WORLD TRADE
ORGANIZATIONG/SCM/N/71/THA/Suppl.1
12 July 2002
(02-3886)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Updating Notification Pursuant to Article XVI:1 of the
GATT 1994 and Article 25 of the Agreement on Subsidies
and Countervailing Measures
THAILAND
Supplement
The following communication, dated 2 July 2002, has been received from the Permanent
Mission of Thailand.
_______________
TABLE OF CONTENTS
Page
I.      INVESTMENT PROMOTION  INCENTIVES...................................................................................2
II.      CREDIT REFINANCING SCHEMES ............................................................................................. ....4
III.  PACKING CRED IT FACI LITY ................................................................................................... .......6
IV.  DIRECT PACKING CREDIT FACILITY..........................................................................................8
V.      EXPORT MARKET DIVERSIFICATION PROMOTION PROGRAMME...................................9VI. MERCHANT MARINE FINANCING................................................................................................11VII. MACHINERY UPGRADING FINANCING ......................................................................................13VIII. INDUSTRIAL ESTATE AUTHOR ITY OF THAIL AND (IEA T)....................................................15G/SCM/N/71/THA/Suppl.1
Page 2
I. INVESTMENT PROMOTION  INCENTIVES
1. Title of the subsidy programme
Investment Promotion Incentives
2. Period covered by the notification
1 January–31 December 2001
3. Policy objective and/or purpose of the subsidy
Investment promotion incentives aim at promoting the establishment of industries in Thailand
to accelerate the country’s industrialization process and encourage regional development.  During
recent years, investment incentives have been geared towards decentralization to address the on-going
development disparities between the urban and rural areas in accordance with the Thai Government’spolicy theme of regional development.
4. Background and authority for the subsidy
The legal basis of the investment promotion incentives is the Investment Promotion Act
(1977) amended in 1991.  The responsible authority is  the Office of the Board of Investment (BOI).
5. Form of the subsidy
Tax concessions such as exemption/reduction of corporate income tax, exemption/reduction
of import duties on machinery, reduction of import duties on raw materials, and special deduction of
certain expenditures.
The new investment promotion policy, which ha s become effective since 1 August 2000, has
abolished the export and local content requirements to comply with WTO obligations.
In November 1991, the requirement for local content was revoked for the three activities as
listed below:
1. Production of milk or dairy products
2. Manufacture of motorcycles
3. Manufacture of vehicle engines
In order to respond to current and future economic situation and to be in line with WTO
agreements in trade and investment, the Board of Investment has amended its policy in relation to the
export and local content requirements.  Therefore, in August 2000, Board of Investment’s
Announcement No. 1/2543 (1/2000) was launched with repealed previous conditions on exports and
the use of local materials.
In addition, the BOI recently announced the amendment under Section 31 of the Investment
Promotion Act to include a “cap” on the amount of Corporate Income Tax (CIT) exemption available
for promoted projects.  The condition states that  the total amount of CIT exemption must not exceed
100 per cent of the total investment, excluding land cost and working capital.  The cap came into
effect from 1 December 2001 and is not retroactive.G/SCM/N/71/THA/Suppl.1
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6. To whom and how the subsidy is provided
General
A range of activities covering primary, secondary, and tertiary sectors are eligible for
investment promotion incentives.  The scheme is not specific to any particular sector.  Moreover,
companies in every province in Thailand can have  access to the investment promotion incentives.
The Board of Investment has established the criteria in granting tax incentives, which are generally
based on the location of the investments.  The entire country is divided into 3 zones as follows:
Zone 1: Bangkok and vicinities (Samut Prakan, Samut Sakhon, Pathum Thani, Nonthaburi,
and Nakhon Pathom)
Zone 2: Samut Songkram, Ratchaburi, Kanchanaburi, Suphanburi, Ang Thong, Ayutthaya,
Saraburi, Nakhon Nayok, Chachoengsao, Chonburi, Rayong and Phuket
Zone 3: The remaining 58 provinces (the least developed area of which per capita income is
below 85 per cent of the national average)
Zone 1 is granted the least incentives whereas Zone 3, the most disadvantaged and least
developed area, is granted the maximum incentives.   The Board of Investment may require certain
activities to be located in zone 2 or 3 only in order to be eligible for investment promotion incentives.
Factory Relocation
In order to further encourage decentralization, the Board of Investment also provides
incentives for the relocation of existing factories from Zone 1 to Zone 2 or from Zone 1 or 2 to Zone.The following criteria are applied:
1. The operation must be relocated to an industrial estate or promoted industrial zone.
2. The existing operation must be closed down and the operation at the relocated
location must start within 2 years after receiving the promotion certificate.
The following incentives are granted:1. For relocation to Zone 2: Corporate income tax exemption for 5 years.
1
2. For relocation to 40 provinces in zone 3: Corporate income tax exemption for
8 years1, 50 per cent reduction of corporate income tax for 5 years after the exemption
period; and double deduction from taxable income of water, electricity, and
transportation costs for 10 years.2
3. For relocation to 18 provinces which are the least developed and most disadvantaged
in Zone 3: Corporate income tax exemption for 8 years1;  50 per cent reduction of
corporate income tax for 5 years after the exemption period;  double deduction from
taxable income of water, electricity, and transportation costs for 10 years2;  and
deduction from net profit of 25 per cent of cost of installation or construction of
infrastructure facilities for 10 years starting from the date of first sales.
                                                     
1 Provided that such a project with capital investment of 10 million baht or more (excluding cost of
land and working capital) obtains ISO 9000 or similar international standard within 2 years from the start-update of its new plant.  Otherwise, the corporate income tax exemption will be reduced by 1 year.
2 Starting from the date o first revenue derived from the promoted activity.G/SCM/N/71/THA/Suppl.1
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7. Amount of the subsidy
There is no specific budget earmarked for investment promotion incentives.  The information
on the subsidy per unit therefore cannot be provided.  No statistics on corporate income tax exemptionand reduction are available.
8. Duration of the subsidy and/or any time limit attached to it
The duration of the programme is indeterminate.  However, the incentives granted to each
investment are subject to certain time limits.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Statistics on investment projects granted incentives by the Board of Investment
Year Number of Investment Projects Total Investment Volume
(billion baht)
1996 611 230.3
1997 479 273.5
1998 740 294.6
1999 526 205.3
2000 625 304.9
2001 611 267.9
Source:   Office of the Board of Invest ment, Office of the Prime Minister
II. CREDIT REFINANCING SCHEMES
1. Title of the subsidy programme
Credit Refinancing Schemes
2. Period covered by the notification
1 January 2001–31 December 2001
3. Policy objective and/or purpose of the subsidy
To provide financial assistance to priority sectors3 and projects through refinancing schemes.
4. Background and authority for the subsidy
The legal basis of this scheme is the Royal Decree Regulating the Affairs of the Bank of
Thailand B.E.2485, Section 12(4).  The responsible authority is the Bank of Thailand (BOT).
5. Form of  the subsidy
Loan
                                                     
3 Economic sectors deemed important to the development of the national economy and its sustainable
growth.G/SCM/N/71/THA/Suppl.1
Page 5
6. To whom and how the subsidy is provided
In January 2001, the BOT provided long-term capital support for SMEs which are classified
as non-performing loans (NPL) but still have busin ess potential, in order to support the debt
restructuring policy of the government and to stimulate economic recovery.  Such SMEs must have
already signed debt restructuring agreements with a financial institution.  Regarding non-collateral
loans, they must be guaranteed by the Small Industry Credit Guarantee Corporation (SICGC) in the
proportion not less than 75 per cent.  The total loans provided for each SME must not exceed
50 million bath and financial institutions are permitted by the BOT to charge SMEs at their Minimum
Loan Rate (MLR).
Applications for financial assistance must be submitted to the BOT no later than 5 April 2002
and the maximum period of financial assistance must not exceed 5 years.  Other criteria and
conditions are in compliance with the BOT Regulation B.E. 2543 as mentioned previously.  After a
review in August, the BOT had revised the maximum period from 5 years to 3 years, and in October,
the submission period was extended to 7 April 2004.  The expiry date for working capital is extendedfrom 7 April 2002 to 7 April 2004.
In addition, the BOT has provided working capital for SMEs, general industries and animal
husbandries, which were damaged by flood in the southern part of Thailand in November 2000.
Financial institutions are permitted by the BOT to charge them at MLR minus 2.75. Applications forthis financial assistance must be submitted to the BOT no later than 12 July 2001 and the maximum
period of this financial assistance is 2 years.  Apart from the above criteria, other details must be
complied with the BOT regulation arising from the SMEs (B.E. 2543) and arising from general
industries and animal husbandries (B.E. 2531).
Furthermore, according to the continued fall of market interest rates, the BOT has also
lowered its interest rate for financial instituti ons complied with the BOT regulation arising from the
SMEs (B.E. 2543) and SMEs which are classified as  non-performing loans (NPLs) but have business
potential approved by the BOT from 3 per cent per annum to 2 per cent per annum for the amount
purchased which is 60 per cent of the amount of the promissory notes for 1 year period from
12 January 2001 to 11 January 2002.
In August 2001, the BOT revised the BOT regulation arising from animal husbandries (B.E.
2531) that increased the credit promotion from 50 per cent to 60 per cent of the amount of total credit
and lowered the interest rate charged to the financial institutions from 5 per cent per annum to 3 per
cent per annum.
7. Amount of the subsidy
At the end of 2001, outstanding loans under the BOT financial assistance through financial
institutions totaled 9,523.82 million baht as shown below.G/SCM/N/71/THA/Suppl.1
Page 6
Outstanding as of Interest rate
Schemes December 31, 2001
(Million Baht)Charged by the
BOT  (% p.a.)Charged by the financial
institutions  (% p.a.)
Industry 255.39 5.0 MLR-1
Small and Medium
Enterprises8,798.88 2.0 MLR-1
Livestock raising and
aqua-culture433.55 3.0 MLR-2.75
Rural development 0.00 3.0 MLR-2.75
Investment in zone 3 36.00 3.0 MOR/MLR-2
TOTAL 9,523.82
8. Duration of the subsidy and/or any time limit attached to it
In August 2001, the BOT had revised financial support for new businesses for a maximum of
3 years.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Not determined
III. PACKING CREDIT FACILITY
1. Title of the subsidy programme
Packing Credit Facility
2. Period covered by the notification
1 January–31 December 2001
3. Policy objective and/or purpose of the subsidy
To encourage commercial banks to provide export financing for exporters.  The initial
purpose of the programme was to encourage the financing of commodity exports.
4. Background and authority for the subsidy
Packing credit facility is an export-financing scheme provided by the Bank of Thailand with
co-financing from commercial banks.  Under this  facility, commercial banks obtain fund, provided by
the Bank of Thailand through the Export-Import Ba nk of Thailand (EXIM Bank), at a concessionary
interest rate on a condition that commercial banks co-finance the other half in order to on-lend to
exporters and export-oriented manufacturers.  The facility is provided for both pre-shipment and post-
shipment financing.
The Bank of Thailand provided the funding. The EXIM Bank allocated fund to commercial
banks and supervised the utilization of the facility.G/SCM/N/71/THA/Suppl.1
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7. Amount of the subsidy
As a result of high liquidity in the market, commercial bank’s demand for fund from the
EXIM Bank had dropped constantly as they lent to exporters out of their own money.  Under this
circumstance, the Bank of Thailand reduced the packing credit line from 20 billion baht in 2000 to 10billion baht in 2001 in which the commercial banks co-finance another half.
The Bank of Thailand charged the EXIM Bank at 2 per cent p.a., while the EXIM Bank
channeled fund to commercial banks at 3 per cent p.a. Commercial banks co-financed and on-lent to
exporters at interest rates not more than 7 per cent p.a. as of December 2001.
8. Duration of the subsidy and/or any time limit attached to it
Date of Commencement: 1994.
9. Statistical data permitting an assessment of the trade effects of the subsidy
                      (billion baht)
1999 2000 2001
/g167 Total packing credit financing
disbursed115.4 134.3 59.1
/g167 Total BOT’s financing* 57.7 67.2 29.6
/g167 Credit outstanding at year-end 8.8 6.8 6.7
Note:   * The figures were roughly calculated, based on the assumption that commercial banks co-
financed 50 per cent of the total credit on-lent to exporters.
IV. DIRECT PACKING CREDIT FACILITY
1. Title of the subsidy programme
Direct Packing Credit Facility
2. Period covered by the notification
1 January–31 December  2001
3. Policy objective and/or purpose of the subsidy
 
- To encourage fuller utilization of the packing credit fund.
- To provide liquidity to the export sector
4. Background and authority for the subsidy
In early 1998, Thailand faced a severe liquidity shortage and most commercial banks slowed
down their lending, including the co-financing under the packing credit facility.  Utilization of
packing credit fund stayed around 20 billion baht in January 1998 compared to the available fund of
33 billion bath at the time.  The packing credit fund remained under-utilized despite the badly needed
export financing because commercial banks had limited fund to co-finance, as well as they faced
constraints due mainly to existing NPLs and the capital adequacy.G/SCM/N/71/THA/Suppl.1
Page 9
In order to alleviate the credit crunch in export financing and to encourage fuller utilization of
the inactive packing credit fund provided by the Bank of Thailand, the EXIM Bank embarked the
packing credit scheme to direct lend to exporters.  In 1998, the Bank of Thailand approved the credit
line of 5 billion baht for the EXIM Bank’s direct packing credit facility to on-lend to exporters under
the same terms and conditions as the packing credit facility co-financed by commercial banks.
5. Form of the subsidy
Loan
6. To whom and how the subsidy is provided
With the Bank of Thailand’s fund, the EXIM Bank co-financed 50 per cent of the total credit
granted and on-lent to exporters.
In such co-financing, the EXIM Bank was obliged to the same regulations and work
procedure as commercial banks under the packing credit facility.  Functions in the part of commercialbanks were carried out by the Banking Department of the EXIM Bank, while the Packing Credit
Department of the bank was responsible for the documentation and the settlement with the Bank of
Thailand.
In addition, the Direct Packing Credit Facility is provided under the same terms and
conditions as Packing Credit Facility, therefore, there is no minimum interest rate at which loans are
provided to exporters under this programme.
7. Amount of the subsidy
In 2001, the Bank of Thailand allocated a line of 7 billion baht for the EXIM Bank’s direct
packing credit facility, which the EXIM Bank co-financed another half.  Out of the 7-billion-baht
credit line, 2 billion baht was for the Export  Market Diversification Promotion Programme.
The Bank of Thailand lent to the EXIM Bank at 3 per cent, while the EXIM Bank co-financed
one half and on-lent to exporters at interest rates not more than 7 per cent as of December 2001.
8. Duration of the subsidy and/or any time limit attached to it
Date of Commencement: 27 April 1998.
9. Statistical data permitting an assessment of the trade effects of the subsidy
- Total financing disbursed in 2001           27.2 billion baht
- Total Bank of Thailand’s financing disbursed 13.6 billion baht
- Credit outstanding at end 2001   8.3 billion baht
V. EXPORT MARKET DIVERSIFICATION PROMOTION PROGRAMME
1. Title of the subsidy programme
Export Market Diversification Promotion Programme
2. Period covered by the notification
1 January–31 December 2001G/SCM/N/71/THA/Suppl.1
Page 10
3. Policy objective and/or purpose of the subsidy
To promote export to the 141 targeted countries in 8 regions consisting of Indochina (4),
Middle East (14), Africa (53), Latin America (31), Ea stern Europe (27), South Asia (8), East Asia (2)
and the South Pacific Islands (2)
4. Background and authority for the subsidy
In early 1999, in order to stimulate export growth in the aftermath of the Asian Crisis, the
Ministry of Commerce launched the “Export Market Diversification Promotion Programme” to
encourage diversification of Thai exports to new or potential markets.
Under this programme, the EXIM Bank would reba te interest to exporters who utilized the
Packing Credit Facility (at the commercial banks) or the Direct Packing Credit Facility (at the EXIM
Bank).  Such interest rebate was capped at a maximum 5 per cent and applicable for the incremental
export value over the previous year’s level to that particular export market.  The Ministry ofCommerce allocated the 750 million baht fund from the International Trade Promotion Fund to the
EXIM Bank for 5 years to facilitate this programme.
5. Form of the subsidy
Interest rebate
6. To whom and how the subsidy is provided
6.1 Exporters, having Packing Credit lines with commercial banks or Direct Packing Credit
lines with the EXIM Bank, complete and submit the Export Declaration for Interest
Rebate Form when applying for credits.
6.2 Exporters are required to include a clause “Export Market Diversification Promotion
Programme” in documents accompanying the promissory notes used as collateral for
credits.
6.3 Having shipped out their products and paid by foreign buyers, exporters are required to
submit copies of the bill of lading, Export Entry Form, invoice, proof of foreign currency
remittance together with Interest Rebate Request Form within 60 days from the due date
of the last promissory note issued under such export.
6.4 The EXIM Bank checks all relevant details and cross-checks with the Ministry of
Commerce, in particular the incremental expor t value to such market over the previous
year’s level. If all details are valid, the EXIM Bank will pay the rebate to the exporters.
The interest rate rebate is calculated as in this example.First step:  Limit of eligible amount used for calculation
Export value to “A” country in 1999 = 100 million Baht
Export value to “A” country in 2000 = 120 million Baht
∴ Eligible amount used for calculation in 2000 =   20 million Baht
Second step:  Actual amount of interest rebateG/SCM/N/71/THA/Suppl.1
Page 11
1. EXIM Bank will use the value of promissory notes, or the value shown in export
delivery documents issued by the Customs Department, whichever is lesser, to calculate
interest rebate. Such amount shall not accumulatively exceed 20 million Baht.
2. EXIM Bank will rebate interest to an exporter equal to the actual interest amount paid
for particular promissory notes or export delivery documents but not higher than 5 per cent.
7. Amount of the subsidy
The Ministry of Commerce has provided the EXIM Bank an annual fund of 150 million baht
for 5 consecutive years, totaling 750 million baht for interest rebate under this programme.  In 2000,
the Ministry of Commerce called back the line 100 million bath out of the first 150 million baht forthe first time due to less demand of interest rebate. In 2001, the Ministry of Commerce allocated fund
of 42.5 million baht to EXIM Bank for the disbursement of the rebate.
8. Duration of the subsidy and/or any time limit attached to it
Date of Commencement:  14 June 1999
Date of Termination:    31 December 2003
9. Statistical data permitted an assessment of the trade effects of the subsidy
Interest rebates paid to exporters since June 1999 until December 2001 totaled 47.7 million
bath or 6.36 per cent of the total fund initially provided by the Ministry of Commerce.
VI. MERCHANT MARINE FINANCING
1. Title of the subsidy programme
Merchant Marine Financing
2. Period covered by the notification
1 January–31 December 2001
3. Policy objective and/or purpose of the subsidy
 - To alleviate the country’s deficit on balance of trade & services
 - To strengthen the merchant marine business of Thailand
 - To accommodate the export and import activities with good shipping facility
4. Background and authority for the programme
Since 1995, the government took a serious look into the country’s problem of current account
deficit, and found out that the neglected merchant marine business not only incurred revenue foregone
but also brought about substantial outflow of fre ight and shipping expenses, not to mention the
insufficiency of Thailand’s shipping business.
As a result, the EXIM Bank launched a financial service for the merchant marine business
from its own fund in early 1996.  Later, in September 1996, the government provided, through the
Bank of Thailand, a credit line of 2 billion baht for merchant marine financing at the EXIM Bank.Then, in February 1998, a portion of 1 billion baht from the Structural Adjustment Loan (SAL) fromG/SCM/N/71/THA/Suppl.1
Page 12
the ADB World Bank Co-financing to the Thai Government was provided to the EXIM Bank to on-
lend under merchant marine financing together with the machinery upgrading financing.
In the meantime, EXIM Bank still provided financing from its own source of fund, especially
to customers who were not qualified by the BOT’s conditions, for example, when the financed shipaged over 20 years.
5. Form of the subsidy
Loan
6. To whom and how the subsidy is provided
The EXIM Bank extended credit to entrepreneurs of merchant marine business to
buy/renovate their ships, new or used ones.
Customers who were qualified by the BOT’s cond itions could utilize the BOT’s fund in baht
denomination which offered interest rates of up to 5 per cent p.a. while the BOT charged the EXIM
Bank at 3 per cent p.a.  The EXIM Bank co-financed another half with the BOT’s fund in baht or
US dollar denomination at the market interest rate.
From the EXIM’s own fund, the financing was provided in baht or US dollar, both at the
market interest rate, with more relaxed conditions.
As for the SAL fund, since the cost of fund was relatively high, above 6.45 per cent in
US dollar lending, the fund was not commercially acceptable for customers.
Criteria for the Bank of Thailand’s fund for merchant marine financing:
- The company is registered in Thailand and has Thai ownership more than 50 per cent of total
registered capital.
- The main business involves international shipping.
- The financing is for the investment in new ships or the used ones with up to 20 years of age.
This investment shall include the rehabilitation cost of the used ship.
- The financed ship must be registered in Thailand and flies Thai flag.
The term of lending from the BOT’s fund was up to 5 years, while that from the EXIM’s fund
was up to 7 years, depending on business conditions.
7. Total amount of the subsidy
- BOT’s fund totalled 1.5 billion baht
- SAL fund totalled 25.7 million US dollar (together with machinery upgrading)
- EXIM Bank’s own source of fund was up to customers’ demand for financing and funding
availability.
8. Duration of the subsidy and/or any time limit attached to it
Date of Commencement:
EXIM Bank’s facility : Early 1996.
BOT’s fund : September 1996.
SAL fund : February 1998.G/SCM/N/71/THA/Suppl.1
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9. Statistical data permitted an assessment of the trade effects of the subsidy
                                                                                                                                        (billion baht)
1997 1998 1999 2000 2001
/g167 Total credit granted 2.42* 3.89 3.82 3.37 2.58
/g167 Total BOT’s financing 0.76 1.43 1.19 1.17 0.92
/g167 Credit outstanding at year-end 2.77* 3.43 3.61 3.48 2.67
Note *  Credit outstanding exceeded credit line because of the exchange rate effect.  Credit line was
quoted at the proxy exchange rate of 30 baht to a US dollar in 1997, while credit outstandingwas quoted at the market exchange rate as of 30 December 1997.
VII. MACHINERY UPGRADING FINANCING
1. Title of the subsidy programme
Machinery Upgrading Financing
2. Period covered by the notification
1 January–31 December 2001
3. Policy objective and/or purpose of the subsidy
 - To improve the productivity of Thai industrial operators
 - To encourage the renovation/upgrading of the technology of production/quality of Thai
products
4. Background and authority for the subsidy
The government deemed it necessary to improve the productivity of Thai industrial operators.
Moreover, some industries did face a serious prob lem of out-of-date technology of production which
brought about low quality of products.
The EXIM Bank, therefore, introduced a fina ncial service to facilitate the machinery
upgrading of the operators.  The government later supported through the provision of fund from the
Bank of Thailand to co-finance with the EXIM Bank  in this facility.  Then came the SAL fund to be
mutually used in machinery upgrading and merchant marine financing.
5. Form of the subsidy
Loan
6. To whom and how the subsidy is provided
The EXIM Bank extended credit to operators whose plans to renovate/upgrade their
machinery were approved by agencies authorized by the Ministry of Industry (MOI).
Operators eligible for the Bank of Thailand’s fund must be qualified by the following criteria:
- The renovation plan had been approved by agencies authorized by MOI.
- The financing shall be used for new machinery investment in replacement of the old one.G/SCM/N/71/THA/Suppl.1
Page 14
Nevertheless, in late 1999, in compliance with th e MOI’s policy, the criteria that the financing
shall be used only for the replacement of the old machinery had been reviewed and the scope of
Machinery Upgrading Facility was expanded to also cover the following activities:
- Investments to modify or further enhance the performance of the prevailing machines or
equipment, in order to increase efficiency,
- Investments related to energy conservation,
- Investments related to environment conservation, including the relocation of factories into
industrial estates, etc.
In addition, targeted industries eligible for this f acility were also clearly identified to cover the
13 industries4 under the Industrial Restructuring Plan, with small-and-medium-scaled enterprises
(SMEs) as the priority.
Operators qualified by the BOT’s criteria could utilize the BOT’s fund in baht denomination
by 50 per cent of total lending at an interest rate of not more than 4.5 per cent p.a.  The EXIM Bank
co-financed the other half, in baht or US dollar, at the EXIM’s prime rate plus up to 1.5 per cent p.a.
for baht lending; or LIBOR plus up to 3.5 per cent p.a. for US dollar lending.
Apart from co-financing with the BOT’s fund, the EXIM Bank also provided machinery
upgrading financing on its own, with a more relaxed condition, for instance, to finance the investment
in some particular kinds of machinery that were not included in the MOI’s conditions.
Lending interest rate of the EXIM Bank stayed at EXIM Prime plus 1.5 per cent p.a. in baht
lending, while US dollar lending is at the rate of up to LIBOR plus 3.5 per cent p.a. (EXIM Prime
stayed at 7.5 per cent p.a. as of December 2001.)
The term of lending for machinery upgrading was up to 5 years for the BOT’s and up to
7 years for the EXIM Bank’s fund due to repayment capability of operators.
There is no minimum lending rate under the Machinery Upgrading Financing.
7. Amount of the subsidy
BOT’s fund 0.24 billion baht
SAL fund 25.7 million US dollar (together with merchant marine)EXIM Bank’s own source of fund was subject to fund availability.
8. Duration of the subsidy and/or  any time limit attached to it
Date of Commencement:
EXIM Bank’s facility : Early 1997.
BOT’s fund : May 1997.
SAL fund : February 1998.
                                                     
4 Thirteen industries eligible under this program are as follows: (1) Food and animal food (2) Textiles
and articles of apparel and clothing accessories (3) Foot wear and parts and leather and bovine leather products
(4) Wood and wood sheets and housewear (5) Pharmaceutical and chemical products (6) Rubber and rubberproducts (7) Plastic products (8) Ceramic products an d tableware and kitchenware of glass (9) Electrical
equipment and electronic appliances (10) Motor cars, parts and accessories (11) Precious stones and jewelry
(12) Iron or steel products (13) Petrochemical industry and its relatedG/SCM/N/71/THA/Suppl.1
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9. Statistical data permitting an assessment of the trade effects of the subsidy
                     (billion baht)
1998 1999 2000 2001
/g167 Total credit granted 0.67 0.81 0.74 0.56
/g167 Total BOT’s financing 0.09 0.55 0.15 0.12
/g167 Credit outstanding at year-end 0.37 0.62 0.63 0.40
VIII.  INDUSTRIAL ESTATE AUTHORITY OF THAILAND (IEAT)
1. Title of the subsidy programme
Industrial Estate Authority of Thailand (IEAT)
2. Period covered by the notification
1 January–31 December 2001
3. Policy objective and/or purpose of the subsidy
- To procure suitable land for the establishment or expansion of industrial estates,
including general industrial zones and export-processing zones
- To provide facilities for industrial operators in the industrial estates
- To promote and control industrial estates owned by the private sector or other
government agencies
4. Authority for the subsidy
Industrial Estate Authority of Thailand (IEAT)
5. Form of the subsidy
Incentives cover the exemptions of payment of surcharge under the law on promotion of
investment, import duties, value added tax and excise tax on machinery, equipment, tools and supplies
including the component thereof which are essential for the production of goods or trading, as the case
may be, and on materials to be used for construction, assembly or installation of factories or buildings
and goods imported and taken into export processing  zones by industrial operators and traders for
exportation or for use in the production of goods or trading for exportation.G/SCM/N/71/THA/Suppl.1
Page 16
6. To whom and how the subsidy is provided
Incentives are provided to the industrial opera tor who is permitted to engage in industrial
activities in an industrial estate.  In respect to the Export Processing Zone, products, by products, and
other items resulting from the production in the export processing zone for use or distribution in theKingdom are subject to tariffs and duties according to their condition, price, and customs tariffs on the
date of their removal from the export processing zone .  They will be considered as imported into the
Kingdom on the date of their removal from the export processing zone according to Section 51, IEAT
ACT B.E. 2522, which has been amended by Section 3, IEAT Act (second) B.E. 2534.
The criteria that an entity or enterprise has to meet in order to qualify to take part or locate in
an industrial estate are stated in the IEAT  announcement No. 1/2531, No. 4/2535, No. 6/2535 and
No. 2/2538 regarding standard, procedures, and conditions in the application for permission and the
granting of permission to operate in industrial estates.
7. Amount of the subsidy
No specific budget provided
8. Duration of the subsidy and/or any time limit attached to it
The duration of the programme is indeterminate. However, the incentives granted to each
operator are subject to certain time limits.
9. Statistical data permitting an assessment of the trade effects of the subsidy
(Unit:  Million Baht)
YEAR IMPORT VALUE EXPORT VALUE
1998 128,270.75 200,181.56
1999 126,015.53 205,459.43
2000 115,518.39 208,433.14
2001 152,679.90 259,478.06
 TOTAL 522,484.58 873,552.21
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