on 4 July 2000, tariffs on 542 items of raw materials,
intermediate products, capital goods and other items such as chemicals, pharmaceutical products,packaging, machinery, and input for automotive parts were reduced;  and on 31 October 2000, the
Cabinet approved a tariff reduction on 73 items of raw materials for goods under the ITA-I,
petrochemical goods, synthetic organic coloring matter, and other goods, as part of a Cabinet-
approved new economic package.
24 Tariff rates for meat of bovine animals (HS0210.20), oil cake
(HS2306.490), and packing material (HS3923.90)  were increased between 2002 and 2003.
42. At the WTO Singapore Ministerial Conference in early December 1996, Thailand was party
to the Ministerial Declaration on Trade in Information Technology Products (the Information
Technology Agreement (ITA)), which bound tariffs on specific information technology products at
zero.  In this process, Thailand committed itself to eliminating duties on an MFN basis in two equal
annual rate reductions ending in January 2000 on approximately three quarters of products covered by
the ITA;  for the remainder, tariffs are to be brought down to zero in eight equal rate reductions
ending in 2005.
(l) Regional and bilateral tariff preferences
43. Thailand grants tariff preferences to members of the Association of South-East Asian Nations,
under an agreement for the progressive establishment of an ASEAN Free-Trade Area by 2002
(Chapter II(6)(ii)(b)).  The average AFTA preferential rate extended by Thailand was about 4.0% in
2003, compared with an MFN average of 14.7%.25  By 2002, Thailand had no line specified on the
Temporary Exclusion List;  seven sensitive items are excluded (Chapter II(6)(ii)(b)).
44. In 1999, Thailand granted GSP to the Lao People's Democratic Republic.26
(m) Global System of Trade Preferences
45. Under the Global System of Trade Preferences (GSTP), Thailand provides preferential
margins of 2.5% to 100% of MFN rates  on about 1,600 items to members of the GSTP Agreement.
                                                     
24 APEC (2002).
25 In 1999, the AFTA rate was 9.8%, about half the average applied MFN rate (WTO, 2000, p. 43).
26 APEC (2002).WT/TPR/S/123 Trade Policy Review
Page 44
(iii) Non-tariff border measures
(a) Import licensing and prohibition
46. Thailand's system of import restrictions involving licensing and prohibitions have remained
generally unchanged since its previous Review.  Conditions attached to import licensing on various
items tend to be complex and opaque, and in some cases appear equivalent to quantitative restrictions
(Table III.3).  A number of import restrictions are in force for economic purposes, including onseveral additional products made subject to import licensing or prohibition, while some products were
liberalized, since 1999.
27  Infant industry protection has been the main objective behind import
restrictions since the 1970s.
Table III.3
Products subject to import licensing in Thailand, 2002
Commodity HS code Rationale Measures and condition
Yellowfin tunas 0302.32 Environmental protection Import certificate from the
Department of Fishery isrequired.
Milk and cream 04.01, 2202.90 To encourage the production of
milk, to protect local producersTariff quota
Milk and cream in powder 0402.10.0007 To develop and encourage
domestic industry, to securefarmers' incomeTariff quota
Potatoes 0701 Domestic protection Tariff quota
Onion 0703.10.0005, 0712.20.0104,
0702.20.0200Industry protection Tariff quota
Garlic 0703.20.0007, 0712.90.0115,
0712.90.0128To protect domestic farmers Tariff quota
Coconut 0801.11.0000, 0801.19.0007 Local farmers' protection Tariff quota
Dry longan 0813.4 Industry protection Tariff quota
Coffee 0901, 2101.10 Industry protection Tariff quota
Tea 09.02 Local farmers' protection Tariff quota
Pepper 09.04 Domestic protection Tariff quota
Maize (Corn) 1005.90 To protect domestic farmers Tariff quota, import surcharge
for non-WTO Members
Rice 1006.10, 1006.20, 1006.30,
1006.40To secure local farmers' income Tariff quota
Soyabeans 1201.001.000, 1201.009.001 Local farmers' protection Tariff quota
Copra 1203.00.0005 Industry protection Tariff quota
Onion seeds 1209.91.0106 To stabilize price of onion seeds Tariff quota
Soyabean oil and its fractions 1507.10.0001, 1507.90.0006 Domestic protection Tariff quota
Palm oil and its fractions 1511, 1513.210004,
1513.29.0007To encourage the production of
palm oil and to secure localproducers' incomeTariff quota
Coconut oil 1513.11.0008, 1513.19.0005 Industry protection, to secure
farmers' incomeTariff quota
Fish-meal with protein
content less than 60%2301.200.106 Stabilize price of raw material use
for animal foodNAL:  importation is not
generally allowed
Table III.3 (cont'd)
                                                     
27 These include:  prohibition of the import of diamonds originating in Sierra Leone (in June 2001) and
Liberia (in January 2002) in accordance with the resolution of the UN Security Council;  the introduction oflicensing requirement for the import of albuterol or salbutamol and its salts (in March 2002), caffeine (in
June 2002) for public health reasons, and certain pharmaceuticals and chemicals (in May 2002) for economic
stability and public health reasons.  In January 2003, the importation of 50 x 50 x 50 cm marble blocks was
liberalized.Thailand WT/TPR/S/123
Page 45
Commodity HS code Rationale Measures and condition
Fish-meal with protein
content more than 60%2301.200.106 Stabilize price of raw material use
for animal foodImport surcharge
Oil cake residues, from the
extraction of soyabean oil2304.00.0008 Stabilize price of raw material use
as animal foodTariff quota, import surcharge
for non-WTO Members
Marble (except marble blockof 50x50x50 cm
3)2515 Encourage and protect domestic
industryNAL:  importation is not
generally allowed
Gasoline 2710.001 Monitoring current fuel price Automatic licensing, only for
authorized importers
Kerosene 2710.002 Monitoring current fuel price Automatic licensing, only for
authorized importers
High speed diesel oil 2710.003 Monitoring current fuel price Automatic licensing, only for
authorized importers
Naphtha 2710.005, 2710.009 Monitoring current fuel price Automatic licensing, only for
authorized importers
LPG Gas 2711.120, 2711.130,
2711.140, 2711.190Monitoring domestic consumption Automatic Licensing, only for
authorized importers
Potassium Permanganate 2841.61 Public morals, drug suppression Automatic licensing, only for
registered importers
Clenbuterol 2922.199 Public health NAL:  importation is permitted
under the approval of the Food
and Drug Administration
Albuterol or Salbutamol 2922.509 Public health NAL:  importation is permitted
under the approval of the Food
and Drug Administration
Caffeine 2939.30, 3003.40 Public health, social security Restriction, allow only with
certificate from the FDA, or
other authorized concerned
Waste, parings and scrap ofplastics3915 Environmental and public health NAL:  with approval from the
Department of Industrial Works
Wood sawn or chipped 4403, 4407 – 4421 To facilitate international trade
transactionAutomatic licensing, certificate
of origin, export certificate fromexporting country
Raw silk 5002 Accommodate to current situation,
industry protectionTariff quota
Silk yarn 5004 Accommodate to current situation,
industry protectionAutomatic licensing, with
conditions set by Department of
Foreign Trade
Jute 5303.10, 5303.90, 5305.91,
5305.99To secure farmers' income NAL:  imports permitted for use
as raw material in
manufacturing
Garment 61.01 to 61.14 61.17.90,
62.01-62.11, 62.17.90Compliance with ATC
commitmentAutomatic licensing
Sacks and bags of jute or
other textile6305.10, 6305.90 To secure farmers' income Importation is not generally
allowed, only permitted for the
use as raw material in
manufacturing
Worked monumental or
building stone6802 Industry protection NAL:  importation is not
generally allowed
Used motorcycle engine 8407.31, 8714.19, 72.04,
76.02Public health and safety Absolutely prohibited
Used diesel engines with
displacement of 331-1,110cc.8408.90 Public health and safety NAL:  importation is not
generally allowed
Intagio printing machinery 8443.500 To prevent making of counterfeit
moneyAutomatic licensing
Chain saws 8467.81, 8467.91, 8508.20,
8508.90To prevent smuggling of logging,
forest conservationDepartment of Foreign Trade
authorizes the Department of
Forestry to grant import permits
Table III.3 (cont'd)WT/TPR/S/123 Trade Policy Review
Page 46
Commodity HS code Rationale Measures and condition
Passenger car (prototype) 8702.101, 8702.901 Industry protection, foreign
currency reservationImportation is not generally
allowed, except for use as
prototype for assembly or
production
Used motor vehicles 8703.21, 8703.229,
8703.239, 8703.249,
8703.319, 8703.329,8703.339Public health, environmental
protectionNAL:  importation is not
generally allowed, exempt for
importation for re-export orimportation by individual
Motor vehicles for thetransport of 30 or morepersons8702.101, 8702.901 Industry protection, foreign
currency reservationNAL:  importation is not
generally allowed, except for
use as prototype for assembly or
production
Used motorcycle 8711 Public health Importation is not generally
allowed
Colour photo-copyingapparatus9009.110, 9009.120 To prevent making of counterfeit
moneyAutomatic licensing
Game machines, coin or disc
operated9504.30, 9504.901, 9504.909 Public moral Prohibited
Original sculptures and
statuary, in any materials9703.009 To prevent smuggling of historical
objects or antiquesNAL:  Department of Foreign
Trade authorizes the Department
of Fine Art to grant licences
Used machine for multimediaproductionTo prevent the violation of
intellectual propertyNAL
CFC refrigerators Public health and environmental
protectionImportation is prohibited
Glazed ceramic wares Public health NAL:  importation will be
allowed on case by case basis
Gold Economic security and stability NAL:  Department of Foreign
Trade authorizes the Department
of Finance to grant licences
Counterfeit products To prevent importation of
imitation and counterfeit productAbsolutely prohibited
Diamonds from Sierra Leone
and LiberiaConformity with UN resolution Importation is prohibited
Medals, coins To prevent making of counterfeit
medals and coinsNAL:  importation is allowed
only by the Minister of Finance
and other authorized entity
Goods duplicating registered
productsTo prevent imports that violate the
rights of registered productAbsolutely prohibited
Drug and pharmaceutical
chemicals in 16 items, 154
categories (Aristolochia spp.,
Chloramphenicol,Chloroform,
Chlorpromazine, Colchicin,
Dapsone, Nitrofurans,Diethylstilbestrol,
Sulfonamides,
Fluoroquinolones,Glycopeptides,
Dimetridazole,
Metronidazole, Ronidazole,Ipronidazole,
NitroimidazolesEconomic security, public health,
accommodate to domestic
productionAutomatic licensing, with
import certificate from
authorities concerned
Note: NAL = Non-automatic licensing.
Source: Department of Foreign Trade, Thailand.  Available at:  http://www.dft.moc.go.th/import_index.htm (in Thai only).
47. The legislative authority for regulating imports is provided by the Export and Import Act
B.E.  2522 (1979).  The Act empowers the Minister of Commerce, with the approval of the Cabinet,
to restrict imports for reasons such as economic stability, public interest, public health, nationalThailand WT/TPR/S/123
Page 47
security, peace and order, morals, or for any other reason in the national interest.  Under the Act,
imports may be "absolutely" or "conditionally" prohibited;  in the latter case, e.g. those requiring non-
automatic licensing, they are allowed if certain specified conditions are satisfied.  In addition to the
Export and Import Act B.E. 2522 (1979), various other laws stipulate import restrictions.  Under the
Investment Promotion Act, the Board of Investme nt is authorized to request the Ministry of
Commerce to ban imports of goods competing with those produced by a domestic industry, if theBoard is of the view that other forms of protection are not sufficient to assist the industry.  Imports
may also be prohibited under the various laws in place for health and safety reasons (see below).
Import prohibitions
48. Products that are absolutely prohibited include counterfeit goods and the equipment for their
manufacture, marble, used motorcycle engines, game machines (coin or disc operated), householdrefrigerators utilizing CFC in the production process, and glazed ceramic ware (Table III.3).  Thailand
lifted the ban on imports of diamonds from Angola in April 2003.  The authorities state that the
objective of import prohibitions is to protect public morals, national security, human, animal or plant
life, and health.
28
49. To prevent the outbreak of BSE (Bovine Spongiform Encephalopathy) in Thailand and for
food safety purposes, animal carcasses and products thereof from countries where the disease exists
are not admissible into Thailand.29
Import licensing
50. Products subject to non-automatic licensing currently include 23 agricultural items under
tariff quota and processed goods (including certain fish-meal, raw silk and silk yarn, jute and kenaf,
gunny bags woven of jute or kenaf, used diesel engines, certain buses, chainsaws, used cars and
tractors, used motorcycles, marble, plastic wastes, building stones and coins in size and weightsimilar to official coins, and certain antiques or objects of art).  Automatic import licensing system
currently applies to certain garments, intaglio pr inting machines, and colour photocopying machines.
Coverage of products can be changed through notifications of the Ministry of Commerce.
51. Thailand has not notified its relevant licensing legislation nor provided replies to the Import
Licensing Questionnaire under Articles 1.4(a), 8.2(b) and 7.3 of the Agreement.
30
(b) Import quotas
52. According to the authorities, Thailand maintains no import quotas.
(iv) Contingency measures
(a) Safeguards
53. Since 9 July 1999, Thailand's legal basis for safeguard measures has been the Ministry of
Commerce Notification on Safeguard Measures B.E. 2542 (1999).31  In January 2002, the Board of
Investment (BOI) announced the imposition of temporary surcharge on steel imports in an attempt to
                                                     
28 APEC (2002).
29 Department of Livestock Development Notification, 28 December 2000.
30 WTO document G/LIC/9/Rev.1, 18 February 2003.
31 WTO document G/SG/N/1/THA/2, 17 December 1999.WT/TPR/S/123 Trade Policy Review
Page 48
protect local steel production promoted by the BOI.32  This measure was terminated in July 2002 and
replaced by anti-dumping measures.
(b) Anti-dumping and countervailing measures
54. There has been no change in Thailand's Anti-Dumping and Countervailing Act, which
provides the legal basis for anti-dumping and countervailing measures.33  Under the Act, formal
procedures for anti-dumping and countervailing investigations are initiated by petition filed with theDepartment of Foreign Trade (DFT).  The DFT then conducts an investigation and makes a
preliminary determination.  The preliminary determination may involve duty rates calculated on the
basis of a preliminary analysis of responses to a questionnaire submitted by the foreign government
and the foreign producers/exporters.  The preliminary determination is then announced to the public
by the DFT.  The DFT may then apply provisiona l measures after affirming that the investigated
products are dumped, causing injury to domestic producers.  Provisional measures may take the form
of a provisional duty or a security by cash deposit or bond equal to the amount of the preliminarily
determined margin of dumping.  The imposition of provisional measures is generally limited to four
months, with a possible extension to six months at the request of exporters.  Provisional measures are
announced to the public by the DFT.  After the end of period of imposition of provisional measures, ifthe DFT makes an affirmative determination of dumping with regard to the product concerned, it will
announce the imposition of final measures.
55. As of May 2003, Thailand maintained definitive anti-dumping duties on six products from
12 WTO Members;  another three were levied on products imported from non-members
(Table III.4).
34  During the period under Review, Thailand’s anti-dumping duties (including
provisional measures) ranged from 5.98% to 135.5% of the value of imports.  Thailand has used no
countervailing measures since its previous Trade Policy Review.
Table III.4
Anti-dumping measures, as at 31 May 2003
Product Country/customs
territoryDate of imposition Definitive duty rate in
force
Hydrogen peroxide India 08/02/99 30% (f.o.b.)
China 10/10/02 27.81% (c.i.f.)
Poland 27/05/97 27.78% (c.i.f.)H-section
Republic of Korea 24/04/98 31-65-44.70% (c.i.f.)
Float Glass Indonesia 08/02/00 39.96% (c.i.f.)
Kazakhstan 25/01/03 26.36% (c.i.f.) Cold-rolled carbon steel, sheet and
strip in coils and cut-to lengthRussia 20/02/03 35.80-64.70% (c.i.f.)
Table III.4 (cont'd)
                                                     
32 Imports of hot-rolled sheets/plates/coils of iron or non-alloy steel will be subject to import surcharges
of 25% of c.i.f. value. Surcharges for cold-rolled sheets/coils of iron or non-alloy steel will also be at 25% ofc.i.f. value. Surcharges for painted or unpainted, zinc-coated or aluminium zinc alloys coated of iron or non-alloy steel will be at 5% of c.i.f. value. Surcharges for cold-rolled sheets/coils of stainless steel will be at 15% of
c.i.f.  (Announcement of the Board of Investment No. Thor.1-4/2545 [Online].  Available at:
http://www.boi.go.th/english/announcements).
33 An unofficial translation of the Anti-Dumping and Countervailing Act is found in WTO document
G/ADP/N/1/THA/4 (G/SCM/N/1/THA/4), 20 December 1999.
34 WTO document G/ADP/N/98/THA, 29 April 2003.Thailand WT/TPR/S/123
Page 49
Product Country/customs
territoryDate of imposition Definitive duty rate in
force
Chinese Taipei 13/03/03 4.84-33.99% (c.i.f.)
EU 13/03.03 10.02-25.57% (c.i.f.)
Japan 13/03/03 0.00-50.92% (c.i.f.)Flat-rolled products of stainless steela
Republic of Korea 13/03.03 50.99% (c.i.f.)
Flat hot-rolled steel in coils and not
in coilsAlgeria 27/05/03 33.26% (c.i.f.)
Argentina 27/05/03 37.94-53.09% (c.i.f.)
Chinese Taipei 27/05/03 3.45-25.15% (c.i.f.)
India 27/05/03 26.81-31.92% (c.i.f.)
Indonesia 27/05/03 24.48% (c.i.f.)
Japan 27/05/03 36.25% (c.i.f.)
Kazakhstan 27/05/03 109.25% (c.i.f.)
Republic of Korea 27/05/03 13.96% (c.i.f.)
Romania 27/05/03 27.95% (c.i.f.)
Russia 27/05/03 24.20-35.17% (c.i.f.)
Slovak Republic 27/05/03 51.95% (c.i.f.)
South Africa 27/05/03 128.11% (c.i.f.)
Ukraine 27/05/03 30.45-67.69% (c.i.f.)
Venezuela 27/05/03 78.44% (c.i.f.)
Citric acidbChina 14/03/03 45.85% (c.i.f.)
a Provisional measures.
b Preliminary determination.
Source: Department of Foreign Trade, Thailand.
(v) Government procurement and countertrade
(a) Government procurement
56. Thailand participates in the WTO Working Group on Transparency in Government
Procurement;  it is not a member of the Government Procurement Agreement.
57. The core procurement rules for the Central Government are the Regulations of the Office of
the Prime Minister on Procurement B.E. 2535 (1992), as amended in 2002.  The 2002 amendmentinvolved, inter alia , changing of membership of the Procurement Committees and the implementation
of electronic auction (e-Auction).  According to the authorities, all government agencies (central and
provincial administration) must comply strictly with the Regulations for procuring activities;  local
administration and state enterprises are not under direct control of the Regulations.
58. The authorities state that procurement regulations are designated to ensure that public funds
are used economically and efficiently, provide fair and equal opportunity to anyone to supply the
goods and services required, prevent corruption, and respond to the Government's social and
economic policies;  competitive bidding in the form of open tendering is regarded as the best method
of achieving these objectives and must be employed for higher value contracts.  However, in practice,
preference is given to Thai products, contractors, and consultants, as described in the previousSecretariat Report.
35  Competitive bidding is used when the value of a goods or services contract
                                                     
35 Determination of the local preference margin is based on the level of industrial standards met by the
product concerned.  Where products do not meet industri al standards or registration, the Government considers
the origin of the product.  If foreign products are proposed at a price not more than 5% higher domesticWT/TPR/S/123 Trade Policy Review
Page 50
exceeds B 2 million36;  for procurement valued between B 100,000 and B 2 million, selective
tendering is used, and price agreement through negotiation is used for procurement valued at no more
than B 100,000.  Special methods are used when procurement is made repeatedly or when a delay in
procurement may be detrimental to the procuring agency concerned and when the amount of
procurement exceeds B 100,000.  According to the authorities, domestic and foreign contractors with
capital of more than B 500 million are considered on an equal basis.
59. The Office of Procurement Management under the Comptroller General's Department in the
Ministry of Finance serves as the Secretariat of the Public Procurement Management Committee37,
issues, amends, and advises on procurement regulations and practices, and negotiates international
agreements on procurement issues.38  Other relevant agencies responsible for the administration of
Thailand’s government procurement include:  the Bur eau of the Budget (which is responsible for the
budget planning, allocation, and evaluation);  the Comptroller General's Department (budget
disbursement);   the Thai Industrial Standards Institute (registration of products subject to industrial
standards requirements in order to be eligible for preference margins);  Office of the Auditor General
(procurement audit);  Office of the National Counter Corruption Commission (inspection of the
procurement process);  and the Administrative Court (the jurisdiction of administrative casesinvolving such matters as a dispute in relation to unilateral administrative acts).
60. A Cabinet resolution of 1 October 2002 required that all government agencies maintain their
own websites containing procurement information, and implement the electronic auction (e-Auction)
for at least one item of simple merchandise purchasing by 14 February 2003.  To this end, the
regulations of the Office of the Prime Minister on procurement 1992 were amended to allow
e-Auction procedures.
61. The authorities indicate that the Government does not record the value of annual procurement
by government agencies;  Budget Appropriations on Equipment, Properties and Construction, which
may be considered as an indirect indicator of the value of annual procurement by government
agencies, has declined gradually since FY 1999, from B 193.6 billion to B 121.3 billion in FY 2002.
39
                                                                                                                                                                    
products, the Government exercises the right to negotiate with domestic suppliers and may purchase the
domestic products.
36 Tenders are advertised within the specified time through a bid notice posted at the office of the
government agency, radio broadcasts, and newspapers;  notices are also sent to the Public Relations Department,the Mass Communication Organization of Thailand for public information, the Bidding Information Centre for
dissemination, and the Office of the Auditor-General.
37 The Procurement Committee comprises the Permanent Secretary of the Finance Ministry as
chairman, the Comptroller-General from Comptroller General's Department, and representatives from theDefence Ministry, the Office of the Auditor General, the Office of the Attorney General, the Bureau of theBudget, the Office of the Council of State, the Office of the National Counter Corruption Commission, theOffice of the Permanent Secretary to the Prime Minister, the Office of Public Debt Management, Thai Industrial
Standards Institute, and other appointed qualified pe rsons.  The responsibilities of the Committee include:
interpreting and making rules concerning compliance with the Regulations;  considering exemption from, orrelaxation of compliance with the Regulations;  considering complaints concerning failure by a governmentagency to comply with the Regulations;  proposing revisions of the Regulations to the Council of Ministers;  anddesignating categories or types of supplies that must be purchased from abroad.
38 The functions and responsibilities of the Office were transferred from the Office of the Permanent
Secretary, the Prime Minister's Office in October 2002.
39 The government agencies of Thailand are divided into four categories:  central and provincial
administration, local administration, state enterprises and independent public bodies.  The expenditures of theCentral and Provincial Administration mainly rely on the budget allocation;  the other three categories partiallyrely on the budget allocation and are able to manage their own budget and revenues.Thailand WT/TPR/S/123
Page 51
(b) Countertrade
62. Current countertrade policy stipulates that all procurement contracts by government agencies
and state enterprises that involve imports above B 300 million must have a related countertrade
transaction of at least one half of the procurement value.40  Coordination of countertrade is the
responsibility of the Department of Foreign Trade at the Ministry of Commerce.
(3) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Registration and documentation procedures
63. A few export items (e.g. orchids, langans, durian) require registration with the Department of
Agriculture;  registration is apparently in place for quality, price monitoring, and food security
purposes.  Registration is also used to meet quantitative restrictions in the case of textiles and
clothing.  In order to expedite customs clearance for exports, an EDI (electronic data interchange)system has been implemented since 2000.
(ii) Export taxes, charges, and levies
64. Since 1999, there has been no change in Thailand's export duties (Table III.5).  Export taxes
in Thailand consist of statutory rates and applied rates.  The contribution of export taxes to
government revenue remains negligible.  The persistence of relatively high statutory export taxes,nevertheless, leaves an element of uncertainty in Thailand's trade regime, as export taxes on important
products such as rice or rubber could in principle be reintroduced up to the level of the statutory rates
without the need for legislative approval.  Accordin g to the authorities, the collection of export taxes
is primarily for the purpose of conserving the environment.
Table III.5
Export duties in Thailand, 2003
(Baht and per cent)
Commodity Applied rate Statutory rate
Hides of bovine animals
Raw hides B 5 per kg. B 5 per kg.
Parings, waste, and dust for use in the production of leather B 0.4 per kg. B 4 per kg.
Wood, sawn wood, and articles made of wood
Wood and sawn wood 0% to 40% 40%
Articles of wood
Unsuitable for other conversion 10% 10%
Other 20% 20%
Rice 0% 10%
Metal scraps 0% 50%
Rubber 0% 40%
Raw silk and silk yarn 0% B 100 per kg.
Certain fish 0% 75%
Source: Information provided by the Thai authorities.
(iii) Export prohibitions, restrictions, and licensing
65. As in the case of imports, licensing is used to administer quotas, conditional prohibitions, and
absolute prohibitions.  These measures are in place for economic, quality, health and safety purposes,
                                                     
40 Office of the Prime Minister Regulation on Countertrade B.E. 2543 (2000).WT/TPR/S/123 Trade Policy Review
Page 52
as well as to implement agreements with trading partners, concerning notably textiles and clothing,
motor vehicles, and certain agricultural products (Table III.6).  Membership of the Board of Trade and
respective trade associations is often required to obtain export licences.41
Table III.6
Products subject to export licensing in Thailand, 2002
Commodity HS Rationale Measures and condition
Agriculture products
Live horses, asses, and
mules0101 Animal preservation Export is generally not allowed
Chipmunks 0106 Animal preservation Export is generally not allowed
Elephants 0106 Animal preservation NAL, with approval from
Department of National Parks,Wildlife, and Plants
Turtles (spiny terrapin) 0106 Animal preservation Export is generally not allowed
Live animals in 277categories0106 Animal preservation NAL, for 80 categories, automatic
licensing for 197 categories withapproval from Department of
Forestry
Rare live sea animalscarcass and products0301-0307 Animal preservation, in compliance with
CITES agreementExport is not generally allowed
Ornamental fish (in
400 species)0301.10 Animal preservation Export is generally not allowed
Live shrimp 03.06 Prevent domestic shortages Automatic licensing, with
certificate from Department of
Fishery
Crustaceans (shrimp and
octopus) frozen or chilled0306, 0307, 1605,
1902Requirement of importing nation (only
exports to the U.S. and EU)Exporter must be members of Thai
Frozen Food Association
Pearl shell 03.07 To encourage local farming industries NAL, with export certificate from
Department of Fishery
Tortoise-shell 05.06, 05.07, 05.11 Animal preservation NAL, with approval from Ministry
of Agriculture
Dead animals, unfit for
human consumption
(291 categories)05.06, 05.07, 05.11 Animal preservation NAL, for 262 categories
AL, for 29 categories withapproval from Ministry of
Agriculture
Coral 0508 Animal preservation Export is generally not allowed
Pearl shell 0508 To encourage local industry Automatic licensing, with export
certificate from Department of
Fishery
Orchids for export to EU 0603.10 According to bilateral agreement Exporters must be registered with
Department of Agriculture, and
required phytosanitary certificate
Durian 0810.90 To regulate the export system Automatic licensing, exporters
must be registered with
Department of Agriculture
Longans 0810.90 To regulate the export system Exporters must be registered with
Department of Agriculture,Ministry of Agriculture
Coffee 0901, 2101.10 Compliance with International Coffee
AgreementAutomatic licensing
Rice 1006.10, 1006.20
1006.30, 1006.40Prevention of domestic shortages, export
controlAutomatic licensing, export quota
(EU)
Jute seeds 1209.99 Domestic preservation Export is generally not allowed
Rattan 1401.20 Domestic preservation Export is generally not allowed
Table III.6 (cont'd)
                                                     
41 EIU (2002a), p. 25.Thailand WT/TPR/S/123
Page 53
Commodity HS Rationale Measures and condition
Tuna in airtight containers 1604.14 To regulate the export system Exporter must be members of Thai
Food Processors Association
Sugar 1701 Local industries protection Automatic licensing, exporters
must be registered with Ministry of
Industry
Canned pineapple and
concentrated pineapplejuice2008.20, 2009.40 To regulate the export system Exporters must be a member of
Thai Food Processors Association,or Thai Pineapple Industry
Oil cake and other solidresidue, resulting from
extraction of ground-nut
oil2304, 2305 Prevention of domestic shortages Export is generally not allowed
Oil cake and other solid
residue, resulting from
extraction of soyabean oil2304.00.0008 Prevention of domestic shortages Export is generally not allowed
Non-agriculture
products
Potassium permanganate 2841.61 Public moral, prevention of narcotics Automatic licensing:  only with
approval from Office of theNarcotic Control Board
Caffeine 2939.30, 3003.40 Public health Automatic licensing:  only with
approval from FDA or Departmentof Industrial Works
Animal or vegetablefertilizers3101.00 Prevention of domestic shortages NAL:  with approval from
Department of Agriculture,
Ministry of Agriculture and
Cooperatives
Wood, sawn or chipped 4401, 4403, 4404,
4406, 4407Prevention of  domestic shortages Export is generally not allowed,
except Pines and Eucalyptus thatreceive approval from Director-
General of Department of Forestry
Wood charcoal 4402 Forest conservation NAL:  exportation is not generally
allowed
Rubber woods 4403, 4404, 4406,
4407Prevention of domestic shortage Automatic licensing
Non-categorized HS
numbers
Buddha images To protect national treasures of artistic,
historic, and archaeological valueAutomatic licensing, with export
certificate from Department of
Fine Arts
Coal Conservation of exhaustible natural
resourcesNAL, allowed only for re-export,
or coal imported to produce for
exports;  export certificate from theDepartment of Alternative Energy
Development and Efficiency,
Ministry of Energy
Counterfeit products To prevent the production of counterfeit
productsProhibited
Fuel Pursuant to the UN Security Council
resolutionAutomatic licensing, with
certificate from Petroleum
Authority of Thailand
Gold Economy security and stability Automatic licensing, with
conditions set by Ministry of
Finance
Goods duplicated fromcopyright productsTo prevent the exportation of imitation
productsProhibited
Goods export to Sierra
LeoneCompliance with UN resolution 1171
(1998)Prohibited
Goods export to Angola Compliance with UN resolution 1173
(1998)Prohibited
Table III.6 (cont'd)WT/TPR/S/123 Trade Policy Review
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Commodity HS Rationale Measures and condition
Natural sand Conservation of exhaustible national
resourcesProhibited
Re-export products According to the commitment with the
countries that produce or export goods
to ThailandThailand has not yet committed to
re-export agreement with any
countries
Silica sand or quartz sand Conservation of exhaustible national
resourcesDepartment of Foreign Trade
authorizes the Department of
Mineral Resources to grant
licences
Tapioca Export quota (EU) Bilateral agreement provisions
Textiles Export quota (EU, U.S., Canada,
Norway)Bilateral agreement provisions
Note: NAL = Non-automatic licensing.
Source:  Department of Foreign Trade, Thailand [Online].  Available at:  http://www.dft.moc.go.th/export_index.htm.
66. Changes in Thailand’s export licensing and prohibitions since 1999 include:  removal of
export prohibition on all types of arms, military vehicles, military hardware, and spare parts to Serbia
and Montenegro (including Kosovo) (in March 2002);  imposition of an export prohibition on alltypes of arms, military vehicles, hardware, and spare parts to Ethiopia and Eritrea (in June 2001),
Liberia (in January 2002), and Somalia (in February 2002) in accordance with resolutions of the UN
Security Council;  and the export of caffeine has been regulated since June 2002 and of potassium
permanganate since August 2002.
67. Exports of automobiles to Chinese Taipei is subject to export licence and quota allocation, in
accordance with a bilateral agreement.
68. There has been no change since 1999 in Thailand’s export-related exchange control
regulations;  they require that all proceeds of exports exceeding B 500,000 are received in Thailand
not be later than 120 days from exportation.
(iv) Export assistance
69. Since 1999, the Export-Import Bank of Thailand (EXIM Bank) has terminated its major
subsidy programmes by the end of 2002, including the Packing Credit Facility, which was an exportfinancing scheme involving concessionary interest rate provided by the Bank of Thailand, with
co-financing from commercial banks.
42  The other main export finance schemes by the EXIM Bank
remain unchanged.43
70. In December 2002, pursuant to Article 27.4 of the WTO Agreement on Subsidies and
Countervailing Measures, the SCM Committee granted Thailand a time-limited extension in respectof two specific export subsidy programmes.
44
71. Domestic products that are exported are eligible for tax cards as defined in the Tax and Duty
Compensation of Exported Goods Produced in the Kingdom Act B.E. 2524 (1981).  Tax cards can be
used by the holders for payment of taxes and dutie s.  According to the authorities, the refund is
intended to cover some hidden tax and duty costs attached by upstream industries.  Foreign producers
                                                     
42 WTO document G/SCM/Q2/THA/15, 9 May 2003.
43 These include the Preshipment Financing Facility, the Term Loan for Business Expansion, the
Merchant Marine Financing the Long-term Credit for Exports of Capital Goods, the Financing Facilities forOverseas Contract, and Export Credit Insurance (see WTO, 2000, pp. 53-55 for details).
44 WTO document G/SCM/101, 13 January 2003.Thailand WT/TPR/S/123
Page 55
producing in Thailand are eligible for tax cards provided they present either the credit note or credit
advice issued by a commercial bank showing the re ceipt of goods payment from abroad (especially
the amount of money received).  All exported products are eligible for tax cards except for certain
items including minerals and goods subject to export duty or fees.
(4) MEASURES AFFECTING PRODUCTION AND TRADE
(i) Taxation
72. Tax revenues in Thailand were B 783.8 billion in FY 2001, which was about 15.3% of GDP
(B 5,123 billion);  personal and corporate income tax, value-added tax and excise tax accounted for
about 82% of the tax revenues, while customs duties accounted for 11.7%.
(a) Indirect taxes
73. In addition to the customs tariff, three indirect taxes are levied on the c.i.f. value of imports:
the excise tax, municipality tax, and VAT.  All three are levied on imports at the same rates as on
domestic production.  These indirect taxes represent about 50% of tax revenue, compared with 11.7%
for customs duties (Chart III.4).
Excise taxes
74. In FY 2001, excise taxes accounted for approximately 23% of total tax revenues.  They are
levied on 15 product groups, although 95% of revenue is derived from four product groups:
petroleum products, beverages, tobacco, and motor vehicles.  Excise taxes involve ad valorem ,
specific, or alternative rates (i.e. rates involving either an ad valorem  or specific rate;  the higher ofChart III.4
Composition of tax revenue, fiscal year 2001
Source :   Data provided by the Thai authorities.Personal income tax
12.9
Corporate income tax
19.1
Value-added tax
27.5Excise taxes
22.6Other
6.2
Customs duties
11.7Per centWT/TPR/S/123 Trade Policy Review
Page 56
the two is applied).  Ad valorem  rates are as high as 75% (for cigarettes).  Since 1999, excise taxes on
certain petroleum and petroleum products (gasoline, kerosene, diesel, and LPG) have been eliminated.
All goods subject to excise tax (with the excep tion of alcohol, tobacco, and playing cards) are
exempted in the case of exportation.   Excise taxes on local wines were reduced effective from
January 2003, from B100 per unit (a litre of pure alcohol) to B70 per unit.
Value-added tax75. The VAT is levied at the rate of 7% on goods and services, with exemptions only for books,
education, hospitals, unprocessed agricultural products, fertilizers, animal feeds, pesticides, and
certain other social goods and services.  For products where excise tax and interior tax are applied,
VAT is levied on the value inclusive of excise and interior tax.  Exports are exempt from VAT.
(b) Direct taxes
76. Taxes on income and profits account for roughly 32% of total tax revenues;  corporate and
personal income taxes account for 19% and 13% respectively.
77. Corporate income tax in Thailand is levied on the profits of domestic and foreign companies
alike.  The tax rates vary from 2% to 30% depending on the taxpayer and the amount of profits
(Table III.7).
45
Table III.7
Corporate income tax in Thailand, June 2003
Taxpayer Tax base Rate (%)
Small companyaNet profit not exceeding B 1 million 20
Net profit over B 1 million but not exceeding B 3 million 25
Net profit exceeding B 3 million 30
Companies listed on the Stock Exchange of Thailand Net profit (first B 300 million) 25
Net profit (the amount exceeding B 300 million) 30
Companies listed on or after 6 September 2001 Net profit 25
Company newly listed in Market for Alternative
Investment (MAI)Net profit for the first five accounting periods after listing 20
Net profit after the first five accounting periods after listing 30
International Banking Facilities (IBF) Net profit 10
Foreign company engaging in international transportation Gross receipts 3
Foreign company not carrying on business in Thailand
receiving dividends from ThailandGross receipts 10
Foreign company not carrying on business in Thailand
receiving other types of income apart from dividend from
ThailandGross receipts 15
Foreign company disposing profit outside of Thailand Amount disposed 10
Profitable association and foundation Gross receipts 2 or 10
a Small company refers to companies with paid-up capital less than B 5 million at the end of each accounting period.
Source: Revenue Department online information.  Available at:  http://www.rd.go.th/publish/6044.0.html.
78. As in many other countries, the corporate tax is used by the Thai Government not just to
generate revenue, but also as an instrument of economic policy by means of tax incentives.  Among
                                                     
45 Revenue Department online information.  Available at http://www.rd.go.th/publish/6044.0.html.
Profits are defined for tax purposes as income minus business expenses, including depreciation allowances(ranging from 5% to 100% per annum depending on the type of asset), wages, and salaries.Thailand WT/TPR/S/123
Page 57
the main types of incentive are corporate tax holidays (that is, total exemption from tax) for specified
periods;  these incentives are, in most cases, granted by the Board of Investment (section (ii) below).46
One noteworthy tax incentive outside the purview of  the BOI involves the reduced tax rate of 10%
granted to International Banking Facilities (IBFs) in  an attempt to develop Thailand's financial sector.
This particular tax incentive, by implicitly subidizing foreign exchange borrowing by Thai
enterprises, was probably one of the factors that exacerbated the financial crisis in 1997.  TheGovernment also continues to allow businesses to choose the "double declining balance" method of
accelerated depreciation, by which assets can be depreciated at twice the rate of the straight line
method.  This measure is intended to increase after-tax cash flow of businesses and encourage them to
invest in new assets.  The inevitable outcome of these tax incentives is that marginal effective tax
rates can vary substantially across sectors.
79. No major changes appear to have taken place in Thailand's personal income tax since 1999.
47
Personal income tax rates range from 5% to 37%.
(c) Transparency
80. There appears to be a lack of transparency in Thailand's tax incentives, which undermines
public accountability and thus governance.  In particular, the tax authorities do not publish detailedinformation on the amounts of tax revenue forgone as a consequence of these measures.  Nor do they
rigorously and systematically evaluate the impact and effectiveness of such incentives.  Experience in
other countries suggests that tax incentives are seldom cost-effective.
48  Clearly, publication of
estimates of tax revenues forgone along the lines of practices in many OECD countries49, as well as
studies evaluating their cost-effectiveness, would greatly enhance fiscal transparency in Thailand and
contribute to more effective tax policy.  Elimination of incentives that are found to be ineffective
would permit a broadening of the tax base, which could be accompanied by reductions in statutory taxrates without necessarily involving any loss in total tax revenues; the outcome would be a more
neutral tax system.
(d) Bilateral tax treaties
81. Since its previous Review, Thailand has signed double taxation treaties with five countries:
Armenia, Bulgaria, Cyprus, United  Arab Emirates, and Uzbekistan.
50
                                                     
46 See, for example, WTO document G/SCM/101/Suppl.1, 2 April 2003.
47 See WTO (2000), p. 58 for details.
48 Most econometric studies show that forgone tax revenues exceed the increase in desired investment,
(OECD, 1995).  Tax holidays are regarded as a particularly ineffective type of tax incentive compared to taxcredits (see Mintz ,1990, 1992).
49 Such estimates are published in the form of tax expenditure accounts in 14 countries (See OECD,
1996).
50 To date, Thailand has concluded tax treaties wi th:  Armenia, Australia, Austria, Bangladesh,
Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hungary,
India, Indonesia, Israel, Italy, Japan, Republic of Korea, Laos, Luxembourg, Malaysia, Mauritius, Nepal, theNetherlands, New Zealand, Norway, Pakistan, the Philippines, Poland, Romania, Singapore, South Africa,Spain, Sri Lanka, Sweden, Switzerland, United Arab Emirates, the United Kingdom, the United States,
Uzbekistan, and Viet Nam.WT/TPR/S/123 Trade Policy Review
Page 58
(ii) Investment incentives
(a) Incentives provided by the Board of Investment
82. The BOI recognizes a need to remove impedi ments to investment rather than relying on
widely-used tax incentives.51  On 1 August 2000, therefore, the BOI made various changes to its
investment incentive scheme;  the changes involved, inter alia,  streamlining various tax-based
incentives intended to attract inward FDI.  On the other hand, the BOI appears to be taking a moreproactive approach to industrial policy and the pursuit of competitiveness, with measures targeted at
certain industries, such as agri-industry, automobiles, textiles, electronics, and high-valued services.
83. Under the Investment Promotion Act B.E. 2520 (1977), the BOI continues to have wide-
ranging influence on the formulation and implementa tion of trade and investment policies.  The BOI,
inter alia , authorizes the granting of tax and non-tax measures;  main tax incentives include reduction
of import duties and corporate tax exemptions, and main non-tax measures include permission to be
majority foreign-owned and permission to own lan d, to approved investments, domestic or foreign.
52
In 2002, BOI-approved FDI totalled B 99.6 billion for 483 projects;  over half involved 100% foreign-
owned investments.  Japan was by far the largest source of inward FDI.  Most inward FDI was for
export-oriented ventures, especially in metal products and machinery, electric and electronic products,and light industries.  Some 70% of approved investments were from foreign sources.  Minimum
investment of B 1 million is required for promoted projects.
84. In August 2000, the BOI undertook various reforms in its investment incentive schemes
53:
- Approval criteria now differ between a proj ect investing less than B 500 million and a
project equal to or above B 500 million;  both are required to generate value added of
at least 20% of sales revenue (except electronic products and agricultural projects),
and the latter requires a feasibility report at the time of application.  Investmentapplications must be processed within 60 working days (for projects under
B 500 million) or 90 working days for larger projects.
- The BOI lowered the maximum permissible debt-to-equity ratio.  As a result, the
criteria to assess eligibility for investment promotion measures include having a
maximum debt-to-equity ratio of three-to-one (previously four-to-one).
- The BOI abolished certain eligibility requirements for the reduction or exemption of
import duties
54;  as a consequence, BOI-approved projects are granted either
exemptions (for projects located in zone 3) or a 50% reduction (for those in
zones 1 or 2) of import duties on certain machinery, without any requirement to
export or locate factories in industrial estates or promoted industrial zones.55  Import
duty exemptions on raw or essential materials used in manufacturing exports are
                                                     
51 BOI online information.  Available at:  http://www.boi.go.th/english/7_Strategies.pdf.
52 The BOI also offers promoted investments legi slative guarantees against:  expropriation without
adequate compensation;  competition from new state enterp rises;  state monopolization of the sale of products
similar to those produced by the promoted project;  price controls;  tax-exempt imports (by government agenciesor state enterprises) of products competing with those produced by the promoted project;  and imposition of
export restrictions.
53 According to Board of Investment Announcement No. 1/2543 (1/2000).
54 These requirements were that investment projects locate their factories in industrial estates or
promoted industrial zones, or export at least 80% of total sales.
55 The measure applies to machinery with an import tariff of 10% or above.Thailand WT/TPR/S/123
Page 59
granted for one year (for projects located in zone 1 or 2) or five years (for those in
zone 3).56
- Corporate tax exemptions continue to be accorded depending on the zone in which an
enterprise is located.57  A three-year corporate tax holiday (exemption) is granted for
projects in industrial estates or promoted industrial zones in zone 1.  In zone 2,  the
exemption is for three years or five years (previously seven years), if projects arelocated in industrial estates or promoted industrial zones.
58  In zone 3, an eight-year
corporate tax holiday is granted, regardless of the location, capped at 100% of
investment capital.59  Since December 2001, the amount of the corporate tax
exemption has been capped at 100% of investment capital (excluding the costs of
land and working capital).60
- The BOI selected five targeted industries:  agri-business, automobiles, fashion,
electronics, and high-valued services61;  these industries appear to be eligible for
exemptions of import duties on certain machinery and a corporate tax holiday for
eight years, irrespective of the location of the project.62
- The BOI also allows foreign investors up to 100% equity in promoted projects,
except for List 1 businesses, as defined in the Foreign Business Act
(Chapter II(8)(ii)), and investment incentiv es are now available to both foreign and
domestic investors on a non-discriminatory basis.  Since August 2000, the BOI has
allowed up to total foreign ownership in manufacturing activities, irrespective of
location.
85. The Ministry of Finance also introduced a tax incentive scheme in December 2001 for firms
locating regional operating headquarters (ROH) in Thailand.  The scheme includes a reducedcompany tax rate of 10% (instead of 30%), and accelerated depreciation.  Expatriate employees of
ROH can also opt to be taxed at a flat rate of 15 % (instead of progressive scales ranging from 5% to
37%), for a maximum of two years.  Eligibility criteria apply;  for example, ROHs must provide
services to affiliated entities in at least three foreign countries, and have minimum paid-up capital of
B 10 million.
                                                     
56 Extra incentives apply in certain zone 3 provinces, such as a 50% tax holiday for an additional five
years.
57 Zone 1 includes Bangkok and five provinces (e.g. Samut Prakan);  zone 2, twelve provinces (e.g.
Ang Thong);  and zone 3 (all 58 remaining provinces).  In August 2000, two provinces were added to zone 2
and the 58 provinces in zone 3 were divided into two areas based on development level of each province;incentives for the 40 more developed provinces are now more limited in scope than for the 18 less-developedprovinces in zone 3.
58 Projects submitted before end 2004 and located in industrial estates receive a seven-year tax holiday.
59 Extra incentives apply in certain zone 3 provinces;  a 50% tax holiday is available for five years after
the eight-year exemption period;  water, electricity, an d transportation costs are deductible from taxable income
for ten years from the date of first sales, meaning that these costs can be deducted twice;  and 25% of theinstallation and construction costs of infrastructure facilities can be deducted in the calculation of net profit..Since August 2001, projects with capital exceeding B 10 million must obtain ISO or similar internationalstandard certification within two years;  otherwise the tax holiday is reduced by one year.
60 According to an amendment to the Investment Promotion Act.
61 BOI Bulletin No.68/45, 10 April 2002 "BOI Targets Five Industries For Proactive Marketing
Campaign" [Online].  Available at:  http://www.boi.go.th/english/focus/boi_pr_target_industries02.html.
62 These incentives also seem to apply to enterprises engaged in other priority activities.  Priority
activities are:  agriculture and agriculture products;  technological and human resource development;  publicutilities and infrastructure;  environmental protection;  and targeted industries.WT/TPR/S/123 Trade Policy Review
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86. Effective from 19 September 2002, zoning requirements for various promoted activities were
relaxed:  e.g. projects previously required to locate in either zones 2 or 3 may relocate to zone 1.63
87. Thailand requested and was granted by WTO Members extension of the transition period to
eliminate export subsidies in the form of corporate tax exemptions (tax holidays) associated with
these pre-existing BOI-approved investments.64
(b) Notifications to the WTO
88. Since 1999, Thailand has made five subsidy notifications pursuant to Article XVI:1 of GATT
1994 and Article 25 of the WTO Agreement on Subsidies and Countervailing Measures.65  T h e
notifications cover certain of the investment promotion incentives described above, the benefits
provided by the Industrial Estate Authority of Thailand, and the refinancing schemes operated by the
Bank of Thailand at subsidized interest rates.  Several WTO Members have asked questions regardingthese notifications.
66
(iii) Trade-related investment measures
89. Thailand abolished local-content requirements in the automotive sector as of January 2000.
Thereafter, incentives offered by the BOI for the manufacture of locally made engines for pick-up
trucks were also abolished.  The only remaining local-content requirement concerns the manufacture
of ready-to-drink milk;  according to the authorit ies, the requirement is not tied to any incentives
granted by the BOI.  Thailand has also eliminated export performance requirements on new
investments tied to BOI incentives, as discussed in the previous section;  however, projects approved
before August 2000 must apparently still meet their export requirements in order to continue to
benefit from the tax incentives, especially tax holidays.67  Certain export requirements tied to
incentives granted to those locate in EPZs were also eliminated on 1 January 2003.68
(iv) Standards and other technical requirements
(a) Products regulated by the Thai Industrial Standards Institute (TISI)
90. Thailand is a member of ISO and IEC.  Between 1999 and 2002, the TISI established
692 Thai industrial standards (TISs), of which about 4.8% are mandatory.  The number of TISs that
are identical to international standards has increased since 1999 (Table III.8).69  Thailand intends to
align its standards in priority areas with the relevant international standards by the end of 2005;  theseareas include electrical products and electronics, rubber products, machinery, food labelling, and
standards and guides on conformity assessment.
                                                     
63 Board of Investment Announcement No. 2/2545, 26 December 2002.
64 WTO document G/SCM/101, 13 January 2003.
65 The latest notification is in WTO document G/SCM/N/71/THA/Suppl.1, 12 July 2002.
66 For example, WTO document G/SCM/Qe/THA/13, 27 May 2002.
67 Previously, at least 80% of total sales had to be exported, for example, to be eligible for the reduction
of import duties on machinery and certain materials.
68 WTO document G/SCM/101/Suppl.1, 2 April 2003.
69 TIS are defined by the Industrial Product Standard Act B.E. 2511 (1968) and its amendments, as well
as relevant ministerial regulations.Thailand WT/TPR/S/123
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Table III.8
Thai industrial standards (TISs), 1999-02
Cumulative total of published TISs identical to international standardsYearCumulative total of
published TISsISO IEC/CISPR CODEX
1999 1,750 97 65 2
2000 1,939 168 137 7
2001 2,130 241 184 7
2002 2,280 320 217 7
Source: Thai Industrial Standards Institute.
91. Since 1999, Thailand has made some 120 notifications under the WTO Agreement on
Technical Barriers to Trade;  most were under Article 2.9 and three under Article 2.10 (urgency
procedure).
92. It would appear that firms meeting TISs continue to enjoy a 5% price preference for
government procurement (see section  (2)(v)).  The TISI has established 33 technical regulations
(mandatory standards) (Table AIII.2).
93. In 1999, the Thai Industrial Standards Institute (TISI) and the Federal Office of Road Safety
of Australia concluded a bilateral Mutual Recognition Arrangement on automotive products.
Thailand currently participates in various APEC mutual recognition arrangements.70  I t  h a s  a l s o
signed:  the Pacific Accreditation Cooperation Multilateral Recognition Arrangement and IAF
Multilateral Recognition Arrangement, the Asia  Pacific Laboratory Accreditation Cooperation
(APLAC) Multilateral Recognition Arrangement, the International Laboratory Accreditation
Cooperation (ILAC) Multilateral Recognition Arrangement, and the Asia Pacific Legal Metrology
Forum Memorandum of Understanding.
94. Manufacturers that have been awarded ISO 9000 certification are exempted from assessment
of their quality control system;  a quality management system certificate for a product or productgroup is generally accepted provided that such certificate is issued by either the ISO 9000 certification
body that has been accredited by the Office of the National Accreditation Council of Thailand, or by
the ISO 9000 certification body that has been approved by the Industrial Product Standards Council.
The TISI may, however, conduct additional assessments on items if the certified quality management
system differs from the particular requirements for product certification and the general requirementsfor product quality control.
71
(b) Products regulated by the Food and Drug Administration and the Ministry of Agriculture and
Cooperatives
95. Thailand's Food and Drug Administration (FDA) , under the Ministry of Public Health,
monitors and regulates the production, sale, and import of food and tobacco products, cosmetics,
drugs and narcotics, medical devices, and psychotropic and volatile substances, as empowered by the
Food Act B.E. 2522 (1979).  Imports and exports of feedstuffs, fertilizers, hazardous substances, live
                                                     
70 These include the APEC Mutual Recognition Arrangement on Conformity Assessment of Electrical
and Electronic Equipment (APEC Electrical MRA - Part  I), the APEC MRA on Conformity Assessment of
Foods and Food products (APEC Food MRA), the APEC MRA on Conformity Assessment of
Telecommunications Equipment (APEC Tel MRA), and the APEC Arrangement for the Exchange of
Information on Toy Safety (APEC, 2002, Chapter 5).
71 Criteria for product certification are available online at:  http://www.tisi.go.th/license/
r_pc_01_e.html;  information on Thai Laboratory Accreditation Scheme (TLAS) and the directory of accreditedlaboratories is available at:  http://www.tisi.go.th.WT/TPR/S/123 Trade Policy Review
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animals, plants, and seeds are administered by the Ministry of Agriculture and Cooperatives.  Under
the WTO Agreement on Sanitary and Phytosanitary Measures (the SPS Agreement), 80 quarantine,
health and food-related regulations have been notified.  Thailand is an active participant of the
FAO/WHO Joint Codex Alimentarius Commission, the FAO International Plant Protection
Convention, the World Animal Health Organization, and the WTO SPS Committee.
96. As a part of a comprehensive government restructuring in 2002, the National Bureau of
Agricultural Commodity and Food Standards (ACFS) was established under the Ministry of
Agriculture and Cooperatives.  The aim of the ACFS is to consolidate work in various agencies on
agricultural commodity and food standards;  it is mandated as a single national body to formulate and
implement policy for SPS regulations.72
97. Importers of regulated products must appl y to the FDA for an import licence, and
manufacturers require a manufacturing licence.  Additional registration requirements are imposed on
various "specific-controlled" processed and packaged food items, as well as drugs, cosmetics, and
most other regulated products, at a cost of B 5,000 per item, not including expenses for analysis.  The
Food Committee may recommend to the Minister of Public Health that an individual food be specified
as a specific controlled food;  currently, 18 kinds of food are listed as specific-controlled food(Table III.9).  In addition, there are a number of "standardized" food products, which do not require
registration but their quality and labelling must meet  the requirements as specified in the Notification
of the Ministry of Public Health.
73
Table III.9
"Specific-controlled" food products administered by the Ministry of Public Health, 2002
Type of food Notification No. (year)
1. Food colouring 21 (1979), 55 (1979) and 66 (1982)
2. Cow milk 265 (2003)
3. Ice cream 222 (2001) and 257 (2002)
4. Flavoured milk 266 (2002)
5. Other milk products 267 (2002)
6. Food enhancers 38 (1979)
7. Cultured milk 46 (1980) and 99 (1986)
8. Drinking water in sealed containers 61 (1981), 135 (1991), 220 (2001) and 256 (2002)
9. Non-alcoholic beverages in sealed containers 214 (2000) and 230 (2001)
10. Ice 78 (1984), 137 (1991) and 254 (2002)
11. Food additives 84 (1984) and 119 (1989)
12. Sodium cyclamate and food containing cyclamates 113 (1988)
13. Food for weight control 121 (1989)
14. Food in sealed containers 144 (1992), 179 (1997) and 253 (2002)
15. Modified milk for infants and young children 156 (1994) and 167 (1995)
16. Modified food (other than milk) for infants and young children 157 (1994),  168 (1995) and 171 (1996)
17. Supplementary food for infants and young children 158 (1994) and 169 (1995)
18. Stevioside and food containing stevioside 262 (2002)
Source: Ministry of Public Health, Government of Thailand.
                                                     
72 WTO document G/SPS/N/THA/93, 4 April 2003.
73 These foods include peanut oil, palm oil, coconut oil, chocolate, fortified rice, iodized table salt,
electrolyte beverage, tea, coffee, soybean milk in sealed containers, natural mineral water, products from the
hydrolysis or fermentation of soybean protein, fish sauce, vinegar, fat and oil, butter oil, margarine, cream,cheese, semi-processed food, honey, royal jelly, jam, ghee, butter, quicklime soaked egg, food containingcontaminants, food contaminated with radioactive substances, food containing pesticide residues, foodcontaining veterinary drug residues, shrimp, and certain methanol.Thailand WT/TPR/S/123
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(c) Quarantine requirements
98. Since its previous Review, Thailand has introduced various amendments to its laws related to
quarantine requirements.  In 1999, the Plant Quarantine Act B.E. 2507 (1964) was amended with a
view to harmonizing Thailand's domestic pest cont rol measures with international requirements.  The
amendment, inter alia,  includes: additional import and export control measures for plants and
germplasms;  increases in penalties for any violation of the law;  and adjustment of the administrativefees for phytosanitary services.  The Animal Epidemics Act B.E. 2499 (1956) was also amended with
a view to harmonization of animal disease control measures;  the amendment involved, inter alia ,
introduction of regulations over activities involving embryos;  strengthening the authority of
veterinarians and the Department of Livestock De velopment to control animal diseases;   and
strengthening of penalties.  There was also an am endment to the Animal Feed Control Act B.E. 2525
(1982) in 1999.  In 2000, a Ministerial Announcement under the Plant Quarantine Act was issued to
prohibit import or transit of certain genetically modified (GM) plants.  In 2001, Ministerial
Regulations under the Animal Epidemics Act B.E. 2499 (1956) were promulgated;  they stipulated
requirements for import, export, or transit of animals and carcasses thereof.  In 2002, an amendment
to Royal Decree under Animal Epidemics Act B.E. 2499 (1956) was promulgated;  it stipulatescontrols on import, export, and transit of dogs and cats in order to prevent diseases such as rabies,
leptospirosis or tuberculosis.
99. A health certificate issued in the exporting country must accompany imports of certain food
products.  Sanitary certificates are required for imports of certain live animals and their products, and
a phytosanitary certificate is needed for the import of most plants and plant materials.
(d) Labelling requirements
100. A ministerial announcement on genetically modified food products was issued under the Food
Act in 2002 and entered into force on 10 May 2003.  The announcement stipulated that food products
derived from genetically modified or engineered maize and soya in whole or in part must be labelled
as such in legible form
74;  the announcement also prohibited labelling such as GM free or non GM
food.
(v) Intellectual property rights
101. Since its previous Trade Policy Review in 1999, Thailand has amended its legislation in order
to implement the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);
it has also taken further steps to improve enforcement.
102. Thailand is a member of the World Intellectual Property Organization and a party to the
Berne Convention.  However, Thailand has not acceded to the Paris Convention for the Protection ofIndustrial Property, the Patent Cooperation Treaty, or the  Rome Convention (International
Convention for the Protection of Performers, Producers of Phonograms and Broadcasting
Organizations).
(a) Legislative developments
103. Major changes since 1999 include the amendment to the Trademark Act in 2000 and the
enactment of the Plant Varieties Protection Act B.E. 2542(1999), the Protection of Layout Designs of
                                                     
74 The requirement applies to food products containing more than a certain amount of modified or
engineered DNA.  The requirement does not apply to small producers that sell food products directly toconsumers.WT/TPR/S/123 Trade Policy Review
Page 64
Integrated Circuits Act B.E. 2543 (2000), and the Tr ade Secrets Act B.E. 2545 (2002).  In addition, a
draft law on the protection of geographical indications is under consideration by Parliament.
Copyright and related rights
104. There has been no change in Thailand's copyright legislation in the period under review.
Under the Copyright Act (1994), protection is given during the life of the creator, plus 50 years75,
except in the case of works of applied arts, which are protected for 25 years from the date ofcreation
76;  under Thai law, a copyright is considered to exist upon creation of a work and registration
is not required.  Protection extends to literary works (including computer programs), dramatic, artistic,
musical, audio-visual, photographic, cinematographic works, sound recordings, broadcasting works,
and all other materials in the literary, scientific, and artistic domains.  Authors' moral rights and
performers’ rights are also protected under the Act.
105. In the case of infringement, copyright holders have the right, under the Act, to seek
injunctions, compensation for damages, and to recover investigation costs and legal expenses.
Competent authorities under the Copyright Law are given the right to seize pirated goods upon the
request of the copyright holder and to enter any premises where they suspect such goods are being
held.  Penalties for direct infringement for commercial purposes range from B 100,000 to B 800,000,with prison terms of six months to four years.  Exception clauses in the case of computer software
include the research and study of the computer an d personal use by the owner of a copy of the
software, provided that the purpose is not for profit.
Trade marks
106. An amendment to the Trademarks Act B.E. 2534 (1991) in 2000 introduced, inter alia , the
principle of national treatment, the registration of  colour marks and three dimension marks.  Owners
of registered trademarks are granted protection for ten years;  registration may be renewed everyten years.  Trademarks that are identical or similar to well-known trade marks may not be registered
and those already registered can be revoked.  Also protected are service marks, certification marks,
collective marks, and "well-known marks".
107. Applications for trade mark registration must be filed with the Department of Intellectual
Property at the Ministry of Commerce.  To quali fy, a trade mark must meet the requirements of
distinctiveness, differentiation from other registered trade marks, and not be in violation of public
order or morality.  Thailand's Trademark Act adopts the International Classification of Goods and
Services, in accordance with the Nice Agreement.  Statistics on trade mark registration in Thailand
indicate a fall in 2000 and recovery since 2001
 (Table III.10).
                                                     
75 In the case of a work of joint authorship, copyright lasts for the life of the joint authors plus 50 years
after the death of the last surviving author.  Where the author is a legal person, copyright lasts for 50 years from
the date the work was created;  provided that the work is published during such period, copyright endures for50 years from its first publication.
76 If the work of applied art is published within 25 years of its creation, copyright endures for fifty
years from first publication.Thailand WT/TPR/S/123
Page 65
Table III.10
Trade mark and patent statistics for Thailand, 1998-02
1998 1999 2000 2001 2002
Trade marks
Applications 18,419 22,439 27,055 26,119 30,109
Registrations 12,231 15,711 14,217 19,937 23,146
Patents
Applications 6,409 6,897 7,746 7,994 7,726
Registrations 1,131 598 744 1,516 2,466
Source: Department of Intellectual Property [Online].  Available at:  http://www.ipthailand.org.
Patents
108. There has been no change in Thailand's patent legislation since its previous Review.  The
Patent Act B.E. 2522 (1979), as amended, grants protection to nationals of other countries that are
party to any international convention to which Tha iland is also a party in the same manner as that
given to Thai nationals.  The importation of patented products by the patentee is considered as"working the patent".  The Patent Act includes both invention and petty patents;  an invention may be
in the form of a product or process.  Terms of protection, applied from the date of filing, are 20 years
for inventions, ten years for designs, and six years for petty patents.
77  Under the Patent Act, an
invention is defined as any innovation or inventi on that creates a new product or process, or any
improvement on a known product or process.  A product design is defined as any form or compositionof lines or colours that gives a special appearance to a product and can serve as a pattern for an
industrial or handicraft product.
109. Applications for patents must be submitted to the Department of Intellectual Property at the
Ministry of Commerce.  Statistics on patent registration in Thailand indicate a decline in 1999 and a
recovery since 2000.
Layout designs of integrated circuits
110. Under the Protection of Layout Designs of Inte grated Circuits Act B.E. 2543 (2000), a layout
design must be the outcome of the designer's own effort and not deemed commonplace.  To enjoy
protection, the designer must have his layout design  registered with the Department of Intellectual
Property;  protection enters into force upon registration and issuance of a certificate.  The certificate is
valid for ten years from the date of filing or the date of the first commercial exploitation whether
within or outside Thailand, whichever occurs first, but not longer than 15 years from the date of thecompletion of the layout design's creation.
Trade secrets
111. In the Trade Secrets Act B.E. 2545 (2002), protection of undisclosed information requires that
it must not be generally known among or readily accessible to persons in the business, must have
value attributable to its secrecy and be in the control of persons who have taken measures to keep itsecret;  the Act allows government agencies to disclose information to protect any public interest that
does not have commercial objectives.  The protection lasts indefinitely as long as the information
remains confidential.  No registration is required under the Act.
                                                     
77 These terms of protection can be extended twice for periods of two years.WT/TPR/S/123 Trade Policy Review
Page 66
Protection of plant varieties and geographical indications
112. The Plant Varieties Protection Act B.E. 2542 (1999) entered into force in December 1999.78
The Act protects plant research and development;  protection lasts up to 27 years.79  The draft law on
geographical indications has been sent to the Parliament for approval.
(b) Parallel imports
113. Parallel imports are allowed for goods protected by copyrights or by registered or
unregistered trade marks.  Under the Patent Act, the patentee has an exclusive right to import patented
products or products produced by the patented process.  However, after a patented product or a
product produced by the patented process has been produced or sold by a third party with the
authorization or consent of the patentee, the patentee’s rights over such patented products are deemed
exhausted, including the patentee's right to prevent parallel importation.  Right holders under theProtection of Layout Designs of Integrated Circuits Act have an exclusive right to import the
protected layout design into the country.
(c) Compulsory licensing
114. Since 1999, there has been no change in Thai legislation concerning compulsory licensing.
80
Regarding copyright, any interested person may apply for compulsory licensing to translate a work
into Thai or to reproduce a translation published in Thai, under special circumstances, such as for the
benefit of study, teaching or research without a profit-seeking purpose.  Regarding patents, any person
may apply for a licence under the provisions of Se ction 46 (Annex III) of the Patent Act after the
expiration of three years from the grant of a patent or four years from the date of application,
whichever is earlier.  According to the authorities, a compulsory licence has been granted for use by
third party in only one instance, since 1999.
(d) Enforcement
115. Upon request or suspicion, customs officiers are allowed to seize, at the border, trade mark
infringing goods that are being imported or exported.  With respect to copyright, the right holder must
file a request with customs to suspend importation and/or inspect goods.  Customs jurisdiction is not
confined to border points.
116. Since the previous Review of Thailand in 1999, the Government has taken various actions to
promote and enforce protection of intellectual property rights.  On 1 May 2003, the Royal Thai Police
in coordination with the Department of Intellectual Property started monitoring and raiding major
shopping centres and CD factories reputed for IPR infringement.  A Memorandum of Understanding
on the Cooperation of the Relevant Government Agenci es on the Enforcement of Intellectual Property
Rights, aimed at enhancing coordination of relevant agencies for the protection of IPRs, came intoforce on 20 December 2002.  Table III.11 summarizes the result of arrests and confiscation related to
violations of IPR-related laws in Thailand.
                                                     
78 WTO document IP/N/1/THA/P/1, 13 November 2000.
79 EIU (2002a), p. 36.
80 The relevant provisions are in Sections 45, 46, 47 and 47 bis of the Patent Act B.E. 2522 (1979) as
amended by Patent Act (No. 2) B.E. 2535 (1992) and Patent Act (No.3) B.E. 2542 (1999).Thailand WT/TPR/S/123
Page 67
Table III.11
Activities against intellectual property rights violation, 1998-02
Offences under 1998 1999 2000 2001 2002
Copyright Act B.E. 2537
Arrests 742 661 1,558 2,515 3,363
Materials seized (items) 414,265 274,252 1,858,839 1,038,301 743,724
Trademark Act B.E. 2534
Arrests 813 839 1,317 1,456 1,295
Materials seized (items) 506,600 876,795 1,733,796 917,893 1,409,848
Patent Act B.E.2522
Arrests 2 7 4 14 16
Materials seized (items) 142,181 5,166 28,272 1,848 150,376
Cassette Business and Television
Devices B.E.2530
A r r e s t s 2 61 04 81 7 1 1 4
Materials seized (items) 4,175 524 35,795 1,268 10,911
Total
Arrests 1,583 1,517 2,927 4,002 4,788
Materials seized (items) 1,067,221 1,156,737 3,656,702 1,959,310 2,314,859
Source: Department of Intellectual Property online information.  Available at:  http://www.ipthailand.org.
(vi) Involvement of state-owned enterprises in production and trade
(a) Privatization and corporatization of state-owned enterprises
117. Since Thailand's previous Trade Policy Revi ew in 1999, there has b een little progress in
Thailand's privatization (divestment).81  However, considerable progress has been made to corporatize
state-owned enterprises in preparation for their eventual privatization.82  The current 85 state
enterprises can be grouped into six broad sectors:  telecommunications, water, energy, transport,finance, and others, the latter consisting mainly of agricultural, industrial, or services suppliers,
notably financial services.
118. According to the authorities, re-prioritization of privatization programmes took place in 2001;
the current priority of the government is the development of performance and commercial operations
of state enterprises.  The Master Plan for Stat e Enterprise Reform thus envisages the following
sequence in the reform of state enterprises:  the development of policy for market and regulatory
structure, the transformation of state enterprises into limited liability companies in accordance with
the Corporatisation Act B.E. 2542 (1999), and eventu al privatization.  Actual implementation of this
reform depends on issues to be addressed for each enterprise.
119. Since 1999, various laws and regulations have entered into force with a view to enhancing
implementation of the privatization programmes, such as the Trade Competition Act (1999), the
                                                     
81 For example, there remain comprehensive statutory state monopolies in some key service sectors,
such as petroleum and electricity.  Although these have been identified by the Government for privatization,
there has been resistance from these sectors (APEC, 2003, p. 22).
82 In particular, the Petroleum Authority of Thailand was transformed into PTT PLC in October 2001,
the Telephone Organization of Thailand was transformed into TOT Corporation in July 2002, and the Airportsof Thailand was transformed into AOT Co. Ltd. in September 2002.  Since 1999, initial public offerings havetaken place for certain percentages of shares of:  In ternet Thailand (October 2001), PTT PLC (December 2001),
Bank Thai (November 2002), and Kr ung Thai Card (November 2002).WT/TPR/S/123 Trade Policy Review
Page 68
Foreign Business Act (1999), Taxation Laws (amended in 2002), and the Corporatization Act
(enacted in 1999).
120. The State Enterprise Policy Committee (SEPC) coordinates regulatory restructuring;
deregulation and liberalization policies have been developed on a case-by-case basis.  A policy for the
reform and development of state enterprises was announced in March 2001.83
(b) Publicly owned enterprises involved in external trade
121. Thailand's latest notification to the WTO Working Party on State Trading Enterprises referred
to three state-trading enterprises:  the Public Warehouse Organization (PWO), the Liquor Distillery
Organization (LDO), and the Thailand Tobacco Monopoly (TTM).84  In addition, a number of other
publicly owned companies are directly or indirectly involved in trade of goods or services
(Table III.12).
Table III.12
Selected publicly owned commercial companies, 2002
Organization (affiliated ministry in parenthesis)aFunction and trade-related privileges
Agriculture and agri-industry
Dairy Farming Promotion Organization of Thailand (MoA) Promotion of dairy farming including sales of domestic output to meet
domestic-content requirements.  No external trade.
Fish Marketing Organization (MoA) Fish marketing facilities.  No external trade.
Forest Industry Organization (MoA) Plantation management, re-afforestation, logging, sawmilling and forest
industries.  According to the authorities:  not responsible for export or
import;  generates income from forest industry and related activities;without special privileges;  and freely competes with the private sector.
Marketing Organization for Farmers (MoA) Marketing of agricultural products and supply of services.  No external
trade.
Rubber Estate Organization (MoA) Production, purchase, and distribution of rubber and rubber by-products.
No external trade.
Thai Plywood Company Limited (MoA) Production of plywood, import and export of wood, and forest planting and
conservation.
Thailand Tobacco Monopoly (MoF) Supply and production of cigarettes (domestic monopoly).  Imports of
tobacco.
Public Warehouse Organization (MoCM) Purchase and distribution of agricultural products.  Exclusive import rights
for potatoes and tea.
Liquor Distillery Organization (MoF) Production and supply of alcohol (sole domestic producer), and production
of liquor.  Exclusive production rights for 95% ethyl alcohol.
Energy
PTT Public Company LimitedbOil and gas production, distribution, and import.  According to the
authorities:  PTT operates as a normal private enterprise;  receives nospecial privileges from the Government;  and freely competes with other
international and domestic enterprises.  Source for government purchases.
Esso Oil, gas, and petrochemicals production and trade.
Electricity Generating Authority of Thailand Sole rights for distribution and trade in electricity.
Provincial Electricity Authority Supply of Electricity.  No external trade.
Metropolitan Electricity Authority Supply of Electricity.  No external trade.
Manufacturing
Glass Organization (MoD) Production of glass and glass by-products, under the supervision of the
Ministry of Defence.  Established primarily for the purpose of military
utilization;  10% price advantage for government sales.  No external trade.
Battery Manufacturing Organization (MoD) Same
Table III.12 (cont'd)
                                                     
83 State Enterprise Policy Office online information.  Available at:  http://www.privatisation.go.th/.
84 WTO document G/STR/N/7/THA, 18 May 2001.Thailand WT/TPR/S/123
Page 69
Organization (affiliated ministry in parenthesis)aFunction and trade-related privileges
Leather Tanning Organization (MoD) Same
Government Pharmaceutical Organization (MoPH) Procurement of drugs, and drug manufacture.  Source for government
procurement.
Playing Cards Factory (MoF) Monopoly supply and production of playing cards.  Exclusive import rights
(to be lost upon privatization).
Services
Communications Authority of Thailand Telecommunications services
TOT Corporation Public Company LimitedcTelecommunications services
Thai Airways International Air transport services
Airports of Thailand Public Company LimiteddAir transport services
Krung Thai Bank Financial services
Bank for Agriculture and Agricultural Cooperatives Financial services
a MoA = Ministry of Agriculture and Cooperatives.
MoCM = Ministry of Commerce.
MoD = Ministry of Defence.
MoPH = Ministry of Public Health.MoF = Ministry of Finance.
MoID = Ministry of Industry.
MoI = Ministry of the Interior.
b PTT Public Company Limited was incorporated as a public company on 1 October 2001 on corporatization from the Petroleum
Authority of Thailand under the Corporatization Act of B.E. 2542 (1999).
c TOT was transformed from the state-owned enterprise under the control of Ministry of Transportation and Communications
(MoTC) into a public company named TOT Corporation Public Company Limited, on 31 July 2002 under the control of the
Ministry of Information and Communication Technology (MICT).
d The Airports of Thailand Public Company Limited was established on 30 September 2002.
Source: Information provided by the Government of Thailand.
(vii) Regulation of corporate practices
122. Since its previous Review in 1999, Thailand has continued to take steps to create a more
transparent, competitive, and rules-based business environment.
123. Thailand participates in the WTO Working Group on the Interaction between Trade and
Competition Policy.
(b) Competition policy and regulatory issues
124. Thailand's laws and regulations concerning competition policy remain largely unchanged
since its previous Trade Policy Review in 1999.  Under the Constitution of the Kingdom of Thailand
B.E. 2540 (1997), the Government must support a market-based economy, and regulate and ensure
fair competition, consumer protection, and anti-monopoly practices through indirect and indirect
means.  The Price of Goods and Services Act B.E. 2542 (1999) and the Trade Competition Act
B.E. 2542 (1999) are main laws defining Thailand's competition policy.
125. Under the Price of Goods and Services Act (1999), the Central Commission on Price of
Goods and Services was established to prevent price manipulation or other unfair business practices,where these may affect consumers directly.
  
126. Subject to Cabinet approval, the Commission has the power to designate (by issuing a
notification) any particular goods or services as controlled goods or services, or introduce minimumWT/TPR/S/123 Trade Policy Review
Page 70
purchasing prices or maximum selling prices for these goods and services, and to maintain the prices
at a certain level.85
127. Under the Trade Competition Act, which entered into force in April 1999, the Trade
Competition Commission, established in November 1999, is responsible for carrying out research and
monitoring competitive conduct and implementing competition legislation and regulations in
Thailand.  The Commission consists of the Minister of Commerce (chairperson), the Permanent-Secretary of Commerce (vice-chairperson), the Perm anent-Secretary for Finance, and eight to twelve
"qualified persons" appointed by the Council of Ministers.
86  The Director-General of the Department
of Internal Trade is the Secretary-General of the Commission.  The Trade Competition Commission is
empowered to appoint inquiry subcommittees to conduct investigations and inquiries into anti-
competitive practices.  The Act, inter alia , prohibits businesses that are deemed dominant from setting
unfair prices, establishing unfair trading conditions, limiting supply, and intervening in other
businesses without proper reason;  mergers that may create "monopolistic" power or reduce
competition unless permission for those mergers is obtained from the Trade Competition
Commission;  conspiring and colluding in order to create "monopolistic" power or reduce
competition;  any act that may restrict a person in Thailand from purchasing goods or services directlyfrom business operators outside Thailand;  and any act that has negative effects such as impairing or
obstructing business operation of other businesses.
128. The Trade Competition Commission has the authority to issue written orders to business
operators deemed to be in violation of the provisions of the Trade Competition Act;  the orders may
involve suspension, cessation or correction of unfair business practices.  Failure to abide by the
provisions of the Trade Competition Act may result in jail terms of one to three years, and/or fines up
to B 6 million.  An Appellate Committee appointed by the Council of Ministers in December 2000 isempowered to consider and decide on appeals against orders of the Trade Competition Commission.
Business operators that are under control of other laws and regulations, such as state-owned
enterprises (under the State-owned Enterprise Law) and groups of farmers (under the Agricultural
Cooperatives Law) are exempted from the Act.
129. Since its inauguration, the Office of Trade Competition Commission has made decisions on
three cases;  one involves alleged excessive pricing by a cable television monopoly and one alleged
tying of the sale of beer with that of whisky;  no penalties were imposed in either case.  According to
the authorities, the weak enforcement of the competit ion legislation can be attributed to:  the lack of
definition of "dominance" required to enforce the Trade Competition Act provisions on abuse of
dominance;  institutional, procedural, legal or resource limitations in the Office of Trade Competition,including lack of funds for staff-training, public relations, and investigative activities.
87
(c) Corporate governance:  accounting and disclosure practices
130. Thailand's successful economic restructuring and long-term development depends on creation
of an efficient capital market capable of mobilizing savings and channelling them into the most
                                                     
85 The current list of controlled goods consists of:  liquified petroleum gas, formic acid, cassette tapes,
compact discs, video tapes, student uniforms, calcium carbide, milk (fresh or powdered), sugar, oils and fatsobtained from plants and animals (edible or inedible), ga soline and diesel, pork and edible parts of pig, chemical
fertilizers, pesticides or fungicides, drug and medical products, motorcycles, passenger cars, pick-up trucks,
animal feed and concentrated feed, bar steel, slab, structural steel.  The Commission reviews the list of
controlled goods and services at least once a year with a view to ensuring its conformity with the economicconditions.
86 No less than half of the qualified persons must be from the private sector.
87 WTO document WT/WGTCP/W/188, 29 May 2002.Thailand WT/TPR/S/123
Page 71
productive uses.  Good corporate governance is essential for the establishment of such a market;
studies show a positive correlation between the quality of corporate governance and share prices in
the local market88, which are, in turn, a key determinant of companies' cost of capital.  Inadequate
standards of corporate governance could jeopardize other reforms, notably corporate and financial
restructuring as well as privatization.
131. In the face of the weak balance sheets of various corporations, improving corporate
governance across sectors has become a government priority.  Various analyses of the 1997 Asian
financial crisis have highlighted inappropriate accounting and disclosure practices and insufficient
accounting requirements.  The Government’s strategy for economic recovery has included various
measures to remedy these shortcomings.
132. In August 2000, the Accounting Act entered into force, requiring all companies to register the
names of its accounting officers.  The Act has also given legal force to the accounting standards as
pronounced by Thailand's accounting body, the Institute of Certified Accountants and Auditors of
Thailand (ICAAT).  There are approximately 100,000 qualified company accountants (as of
October 2002).
133. In 2002, the Securities and Exchange Commi ssion (SEC) announced the Action Plan on Good
Corporate Governance;  it includes amending releva nt laws, issuing a set of best practices, introducing
incentive schemes, and an educational programme.  The Plan is aimed at promoting shareholders'
rights, transparency and accounting standards, good corporate governance, directors' accountability, a
good corporate governance rating programme, and educational and public relations programmes.89  In
this context, the SEC is to announce names of list ed companies that have accomplished high level of
information disclosure, and information concerning investigation of complaints, and inappropriate
acts of companies under SEC supervision.
134. The SEC has adopted several measures to ensure and enforce compliance with good corporate
governance practices by listed companies, such as updating disclosure requirements and accounting
standards to international levels.  If disclosure docu ments are found to be incorrect or insufficient, the
SEC orders amendments to be made, and the Stock Exchange of Thailand (SET) suspends trading of
such stock.
135. One company has been delisted since 1999 due to false disclosure of financial information.
The authorities are of the view that in the interest of retail investors mandatory delisting should be the
last measure of enforcement to be adopted;  the SEC and the SET focus more on the management of
the listed companies by imposing measures on the management.  A list is made of companies whose
management does not comply with good corporate government practices.
(d) Bankruptcy procedures
136. Major amendments to the Bankruptcy Act in 1998 and 1999, on bankruptcy and foreclosure
procedures, allow creditors to seek payment from loan guarantors.  A Bankruptcy Court was also
established in mid-1999 (Chapter II(5));  the Court has processed more than 4,300 cases since its
inception.
                                                     
88 See, for example Gompers et al (2001), p. 29.
89 SEC online information.  Available at:  http://www.sec.or.th/secen1/news/secnews/10-2002.doc.