WT/TPR/S/191/Rev.1 Trade Policy Review 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since its previous Trade Policy Review, the ge neral thrust of Thailand's trade policy has 
remained liberal, and steps have been taken to facilitate trade and improve market access. 
2. The tariff remains one of the main trade policy instruments and a significant, albeit declining, 
source of tax revenue.  The introduction of th e 8-digit ASEAN Harmonized Tariff Nomenclature 
(AHTN) 2007, in January 2007, increased the number of ta riff lines by 50.8%;  the lack of a workable 
version in an official WTO language confined the ta riff analysis in this report to the 2006 tariff.  The 
2006 tariff remained relatively complex,  involving a multiplicity of rates (31 ad valorem , 19 specific, 
and 158 alternative rates).  Tariff  cuts involving more than a third of the lines, reduced the overall 
simple applied MFN tariff average rate from 13% in 2003 to 11% in 2006.  Although the number of duty-free tariff lines has increased considerably, peak ad valorem  rates have remained unchanged and 
are concentrated in a few sensitiv e items.  Thailand has slightly re laxed its tariff-rate quota regime, 
affecting 23 agricultural products, by, inter alia,  allowing unlimited imports of soya bean and soya 
bean cake for certain producer groups at lower in- quota rates.  Thailand has bound 73.7% of its tariff 
lines;  it concluded the process of binding its tariffs  on specific information technology products at 
zero at end 2005.  When an applied MFN rate is hi gher than the bound rate, observance of the binding 
commitment depends on the implementation by Cu stoms (upon the claim of the importer) of the 
"whichever is lower" principle;  for a few tariff lin es the bound rate is not the same type of duty as the 
applied rate (e.g. applied rate specific, bound rate ad valorem ).  The gap of 16.5 percentage points 
between the average bound and applied MFN tariff rat es, due to unilateral a nd ASEAN-related tariff 
restructuring, still imparts a considerable degree of  unpredictability to the tariff regime and provides a 
great deal of scope for the authorities to raise app lied rates within the bindings;  for instance, between 
2003 and 2006 duties on eight tariff lines (e.g. cuts and edible offal, fused magnesia, cocaine, raw 
hides and skins, flat rolled products of iron and steel) were increased considerably .  Nonetheless, the 
overall trend in applied tariff rat es is downward.  The transposition of WTO binding commitments to 
HS2007 is another pressing task.  Furthermore, Tha iland continues to impose certain product-specific 
import surcharges;  these currently affect two items. 
3. The transparency and simplicity of customs proce dures, a crucial element of trade facilitation, 
has been increased;  clearance times were shortene d with extensive use of paperless trading, and 
corruption is being tackled with sev eral preventive measures.  Further regulatory changes and training 
activities have enhanced the implementation and understanding of the WTO Agreement on Customs 
Valuation;  nevertheless, the process of repealing legal provisions allowing for the use of reference 
prices, which the authorities maintain we re never applied, is still under way. 
4. Import licensing and prohibitions on various items for, inter alia,  economic reasons (infant 
industry protection) have remained generally unch anged during the review period;  import fees for 
meat products are levied at specific rates.  Du ring the period under review, Thailand initiated several 
anti-dumping cases;  anti-dumping duties on hot-rolled  steel, which caused market supply problems, 
were temporarily relaxed.  The number of Thai i ndustrial standards based on international standards 
has continued to rise;  various amendments were ma de to laws related to quarantine requirements.   
5. Institutional efforts have been made to cl amp down on re-exporting aimed at circumventing 
or benefiting from origin-related treatment in thir d markets.  The persistence of relatively high 
statutory export taxes on a few commodities (wood and articles thereof, and hides) and the possibility 
of re-instating others, constitutes assistance to th e downstream processing of such commodities and an 
element of uncertainty.  The scope of export licensing and prohibitions has been reduced since 2003;  Thailand WT/TPR/S/191/Rev.1 
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voluntary licence and quota restrictions on exports of automobiles to Chinese Taipei have not been 
used since 2004.  Exports of items that are in s hort supply domestically or that might unduly affect 
prices are subject to quotas (e.g. sugar).  The state-owned Export-Import Bank of Thailand (EXIM Bank), which provides financial services not adequa tely provided by the Thai banking system, has 
launched a new credit facility for small and medium  enterprise (SME) exporters.  Exports remain 
eligible for "tax and duty compensation", which is set  as a fixed percentage of the f.o.b. value for each 
product, thus providing the possibility of over- and under-compensation despite regular adjustments. 
6. In order to encourage investment in priority sectors and remote areas Thailand continues to 
use tax and non-tax incentives, whose cost-effectiven ess is questionable.  Various subsidies tied to 
exports and local content have been removed.  State involvement in the economy persists and 
privatization efforts are stalled; regulatory chang es were made to prevent abuse of monopoly power of 
corporatized entities.  Government procurement rema ins an important instrument of economic policy, 
with 3% price preferences being accorded to do mestic suppliers; reportedly, language used in 
procurement tenders may exclude foreign products  from the process although relevant regulations 
require that wording does not obstruct competition or benefit specific suppliers.  In early 2007, 
countertrade for public procurement was repealed.  Pri ce controls and/or monitoring continue to affect 
more than 200 products and 20 services possibly accounting for as much as 20% of the CPI basket of goods and services.  
7. Thailand has strengthened its lega l framework for the protection of intellectual property rights 
(IPRs) by enacting legislation on geographical indi cations and optical disc production; action was also 
taken to promote, coordinate, and enforce protection of IPRs through a Memorandum of 
Understanding with a number of private-sector representatives and law-enforcement groups, as well 
as by strengthening the institutional framework fo r enforcement.  To cope with persisting 
competition-policy weaknesses, Thailand enacted a de finition of the dominant player in the market; 
state-owned enterprises and farmers cooperatives are not covered by the competition legislation.  
8. Considerable efforts to increase the level of transparency and disclosure appear to have 
reduced allegations of corruption in certain areas;   these allegations refer to Thailand's customs 
procedures, customs valuation, tariff-rate-quota licen sing, government procur ement, and the granting 
of tax incentives.
1 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
(a) Recent developments 
9. Thailand considers improvements to its customs procedures as one of the crucial elements of 
trade facilitation.  Various measures have been adopt ed to increase the transparency and simplicity of 
procedures.  Efforts have been undertaken to, inter alia :  implement the WTO Customs Valuation 
Agreement and the last version of Harmonized System s for tariff classification, implement an on-line 
system between Customs and banks (revolving bank guarantees);  promptly publish and make 
available on the Internet information on custom s laws, regulations, procedures and administrative 
                                                      
1 The authorities indicate that the implementation of in ternational, simplified, and standard practices in 
assessing duty and physical inspection, together with th e use of computerization reduces the time for goods to 
be released.  Meanwhile, it deters customs officers from using their discretion.  Additionally, many allegations 
relate to dishonest and unprofessional customs brokers who overcharged by claiming extra-money collected for 
customs. WT/TPR/S/191/Rev.1 Trade Policy Review 
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rulings;  and establish a Customs Transparency Center (CTC) in 2004  to fight corruption and support 
the understanding between customs and the private sector.2   
10. Concerning paperless trading, the authorities indicate that by 2006 about 92% (85% in 2002) 
of declaration forms were processed through the EDI (electronic data interchange) system, which uses 
both electronic and hard data to complete the custom procedure.3  Furthermore, in order to minimize 
the use of documents and expedite the customs clea rance, the authorities indicated that an entirely 
paperless customs procedure was to be implemented in  the course of 2007.  This new procedure is 
expected to facilitate international trade by s hortening the customs procedure and thus improving 
country's competitiveness. 
11. An e-payment system was implemented in 2003 to allow traders to pay duties and taxes 
electronically 24 hours a day 7 days a week.  An internet-based declaration system implemented in November 2002 is mainly used by small and me dium-sized enterprises (SMEs).  In addition, 
companies that belong to the Board of Investment I nvestor Club Association are eligible to use the 
raw materials tracking system;  customs clearance fo r raw materials can be done in three hours or less 
for users of the system.
4 
12. The time required by Customs for duty and tax collection, as well as physical inspection 
averages less than an hour, comp ared with three to four hour s through non-EDI (manual document) 
processing.5  Other sources report that for all traders, customs clearance at airports and seaports was 
reduced from five days to one by January 2005;  as from September 2004, the Customs Department cut the time needed to process goods before deliv ering them to airlines from three hours to two.
6  
Corruption seems to persist, thus increasing import costs.  According to a June 2006 study by the 
University for International Trade Studies of the Thai Chamber of Commerce, export and import 
companies seem to have paid B 404 million in bribes in 2005 for faster service at trade checkpoints;  
the authorities expressed their reservations over th e methodology and estimated values of this study.7  
In an attempt to reduce illegal payments, whic h some observers blame on low salaries, as from 
August 2004 customs officials have received an extra B 5,000-B 6,000 per month in salary.  Other 
preventive measures taken to deal with allegations of corruption are:  the introduction of e-Customs 
i.e. e-import, e-export, e-container, and paperl ess trading, aiming at reducing physical contact 
between officers and importers;  the launch of a Cu stoms hot-line;  the operation of a joint committee 
with the private sector to develop customs service s;  and the improvement of fringe benefits for 
customs officers, such as accommodatio n, health care services, bonuses, etc. 
                                                      
2 APEC (2006b), Chapter 6. 
3 EDI documents include declarations, vessel/fli ght schedules, and response messages according to 
UN/EDIFACT processing system. 
4 Board of Investment online information.  Viewed  at:  http://www.boi.go.th/english/how/taxation.asp 
[22 January 2007]. 
5 According to the Customs Administration, in 2006 the time taken for release of goods (excluding 
queuing time) as per the World Customs Organization Guideline was:  for import clearance the green line 
average was 33 minutes, and the red lin e average 1 hour 4 minutes;  for ex port clearance, the green line average 
was 19 minutes, the red line average 42 mi nutes, and manual average 33 minutes.   
6 According to the authorities, the differences in time required for clearance might be due to the 
different methods of estimation, as many agencies are engaged in the cargo clearance procedure.  Apart from 
Customs, these other agencies include warehouse operators, intermediaries, customs brokers, owners of goods, 
transporters, and other related government authorities.  A ll interventions in the supply chain may slow down the 
process (EIU, 2006b). 
7 The authorities indicate that the study by the Centre for International Trade Studies involved an 
opinion survey not research.  The st udy did not take into account money leaked into the hands of customs 
brokers or intermediaries between the owners of the goods and Customs.  Although corruption exists, it is being reduced and its estimated costs are much lower than those indicated in the study (EIU, 2006b). Thailand WT/TPR/S/191/Rev.1 
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13. Thailand is not yet 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;  however, it has expressed its intention of acceding 
to the Revised Kyoto Convention.  Since its previous TPR, Thailand h as been amending its legislation 
to comply with the Revised Kyoto Convention;  in  June 2007, it was at the parliamentary stage for 
final consideration.  According to  the authorities, the current customs procedures applied to cargo 
clearance are, by and large, consistent with th e General Annex of the revised Kyoto Convention. 
(b) Registration 
14. All importers, except natural pe rsons and government agencies, are required to register and 
receive a customs card.  Preferential treatment is provided for companies that meet certain criteria 
specified under a "gold card" system.  Gold Card hol ders are major exporters and importers qualified 
as:  being juristic person;  having registered pa id-up capital of not less than B 5 million;  being 
engaged in the import/export business for not less than three years;  being a member of the Federation 
of Thai Industries or the Thai Chamber of Comm erce;  having never violated Customs Laws and 
regulations for three years;  and pledging a bank guarantee (a member of the Customs Transparency 
Program is exempted).  Gold Card holders' bene fits include exemption from regular inspection, 
immediate approval of tax reimbursement, etc.  Government agencies, state enterprises, and companies granted duty exemptions by the BOI may also be granted gold card holder status.  About 
250 major importers/exporters are currently Gold Ca rd holders, representing more than 70% of the 
volume of total trade. 
(c) Customs inspection and valuation procedures 
15. The authorities further amended legislation in October 2003 and 2004 in order to enhance the 
implementation of the WTO Agreement, increase tran sparency, raise standards of customs valuation 
practices, and serve as the basis for bilateral a nd multilateral trade negotiations.  The amendments 
include provisions allowing importers to request c onsultation and reasons for,  and written notification 
of, the method for determining customs value when  the transaction value method is inapplicable;  
revising the definition of "price actually paid or pa yable";  and, adopting the interpretative notes in 
Annex I and Annex III of the Agreement on Impl ementation of Article VII of the GATT 1994. 
16. Under the current procedures, details on invo ices and other related documents (including 
country of origin, quantity, composition of valu e, and description of goods) are taken into 
consideration for valuation purposes.  Thailand uses the c.i.f. (cost, insurance, and freight) price 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 believe that this is inappropriate;  
in the event that transaction value cannot be applie d, the Department uses other methods in the WTO 
sequential order;  i.e. transaction value of identi cal goods, similar goods, deductive value, computed 
value, and fallback value method.
8  Under the last method, the value is determined by Customs using 
reasonable means in accordance with the principles and general provisions of the Customs Valuation 
Agreement and Article VII of the GATT, based on the flexible interpretation of all the previous 
valuation methods.9  
                                                      
8 The Valuation and Standard Formality Group, established in the Customs Department, deals with 
valuation issues, and the Tax Examination Unit, establ ished in 2002, is in charge of the post-clearance 
verification process. 
9 Under this method no customs value is determined on the basis of: price of similar goods produced in 
Thailand;  a system which accepts the higher of two alternative values;  price of same goods on the domestic 
market of the country of exportation;  the cost of production other than computed value;  minimum customs WT/TPR/S/191/Rev.1 Trade Policy Review 
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17. Thailand notified its national legislation to the WTO on 17 July 2003; in October 2003 it 
supplied information on the implementation and ad ministration of the relevant WTO Agreement.10  
On 6 October 2006 and 8 May 200711, the WTO Committee on Customs Valuation examined Thai 
legislation relating to customs valu ation, and Thailand replied to Me mbers' questions in certain areas 
including the use of reference pricing.12  In Thailand's written replies to the written questions by the 
United States in October 2006, the authorities i ndicated that the proposal for the repeal of 
Section 11 bis of the Customs Act B.E. 2469 (1926), stipulating that the Director General may determine the customs value if the declared value does not accurately reflect true value, had been 
approved by the Cabinet and Council of State, but given the changing political  situation, the process 
of repealing the Section in question would be c ontinued when the new Parliament is installed.
13  The 
authorities indicate that Section 11 bis has neve r been invoked.  In March 2007, the Philippines 
submitted a communication to the WTO Council on Tr ade in Goods, stating that certain Thai 
measures on customs valuation and excise tax discrim inated against imports of Philippine cigarettes 
and protected the Thailand Tobacco Monopoly.  Tha iland denied this allegation, indicating that it 
determined customs values of Philippine cigare tte imports under Article 5 of the WTO Customs 
Valuation Agreement, and on 30 March 2007 ad justed the minimum retail price accordingly. 
18. Rules and regulations, in force as from 1 January 2000, stipulate that where a dispute arises 
regarding the value of a product or article, the impor ter may file an appeal to the Appeal Committee 
within 30 days of receiving valuation notification from customs officers.  The Appeal Committee is responsible for decisions concerning any valuation discrepancy between Customs and the importer.  
The decision of the Committee is deemed final, exce pt where the appellant raises his/her concern in 
Tax Court.  Since 2003, 94 importers ha ve filed about 2,000 appeals to the  Committee;  50% relate to 
royalties included in the dutiable values, the othe rs include engineering fee, installation and 
maintenance, etc. 
19. The Customs Department collects fees for custom s services;  they include documentation, and 
charges for attendance at Customs House on holidays or after office hours.  The import declaration fee 
is B 200 per transaction. 
20. Thailand does not require preshipment inspection for imports. 
21. A series of training activities for Customs officers and the private sector have been carried out 
to cope with difficulties due to lack of skill and experience in implementing the WTO Customs Valuation Agreement.
14  A Valuation manual has been published and distributed to customs officers.  
Other publications, such as articles, brochures were  also published, with assistance from the World 
Customs Organization and the WTO, to help con cerned parties understand valuation methodology and 
how valuation is determined.  With regard to susp ected invoices, the lack of an adequate valuation 
database causes some difficulties in va luation assessment or determination. 
                                                                                                                                                                     
values;  and arbitrary or fictitious values.  Cust oms Department online information.  Viewed at: 
http://www.customs.go.th/Customs-Eng/Valuation/Valuation.jsp?menuNme=Valuation [30 January 2007]. 
10 WTO documents G/VAL/N/1/THA/1, 23 July 20 03;  and G/VAL/N/2/THA/1, 6 October 2003. 
11 WTO document G/VAL/M/43, 25 May 2007. 
12 According to the United States, Thailand's cust oms reference price system often disregards the 
declared transaction price of certain  products (USTR, 2006).  At the time of the previous TPR in 2003, the 
authorities indicated that the Customs Department no longer applied minimum import prices for customs 
valuation purposes (WTO document G/VAL/M/42, 14 December 2006). 
13 WTO document G/VAL/W/158, 9 October 2006.  Pending legislation is expected to limit the 
discretion of the Customs Director General to arbitrarily  increase the customs value of imports (in practice, the 
Director General has not made use of that discretion) (USTR, 2006). 
14 APEC (2006b), Chapter 6. Thailand WT/TPR/S/191/Rev.1 
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(d) Rules of origin 
22. Thailand does not have specific laws, judicial d ecisions or administrative rulings of general 
application relating to non-preferential rules of or igin.  Preferential rules of origin regarding the 
Global System of Trade Preferences (GSTP) are specified in Annex II of the GSTP Agreement 
(Chapter II).  Imports from ASEAN countries are subj ect to the rules of origin for the ASEAN CEPT 
Scheme (Chapter II). A certificate of origin is required for GSTP or ASEAN preferential imports.15 
23. Preferential rules of origin  differ amongst FTAs agreements:  for bilateral agreements, i.e. 
TAFTA and TNZFTA, are specified in Chapter IV of these agreements (Chapter II).  A certificate of 
origin is required for TAFTA, while the declaration of origin specified on the invoice or any other 
document issued in respect of the good is required for TNZFTA. 
24. The Rules of Origin Division, under the Ta riff Classification Directorate of the Customs 
Department, reviews the progress of harmoni zation, improvement, and simplification of 
non-preferential and the preferential rules of origin .  Thailand considers that it has implemented all 
WTO obligations in this area.   
(ii) Tariffs  
(a) Main features 
25. Thailand's 2006 tariff schedule consisted of 5,505 tariff lines (same as in 2003) at the 
HS 7-digit level.16  As an ASEAN member, Thailand adopted the eight-digit ASEAN Harmonized 
Tariff Nomenclature (AHTN) 2007 for intra- and extra-ASEAN trade as of 1 January 2007.17  
Changing the national tariff lines to eight digits to  be in line with the AHTN increased the total 
number of tariff lines to 8,301.  Ministry of Finance notifications granting duty exemption and 
reduction under Section 12 of the Custom Tariff Decree B.E. 2530 (1987) (Adjusted MFN applied 
rates) and under the Section 14 (WTO bound rates and preferential rates) were amended to reflect the 
change in the commodity classification code, effectiv e 1 January 2007.  According to the authorities, 
the transposition of commitments under the WTO (sec tion (b)) and preferential agreements has also 
been made at the national level (as Section 14 was amended).  The Ministry of Finance notifications 
are published and are also availa ble in the Thai language online.18  Nevertheless, the new tariff is still 
                                                      
15 For a product to be eligible for ASEAN preferential duties, at least 40% of its content must originate 
in an ASEAN member state (APEC, 2003, Chapter 11). 
16 Thailand's 2006 tariff schedule is based on HS 2002 No menclature.  It has four distinct sets of rates:  
(i) statutory rates, (ii) applied adjusted/temporary MFN rates, (iii) WTO bound rates, and (iv) concession rates 
(these include CEPT (AFTA) rates, AISP (ASEAN Integrat ed System of Preferences) rates, and GSTP rates).  
Adjusted/temporary MFN rates, which are those in fo rce for all WTO and non-WTO trading partners, may 
exceed WTO bound levels (section (b) below);  the author ities indicate that in these cases the lower rate, i.e. 
WTO bound rate, applies for imports originating in WTO Members.  Applied adjusted/temporary MFN rates 
and/or bound rates, whichever were lower, and AVEs su pplied by the authorities were used for calculations in 
this report.  If a product is eligible for more than on e concession rate, the importer can choose the lowest by 
submitting the corresponding the certificate of origin.  If the concession rate for a tariff line is higher than the 
applied rate, the latter applies.  
17 At end 2006, Thailand applied two types of commodity classification code:  the six/seven-digit 
commodity classification code for general imports, and the eight-digit commodity classification code for 
intra-ASEAN trade (International Customs Tariff Division/Customs Tariff Classification Directorate of the Royal Thai Customs online information.  "Harmonized System Nomenclature - 2007 Amendment (The Fourth 
Edition of HS 2007)", 31 August 2006.  Viewed a t:  http://www.customs.go.th/UploadFile/EngAnnounce/ 
A0906003.doc [30 January 2007]). 
18 Customs online information.  Available at:  http:www.customs.go.th/Anouce/Anno.html. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 48 
 
 
not available in English and not submitted to the WTO Secretariat.  Therefore, estimates contained in 
this report are based on the 2006 tariff. 
26. During the period under review, there was no fundamental change in Thailand's tariff 
legislation.  Whereas changes to statutory rates require legislative approval19, applied rates (or 
temporary/adjusted rates) may be modified by the Minister of Finance without Parliament's approval, 
subject to Cabinet consent;  the Minister, with the approval of the Cabinet, may also charge "special 
duty" for any goods at a rate not exceeding 50% of the relevant rate in the Tariff Schedule (section (e) 
below).  
27. The tariff remains relatively complex, involving a multiplicity of rates.  In 2006, it contained 
31 ad valorem  rates (43 in 2003) ranging from zero to 80%, 19 specific duty rates (same as 2003), and 
158 alternative duty rates (172 in 2003).  Peak ad valorem  rates remain unchanged and on a few 
sensitive items at:  60% (12 lines, tea, dried onions, motorcycles), 65% (1 line, certain sugars in solid 
form), and 80% (15 lines, motor vehicles only).  A study based on 2001 data, found that Thailand's 
high import tariffs are equivalent to a substantia l export tax and thus a major impediment to its 
exports.20  According to the authorities, the 2007 tariff structure consists of no more than ten rates.   
The main features of the 2006 tariff, with respect to MFN duty rates and the full implementation of 
the Uruguay Round (and the ITA) commitments, are captured by the summary indicators for 2003 and 2006 in Table III.1. 
28. Conflicts between upstream a nd downstream industries seem  to have delayed tariff 
restructuring.
21  Nonetheless, Thailand has continued to  lower selected import duties in line with 
WTO and AFTA commitments (Chapter II), mostly on raw materials and inputs not produced locally.  
According to WTO Secretariat estimates, between 2003 and 2006 duties on 1,981 (35.7% of all lines, 
involving mostly textiles and clothing, chemicals, base metals and articles thereof, and machinery) were reduced, while those on eight tariff lines (cuts and edible offal, fused magnesia, cocaine, raw 
hides and skins, flat rolled products of iron and st eel, machines and other machine tools and parts and 
accessories thereof, and containers for the transport of fluid) were increased considerably (e.g. from 
zero to 5%, and 1% to 27%).  According to the au thorities, Thailand completed its tariff restructuring 
on 1 January 2007 with the adoption of the AHTN.  Tariffs on products in Chapters 39 and 72, the 
final two to be restructured were completely r estructured on 1 January 2007.  There are no further 
plans for tariff reductions. 
29. Although by June 2007 Thaila nd was behind its schedule
22 for implementing its AFTA 
(Chapter II) tariff reduction commitments and ra tionalizing its complicated tariff regime, upon 
completion of relevant legal enactments thes e changes will have retroactive effect from 
1 January 2007.  This restructuring, which is s till pending, involves the reduction of duty rates to zero 
for products under the Framework Agreement for the Integration of Priority Sectors and for 80% of 
products in Thailand's Inclusion List. 
                                                      
19 There has been no change to statutory rates since the previous Review of Thailand.   
20 Based on 2001 data, Thailand's import tariffs were equivalent to an export tax of 16.5%, one of the 
highest among the 26 developing countries covered by the study (Tokarick, 2006). 
21 Upstream industries (petrochemicals and steel) have objected strongly to cuts  since they expect to 
suffer greatly from the increase in imports.  But down stream industries (car manufacturing, electronics, 
electrical consumer goods, and garments) want lower ta xes on raw materials (EIU, 2006b);  and USTR (2006). 
22 The authorities were to complete the tariff restructuring by the end of 2006.   Thailand WT/TPR/S/191/Rev.1 
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Table III.1 
Tariff structure (including ad valorem  equivalents (AVEs)), 2003 and 2006 
(Per cent)  
    2003 2006 Final bounda 
1. Bound tariff lines (% of all tariff lines) 73.7 73.7 73.7 
2. Simple average applied rate 13.0 11.0 27.5 
 Agricultural products (HS01-24) 25.3 25.2 32.3 
 Industrial products (HS25-97) 11.0 8.7 26.3 
 WTO agricultural products 25.0 25.0 34.9 
 WTO non-agricultural products 11.2 8.8 25.8 
 Textiles and clot hing 18.6 14.7 28.9 
3. Tariff quotas (% of all tariff lines) 1.0 1.0 1.0 
4. Domestic tariff "peaks" (% of all tariff lines)b 3.9 3.9 0.5 
5. International tariff "peaks" (% of all tariff lines)c 30.3 25.2 65.4 
6. Overall standard deviati on of tariff rates 14.3 14.0 14.1 
7. Coefficient of variation of tariff rates 1.1 1.3 0.5 
8. Duty free tariff lines (% of all tariff lines) 4.1 18.5 2.2 
9. Non- ad valorem  tariffs (% of all tariff lines) 23.1 22.5 18.9 
10. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 20.3 19.9 18.8 
11. Nuisance applied rates (% of all tariff lines)d 21.4 12.2 0.1 
a Implementation of the U.R. was achieved in 2005.  Calcula tions on bound averages are based on 4,059 bound tariff lines 
(representing 73.7% of total lines).  
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
c International tariff peaks are defined as those exceeding 15%. 
d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: Calculations include AVEs for non- ad valorem rates provided by the aut horities to the WTO, as available.  In case of 
non-availability, the ad valorem  part of alternate rates is taken into account .  Calculations do not include in-quota rates. 
Source: WTO calculations, based on data provide d by the authorities of Thailand. 
30. The Customs Department is responsible for application of the Harmonized System;  the 
details of tariff classification are decided by the Customs Tariff Classification Directorate within the 
Department.  
(b) MFN tariff bindings 
31. Thailand has bound 73.7% of its tariff lines (Tab le III.1);  all of its agricultural lines (WTO 
definition) and 69.5% of its non-agricultural lines are bound in the form of ad valorem , specific or 
alternative duties depending on the item.  As a part y to the 1996 Ministerial Declaration on Trade in 
Information Technology Products (the Informati on Technology Agreement, Thailand finalized the 
process of binding its tariffs on specific informa tion technology products at  zero on 1 January 2005.23  
32. Unbound tariff lines cover, inter alia, salt, mineral fuels, chemicals, fertilizers, pulp of wood, 
transport equipment, rubber products, and iron and st eel.  Where an applied temporary/adjusted MFN 
ad valorem  or AVE rate is higher than the bound rate or wh ere the applied MFN rate is a specific rate 
and the bound rate an ad valorem  rate24, observance of the binding commitments depends on the 
                                                      
23 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;  tariffs 
for the remainder were brought down to zero in eight equal rate reductions ending in 2005. 
24 In 2006, there were:  39 tariff lines with the app lied MFN rate set in the form of specific duty and an 
ad valorem  bound rate;  12 lines where the temporary/adjusted MFN applied rate was an alternative duty and the WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 50 
 
 
implementation of the "whichever is lower" principle.  No complaints on breeches of binding 
commitments have been made so far.  With about  a quarter of all tariff lines unbound, tariffs can be 
changed at any time, up to the statutory/bound rat es, with the consent of only the Cabinet;  this 
imparts a high degree of unpredictability to the tariff. 
33. Pending incorporation of Harmonized System nome nclature (HS96, HS2002) changes into its 
Schedule of Concessions LXXIX and completion of  consultations and/or possible Article XXVIII 
negotiations, since its previous TPR Thailand has benefited from waivers suspending the application 
of the provisions of Article II of GATT 1994;  the last such waiver extends the period for 
implementing the HS2002 changes until 31 December 2007.   By August 2006, Thailand had 
submitted a schedule in loose-leaf format including  HS96 changes and corrections, and a list of tariff 
items affected by HS2002 changes.25  By October 2006, Thailand hoped that its revised schedule, 
including all the modifications, would be accepte d and certified to complete HS96 work.  In 
October 2006, the transposition of Thailand's schedul e to HS96 was verified by Members.  The 
certified true copy of the Certification of Modifi cations and Rectifications to Schedule LXXIX of 
Thailand following the HS96 transposition proce ss was released in June 2007 and effective 
10 November 2006.  The authorities were to con tinue work to start the transposition to HS2007.26  
The considerable tariff line incr ease resulting from the introduction of the AHTN in January 2007 
makes the transposition of Thailand's existing bi nding commitments to the new nomenclature an 
urgent task.  
(c) Duty-free items 
34. Since Thailand's previous Review, the number of duty-free tariff lines for MFN rates has 
increased considerably, from 4.1% to 18.5% (Table III.1), due to the elimination of tariff protection 
on certain items (previously subject to rates of ma inly 1%) and the full implementation of ITA-related 
commitments (section (b)).27  Major product categories benefiting from this liberalization have been 
chemicals, base metals, machinery and mechanical a ppliances  This change led to a decrease in 
nuisance rates from 21.4% in 2003 to 12.2% in 2006  (Table III.1).  The proportion of duty-free lines 
is now more than eight times higher than that at Uruguay Round full implementation. 
(d) Non- ad valorem  duties 
35. Non- ad valorem  (specific and alternative) duties28 account for 22.5% (1,236 lines) of all Thai 
tariff lines (23% or 1,268 lines in 2003), at the HS seven-digit level (Chart III.1).  They apply mainly 
to agricultural and food products, pl astic and rubber, pulp and paper,  textiles, leather products, and 
                                                                                                                                                                     
bound rate in ad valorem  form;  and 1 line with an ad valorem  applied rate and a specific bound rate.  Where 
temporary/adjusted MFN applied rates and bound rates were both ad valorem , in 2006 there were 45 tariff lines 
for which the applied rate was higher than the bound rate.  In cases where the applied MFN and bound rates 
were both alternative duties, there were seven tariff lines where the applied specific rate exceeded bound rate 
(the ad valorem  part being the same for both);  there were fo ur tariff lines where the applied specific part 
exceeded its bound level and the applied ad valorem  part was lower than the bound level;  and there were 
six lines with both the specific and the ad valorem  parts exceeding the bound leve l.  Where the applied MFN 
rate and the bound rate were both specific duties, ther e was one line where the app lied rate exceeded the bound 
rate.  According to the authorities, in all these cases bindings are observed by applying the lower rate;  ad valorem  rates are compared with the ad valorem  equivalent (AVE) of the specific rate. 
25 WTO documents G/MA/W/23/Rev.3,  16 May 2006;  and G/SECRET/HS96/17/Rev.2/Add.2, 
10 August 2006. 
26 WTO document G/MA/M/42,  14 November 2006. 
27 According to the authorities, 20% of tariff lines for MFN rates were duty free in 2006. 
28 An alternative duty involv es the choice between an ad valorem  and a specific rate;  the higher of the 
two is applied provided the WTO tariff bi nding commitments are met (section (2)(ii)(b)).  Thailand WT/TPR/S/191/Rev.1 
 Page 51 
 
 
articles of stone (Chart III.1).  Non- ad valorem  duties are indicated clearly in Thailand's tariff 
schedule;  in 2006 the authorities ensured some transparency by providing estimates of 143 AVEs29, 
but these amount to only 11.6% of all non- ad valorem  lines.30  These official AVE estimates show 
that three of the 20 tariff lines w ith the highest rates entailed non- ad valorem  duties with AVEs 
ranging from 87.7% (prepared or preserved fish, minc ed) to 340.2% (certain ethyl alcohol), indicating 
that specific duties can conceal high ad valorem  equivalents.  The simple average of all 
non-ad valorem  rates with available AVEs fell from 20.5% in 2003 to 16.5% in 2006;  over the same 
period, the simple average of the purely ad valorem  rates in the tariff schedule (excluding those of 
alternative duties) dropped from 10.8% to 9.3%.  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 de termined by exchange rate changes. 
(0)(8)
(0)(1,236)
(9)(343)(92)
(8)(28)(163)
(41)(26)(143)(69)
(168)
(9)(56)
(4)(0)(18)(0)(51)
0102030405060708090100
Live animal & prod.
Vegetable products
Fats and oils
Prepared food, etc.
Mineral prod.
Chemicals & prod.
Plastic & rubber
Hides & skins
Wood & articles
Pulp, paper, etc.
Textiles & articles
Footwear, headgear
Articles of stone
Precious stones, etc.
Base metals & prod.
Machinery 
Transport equipment
Precision instruments
Arms & ammunition
Misc. manufactures
Works of art, etc.
Total Chart III.1
Share of non- ad valorem  duties, by HS section, 2006
Per cent
Note:
Source :Each bar depicts the percentage of tariff lines within each HS section in which duties are non- ad valorem .  
Figures in parentheses show the number of non- ad valorem lines.  Excluding in-quota rates.  
WTO Secretariat estimates, based on data provided by the Thai authorities.
 
                                                      
29 AVEs are computed on the basis of unit values from imports of the items concerned over the period 
1999-01. 
30 The authorities indicate that AVEs other than th ose submitted to the WTO Secretariat were not 
calculated because of absence of imports of the items concer ned;  this suggests that the specific rates in question 
may be prohibitive.  WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 52 
 
 
(e) Special duties (or import surcharges) 
36. Thailand continues to impose product-specific su rcharges (section (a)).  Currently, they are 
levied on out-of-quota imports of maize for feedstuff at a rate of B 180 per tonne as well as on flour, meal, and pellets of fish or of crustaceans, mo lluscs or other aquatic invertebrates (HS 2301.20), at a 
rate of 5% (Table III.4).  Import surcharges seem to take the form of ad valorem or specific duties 
(e.g. US$10 or 20%).  The valuation basis for the ad valorem  surcharge is the rate of special duty 
times the rate of the import duty divided by 100 (Table III.9).
31  Further details of import surcharges 
currently imposed by Thailand remain unavailable to  the Secretariat;  therefore no estimate could be 
made of their impact on tariff binding commitments.  
(f) Tariff quotas 
37. In 2006, tariff quotas covered 1.0% of all tariff lines (at HS seven-digit level), all of which 
related to 23 agricultural product groups (Table III.2).  The authorities indicate that for tariff-rate 
quota (TRQ) products the WTO bound rates are the only applicable rates, and the rates used are only ad valorem  (i.e. the MFN applied/adju sted rates do not apply). 
38. About 38% of the out-of-quota rates are ad valorem , compared with about 66% of the 
in-quota rates.  The estimated simple average in-quota MFN tariff rate remains at 23%;  the 
corresponding average out-of-quota MFN tariff is 43.7% (43.8% in 2003).  In 2006, Thailand increased the in-quota volume of potatoes (from 302 tonnes to 37,978 tonnes) and provided for unlimited allocations for soya beans and soya bean  cake;  however, the unlimited allocations were 
restricted to certain producer groups.
32  In 2005/06, the in-quota and out-of quota applied MFN rates 
were the same for various products;  for some other products, a specific rate was applied instead of an 
ad valorem  bound rate (Table III.2). 
39. Tariff quotas were underfilled for most products wh ile imports of four ite ms (milk and cream, 
potatoes, soya beans, soya bean cake) largely exceeded quota levels.  Reportedly, there is concern that 
access to tariff-rate quotas is often managed in  an arbitrary and non-transparent manner33;  at the time 
of Thailand's previous TPR, it was also noted that import licences were seemingly issued only to 
selected animal and poultry producers.  The authoriti es maintain that access to tariff rate quotas is 
regulated by the committees in charge a nd based on fair and equitable criteria. 
40. Tariff quotas do not apply to imports from ASEAN countries, which may, in principle, upon 
legal enactment by the Ministry of Finance, supply unlimited quantities of items benefiting from 
preferential AFTA duty rates;  this is the case, fo r example, with palm oil imports undertaken by the 
Public Warehouse Organization only.  As of 1 January  2000, all products were, in principle, to be 
included into the AFTA scheme, with maximum duties of 20%.   
                                                      
31 Customs Department online information.  Viewed at:  http://www.customs.go.th/Customs-
Eng/Sample/Sample.jsp?menuNme=Sample [30 January 2007]. 
32 APEC (2006b), Chapter 2.  Due to high domestic demand for soybean, Thailand unilaterally reduced 
its in-quota tariff rate from 20% to zero, with no restri ction on quota volume.  Subsequently, imports of soybean 
reached approximately 1.4 million tonnes, which exceeded the bound quota volume (1 0,092 tonnes)  Under an 
internal agreement between private sector importers an d farmers aimed at ensuring the stability of domestic 
production, the quantity of the imported soybean should be proportionate to the quantity purchased from 
domestic producers.  No further information was available from the authorities. 
33 USTR (2006). Thailand WT/TPR/S/191/Rev.1 
 Page 53 
 
 
Table III.2 
Tariff quota commitments, actual imports under tariff quotas, a nd MFN/bound tariffs, 2005 and 2006 
Tariff quota 2005 (tonnes) In-quota tariff (2006) Out of quota rate (2006) 
Description 
(HS Code) Quota  
level Actual  
imports WTO 
bound MFN 
applied WTO 
bound MFN 
applied 
Milk and cream, not concentrated, not 
containing added sugar or other matters 
(including flavoured milk) (0401, 2202.90) 2,372.74; 
27.26 0.00  20% 20% 41%; 
84% 40%; 
B 3/kg or 60% 
w.i.h. 
Milk and cream, concentrated or containing 
added sugar or other sweetening matter, in 
powder, granules or other solid forms, or a fat content, by weight not exceeding 1.5% 0402.10.0007) 55,000  59,095.56 20% 5% 216% 5% 
Potatoes, fresh or chilled (0701)  302  11,991.96 27% Zero 125% B 6.25/kg or 60% 
w.i.h. 
Onions, fresh, chilled, dried, whole, cut, sliced, broken or in powder, but not further prepared, 
mixed (0703.10.0119, 0712.20. 0104, 0712.20.0200, 0712.40.0304)  365  31,738.38 27% 27% 142% B 6.25/kg or 60% 
w.i.h.; 
60% 
Garlic, fresh or chilled, whether or not in powder (0703.20.0007, 0712.90.0115, 
0712.90.0128) 65  50,057.73 27%, 
40% 27% 57% 57%, 40% 
Coconut, fresh or dried, whether or not chilled 
or peeled including desiccated (0801.19.0007, 
0801.11.000) 2,427   109.98  20% 20% 54% 54% 
Longans, dried (0813.40) 8 0.00 30% 30% 53% B 50/kg or 60% 
w.i.h. 
Copra (1203.00.0005) 1,157    0.00  20% B 0.65/kg 36% B 0.65/kg 
Coffee, whether or not roasted or decaffeinated; coffee husks and skins:  coffee 
substitutes containing any portion of coffee 
(0901) 5.25 3.17  30% 30% 90% B 4/kg or 40% 
w.i.h. 
Tea (0902) 625  557.04 
 30% 30% 90% 60% 
Pepper, dried, whether or not crushed or 
ground (0904.11.0003, 0904.12.0004) 45  124.98 
 27% 27% 51% B 4.2/kg or 30% 
w.i.h. 
Maize, for feedstuff (Ex. 1005.90) 54,700  0.00  20% B 2.75/kg 73% B 2.75/kg 
Rice (including paddy, broken) (1006) 249,757  1,413.7 
  30% B 2.75/kg 52% B 2.75/kg 
Soya beans, edible and inedible whether or not 
broken (1201.00.1000, 1201.00.9001) 10,922  1,606,887.92 20% Zero 80% B 0.3/kg or 6% 
w.i.h.; 
35% 
Onion seeds (1209.91.0106) 3.15  1,536.30 
 30% Zero 218% 1% 
Soya bean oil and its fractions, whether or not 
refined, but not chemically modified 
(1507.10.0001, 1507.90.0006)  2,281   0.00  20% B 1.32/l; 
B 2.5/l 146% B 1.32/l; 
B 2.5/l 
Palm oil and its fractions, whether or not 
refined, but not chemically modified (1511, 
1513.21.0004, 1513.29.0007) 4,860   0.00  20% B 2.5/l; 
B 1.32/l 143% B 2.5/l; 
B 1.32/l 
Coconut oil and its fractions, whether or not 
refined, but not chemically modified  (1513.11.0008, 1513.19.0005) 401   0.00  20% B 2.5/l; 
B 1.32/l 52% B 2.5/l; 
B 1.32/l 
Cane or beet sugar and chemically pure 
sucrose in solid form (1701) 13,760  4,524.39  65% B 3.5/l;  
65% 94% B 3.5/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) 134  54.77 40% 40% 49% 49% 
Soya bean cake (2304.00.0008) 230,559  1,569,058.52 20% 4% 133% 6% 
Unmanufactured tobacco;  tobacco leaves 
(2401)  6,435  4,692.538  60% 30% 72% B 35/kg or 
60% w.i.h. 
Raw silk (5002.00.0003)  483   125.02 30% 10% 226% 10% 
w.i.h. Whichever is higher. 
Source:  WTO document G/AG/N/THA/63;   and data provided by the Thai authorities. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 54 
 
 
41. Import licences (section (iii)(a)) are required in order to apply for most tariff quotas and are 
generally valid for only 30 days;  with the exception of tariff quotas for coffee, tea, pepper and longans, most allocations may be transferred.
34  
(g) Tariff averages 
42. The overall simple applied MFN tariff average rate was 11% in 2006, down from 13% in 
2003.35  The highest simple tariff av erages by HS categories remain  vegetable products, prepared 
food, footwear and headgear, transport equipm ent, and arms and ammunition (Chart III.2). 
05101520253035
Live animals & prod.
Vegetable products
Fats and oils
Prepared food, etc.
Mineral prod.
Chemicals & prod.
Plastic & rubber
Hides & skins
Wood & articles
Pulp, paper, etc.
Textiles & articles
Footwear, headgear
Articles of stone
Precious stones, etc.
Base metals & prod.
Machinery 
Transport equipment
Precision instruments
Arms & ammunition
Misc. manufactures
Works of art, etc.
Total Chart III.2
Simple average applied MFN tariff rates, by HS section, 2003 and 2006
Per cent
Including AVEs for non-ad valorem rates, as available.  Where AVEs are not available, the ad valorem  part of 
alternate rates is used.    Excluding in-quota rates.  WTO Secretariat calculations, based on data provided by the Thai authorities.Note:
Source :2003 
2006
 
                                                      
34 Procedures for the allocation of quotas are described in WTO document G/AG/N/THA/62,  
22 January 2007. 
35 This rate differs from the rate of 14.7%, calculated for the 2003 TPR of Thailand.  The difference for 
this and other 2003 tariff indicators used in this report are due to a revised 2003 customs tariff containing the 
latest AVEs and a single applied temporary/adjusted rate  for each tariff line.  The revised 2003 tariff was 
submitted to the WTO IDB by the Thai authorities in the context of the NAMA negotiations. Thailand WT/TPR/S/191/Rev.1 
 Page 55 
 
 
(h) Tariff dispersion 
43. In addition to the 18.5% of tariff lines that are duty free, 37.3% of lines are subject to applied 
tariff rates of 5% or less (Chart III.3).36  During the review period domestic tariff peaks (rates 
exceeding three times the simple applied MFN aver age) remained unchanged at 3.9% of all tariff 
lines, while international tariff peaks (rates exceeding 15%), dropped from 30.3% (2003) to 25.2% 
(Table III.1). 
(1.5%)
(0.1%)(15.3%)(37.3%)
(18.5%)
(17.1%)
(0.6%)(5.9%)
(0.1%)(2.45%)
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 >400102030405060708090100Chart III.3
Frequency distribution of MFN tariff rates, 2006
Number of tariff lines Per cent
Cumulative per cent (right-hand scale)
Number of lines (left-hand scale)
Figures in parentheses denote the share of total lines.  Including AVEs for non- ad valorem  rates, as available.  
Where AVEs are not available, the ad valorem  part of alternate rates is used.  Excluding in-quota rates.   Total does 
not add to 100% as for 1.3% (representing 70 lines) no tariff rate is available. 
WTO Secretariat calculations, based on data provided by the Thai authorities.Note:
Source :
 
 
(i) Tariff escalation 
44. Tariff escalation remains pronounced, particularly for finished items, in a number of 
sub-sectors, most notably food products, tex tiles and leather products , and wood products 
(Chart III.4). 
(j) Tariff reduction and exemptions  
45. Thailand continues to use border tax exemptions to encourage investment in remote areas;  
the authorities indicate that Thailand no longer uses such exemptions to encourage production for export.  The granting of these concessions is genera lly the responsibility of the Board of Investment 
(BOI).  Data on the amount of customs duty reductio ns and exemptions as well as forgone tax revenue 
resulting from these measures were not available to the Secretariat. 
                                                     
 
36 According to the Thai authorities calculations, 20% of tariff lines were duty free in 2006, and 45% of 
tariff lines were subject to MFN tariff rates of 5% or less. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 56 
 
 
n.a.n.a.051015202530
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishing Chemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherChart III.4
Tariff escalation by 2-digit ISIC industry, 2003 and 2006
n.a.n.a.051015202530
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherAverage applied rate in manufacturing
(12.8%)
Not applicable.
Calculations include AVEs, as available.  In case of non-availability the ad valorem part of alternate rates is 
taken into account.  Excluding in-quota rates.
WTO Secretariat calculations, based on data provided by the authorities of Thailand.n.a.
Note:
Source :Per cent
First stage of processing Fully processed Semi-processedPer cent
Average applied rate in manufacturing
(10.6%)2003
2006
 Thailand WT/TPR/S/191/Rev.1 
 Page 57 
 
 
Board of Investment and other location-related provisions 
46. The BOI abolished local-content requirements and export requirements  in August 2000;  
furthermore, a BOI decision of 31 August 2004 eliminated the export requirement on pre-existing projects.
37 
47. Projects located in the most remote (zone 3) areas are entitled to duty-free imports of 
machinery;  nevertheless, BOI announcements allo w several projects in priority activities (e.g. 
manufacture of vehicle and electronic parts, electrical appliances, natural gas vehicles)38, to benefit 
temporarily from this entitlement regardless zone.39  These exemptions resulted in tax revenue losses 
of US$1,775 million in 2002;  no estim ates of forgone tax revenue si nce 2003 were available from the 
authorities.  Imports of machinery, equipment, a nd materials for use by oil and gas concessionaires 
and their contractors in oil refineries and gas separation plants are exempted from import duties.40 
Duty exemptions for production in expor t processing zones and other special zones 
48. The export processing zones (EPZs) provide exemptions from import duty and VAT for all 
imported factory construction material, machiner y, and raw materials, and from export taxes.41  As of 
1 January 2003, no export performance requirement s are in place as approval criteria (previously at 
least 40% of their producers' a nnual sales had to be exported)42;  firms located in EPZs may supply the 
local market, provided import duty, excise tax, and VAT are paid in full. 
49. Non-tax incentives include:  special permission for foreign investors to own land for carrying 
out promoted activities43;  special permission to bring in foreign technicians and experts to work on 
promoted projects;  and special permission to remit foreign currencies.44  Currently, the main exports 
from Thailand's ten EPZs are parts and accessories;  automatic data processing machines and units 
thereof;  air conditioning machines;  electrical transformers;  electronic integrated circuits and 
microassemblies;  prepared unrecorded media for s ound recording;  motor vehicles for the transport of 
goods;  and lenses, prisms, mirrors, and other optical elements .  Exports from EPZs accounted for 
approximately 7.79 % of total merchandise exports  in 2006 (7% in 2002), down from a peak of more 
than 12% in 2004;  they employ around 129,150 persons. 
                                                      
37 According to Thailand's replies to questions raised by Members at the WTO Committee on Subsidies 
and Countervailing Measures in 2003, most projects under the BOI progra mme should export at least 80% of 
their production;  these export performance requirements were to be phased out at different dates depending on 
the project, the final date being April 2014 (yarn) (WTO document G/SCM/Q3/THA/23, 11 June 2003). 
38 These announcements are available in BOI online information.  Viewed at: http://www.boi.go.th/ 
english/about/law_and_regulations.asp [2 February 2007]. 
39 For projects located in either zone 1 or zone 2, 50% reduction of import duties on machinery are 
accorded. 
40 BOI online information.  Viewed at:  http://www.boi.go.th/english/how/taxation.asp 
[30 January 2007].  
41 Goods sold or services provided among industrial operators, whether in the same or a different EPZ, 
are treated as exports and thus are s ubject 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 (BOI online information.  Available at: 
http://www.boi.go.th/english/how/taxation.asp). 
42 WTO document G/SCM/101/Suppl.1, 2 April 2003. 
43 According to the authorities, the term "promoted" refers to projects or companies that are granted 
investment incentives. 
44 These measures, while generally granted in practi ce, are guaranteed under the legislation covering 
EPZs, but not otherwise. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 58 
 
 
50. The Customs Department introduced a free zone (FZ) programme in 2000, in accordance with 
Article 97 of the Customs Act 1926, to promote investment in and exports from these zones.45  The 
establishment of an FZ is allowed if the zone is u sed for industrial or commercial operations or other 
operations deemed beneficial to the national ec onomy.  Goods imported and moved into an FZ for 
industrial or commercial operations qualify for exem ption from import duties, VAT, and excise tax as 
well as export duty on re-exports, duty on waste, scr ap, and yield loss and standard/quality control 
requirements;  they may also be eligib le for export tax refund/exemption schemes.46  To date, one free 
zone has been established, consisting of ten indu strial plants (electronics, machines, tools and 
jewellery).  No further information, including la test statistical data on performance (employment, 
output, exports, share of output exported abroad, for gone tax revenue as a result of tax incentives to 
FZs) was available from the authorities.  
Bonded warehouse and other provisions for tariff refunds 
51. Goods may be imported into a bonded wa rehouse without payment of import duties  if they 
are to be used as inputs in products for export or  are themselves re-exported;  these imports must be 
stored and used in a production process for e xport within two years from the date of import 
(manufacturing-type bonded warehouse).47  In FY2006, exports bene fiting from this measure 
amounted to B 175.9 billion and forgone customs duty was B 18.2 billion (B 21.5 billion in FY2002). 
52. Exporters can also choose to use the duty draw back scheme administered by the Royal Thai 
Customs to obtain a refund of import duties paid on imported raw materials if they are used for 
production and exported within one year;  claims for drawback must be made within six months after 
export.48  In FY2006, customs revenue forgone as a resu lt of this measure amounted to B 9.11 billion 
(B 13.8 billion in FY2002). 
End-use provisions 
53. No end-use provisions, whereby the tariff on an ite m varies according to its use, seem to be in 
place;  the authorities indicate that no cha nges had been made in this area since 2003.49   
(k) Regional and bilateral tariff preferences 
54. Since its previous TPR, Thailand has expanded its preferential trading commitments, both at 
regional and bilateral levels  (Chapter II);  product coverage and preferential tariffs or margins vary 
from one agreement to another (Table III.3).  Tari ff preferences are accorded to members of ASEAN, 
China, Australia, India, and New Zealand as well as to participants in the GSTP. 
                                                      
45 More information on the FZ regime is available in Customs online information.  Viewed at:  
http://www.customs.go.th/Customs-Eng/FreeZone/Fr eeZone.jsp?menuNme=FreeZone [31 January 2007]. 
46 More information on the FZ regime is available in Customs online information.  Viewed at:  
http://www.customs.go.th/Customs-Eng/FreeZone/Fr eeZone.jsp?menuNme=FreeZone [31 January 2007]. 
47 The materials, parts, and accessories can be stor ed in a vessel repair or construction type bonded 
warehouse for a three-year period after import;  and in a ge neral type for (petroleum) oil storage, for a period not 
exceeding six months from import.  In duty-free shop type bonded warehouse goods can be stored for one year.  
More information on the bonded warehouse regime is available in Customs online information.  Viewed at:  
http://www.customs.go.th/Customs-Eng/Bonded/Bon ded.jsp?menuNme=FreeZone [31 January 2007]. 
48 More information on this scheme is available at:  http://www.customs.go.th/Customs-
Eng/DutyDrawback/DutyDrawback.jsp?menuNme=FreeZone [31 January 2007]. 
49 In 2003 (tariff version used for the previous TPR), there were some end-use provisions in Thailand's 
tariff;  detailed information regarding end-use pr ovisions was not availabl e to the Secretariat. Thailand WT/TPR/S/191/Rev.1 
 Page 59 
 
 
Table III.3 
Preferential trading agreements, 2007 
Agreement Coverage  Applied preferential tariff 
ASEAN FTA (AFTA) (in force since 2002) A ll products, except for those in 10 tariff 
lines  considered sensitive products; 
 
80% of tariff lines covered;  
 
Tariff rates on remaining items will be 
reduced to zero in 2010 (except for sensitive 
products)   
  
Zero (as from 2007) 
 Zero (as from 2010) 
ASEAN-China FTA Trade in Goods 
Agreement (into force on 1 July 2005) 4,775 tariff lines (normal track) 
 
252 tariff lines (sensitive products) Zero (by 2010, been reduced since 
1 July 2005) 
20% in year 2012 and 5% as from year 2018 
ASEAN-China FTA Early Harvest Programme All vegetable and fruit products under 
HS Chapters 7 and 8 
 
Products in HS Chapter 1 to 8 Zero (as from 1 October 2003) 
 
 
Zero (as from 1 January 2006) 
Framework Agreement between Thailand 
and Bahraina 419 items 
207 items  Zero 
3% 
Thailand - Australia FTA (TAFTA) 2,724 tariff lines 
Remaining items Zero (as from 1 January 2005) 
Zero (by 2010) 
Thailand - New Zealand FTA (in force on 
1 July 2005) Most products 
Sensitive items Upon full implementation, approximately 
50% of imports from New Zealand should be 
duty free Zero (by 2010) 
Zero (by 2015) 
Thailand - India FTA Early Harvest programme 82 products 
 
Remaining products in the process of 
negotiations Zero (as from 1 September 2006, tariff 
reduction started on 1 September 2004) 
Global System of Trade Preferences (GSTP) 1,600 items to the 48 members of the GSTP 
Agreement  
(Thailand's commitment on 11 items)  Preferential margins of 2.5% to 100% of 
MFN rates  
(Thailand's commitment:  10% tariff cut) 
a According to the authorities, the tari ff preference for Bahrain has never been  used due to difficulties in Bahrain. 
Source:  WTO Secretariat, based on APEC (2006), Individual Action Plan – Thailand 2006, Chapter 1 .  Viewed at:  
http://www.apec-iap.org/default.asp?pid =/peerReview/default [22 January 2007]. 
(iii) Non-tariff border measures 
(a) Import licensing and prohibition 
55. Thailand's system of import restrictions i nvolving licensing and prohibitions has remained 
generally unchanged since its prev ious Review.  Conditions attach ed to import licensing on various 
items tend to be complex and opaque, and in some c ases appear equivalent to quantitative restrictions 
(Table III.4).  A number of import restrictions are in force for economic purposes, including on several additional products made subject to import li censing or prohibition.  Infant industry protection 
has been the main objective behind import restrictions since the 1970s. 
56. Legislative authority for regulating imports is  provided by the Export and Import Act B.E.  
2522 (1979).  The Act empowers the Minister of Comme rce, with the approval of the Cabinet, to 
restrict imports for reasons of economic stability , public interest, public health, national security, 
peace and order, morals, or for any other reason in th e national interest.  Imports may be "absolutely" 
or "conditionally" prohibited;  in the latter case (e.g. those requiring non-automatic licensing), they 
are allowed if specified conditions are satisfied.  Various other laws stipulate import restrictions.  
Under the Investment Promotion Act, the Board of Investment may request the Ministry of Commerce WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 60 
 
 
to ban imports of goods competing with those produced  by a domestic industry, if the Board 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). 
Table III.4 
Products subject to import licensing and prohibition, 2007 
Commodity HS code Rationale Measures and condition 
Yellowfin tuna 0302.32 Environmental pr otection Import certificate from the 
Department of Fishery is 
required 
Milk and cream 04. 01, 2202.90 Comply with market access 
commitment under the AOA Tariff quota 
Milk and cream in powder 0402.10. 0007 Comply with market access 
commitment under the AOA Tariff quota 
Potatoes  0701 Comply with market access 
commitment under the AOA Tariff quota 
Onion 0703.10.0119, 0712.20.0104, 
0712.20.0200 Comply with market access 
commitment under the AOA Tariff quota 
Garlic 0703.20.0007, 0712.90.0115, 
0712.90.0128 Comply with market access 
commitment under the AOA Tariff quota 
Coconut 0801.11.0000, 0801.19.0007 Comply with market access 
commitment under the AOA Tariff quota 
Dry longan 0813.4 Comply with market access 
commitment under the AOA Tariff quota 
Coffee 0901, 2101.10 Comply with market access 
commitment under the AOA Tariff quota 
Tea  09.02 Comply with market access 
commitment under the AOA Tariff quota 
Pepper 0904.11.0003, 0904.12.0004 Comply with market access 
commitment under the AOA Tariff quota 
Maize (corn) 1005.90 Comply with market access 
commitment under the AOA Tariff quota, import surcharge 
for non-WTO members 
Rice 1006.10, 1006.20, 1006.30, 
1006.40 Comply with market access 
commitment under the AOA Tariff quota 
Soyabeans 1201.001.000,  1201.009.001 Comply with market access 
commitment under the AOA Tariff quota 
Copra 1203.00.0005 Comply with market access 
commitment under the AOA Tariff quota 
Onion seeds 1209.91.0106 Comply with market access 
commitment under the AOA Tariff quota 
Soyabean oil and its fractions 1507.10.000 1, 1507.90.0006 Comply with market access 
commitment under the AOA Tariff quota 
Palm oil and its fractions 1511, 1513.210004, 
1513.29.0007 Comply with market access 
commitment under the AOA Tariff quota 
Coconut oil 1513.11.0008, 1513.19. 0005 Comply with market access 
commitment under the AOA Tariff quota  
Cane or beet sugar  1701 Comply with market access 
commitment under the AOA Tariff quota 
Fish-meal with protein 
content less than 60% 2301.200.106 Stabilize price of raw material 
used for animal food NAL:  import not generally 
allowed 
Fish-meal with protein 
content more than 60% 2301.200.106 Stabilize price of raw material 
used for animal food Import surcharge 
Oil cake residues, from the 
extraction of soyabean oil 2304.00.0008 Stabilize price of raw material 
used as animal food Tariff quota, import surcharge 
for non-WTO members 
Marble (except marble block of 50x50x50 cm) 2515 Encourage and protect domestic 
industry NAL:  import not generally 
allowed 
Gasoline 2710.001 Monitoring current fuel price Automatic licensing, only for 
authorized importers 
Table III.4 (cont'd) Thailand WT/TPR/S/191/Rev.1 
 Page 61 
 
 
Commodity HS code Rationale Measures and condition 
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, 2711.190 Monitoring 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:  import is permitted with 
approval of the Food and Drug Administration 
Albuterol or Salbutamol 2922.509 Public  health NAL:  import permitted with 
approval of the Food and Drug Administration 
Caffeine  2939.30, 3003.40 Public health, social  security Restriction, allowed only with 
certificate from the FDA, or other authority concerned 
Waste and scrap of plastics 3915 Environmental a nd public health NAL:  with approval of the 
Department of Industrial Works 
Wood sawn or chipped 4403, 4407 – 4421  To facilitate international trade 
transaction Automatic licensing, certificate 
of origin, export certificate from 
exporting country 
Raw silk 5002 Accommodate to current situation, 
industry protection Tariff quota 
Silk yarn 5004 Accommodate to current situation, 
industry protection Automatic licensing, with 
conditions set by Department of Foreign Trade 
Jute 5303.10, 5303.90, 5305.91, 
5305.99 To secure farmers' income  NAL:  imports permitted for use 
as raw material in manufacturing 
Garments 61.01 to 61.14 61.17.90, 
62.01-62.11, 62.17.90 Compliance with ATC 
commitment until its expiry in 2004  Automatic licensing 
Sacks and bags of jute or 
other textile 6305.10, 6305.90 To secure farmers' in come Import not generally allowed, 
permitted only as raw material in manufacturing 
Worked monumental or building stone 6802 Industry protection NAL:  import not generally 
allowed 
Used motorcycle engines 8407.31, 8714.19, 72.04, 
76.02 Public health and safety  Absolutely prohibited  
Used diesel engines with 
displacement of 331-1,110cc. 8408.90 Public health and safe ty NAL:  import not generally 
allowed 
Intaglio printing machinery 8443.500 To prevent making of counterfeit 
money Automatic licensing 
Chain saws 8467.81, 8467.91, 8508.20, 
8508.90 To prevent smuggling of logging, 
forest conservation Department of Foreign Trade 
authorizes the Department of 
Forestry to grant import permits 
Passenger cars (prototype) 8702.101, 870 2.901 Industry protection, foreign 
currency reservation Import not generally allowed, 
except as prototype for assembly 
or production 
Used motor vehicles 8703.21, 8703.229, 
8703.239, 8703.249, 
8703.319, 8703.329, 
8703.339 Public health, environmental 
protection NAL:  import not generally 
allowed, except for imports for 
re-export or import by 
individual 
Motor vehicles for the 
transport of 30 or more 
persons 8702.101, 8702.901 Industry protection, foreign 
currency reservation NAL:  import not generally 
allowed, except as prototype for 
assembly or production 
Table III.4 (cont'd) WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 62 
 
 
Commodity HS code Rationale Measures and condition 
Used motorcycles 8711 Public hea lth Import not generally allowed 
Colour photo-copying 
apparatus 9009.110, 9009.120 To prevent making of counterfeit 
money Automatic licensing 
Game machines, coin or disc 
operated 9504.30, 9504.901, 9504.909 Public moral Prohibited 
Original sculptures and 
statuary, in any materials 9703.009 To prevent smuggling of historical 
objects or antiques NAL:  Department of Foreign 
Trade authorizes the Department 
of Fine Art to grant licences 
Used machines for 
multimedia production  To prevent the violation of 
intellectual property NAL 
CFC refrigerators   Public  health and environmental 
protection Import prohibited 
Glazed ceramic wares  Public health NAL:  import 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 import of  imitation 
and counterfeit products Absolutely prohibited  
Medals, coins  To prevent making of counterfeit 
medals and coins NAL:  import is allowed only by 
the Minister of Finance and other authorized entity  
Goods duplicating registered 
products  To prevent imports that violate 
registered product rights Absolutely 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, 
Nitroimidazoles)  Economic security, public health, 
accommodate to domestic 
production Automatic licensing, with 
import certificate from 
authorities concerned 
Note:  NAL = Non-automatic licensing.  AOA = Agreement on Agriculture. 
Source: Department of Foreign Trade online information.  Av ailable at:  http://www.dft.mo c.go.th/import_index.htm (in 
Thai only);  and information provided by the authorities. 
Import prohibitions  
57. According to the authorities, in general, import prohibitions are used only to protect public 
morals, national security, human, animal, or plant life , health, and intellectual property rights (IPRs), 
in accordance with Article XX on General Exceptions  of the General Agreement on Tariffs and Trade 
1947 (GATT 1947).50  Products that are absolutely prohi bited include counterfeit goods and the 
equipment for their manufacture, used motorcycle engines, game machines (coin or disc operated), 
and household refrigerators  using CFC in the production process (Table III.4).  Imports of a wide 
range of endangered fish, molluscs, amphibians, and coral are banned under the Convention of 
International Trade in Endangered Species of Wild Fauna and Flora (CITES). 
                                                      
50 APEC (2006b), Chapter 2. Thailand WT/TPR/S/191/Rev.1 
 Page 63 
 
 
58. To prevent illegal logging, as from 29 November 2005, the Department of Foreign Trade 
(DFT) has prohibited import of logs and sawn wood ma de of teak trees, rubber trees or forbidden 
trees from the border of Targ and Kanchanaburi provinces.51  Bans (based on UN Resolutions) on 
imports of diamonds, logs and w ooden products originating in or  from Liberia as well as diamonds 
originating in or from Sierra Leone  were lifted in 2007 and 2003, r espectively;  Thailand accepts the 
Kimberly Certification Process.  To prevent the out break of BSE in Thailand and for food and feed 
safety purposes, animal carcasses and products thereo f from countries where the disease exists are not 
admitted into Thailand, except for animal products enli sted in the OIE Terrestri al Animal Health Code 
as commodities that can be traded safely regardl ess of the BSE status of the exporting countries.52 
Import licensing 
59. Products subject to non-automatic licensing curre ntly include the 23 agricultural items under 
tariff quota (section (ii)(f)) and processed goods (incl uding certain fish-meal, raw silk and silk yarn, 
jute and kenaf, gunny bags woven of jute or kenaf, used diesel e ngines, certain buses, chainsaws, used 
cars and tractors, used motorcycles, marble, plas tic wastes, building stones and coins in size and 
weight  similar to official coins, glazed ceram ic ware, and certain antiques or objects of art) 
(Table III.4).  An automatic import licensing system  currently applies to certain garments (i.e. 
unfinished garments, parts or components except co llars, cuffs, waist bands, pockets, and cuffs for 
trousers), intaglio printing machines, and colour photocopying machines.  Product coverage can be 
changed through Ministry of Commerce notifications. 
60. In January 2007, Thailand provided its first replies to the WTO Import Licensing 
Questionnaire under Article 7.3 of the relevant Agreement.53  Thailand has never notified its licensing 
legislation to the WTO Committee on Import Licensing as required under Articles 1.4(a) and 8.2(b) of the Agreement.  
(b) Import quotas 
61. According to the authorities, Thailand maintains no import quotas.  
(iv) Contingency measures 
(a) Safeguards 
62. Thailand's legal basis for safeguard measures re mains the Ministry of Commerce Notification 
on Safeguard Measures B.E. 2542 (1999).
54  It appears that no such measures were adopted during the 
period under review.  
(b) Anti-dumping and countervailing measures 
63. There has been no change in Thailand's Anti-Dumping and Countervailing Act, which 
provides the legal basis for anti-dumping and countervailing measures.55  Under the Act, formal 
                                                      
51 APEC (2006b), Chapter 2. 
52 Department of Livestock Development Notification, 28 December 2000. 
53 Article 7.3 of the Agreement on Import Licensing Procedures requires all Members to provide replies 
to the Questionnaire on Import Licensing Procedures by  30 September each year (WTO documents G/LIC/16, 
13 November 2006;  and G/LIC/N/3/THA/1, 22 March 2007). 
54 WTO document G/SG/N/1/THA/2, 17 December 1999. 
55 An unofficial translation of the Anti-Dumping and Countervailing Act is contained in WTO 
document G/ADP/N/1/THA/4 (G/SCM/N/1/THA/4), 20 December 1999. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 64 
 
 
procedures for anti-dumping and countervailing investig ations are initiated by petition filed with the 
Department of Foreign Trade (DFT).  The DFT conduc ts an investigation and submits its findings to 
the Committee on Dumping and Subsidy.  The Comm ittee then makes a preliminary determination, 
which 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 
Committee may apply provisional measures after affi rming that the investigated products are dumped 
and cause injury to domestic producers;  these may ta ke the form of a provisional duty or a security 
involving a cash deposit or bond equal to the am ount of the determined margin of dumping.  
Provisional measures are generally limited to four mont hs, with a possible extension to six months at 
the request of exporters.  The preliminary determin ation and measures are announced to the public by 
the Committee.  If the Committee makes an affirmat ive determination of dumping, injury, and casual 
link with regard to the product concerned, it will announce the imposition of final measures. 
64. According to data supplied by the authorities56, since 2002 (a peak year) there has been a drop 
in initiated anti-dumping cases (Chart III.5);  no case was initiated in 2005.  Between 2002 and 2006, 
the initiated cases involved mainly base metals and products thereof, and chemicals, from mainly 
China, Korea, India, Japan, and Indonesia.  As  of December 2006, Thailand maintained definitive 
anti-dumping duties on seven products from 13 WT O Members and four non-members;  one was 
levied on a product imported from two non-members (Table III.5).57  During the period under review, 
Thailand's anti-dumping duties (including provisiona l measures) ranged from 3.22% to 128.11% of 
the c.i.f. value of imports.  Reportedly, anti-dumping duties on hot-rolled steel caused supply 
problems and many local producers protested because they lacked the raw materials to make up the 
shortfall;  as a result, the Committee cut a nd temporarily suspended (from 20 March to 
19 September 2004) the anti-dumping duties in force and reduced import tariffs.  Thailand has used 
no countervailing measures since its previous Review.  
65. The authorities maintain that Thailand has con tinuously complied with its obligations under 
the GATT 1994 and the Agreement on Implementati on of Article VI of the GATT 1994 (ADA).  
Politics do not direct the outcome of anti-dumpi ng proceedings because non-governmental agencies 
also take part in the anti-dumping decision-maki ng process.  Moreover, a lthough Thailand considers 
public interest in deciding whether to adopt anti-dum ping measures, the authorities in charge take into 
account interests of all parties concerned and Thaila nd does not have a policy to protect any particular 
industry more than the others.  For example, in the hot-rolled steel case discussed above, the 
Committee considered the interests of all parties in deciding to suspend AD duties.  Thailand also 
takes the lesser duty approach when imposing AD du ties.  Thailand has been persistent in supporting 
the ban of zeroing in all methods of comparis on in the Negotiating Group on Rules and in many AD 
proceedings.  One of Thailand's major policies, how ever, is to improve the capacity of government 
officials by way of internal training and particip ation in training courses monitored by both private 
and public organization such as the WTO.  In add ition, in conducting AD inv estigations and making 
any determination, the provisions of the Act and its  regulations are applied strictly.  Since the Act 
entered into force in 1999, no dispute has been in itiated against Thailand under the Agreement in the 
WTO dispute settlement system.  
 
                                                      
56 These data do not coincide exactly with WTO Secr etariat data.  Thai figures show more initiations 
(i.e. three more in 2003 and two more in 2006).  
57 WTO document G/ADP/N/98/THA, 29 April 2003. Thailand WT/TPR/S/191/Rev.1 
 Page 65 
 
 
051015202530
2002 2003 2004 2005 2006
Source :  Data provided by the Thai authorities.Japan
10.0Base metals
 & products thereof
73.3
Korea,  Rep. of
13.3India 
6.7Otherb
33.3Chemicals & products thereof
16.7
Machinery &  mechanical/ 
electrical appliances 
6.7(b) Initiations by product
Per cent(c) Initiations by origin 
Per centChart III.5
Anti-dumping measures, 2002-06
(a) Number of cases initiated and measures in force
Indonesia
10.0
Ukraine
6.7Chinese Taipei
6.7a    Anti-dumping measures in force on 31 December.Cases initiated 
Measures in forcea
Articles of
 glass & glassware
3.3
b     Algeria, Argentina, the European Communities, Kazakhstan, Malaysia, Romania, Russian Federation, Slovak 
       Republic, South Africa, and Venezuela, with one initiation each (3.3% of total initiations).China
13.3
 WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 66 
 
 
Table III.5 
Anti-dumping measures, 31 December 2006  
Product Country/customs 
territory Date of imposition Definitive duty in force 
(c.i.f.) 
H-section China 10/10/02 27.81% 
Glass block Indonesia 05/08/05 14.27-50.59% 
Kazakhstan 25/01/03 26.36% Cold-rolled carbon steel, sheet and strip in coils and cut-to length Russian Federation 25/01/03 35.80-64.70% 
Chinese Taipei 13/03/03 0.00-33.99% 
EC 13/03/03 10.02-25.57% 
Japan 13/03/03 0.00-50.92% Flat-rolled products of stainless steel 
Republic of Korea 13/03/03 50.99% 
Algeria 27/05/03 33.26% 
Argentina 27/05/03 37.94-53.09% 
Chinese Taipei 27/05/03 3.45-25.15% 
India 27/05/03 26.81-31.92% 
Indonesia 27/05/03 24.48% 
Japan 27/05/03 3.22-36.25% 
Kazakhstan 27/05/03 109.25% 
Republic of Korea 27/05/03 13.96% 
Romania 27/05/03 27.95% 
Russian Federation 27/05/03 24.20-35.17% 
Slovak Republic 27/05/03 51.95% 
South Africa 27/05/03 128.11% 
Ukraine 27/05/03 30.45-67.69% Flat hot-rolled steel in coils and not in coils 
Venezuela 27/05/03 78.44% 
Citric acid China 09/01/04 28.70-38.10% 
Cathode ray tubes Malaysia 22/10/05 7.00% 
Source:  WTO document G/ADP/N/153/THA, 24 January 2007;  and information provided by the authorities.  
(v) Government procurement and countertrade 
(a) Government procurement 
66. Thailand participates in the WTO Working Group on Transparency in Government 
Procurement;  it is not a member of th e Government Procurement Agreement.   
67. The core procurement rules for the Central Gove rnment are the Regulations of the Office of 
the Prime Minister on Procurement (ROPMP) B. E. 2535 (1992), as amended in 2002.  The 2002 
amendment, inter alia , changed the membership of the Procurement Committees and implemented 
electronic auction (e-Auction).  According to the authorities, all government agencies (central and 
provincial administration) must comply strictly w ith the regulations;  local administration and state 
enterprises are not subject to these regulations.  Th e Government has transformed the implementation 
of e-Auction into the Regulation of the Office of the Prime Minister on e-Procurement B.E.2549 (2006), which has allowed all government agencies except local authorities to  use e-Auction (below) 
as an alternative procurement method.  Thaila nd is considering overh auling its procurement 
framework and is in the process of drafting the new procurement regulation for the executive level 
consideration. 
68. According to the authorities, the core princi ples in this area are openness, transparency, 
fairness, efficiency, accountability, value for money,  private sector participation and local industry Thailand WT/TPR/S/191/Rev.1 
 Page 67 
 
 
development.58  Procurement regulations are to, inter alia,  prevent corruption, and respond to the 
Government's social and economic policies;  comp etitive bidding in the form of open tendering is 
regarded as the best way to achieve these objectives and must be used for higher value contracts.  
However, in practice, preference is given to Thai products, contractors, and consultants, as described 
in previous Secretariat Reports.59  Thailand officially denies that a 2001 "Buy Thai" policy directive 
discriminates against foreign producers and emph asizes that specific language used in government 
procurement tenders does not constitute an obstacl e to competition or benefit specific suppliers.60  Nor 
does it explicitly exclude foreign pr oducts from the bidding process.  
69. The method of procurement depends on several f actors, including the value of the contract, 
the nature of the goods or services, and the urgency of the procurement.  Competitive bidding is used 
for goods or services contracts that exceed B 2 million61;  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.  Speci al methods are used for repeat procurements or 
when a delay in procurement may be detrimental to the procuring agency and when the amount of 
procurement exceeds B 100,000.  According to the Foreign Business Act (Chapter II), domestic and 
foreign contractors with capital of more than B 500 million are considered on an equal basis in 
bidding for highly technological infrastructure projects. 
70. Public procurement in Thailand is decentralized  and involves a range of government bodies.  
The Office of Procurement Management, under the Co mptroller General's Department in the Ministry 
of Finance, serves as the Secretariat of the Public Procurement Management Committee62, issues, 
amends, and advises on procurement regulations and practices, and negotiates international 
                                                      
58 APEC (2006b), Chapter 9. 
59 Determination of the local preference margin is based on the level of industrial standards met by the 
product concerned.  Where no product meets industrial standards, the suppliers are asked to indicate the origin 
of the product.  If the price proposed for domestic products is no more than 5% higher than that of foreign products, the Government will negotiate with domestic suppliers, but may purchase the domestic products only 
if the price is no more than 3% higher than that of foreign products.  
60 The authorities clarified that the "Buy Thai" policy was established in 2001 to cure the economic 
crisis; government and state-owned enterprises were not allowed or had to delay the import of expensive 
products from foreign suppliers, with the exception of items that could not be manufactured in Thailand or those 
considered by the Minister to be economically benefici al.  Under certain circumstan ces, consideration could be 
given on a case by case basis with Cabinet approval. 
61 Tenders are advertised through a bid notice posted  at the office of the g overnment agency, radio 
broadcasts, and newspapers;  notices are also sent to the Public Relations Department, the Mass Communication Organization of Thailand for public information, and the Office of the Auditor-General.  All tender 
announcements are also posted el ectronically on the government agency's website and the government 
procurement website (www.gprocurement.go.th for dissemination).  
62 The Procurement Committ ee comprises the Permanent Secretar y of the Finance Ministry as 
chairman, the Comptroller-General from Comptroller General's Department, and representatives from the 
Defence Ministry, the Office of the Auditor General, th e Office of the Attorney General, the Bureau of the 
Budget, the Office of the Council of State, the Office of the National Counter-Corruption Commission, the 
Office of the Permanent Secret ary to the Prime Minister, th e Office of Public Debt Management, Thai Industrial 
Standards Institute, and other appointed qualified persons.  The Committee's responsibilities include:  
interpreting and making rules concerning compliance with the regulations;  considering exemption from, or 
relaxation of compliance with the regulations;  considerin g complaints concerning failure to comply with the 
regulations;  proposing revisions of the regulations to the Council of Ministers;  and designating categories or 
types of supplies that must be purchased from abroad.  The Government does not collect data on supplies 
purchased from abroad.  Procurement of products that cannot be produced in Thailand is subject to ministerial approval, more complex cases will be consider ed by the Cabinet on a case-by-case basis.  WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 68 
 
 
agreements on procurement issues.63  Other agencies responsible for the administration of government 
procurement include:  the Bureau of the Budget (r esponsible for the budget planning, allocation, and 
evaluation);  the Comptroller General's Department  (budget disbursement);  the Department of 
Special Investigation (inspection of the procuremen t process);  the Thai Industrial Standards Institute 
(registration of products subject to industrial sta ndards requirements in order to be eligible for 
preference margins);  Office of the Auditor Gene ral (procurement audit);  Office of the National 
Counter-Corruption Commission (inspection of the pr ocurement process);  the Administrative Court 
(the jurisdiction of administrative cases involving su ch matters as a dispute in relation to unilateral 
administrative acts);  and the Office of Ombudsman (an alternative for complaint and bid protest). 
71. Thailand's laws, regulations, and policy guidelin es on public procurement are published in the 
Royal Gazette .  They are also posted on the websites of the Ministry of Finance, the State Legal 
Council, and the Ministry of Interior.64  A Cabinet resolution of 1 October 2002 required that all 
government agencies maintain a website 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.  A regulation of the Office of the Prime Minister 
on e-Procurement B.E.2549 (2006) ha s allowed all government agencies (except local authorities) to 
use e-Auction as an alternative procurement met hod.  Moreover, e-auction has been implemented 
throughout Thailand since 2005 for the procurement of goods or services exceeding B 2 million.  The 
Government Products and Services Code  (GPSC) website (www.gprocurement. 
go.th, in Thai language only) publishes procuremen t opportunities;  cancellation and changes of 
procurement activities;  contract awar ds;  and blacklists of suppliers.
65  The name of the winning 
bidder is announced on the website of the procuring agency. 
72. Reportedly, a procuring government agency or st ate enterprise may accept or reject any or all 
bids at any time and, in special circumstances66, may also modify the technical requirements during 
the bidding process.67  The latter provision allegedly allows c onsiderable leeway in managing tenders.  
Private-sector representatives have expressed conc ern regarding a Thai government decision to 
remove arbitration clauses from concessions and gove rnment contracts;  the authorities indicate that 
all dispute settlements should be made through the ad ministrative or judiciary courts governed by 
Thai laws. 
73. Corruption and related costs remain a concern.   Allegations frequently surface that changes 
are made for special considerations, includi ng charges of bias on major procurements.68  Despite the 
commitment to transparency, fore ign companies regularly report irregularities.  In 2006, the National 
Institute of Development Administration found that  corruption involving 95 mega-projects over the 
five and a half years of the previous administration may have cost state coffers B 400 billion;  it was 
                                                      
63 The functions and responsibilities of the Office were transferred from the Office of the Permanent 
Secretary, the Prime Minister's Office in October 2002. 
64 Asian Development Bank (2006b). 
65 APEC (2006b), Chapter 9. 
66 The authorities indicate that "special circumstances" involve wrongdoing during the bidding process.  
The procuring agency can reject a bid/bidder that has benefited from links with interested parties, which may obstruct fair and free competition;  appeals may be initia ted by the rejected bidder.  If the winning bid exceeds 
the set budget, the procuring agency will offer the winning bidder the opportunity to accept the set budget;  or it 
has the right to negotiate with all bidders or adjust the scope of works.  If the bidding specifications are found to discriminate towards a specific bidder or interested party, the procuring agency may revoke or amend the 
specifications. 
67 USTR (2006). 
68 USTR (2006). Thailand WT/TPR/S/191/Rev.1 
 Page 69 
 
 
claimed that corruption added 5.3% to the cost of government projects.69  Furthermore, a study by the 
Office of the Auditor-General, found that in 2004/05 not one of the 2,096 contracts examined (worth an aggregate B 13.5 billion) was transparent. 
74. Several offences are punishable by a fine and imprisonment of five years to life.  Similar 
sanctions apply against corrupt bidders.  If a complain t is proven before a contract is completed, the 
bidding is reopened.  Otherwise, the bidder will be liable for the economic damage suffered by the 
procuring entity.  The pr ocuring agency must keep a register of all bids for each procurement 
operation, and a record of the decisions for at least ten years. 
75. Government agencies are required to keep reco rds of the value of procurement and of the 
procurement process.
70  The introduction of the Government Fi scal Management Information System 
(GFMIS) in October 2004 and its development help ed the Comptroller Gene ral's Department (CGD) 
to establish the database for the en tire record keeping of annual procurement value.  According to 
CGD data, the value of annual procurement by government agencies rose from B 114.9 billion to 
B 204 billion, or by about 79% between 2005 and 2006.  In 2006, most purchases were by the 
Ministries of Information and Communication (28% of total value), Agriculture and Cooperatives 
(13%), Education (8.7%) and Defence (6%).  The most used procurement methods were:  competitive 
bidding (25% of total value), e-auction (23.4%), price inquiry (15%) and price agreeing (13.8%).  No information on the origin and type of supplies (goo ds and services) was available from the authorities. 
76. In 2005, the Thai Government with collabor ation from the World Bank assessed the public 
procurement system in Thailand using the OECD/DAC Baseline Indicator System (BIS).
71  The main 
areas to improve are:  (i) the existing legisl ative and regulatory framework to align it with 
international best practice;  (ii) standardization of procurement practices;  and (iii) the monitoring 
system to enhance agency procurement performan ce in both central and provincial government as 
well as municipality.  In December, 2006, a committ ee was set up to expand the 2005 BIS assessment 
and to draft a strategic plan to be submitted in Ap ril 2007.  The CGD, in partnership with the World 
Bank, were also planning to conduct two studies:  th e first to develop the strategic action plan for 
improving the public procurement system;  and the second, to improve the monitoring and evaluation 
of performance and outcomes of the public procur ement system.  The CGD is in the process of 
drafting a strategic plan and is expected to submit it to the Cabinet in 2007. 
(b) Countertrade 
77. Countertrade and barter are no longer a top pr iority for procurement;  relevant policy 
regulations were repealed  in March and April 2007.72  The countertrade policy stipulated that all 
procurement contracts by government agencies and state enterprises that involved imports above B 300 million should have a related countertrade transac tion of at least half of the procurement value 
                                                     
 
69 EIU (2006b). 
70 Thailand has four categories of government agency:  central and provincial administration, local 
administration, state enterprises, and independent public bodies.  The expenditures of the central and provincial 
administration rely mainly on budget allocation;  the other three categories rely partially on budget allocation and are able to manage their own budget and revenues.  
71 World Bank (2007). 
72 The notification of the Ministry of Commerce B.E. 2547 (2004) concerning countertrade was 
repealed on 15 March 2007 and the regulation of the Office of the Prime Minister B.E. 2549 (2006) concerning 
barter trade was repeal ed on 9 April 2007.  Barter News,  "Thai Countertrade Deal:  Wings for Wings!".  Viewed 
at:  http://www.barternews.com/Thai_Countertrade_De al_Wings_For_Wings.htm [6 February 2007];  and 
USTR (2006). WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 70 
 
 
or 20% to 50% of the imported price.73  Reportedly, from 1994 to end 2006, 310 countertrade 
agreements were signed, resulting in exports valued  at B 75 billion.  A recent deal was aimed at 
trading Thailand's abundant farm goods for costly hi-tech military products.  
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration and documentation procedures 
78. A few export items (e.g. orchids, langans, durian)  require registration with the Department of 
Agriculture, apparently for quality, price monitori ng, and food security purposes.  Registration has 
also been used to meet quantitative restrictions in the case of textiles and clothing.  In order to 
expedite customs clearance for exports, an EDI (ele ctronic data interchange) system has been in use 
since 2000;  a paperless customs procedure was implemented, in paralle l, on 1 September 2006 
(relevant section (2)(i)(a)).  
79. Thailand monitors all products  imported from other countries in order to prevent 
circumvention, which would jeopardize the interest of Thai exporters.  Specifically, some companies 
from countries that do not enjoy GSP benefits, or that face anti-dumping charges in third markets, 
have tried to circumvent these obstacles by re-exporting their products from Thailand.74  Following 
the liberalization of textiles trade upon expiry  of the Agreement on Textiles and Clothing on 
1 January 2005, and the conclusion of various bi lateral trade agreements (Chapter II), Thailand 
established the Bureau of Anti-circumvention in September 2006 to prevent misleading declarations 
of origin in both preferential arrangements and trade remedy measures in the Thai and foreign 
markets, and to verify origin of products in accordan ce with rules and regulations of trading partners. 
(ii) Export taxes, charges, and levies 
80. There has been no change in Thailand's expor t duties since 2003 (Table III.6).  Export taxes 
consist of statutory rates and applied rates;  app lied rates involve specific (hides of bovine animals) 
and ad valorem  (wood sawn and articles thereof, from zero to 40%) duties.  The contribution of 
export taxes to government revenue remains neglig ible (section (4)(i)(a)).  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, su ch as rice or rubber, could in principle be 
reintroduced up to the level of the statutory rates without legislative approval.  According to the 
authorities, the collection of export taxes is primar ily for the purpose of conserving the environment, 
although it also constitutes a form of assistance to downstream processing.  The authorities pointed 
out that export duties are allowed under WTO provisions and are applied in a non-discriminatory 
manner;  these duties are not intended to be prot ection for domestic industries nor trade barriers.  
                                                      
73 Office of the Prime Minister Regulation on Countertrade B.E. 2543 (2000).  Asia Trade Hub online 
information, Counter trade Policy in Thailand.  Viewed at:   http://www.asiatradehub.com/thailand/ 
exportpolicy.asp [6 February 2007]. 
74 EIU (2006b). Thailand WT/TPR/S/191/Rev.1 
 Page 71 
 
 
Table III.6  
Export duties, 2007 
(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 Zero to 40% 40% 
 Articles of wood   
  Unsuitable for other conversion  10% 10% 
  Other 20%  20% 
Rice Zero 10% 
Metal scraps Zero 50% 
Rubber Zero 40% 
Raw silk and silk yarn Zero B 100 per kg 
Certain fish Zero 75% 
Source:  Information provided by the Thai authorities.  
(iii) Export prohibitions, restrictions, and licensing 
81. Export licensing is used to administer quotas, conditional prohibitions, and absolute 
prohibitions.  These measures have been in place for economic, quality, health, and safety purposes, 
as well as to implement voluntary restraint agreemen ts with trading partners, mainly on textiles and 
clothing  destined for the EC and certain agricultural pr oducts (Table III.7).  Membership of the Board 
of Trade and respective trade association may be required to obtain an export licence. 
Table III.7  
Products subject to export licensing, 2007 
Commodity HS Rationale Measures and condition 
Agriculture products    
Elephants 0106 Animal preserva tion NAL, with approval from 
Department of National Parks, Wildlife, and Plants 
Ornamental fish (in 317 species) 0301.10 Animal preservation NAL, with approval from 
Department of Fisheries 
Live black tiger shrimp 0306 Prevent domes tic shortages Automatic licensing, with 
certificate from Department of 
Fisheries 
Crustaceans (shrimp and 
octopus) frozen or chilled 0306, 0307, 1605, 
1902 Requirement of importing nation (only 
exports to the U.S. and EU) Exporter must be member of Thai 
Frozen Food Association 
Pearl shell and its products 0307 Encourage local fa rming industries NAL, with export certificate from 
Department of Fisheries 
Fresh orchids for export to the EC 0603.10 According to bilateral agreemen t Exporter must be registered with 
Department of Agriculture;  and phytosanitary certificate required 
Cassava 0714.10 Regulate the export system and comply 
with the Agreement between Thailand and the EU Automatic licensing, with 
certificate from Department of Foreign Trade 
Durian 0810.90 Regulate the export system Automatic licensing, exporters 
must be registered with Department of Agriculture 
Table III.7 (cont'd) WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 72 
 
 
Commodity HS Rationale Measures and condition 
Longans  0810.90 Regulate the export system  Exporter must be registered with 
Department of Agriculture, 
Ministry of Agriculture 
Coffee 0901, 2101.10 Compliance with International Coffee 
Agreement Automatic licensing 
Rice 1006.10, 1006.20 
1006.30, 1006.40 Prevention of domestic shortages, export 
control  Automatic licensing, with 
certificate from Department of 
Foreign Trade 
Rice exporting to the EU 
under tariff quota 1006.20, 1006.30, 
1006.40 Comply with the Agreement between 
Thailand and the EU Automatic licensing, export quota 
(EU) 
Cassava starches 1108.14 Regulate the export system and comply 
with the Agreement between Thailand and the EU Automatic licensing, with 
certificate from Department of Foreign Trade 
Tuna in airtight containers 1604.14 Regulate the export system Exporter must be member of Thai 
Food Processors Association 
Sugar 1701 Protection of local industr ies Automatic licensing, exporters 
must be registered with Ministry of 
Industry 
Canned pineapple and 
concentrated pineapple 
juice 2008.20, 2009.40  Regulate the export system Exporter must be a member of 
Thai Food Processors Association,  
or Thai Pineapple Industry 
Oil cake and other solid 
residue, resulting from 
extraction of ground-nut oil 2304, 2305 Prevent domestic shortages Export is generally not allowed 
Oil cake and other solid 
residue, resulting from 
extraction of soyabean oil 2304.00.0008 Prevent domestic shortages Export is generally not allowed 
Non-agriculture products    
Potassium permanganate 2841.61  Public moral, prev ention of narcotics Automatic licensing:  only with 
approval from Office of the Narcotic Control Board 
Caffeine and its salt 2939.30, 3003.40 Public health Automatic licensing:  only with 
approval from FDA or Department of Industrial Works 
Wood, sawn or chipped 4401, 4403, 4404, 
4406, 4407 Forest conservation and prevention of  
domestic shortages Export is generally not allowed, 
except pines and eucalyptus with approval from Director-General of 
Royal Forest Department 
Wood charcoal 4402 Forest conservation NAL:  with approval from Royal 
Forest Department 
Rubber woods 4403, 4404, 4406, 
4407 Prevent domestic shortage Automatic licensing 
Rough diamonds 7102.10, 7102.21, 
7102.31 Comply with the UN resolution (subject 
to the export certification issued by the 
DFT under the Kimberly Process Scheme) Automatic licensing, with export 
certificate from the Department of 
Foreign Trade 
Non-categorized HS numbers    
All types of arms, military 
vehicles, hardware and spare parts to Sierra Leone, 
Ethiopia, Eritrea, Liberia, 
Somalia, and Congo   Comply with the UN Resolution Prohibited 
Antique idols, graven 
images  Protect national treasures of artistic, 
historic or archaeological value Automatic licensing, with export 
certificate from Department of 
Fine Arts 
Buddha images  To protect national treasures of artistic, 
historic, and archaeological value  Automatic licensing, with export 
certificate from Department of 
Fine Arts 
Table III.7 (cont'd) Thailand WT/TPR/S/191/Rev.1 
 Page 73 
 
 
Commodity HS Rationale Measures and condition 
Coal  Conserve exhaustible natural re sources NAL, allowed only for re-export,  
or coal imported to produce for 
exports;  export certificate from the 
Department of Alternative Energy Development and Efficiency, 
Ministry of Energy  
Counterfeit products  Prevent production of counterfeit 
products Prohibited 
Gold  Economy security and st ability Automatic licensing, with 
conditions set by Ministry of 
Finance 
Goods duplicated from 
copyright products  Prevent exports of imitation products Prohibited 
Natural sand  Conserve exhaustible national resources Prohibited  
Re-export products  According to agreement commitments  Thailand has no agreements 
Silica sand or quartz sand  Conserve exhaustible national resources Department of Foreign Trade 
authorizes the Department of 
Mineral Resources to grant licences 
Textiles   Export items to the EC as from 2005  Bilateral agreement provisions 
Note: NAL = Non-automatic licensing. 
Source:   Department of Foreign Trade, Thailand.  Viewed at:  http:// www.dft.moc.go.th/export_index.htm. 
82. Changes in Thailand's export licensing and prohib itions since 2003 include the elimination of  
prohibitive export licensing requirements on jute  and kenaf seed, rattan, live bovine animals, 
tree-shrew, 277 kinds of wild animal, 291 kinds of w ild animal carcass, corals, spiny terrapin, fuel oil 
and products thereof, and fertilizer.75  The textile licensing arrangements were terminated in 2005, 
except for items destined for the EC.  The DFT has revised export licensing laws and regulations on 
rubber wood, wood charcoal, elephant, rice, wood and sawn wood, 12 kinds of fruit and vegetable, 
and 400 kinds of ornamental fish.  
83. Thailand has not exported automobiles under its bilateral arrangement with Chinese Taipei 
since 2004;  under the agreement, which precedes Ch inese Taipei's accession to the WTO, exports of 
automobiles to Chinese Taipei are subject to e xport licence and quota allocation.  Since 16 May 2003, 
Thailand has issued export certificates for r ough diamonds under the Kimberley Process Scheme 
before export.  
84. The Export-Import Control Law regulates the export of items that are in short supply 
domestically or that might unduly affect prices.76  The quota system is ostensibly applied to help 
improve the livelihood of farmers and food security in the country.  For example, a portion of sugar 
production is reserved for domestic consumption;  the remainder may be exported to the world 
market.  Successive governments have tried unsu ccessfully to relax the quota system for sugar.77  The 
sugar industry made several appeals in 2005-06 for the removal of the quota system, in order to 
benefit from higher world market prices;  nevert heless, in October 2006 the interim Government 
intended to leave that decision to the next Government.  
85. Export proceeds in foreign currency to a valu e of US$20,000 or above must be received in 
Thailand immediately upon payment, unless otherwise specified;  payment must be received no later 
                                                      
75 APEC (2006b), Chapter 2. 
76 EIU (2006b). 
77 The authorities indicated that Thailand no longer has a quota system for tapioca, while the EC and 
other importing countries set quotas for Thailand, which limits Thai exports. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 74 
 
 
than 120 days from the date of exportation.  Exporters  must sell this foreign currency to an authorized 
financial institution or deposit it in a foreign curre ncy account with an authorized financial institution 
within 15 days of receipt. 
(iv) Export assistance 
86. Since 2003, the state-owned Export-Import Ba nk of Thailand (EXIM Bank), which provides  
financial services not adequately provided by the Th ai banking system, has maintained its numerous 
export-promoting facilities in various forms:  working capital loans78, term loans79, financing for 
overseas projects80, export credit insurance81 and medium- and long-term export insurance.82  
According to the authorities, these facilities are offe red at market rates.  Losses incurred from export 
credit insurance or business transactions are compen sated by the Ministry of Finance through the 
allocation of funds from the Government's annual budget in compliance with government policies or 
cabinet resolutions83;  however, since the operation of the EXIM  Bank, such losses have never arisen.  
In June 2006, the EXIM Bank launc hed the Small Exporters Financi ng Facilities (SEFF) for small and 
medium enterprise (SMEs).84  The main objective of the SEFF cr edit is to provide working capital 
both before and after exportation;  however, these credits are restricted to exporters with sales 
revenues of less than B 100 million and are free from NPLs (non-performing loans).   Only one of the 
EXIM schemes, the Merchant Marine Fina ncing scheme (to be terminated in 2008)85, has been 
notified to the WTO Committee on Subsidies and Countervailing Measures (section (4)(ii)(c)).  
87. Thailand maintains that it does not provide any export subsidies to its producers.86  Following 
the elimination of export subsidies under the E xport Market Diversification Promotion Programme 
(on 31 December 2003) and the Industrial Estate Authority of Thailand (IEAT) (in accordance with 
Article 27.4 of the WTO SCM Agreement), only one  of the three programmes for which Thailand had 
requested an extension of the transition period for th e elimination of export s ubsidies was still in place 
                                                      
78 This facility includes schemes such as:  Pre-Ship ment Financing, Small Exporters Financing facility, 
Express Export Credit, Export Supplier's Finance and Packing Credit Plus. 
79 This facility includes term loans for business expa nsion, long-term credit for export for exports of 
capital goods;  merchant marine financing;  and trade fa ir financing.  New or existing businesses eligible for 
support under term loans for business expansion are export-oriented manufacturing, those earning foreign 
currencies, or import substitution enterprises.  Export Import Bank of Thailand (EXIM) online information.  
Viewed at:  http://www.exim.go.th/eng/serv ices/term-loan-for-business-expansion.asp. 
80 This facility includes the financial facilities for overseas construction contracts;  the financial 
facilities for investment;  financial facilities for Thai restaurants overseas;  and investment insurance. 
81 This facility includes an export credit insura nce policy and small export bill insurance. 
82 Terms and eligibility criteria concerning these schemes, discussed in the 2000 TPR, may be found at 
EXIM's online information.  Viewed at:  http://www.exim.go.th/eng/. 
83 The authorities indicate that in the event that the EXIM Bank suffers losses from its insurance 
business operation, which may affect business operations of the EXIM Bank and/or result in the EXIM Bank's 
inability to maintain the capital fund, the Ministry of Finance will appropriate the annual budget or other fund to 
compensate for such burden or to increase the capital (EXIM Bank onl ine information.  Viewed at: 
http://www.exim.go.th/eng/about_exim/business-policy.asp). 
84 World Bank (2006c). 
85 The Merchant Marine Financing is a special scheme supported by the Bank of Thailand.  Loans under 
this scheme are divided in two parts:  half of the loan amount is denominated in baht and funded by the Bank of 
Thailand with an annual interest rate of up to 5% (c urrent rate is 7.5%-8.0% (Table I.1)) and a repayment 
period not exceeding five years;  and half is provided by th e EXIM Bank in U.S. dollars at a market interest rate.  
The last drawdown of funds from the Bank of Thailand was in 1999.  The loan repayment of the Bank of Thailand's 
fund will be completed in the first quarter of 2008, and the special scheme w ill be terminated automatically. 
86 APEC (2006b), Chapter 2. Thailand WT/TPR/S/191/Rev.1 
 Page 75 
 
 
in 200487;  90 projects had been eliminated and 4 remain ed in place.  The auth orities indicate that the 
BOI has eliminated all export subsidies. 
88. 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 for payment of taxes and duties.  According to  the authorities, the refund on exports under this 
scheme is intended to cover some hidden tax and duty costs incurred by  upstream industries.  Foreign 
companies producing in Thailand are eligible for tax cards provided they present the commercial bank 
credit note or credit advice showing receipt of pa yment for imported goods (specifying the amount 
received).  Certain export items, including minerals and goods subject to export duty or fees, are not 
eligible for tax cards. 
89. Tax and duty compensation for exports is set as a fixed percentage of the f.o.b. value and is 
calculated on both the proportion of raw materials /inputs used for production (according to the 
NESDB Input/Output Table (I/O table)), and their average tariff rate.  The compensation rate is regularly adjusted in line with ch anges in the I/O table and tariff rates on inputs, in order to minimize 
the possibility of over- or under-compensation.  Comp ensation rates for exports are in the notification 
of the Committee Considering the Compensation of Ta x and Duty on the Exported Goods Produced in 
the Kingdom 1/2004.  According to the authorities, exports in 5,224 tariff lines are eligible for duty 
compensation, with average compensation rates ranging from 0.74% to 3.86% of the f.o.b. export value. 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation 
90. Tax revenues in Thailand were estimated at  B 1.3 trillion in FY2006 (B 777.2 billion in 
FY2002), which was about 16.9% of GDP (14.3% in FY2002) (Table I.1);  in FY2006 personal and 
corporate income tax, VAT, and excise tax account ed for about 87.6% of the tax revenues, while 
customs duties (import and export) accounted for 7.4%, virtually all collected on imports (down from 12.3% in FY2002). 
(a) Indirect taxes 
91. In addition to the customs tariff and import surc harge, three indirect taxes are levied on 
imports:  the excise tax, interior  tax (10% of amount of excise tax), and VAT.  All three are levied on 
imports at the same rates as on domestic production; the valuation basis depends on the type of tax 
(Table III.9).  These indirect taxes represent about 46.3% of tax revenue, compared with 7.4% in 
FY2001) for customs duties (Table III.8).  As indica ted in Table III.9, the imposition of all indirect 
taxes may increase considerably the domestic price of an imported item compared to its c.i.f. value. 
Excise taxes 
92. The share of excise taxes in total tax reve nue fell to 22.6% between FY2003 and FY2006, 
though the amount collected rose by 18%;  in FY2 006, imports accounted for 10.3% of total excise 
tax revenue.  Excise taxes are levied on 15 produc t groups and 2 groups of services (including certain 
telephone services), although 87.39% (FY2006) of reve nue is derived from four product groups:  
petroleum products, liquors/alc ohol, tobacco, and motor vehicles.  Excise taxes involve ad valorem , 
                                                     
 
87 The Board of Investment (BOI) Programme, Investment Promotion Incentives, sections (2)(ii)(j) 
and (4)(ii)(a)) (WTO document G/SCM/N/123/THA G/SCM/N/128/THA, 23 June 2005). WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 76 
 
 
specific, or alternative rates (an ad valorem  or specific rate;  the higher of the two is applied).88  
Ad valorem  rates are as high as 79% (for cigarettes).  In July 2004, the authorities reduced the excise 
tax on small passenger cars to 30% (from 35%) and raised slightly the rate on larger vehicles to 35%-
50%, depending on engine size;  th e rate on cars running on natura l gas was cut temporarily from 
30%-50% to 20% in July 2006, depending on engine size, for 30 months (Chapter IV).89  
Furthermore, in September 2005 the excise tax w as increased on distilled liquor with a high alcohol 
content;  excise tax on brandy was raised from 35% to 40%.  
Table III.8 
Central government tax revenue by source, 2002-06 
(Baht billion and per cent) 
 2002/03 2003/04 2004/05 2005/06a 
Total tax revenue 914.80  1,032.90  1,174.10  1,317.30  
 (Per cent of total) 
Taxes on income and profit 36.4  39.5  39.5  43.8  
Payable by individuals 12.2  12.5  11.8  12.1  
Payable by corporations and other enterprises 24.2  27.0  27.7  31.7  
Taxes on property 0.0  0.0  0.0  0.0  
Taxes on goods and services 50.7  49.5  50.6  48.1  
General taxes on goods and servi ces 21.4  22.2  25.5  23.5  
Value-added taxes 20.0  20.3  23.8  21.2  
Sales taxes  1.4  1.9  1.8  2.3  
Excise tax 27.5  25.7  22.7  22.6  
Profits of fiscal monopolies  0.6  -0.1  0.9  0.4  
Taxes on specific services 0.8  1.3  1.2  1.2  
Taxes on use of goods, permission to use goods 0.5  0.5  0.3  0.2  
Taxes on international trade 12.3  10.4  9.2  7.4  
Import duties 12.0  10.0  8.9  7.1  
Export duties 0.3  0.4  0.3  0.3  
Other taxes 0.6  0.7  0.7  0.7  
a Preliminary. 
Source : Ministry of Finance online information.  View ed at:  http://dw.mof.go.th/foc/gfs/database/C1_ 
CentralGovernments.html [12 April 2007]. 
93. All export goods are exempt from excise tax.  The valuation basis for domestic production is 
the manufacturer's selling price (i.e. the ex-factory pr ice) and in the case of services the total gross 
receipts.  Following a complaint against discriminat ory practices in customs valuation and excise tax 
on imports of Philippine cigarettes (section (2)(i )(c)), in April 2007 the Excise Department was 
seemingly reviewing cigarette import prices used to calculate excise taxes.90  The authorities confirm 
that the same excise tax rate is levied on dom estically produced and imported cigarettes (79% ad 
valorem );  the valuation basis for imports is indicated in Table III.9. 
                                                      
88 For further information on excise tax rates, see the Excise Department online information.  Viewed 
at:  http://www.excise.go.th/tax/eng-totaltax1.html [9 February 2007]. 
89 EIU (2006b). 
90 Thailand Outlook, " Excise Department is reviewing cigarette import prices used to calculate excise 
tax charges: Cigarette import prices under attack", 2 April 2007.  Viewed at: http://www.thailandoutlook.com/ 
thailandoutlook1/top+menu/investor+news/2007/Cigarette +import+prices+under+attack.htm [23 April 2007]. Thailand WT/TPR/S/191/Rev.1 
 Page 77 
 
 
Table III.9 
Sample of duty assessment, 2007 
Sample 1  
CIF value of imports  = US$200 
Import duty = 60% 
Surcharge/special duty  = US$10 
Fee   = US$50 
Interior tax  = 10% of excise tax 
Excise tax   = 30% 
VAT   = 7% 
Calculation method  
1. Import duty   = (CIF value * rate of import duty) + surcharge 
   = (200 * 0.6) + 10  
   = 120 + 10 
   = 130  
Note:  the amount 130 is to be used for calculation of excise tax and VAT 
2. Fee   = 50 
3. Excise tax   = {(CIF value + import duty + fee) * ra te of excise tax }/ {1-(1.1 * rate of excise tax)} 
   = {(200 + 130 + 50) * 0.3 }/ {1-(1.1 * 0.3)} 
   =  (380 * 0.3)/0.67  
   = 170.15 
4. Interior tax   = Excise tax * rate of interior tax 
   = 170.15 * 0.1 
   = 17.02 
5. Base VAT   = CIF value * import duty + fee + excise tax + interior tax 
   = 200 + 130 + 50 + 170.15 + 17.02 
   = 567.17 
6. VAT   = Base VAT * rate of VAT 
   = 567.17 * 0.07 
   = 39.70 
Total taxes and duties = 1 + 2 + 3 + 4 + 6 = US$406.87 
Sample 2  
CIF value of imports  = B 100 
Import duty = 60% 
Special duty  = 20% of import duty 
Interior tax  = 10% of excise tax 
Excise tax   = 3% 
VAT   = 7% 
Calculation method  
1. Import duty   = (CIF value * rate of import duty) 
   = (100 * 0.6) 
   = B 60  
2. Special duty   = Rate of special duty * import duty 
   = 0.2 * 60 
   = B 12 
3. Excise tax   = {(CIF value + import duty + fee) * ra te of excise tax }/ {1-(1.1 * rate of excise tax)} 
   = {(100 + 60 + 12) * 0.03}/{1-(1.1 * 0.03)} 
   = 172 * 0.03)/0.97    = B 5.34 
4. Interior tax   = Excise tax * rate of interior tax    = 5.34 * 0.1    = B 0.54 
5. Base VAT   = (CIF value + import duty + special duty + excise tax + interior tax) * rate of VAT 
   = (100 + 60 + 12 + 5.34 + 0.54) * 0.07    = B 12.46 
Total taxes and duties = 1 + 2 + 3 + 4 + 5 = B 90.34  
Source: Customs Department online informa tion.  Viewed at:  http://www. customs.go.th/Customs-Eng/Sample/ 
Sample.jsp?menuNme=Sample [9 February 2007];  and information provided by the authorities. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 78 
 
 
Value-added tax 
94. The VAT, which accounts for more than a fifth of total tax revenue, is set at 7% on goods and 
services, with exemptions only for books, educa tion, hospitals, unprocessed agricultural products, 
fertilizers, animal feeds, pesticides, and certain  other social goods and services.  Reportedly, the 
authorities have delayed several times their decision to restore the VAT to 10%;  the latest date, which 
was set on 1 October 2005, was rescheduled  for 30 September 2007 and subsequently 
30 September 2008.91  For products subject to excise tax and interior tax, VAT is levied on the 
tax-inclusive value;  in the case of imports, the ta x base comprises the c.i.f. price plus the amount of 
all other duties, taxes and fees (Table III.9).   Exports are zero rated for VAT purposes.  
(b) Direct taxes 
95. The share of income and profit taxes in total tax revenues rose from 36.4% in FY2003 to 
43.8% in FY2006;  corporate and personal income taxes accounted for 31.7% and 12.1%, respectively 
(Table III.8). 
96. Corporate income tax in Thailand is levied  on the net profits of domestic and foreign 
companies alike.92  The tax rates vary from 2% to 30% depending on the type of taxpayer 
(Table III.10);  the tax rate for the first bracket for small companies was reduced from 20% to 15% on 
1 January 2004. 
97. 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 
the main types of incentive are corporate tax holiday s (total exemption from tax) for specified periods; 
these incentives are, in most cases, still granted by  the Board of Investment (sections (2)(ii)(j) and 
(4)(ii)(a)).93  One noteworthy tax incentive outside the purvi ew of the BOI involves the low tax rate of 
10% granted to International Banking Facilities (IBFs) in an attempt to develop Thailand's financial 
sector.  This incentive, by implicitly subsidizing fo reign exchange borrowing by Thai enterprises, was 
probably one of the factors that exacerbated the financial crisis in 1997.  In 2006, the Thai 
Government adjusted the incentive scheme for IBFs by repealing the incentive for out-in facilities, but 
continuing the incentive for out-out facilities94, which are operated in the Domestic Banking Unit.   
The Government also continues to allow businesses to  choose the "double declining balance" method 
of accelerated depreciation, by which assets can be de preciated at twice the rate of the straight line 
method.95  This measure is intended to increase the af ter-tax cash flow of businesses and encourage 
them to reinvest their profits in new assets.  Th e inevitable outcome of these tax incentives is that 
marginal effective tax rates can vary substantially across sectors.  
                                                      
91 USTR (2006). 
92 Revenue Department online information.  Viewed  at:  http://www.rd.go.th/publish/6044.0.html. 
[9 February 2007].  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.  Initial allowances are aimed at encouraging R&D and SMEs activities. 
93 See, for example, WTO document G/SCM/N/123/THA, G/SCM/N/128/THA, 23 June 2005. 
94 The authorities indicate that "out -out banking facility" means:  accep ting deposits or borrowing in 
foreign currencies from sources outs ide Thailand for the purpose of lending in foreign currencies outside the 
country;  and accepting deposits or bo rrowing in Thai baht from foreign banks or overseas branches of 
commercial banks for the purpose of lending in Thai baht to foreign banks or overseas branches of commercial 
banks. 
95 The double declining balance is a depreciation method acceptab le by accounting standards.  
Consequently, the authorities consider that it should not be regarded as an incentive. Thailand WT/TPR/S/191/Rev.1 
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Table III.10 
Corporate income tax, June 2007  
Taxpayer Tax base Rate (%) 
Small companya Net profit not exceeding B 1 million 
Net profit over B 1 million but not exceeding B 3 million Net profit exceeding B 3 million 15b 
25 
30 
Companies listed on the Stock Exchange of Thailand Net profit (first B 300 million) 
Net profit (the amount exceeding B 300 million) 25c 
30 
Companies listed on or after 6 September 2001 Net profit  25d 
Company newly listed in Market for Alternative 
Investment (MAI) Net profit for the first five accounting periods after listing 
Net profit after the first five accounting periods after listing 20 
30 
International Banking Facilities (IBF) for Out-Out facilities 
in Domestic Banking Unit Net profit 10 
Foreign company engaging in interna tional transportati on Gross receipts 3 
Foreign company not carrying on business in Thailand 
receiving dividends from Thailand Gross receipts 10 
Foreign company not carrying on business in Thailand 
receiving certain types of income apart from dividend from 
Thailand Gross receipts 15 
Foreign company disposing profit outsi de of Thailand Amount disposed 10 
Profitable association and founda tion Gross receipts 2 or 10 
Regional Operating Headquarters (ROH)  Net profit 10 
a Small company refers to companies with paid-up capital less than B 5 million at the end of each accounting period. 
b Rate of 15% applies for accounting periods  beginning on or after 1 January 2004. 
c The reduced rate applies for currently listed companies, fo r five accounting periods beginni ng on or after 6 September 2001. 
d The reduced rate applies for newly listed companies, re gistered between 6 September 2001 and 5 September 2005, for 
five accounting periods beginning on or after 6 September 2001. 
Source:  Revenue Department online information.  Viewed at:  http://www.rd.go.th/publish/6044.0.html [9 February 2007];  
and information provided by the authorities. 
98. No changes other than the increase in the ta x exempt threshold (up to B 100,000 of net 
income as from 2004) resulting in the elimination of  the first tax bracket (5%) have taken place in 
Thailand's personal income tax since 2003.96  Personal income tax rates now range from 10% (5% in 
2003) to 37%. 
(c) Transparency 
99. All tax measures must be approved by the Cabine t and be published;  they are shown on the 
Government's websites after the approva l.  Nevertheless, there appears to be a lack of transparency in 
Thailand's tax incentives, which undermines public account ability and thus governance.  In particular, 
the tax authorities do not publish detailed informati on on revenue forgone as a consequence of these 
measures.  Nor do they rigorously and systemati cally evaluate their impact and effectiveness.  
Experience in other countries suggests th at tax incentives are seldom cost-effective.97  Clearly, 
publication of estimates of tax revenues for gone, along the lines of practices in many OECD 
countries, as well as studies evaluating their cost-e ffectiveness, would greatly enhance fiscal 
transparency in Thailand and contribute to more e ffective tax policy.  Elimination of incentives that 
are found to be ineffective would permit a broade ning of the tax base, which could be accompanied 
                                                      
96 Revenue Department online information.  Viewed  at:  http://www.rd.go.th/publish/6045.0.html  
[9 February 2007]. 
97 Most econometric studies show th at forgone tax revenues exceed th e increase in desired investment. 
Tax holidays are regarded as a particul arly ineffective type of tax incen tive compared with tax credits (WTO, 
2003). WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 80 
 
 
by reductions in statutory tax rates without necessarily involving any loss in total tax revenues; the 
outcome would be a more neutral tax system.   
(ii) Investment incentives 
(a) Incentives provided by the Board of Investment 
100. Domestic investment in Thailand remains sluggi sh (Chapter I).  The BOI recognizes the need 
to remove impediments to investment rather th an relying on widely used tax incentives;  the 
authorities indicate that this is the BOI's long-term goal.98  The latest regulatory changes brought to 
the BOI investment incentive scheme da te back to 1 August 2000 and, inter alia,  involve a more 
"proactive" approach to industrial policy and the pursuit of improved competitiveness.  Maximum tax 
and duty privileges are given to regions or area s with low income and inadequate investment 
facilities.  SMEs with minimum investment capital of  B 1 million (excluding cost of land and working 
capital) are eligible for promotion incentives.   
101. Under the Investment Promotion Act B.E. 2520 (1977), Amendment No. 2 (1991) and 
Amendment No. 3 (2001), the BOI continues to have a wide-ranging influence on the formulation and 
implementation of investment promotion policies.  The BOI, inter alia , authorizes the granting of tax 
and non-tax measures;  main tax incentives include  exemptions from import duties for machinery or 
raw materials, and corporate tax exemptions, and main non-tax measures include special permission 
for approved investments to be majority foreig n-owned and to own land.   Between 2004 and 2006, 
approved projects declined progressively  due to the economic downturn and political instability.  In 
2006, 33% of BOI-approved projects were 100% fore ign-owned investments and 42.3% were joint 
ventures99;  28.5% of these projects were export-oriented  and involved the production of electronics 
and electrical appliances;  metals, machinery, an d transport equipment;  chemicals, paper, and 
plastics;  light industry, mining, ceramics, and basic metals;  services and infrastructure;  and agricultural items. 
102. According to BOI announcement No. 1/2543 (20 00) and BOI Promotion Procedure, the BOI 
investment incentive scheme is as follows
100:   
- approval criteria are the same for all projects;  for projects investing B 500 million or 
more a feasibility study must be submitted with  the application.  The application must 
be processed for approval within 60 working days (projects less than B 750 million) or 90 working days (projects over B 750 million); 
- maximum debt-to-equity ratio must be three-to-one;   
- BOI-approved projects are granted either exem ptions (projects in zone 3) or a 50% 
reduction (zones 1 or 2) of import duties on certain machinery, without any requirement to export or locate factories in industrial estates or promoted industrial 
                                                     
 
98 BOI (2002);  and BOI online information.  Viewed at:  http://www.boi.go.th/english/about/ 
boi_policies.asp [14 February 2007]. 
99 BOI online statistics.  Viewed at:  http://www .boi.go.th/english/download/boi_statistics/28/0612_ 
app_en.pdf [14 February 2007]. 
100 According to Board of Investment Announcement No. 1/2543 (1/2000).  BOI online information.  
Viewed at:  http://www.boi.go.th/english/about/inve stment_policies_criteria.asp [14 February 2007]. Thailand WT/TPR/S/191/Rev.1 
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zones.101  Import duty exemptions on raw or essential materials used in manufacturing 
are for one year (zone 1 or 2) or five years (zone 3)102; 
- corporate tax exemptions depend on the z one in which an enterprise is located.103  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 for outside industrial estates or five years for inside the i ndustrial estates (seven 
years for applications submitted prior to 31 D ecember 2009).  In zone 3, an eight-year 
corporate tax holiday is granted.104  The corporate tax exemption is capped at 100% 
of investment capital (excluding th e costs of land and working capital)105; 
- as of October 2006, agriculture and agricu ltural products;  mining, ceramics, and 
basic metals, light industry, metal products , machinery and transport equipment;  
electronic industry, and electrical appliances; chemicals, paper, and plastics; and services and public utilities are BOI eligible activities.
106  The BOI's priority  
industries include agriculture and agricu ltural products;  technological and human 
resources development; public utilities and infrastructure;  and environmental 
protection.107  BOI targeted industries108, cover manufacture of steel casting using 
induction furnace, manufacture of forged steel parts, manufacture of machinery and equipment, manufacture of sintered products , manufacture or repair of aircraft and 
aircraft parts, manufacture of vehicle parts, heat treatment, manufacture of material for microelectronics, electronic design, so ftware, software parks and international 
distribution centres.
109  These industries are eligible for exemptions of import duties 
on certain machinery and a corporate tax ho liday for eight years, irrespective of 
location.  In 2002, the BOI selected five targeted industries, agri-business, automobiles, fashion, electronics, and high-valued services for proactive marketing campaign
110;  alternative and renewable energy was added in 2006.  For the period 
                                                      
101 The measure applies to machinery with an import tariff of 10% or above. 
102 Extra incentives apply in certain zone 3 provinces, such as a 50% tax holiday for an additional 
five years. 
103 Zone 1 includes Bangkok and five provinces;  z one 2, 12 provinces;  and zone 3 (all 58 remaining 
provinces).  The 58 provinces in zone 3 are divided into  two areas based on development level of each province;  
incentives for the 40 more developed provinces are more limited in scope than for other 18. 
104 Extra incentives apply in 22 provinces in zone 3;  a 50% tax holiday is available for five years after 
the eight-year exemption period;  double the amount of water, electricity, and transportation are deductible from 
taxable income for ten years from the date of first sales;  and 25% of the installation 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 international standard certification within two years;  
otherwise the tax holiday is reduced by one year. 
105 According to an amendment to the Investment Promotion Act. 
106 According to the authorities, the term "eligible" refers to the list of seven industrial sectors entitled 
to investment promotion;  however the list of eligible  activities is wide ranging.  BOI online information.  
Viewed at:  http://www.boi.go.th/english/about/eligible _activities.asp [14 February 2007];  and EIU (2006b). 
107 According to the authorities, the term "priority" refers to industries that contribute significantly to 
economic development.  The priority industries differ from time to time depending on the economic situation 
and the development plan of the economy. 
108 According to the authorities, the term "targeted industries" refers to activities the BOI wishes to 
promote in trade fairs abroad. 
109 BOI Announcement No. 2/2543, 1 August 2000. 
110 BOI Bulletin No. 68/45, 10 April 2002, "BOI Ta rgets Five Industries For Proactive Marketing 
Campaign".  Viewed at:  http://www.boi.go.th /english/focus/boi_pr_target_industries02.html. WT/TPR/S/191/Rev.1 Trade Policy Review 
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from December 2005-2007, the BOI grants im port-duty exemptions for raw materials 
to companies previously not promoted by the Board111;  
- the BOI also allows foreign investors up to 100% equity in promoted projects (except 
for List 1 businesses, as defined in th e Foreign Business Act (Chapter II)), and 
investment incentives are available equally to  foreign and domestic investors.  Since 
2000, the BOI has allowed total foreign ownership in manufacturing activities, 
irrespective of location; 
- projects of state enterprises should not be nefit from these incentives;  for privatized 
enterprises, only expansions after the priv atization are considered for promotion. 
103. Reportedly, the BOI introduced a new promo tion package for manufacturers of hard-disk 
drives (HDDs) (end-January 2004), pharmaceutical firms (December 2005), electronics (March 2006) 
and other chemicals sectors (May 2006) as well as th e film and software industries in June 2004.112  
Between February 2005 and end 2006, the BOI grante d an eight-year corporate income tax holiday to 
hotel operators in the six southern provinces wh ose properties were damaged by the tsunami in 
December 2004.  
104. Thailand requested and was granted by WTO Members extension until 31 December 2003 of 
the transition period to eliminate export subsidies in the form of corporate tax exemptions (tax 
holidays) associated with pre-existing BOI-approved investments.113  The authorities indicate that the 
BOI has eliminated all export subsidies, including those under pre-existing projects (i.e. prior to 2000) 
(section (3)(iv)). 
(b) Other incentives 
105. The Ministry of Finance has applied a tax incentive scheme since December 2001 for firms 
locating regional operating hea dquarters (ROH) in Thailand.114  The scheme includes a reduced 
company 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 10% to 
37%), for a maximum of four 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.  
106. Zoning requirements for various promoted ac tivities were relaxed from 19 September 2002:  
e.g. projects previously required to locate in zones 2 or 3 may relocate to zone 1
115;  and projects in 
some eligible activities that were pr eviously required to be in certain zones may be located anywhere.  
The zoning requirement was to encourage industria l clusters and foster development in the least 
developed areas. 
107. On 19 December 2006, the Cabinet approved th e establishment of a Special Development 
Zone covering Thailand’s five s outhernmost provinces:  Yala, Pa ttani, Narathiwat, Songkhla, and 
Satun.  The proposed measures aim, inter alia,  at alleviating business operating costs (i.e. reduction of 
                                                      
111 EIU (2006b). 
112 EIU (2006b). 
113 WTO document G/SCM/102, 14 January 2003. 
114 BOI online information, "News from the Ministry  of Finance Number 86/ 2544".  Viewed at:  
http://www.boi.go.th/english/download/law_regulations/60/ roh.pdf.  Similar information is available at: 
http://www.lexuniversal.com/en/articles/1030. 
115 Board of Investment Announcemen t No. 2/2545, 26  December 2002. Thailand WT/TPR/S/191/Rev.1 
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corporate income tax), motivating entrepreneurs to invest in these areas, and ensuring a social security 
net for workers.  By June 2007, the relevant regul ations had been considered by the Office of the 
Council of State and were to be presente d to the Cabinet for final approval. 
108. Since early 2007, all SMEs have been able to source low-interest funds from 
eight commercial banks and the Small and Medium Enterprise Bank (SME Bank) to upgrade their 
machinery.116  A total of B 2 billion is to be available u nder a programme that will allow the Office of 
SME Promotion of the Ministry of Industry to  spend around B 150 million to absorb some of the 
interest costs. 
109. As from November 2005 companies engaging in research and development may deduct up to 
twice the amount spent on R&D from their corporate ta x liabilities;  reportedly, there has been a very 
poor response to this facility.117  Since January 2007, biotechnology businesses have been exempt 
from import duties on machinery and have benefited from an eight-year corporate-tax holiday;  they are eligible for a 50% reduction in corporate tax for an additional five years if they are in a science 
park. 
(c) Notifications to the WTO 
110. Since 2003, Thailand has made two subsidy notif ications pursuant to Article XVI:1 of GATT 
1994 and Article 25 of the WTO Agreement on Subsidies and Countervailing Measures.
118  T h e  
notifications cover some of the investment pr omotion incentives described above, the benefits 
provided by the Industrial Estate Authority of Th ailand, and the refinancing schemes operated by the 
Bank of Thailand at subsidized interest rates.  Th ailand replied to questions raised by certain WTO 
Members (Australia, the EC, Turkey, the United States) regarding these notifications.119 
(iii) Trade-related investment measures  
111. Reportedly, local-content requirements for da iry products (ready-to-drink milk) were 
terminated on 31 December 2003 in accordance with relevant WTO obligations120;  according to the 
authorities, this requirement was not tied to any incentives granted by the BOI.  Thailand abolished 
local-content requirements in the automotive sector in  January 2000.  Certain export requirements tied 
to incentives granted to firms located in EPZs  were also eliminated on 1 January 2003.121 
(iv) Other forms of production assistance 
112. Thailand's agriculture sector benefits from product-specific and general support programmes, 
which include a pledging scheme, soft loans,  and price interventions (Chapter IV). 
113. Retail price subsidies (i.e. cross-subsidization,  Chapter IV) on biofuels seem to be in place 
temporarily.122  Thailand eliminated consumption s ubsidies for petroleum products in 2005 
                                                      
116 EIU (2006b). 
117 EIU (2006b). 
118 WTO documents G/SCM/N/95/THA, G/SCM/N/99/ THA, 23 July 2003;  G/SCM/N/123/THA, 
G/SCM/N/128/THA, 23 June 2005.  
119 For example, WTO documents G/SCM/Q2/T HA/15, 9 May 2003;  G/SCM/Q3/THA/23, 
11 June 2003;  G/SCM/Q3/THA/25, 7 October 2004;  G/SCM/Q2/THA/17, 9 October 2006;  G/SCM/Q2/THA/18, 13 November 2006.  
120 APEC (2006b), Chapter 2. 
121 WTO document G/SCM/101/Suppl.1, 2 April 2003. 
122 World Bank (2006c). WT/TPR/S/191/Rev.1 Trade Policy Review 
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(Chapter IV)123;  no information on this subsidy was made  available for Thailand's previous TPR.  
Under its 2005 electricity tariff restructuring, Tha iland aimed to reduce cross-subsidization of one 
consumer group by another;  nevertheless, subs idization for residential consumers remains, 
particularly for low-consumption residential consum ers, as well as for agricultural pumping services 
(Chapter IV).124  The retail electricity tariff structure distinguishes among the following power 
consumer categories:  residential;  small general services;  medium general services, large general 
services (LGS), and specific business services;  govern ment institutions and no n-profit organizations;  
agricultural pumping service (involving subsidizati on from other power consumers);  temporary 
power customers;  and interruptible rate. 
(v) Standards and other technical requirements 
(a) Products regulated by the Thai I ndustrial Standards Institute (TISI) 
114. Thailand is a member of the International Or ganization for Standardization (ISO) and the 
International Electrotechnical Commission (IEC).  Between 2002 and 2007 (February), the TISI established 374 Thai industrial standards (TISs);  at end October 2006 out of a total of 2,654 TISs 
3.3% were mandatory.
125  Out of 88 compulsory standards 30.7% related to electrical/electronic 
engineering and about 23% to civil and construction material (Table AIII.1);  other items subject to 
compulsory TISs include mechanical engin eering, vehicles, and consumer's products.126  The number 
of TISs that are identical to international sta ndards has increased since 2002 (Table III.11);  their 
share to total published TISs rose from 23.9% (2002) to 24.4% (2006).127 
Table III.11 
Thai industrial standards (TISs), 2002-06 
Cumulative total of published TISs id entical to international standards Year Cumulative total of 
published TISs ISO IEC/CISPR CODEX 
2002 2,280 320 217 7 
2003 2,347 329 225 7 
2004 2,470 354 248 7 
2005 2,690 376 252 7 
2006 2,725 396 261 7 
Source: Thai Industrial Standards Institute. 
115. Between 2003 and 2007 (July), Thailand made  some 142 notifications under the WTO 
Agreement on Technical Barriers to Trade.  In lin e with the TBT Agreemen t Code of Good Practice 
                                                      
123  Thailand through its Oil Fund, subsidized retail pe trol and diesel prices from early January 2004 to 
July 2005 by capping retail prices.  Petrol prices were allowed to float in October 2004, and diesel price caps 
were fully removed in July 2005.  By then the Energy  Fund Administration Institute (EFAI), which administers 
the Oil Fund, was B 92 billion in the red.  The EFAI sold B 26.4 billion in Oil Fund bonds in October 2005 and 
issued another B 20 billion worth of bonds in February 2006.  The remainder of the fund is financed through 
commercial-bank lending.  To repay the borrowings, the Government levies a contribution on petrol;  the ceiling 
amount was raised on 10 October 2006 to B 4 per litr e, up from B 2.5 (Canad ian Energy Information 
Administration, 2006). 
124 Ministry of Energy (2005). 
125 List of TISs as of 19 February 2007.  Viewed at:  http://www.tisi.go.th/standard/cat_ 
eng.html [21 February 2007]. 
126 List of TISs as of 10 October 2006.  Vi ewed at:  http://www.tisi.go.th/standard/comp_ 
eng.html [21 February 2007]. 
127 TISs 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/191/Rev.1 
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for the Preparation, Adoption and Application of Standards, a TISI Work Programme is published 
biannually;  it contains a list of the draft TISs ac cording to their stage of progress (i.e. priority list, 
draft proposal, committee draft, draft standards to  be approved by the Industrial Product Standards 
Council).128   
116. The TISI and the Federal Office of Road Safety  of Australia have maintained a bilateral 
Mutual Recognition Arrangement on automotive products since 1999.  Thailand currently participates 
in various APEC mutual recognition arrangements129;  it is considering par ticipating in the APEC 
Electrical MRA, the APEC MRA on Conformity Assessment of Telecommunications Equipment phases I and II.  It has also signed:  the Paci fic Accreditation Cooperati on Multilateral Recognition 
Arrangement and IAF Multilateral Recognition Arrangement, the Asia Pacific Laboratory 
Accreditation Cooperation Multilate ral Recognition Arrangement, th e International Laboratory 
Accreditation Cooperation Multilate ral Recognition Arrangement, a nd the Asia Pacific Legal 
Metrology Forum Memorandum of Understanding.  
117. 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 product 
group is generally accepted provided it is issued by  either the ISO 9000 certification body accredited 
by the Office of the National Accreditation Council of  Thailand, or by the ISO 9000 certification body 
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 ge neral requirements for product quality control.
130  
(b) Products regulated by the Food and Drug Administration and the Ministry of Agriculture and 
Cooperatives 
118. Thailand's Food and Drug Administration (FDA), under the Ministry of Public Health, 
monitors and regulates the production, sale, a nd import of food products, cosmetics, drugs and 
narcotics, medical devices, and psychotropic subs tance, and monitors and regulates the usage of 
volatile substances, as empowered by the relevant legislation (Food Act B.E. 2522 (1979), Cosmetics 
Act B.E. 2535 (1992), Drug Act B.E. 2510 (1967) and its revision, Medical Devices Act B.E. 2531 
(1988), Psychotropic Substances Act B.E. 2518 (1975) and Hazardous Act B.E. 2535 (1992) (for 
household use), Narcotics Act B.E. 2522 (1979), the Emergency Decree on Pr otection against Abuse 
of Volatile Substances B.E. 2533 (1990)).  Imports and exports of feedstuffs, fertilizers, hazardous 
substances, live animals, plants, and seeds are ad ministered by the Ministry of Agriculture and 
Cooperatives.  Between 2003 and July 2007, 68 notif ications (87 including revisions and addenda) 
were submitted under the WTO Agreement on San itary and Phytosanitary Measures (the SPS 
Agreement).  Thailand is an active participan t in the FAO/WHO Joint Codex Alimentarius 
Commission, the FAO International Plant Protection Convention, the World Animal Health Organization, and the WTO SPS Committee. 
                                                     
 
128 This programme, which is regularly updated, is av ailable in TISI's online information.  Viewed at:  
http://www.tisi.go.th/wo rk_prg/work_prg.html. 
129 Including the APEC Mutual R ecognition 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, 2006b, Chapter 5). 
130 Criteria for product certification are ava ilable at:  http://www.tisi.go.th/license/r_pc_ 
01_e.html;  information on Thai La boratory Accreditation Scheme (TLA S) and the directory of accredited 
laboratories is available at:  http://www.tisi.go.th. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 86 
 
 
119. In 2005, concerns were raised with respect to  some of Thailand's SPS measures in the context 
of the WTO SPS Committee.  Concerns relate to P ublic Health Regulation No. 11 on requirements for 
food health certificates and emergency measures te mporarily suspending the import of live poultry 
carcasses from the Mexican State of Durango;  they were raised by the United States and Mexico, 
respectively.  In June 2007, the authorities indicated  that the measure under Public Health Regulation 
No. 11 had been withdrawn by means of a Thai FD A Notification issued on 25 November 2005.  The 
Thai FDA is in the process of reviewing and reasses sing the actual health risks of this food item so as 
to ensure that it is consistent with current  scientific information based on risk analysis. 
120. The National Bureau of Agricultural Commod ity and Food Standards (ACFS) under the 
Ministry of Agriculture and Cooperatives is responsib le for consolidating 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.131   
121. Importers of regulated products must apply to the FDA for an import licence, and 
manufacturers require a manufacturing licence.  Add itional registration requirements are imposed on 
various "specific-controlled" processed and pack aged food items, these cost B 5,000 per item, 
excluding expenses for analysis.  The Food Commi ttee may recommend to the Minister of Public 
Health that an individual food be specified as a specific controlled food;  currently, 14 kinds of food 
(18 in 2002) are listed as specific-controlled food (T able III.12).  In addition, there are a number of 
"standardized" food products, whose prescribed spec ification and labelling must comply with the 
Ministry of Public Health Notification.132 
Table III.12  
"Specific-controlled" food products administered by the Ministry of Public Health, as of June  2007 
Type of food Notification No. (year) 
1. Cow's milk 265 (2002) and 282 (2004) 
2. Ice cream 222 (2001) and 257 (2002) 
3. Flavoured milk 266 (2002) 
4. Other milk products 267 (2002) 
5. Cultured milk 289 (2005) 
6. Non-alcoholic beverages in sealed co ntainers 214 (2000), 230 (2001) and 290 (2005) 
7. Stevioside and food cont aining stevioside 262 (2002) 
8. Food additives 281 (2004) 
9. Sodium cyclamate and food contai ning sodium cyclamates 113 (1988) 
10. Food for weight control 121 (1989) 
11. Food in sealed containers 144 (1992), 179 (1997) and 253 (2002)  
12. Modified milk for infants and m odified milk of follow-up formula for 
infants and children 156 (1994) and 167 (1995) and 286 (2004) 
13. Food for infants and food of follow-up formula for infants and small 
children 157 (1994), 168 (1995), 171 (1996), and 287 (2004) 
14. Supplementary food for infants and young children 158 (1994) and 169 (1995) 
Source:  Data provided by the authorities. 
                                                      
131 WTO document G/SPS/N/THA/93, 4 April 2003. 
132 These foods are listed in FD A online information.  Viewed  at:  http://www.fda.moph.go. 
th/eng/food/details/foodCategoryIndex.stm. Thailand WT/TPR/S/191/Rev.1 
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(c) Quarantine requirements 
122. In response to allegations by one major trad ing partner over the implementation aspects of 
SPS standards in Thailand (including  slaughterhouses or farm facilities)133, the authorities indicated 
that, in line with the Animal Epidemics Act B.E.  2499 (1956) and its amendments as well as related 
regulations, Thailand has an audit system for nationa l veterinary service.  Within the system audit, 
livestock production units (farm or slaughterhouse) are subjected to individual inspection.  The 
published regulations for imports of animals or an imal products are general instructions for every 
exporting country;  modifications of some conditions  in a given regulation are possible, based on risk 
analysis, scientific evidence, and recommendations of the veterinary inspectors.  In case of an 
outbreak of animal disease in an exporting country , restrictions on imports of livestock or their 
products from that country may be imposed prior to notif ication.  This is to prevent the introduction of 
the disease into Thailand.  However, import restri ctions due to disease outbreak are imposed only 
after the incidence has been offici ally reported by the OIE.  The outbreak of infectious diseases is an 
emergency situation.  The authorities emphasize that based on scientific reasons and disease control principles, import restrictions to prevent diseas e spreading, even before the circulation of 
notifications, are indeed justified, and sh ould not be considered as trade barriers. 
123. Major legislative amendments took place in  1999.  The Plant Quarantine Act B.E. 2507 
(1964) was amended in 1999 with a view to harmoniz ing Thailand's domestic pest control measures 
with international requirements.  The amendment, inter alia,  included:  the Plant Quarantine 
Committee;  import and export control measures for plants and germplasms;  increased penalties for 
any violation of the law;  and adjustment of th e administrative fees for phytosanitary services.  
Recently, the Department of Agriculture revised  three Ministerial Regulations under the Plant 
Quarantine Act B.E. 2507 (1964) amended by Plant Quarantine Act (2
nd Edition) B.E. 2542 (1999).  
The new regulations, published in the Royal Gazette of 1 June 2007, and effective 31 July 2007, list 
articles (such as fresh fruit), whose entry into Thaila nd is prohibited or restricted.  The importation of 
prohibited articles for commercial purpose must pass the pest risk analysis process, subject to 
conditions set by the Director-General of the Departme nt of Agriculture.  Imports of restricted articles 
must be accompanied by a phytosanitary certificate, while some restricted articles are subject to 
conditions set by the Director-General of the Depart ment of Agriculture and an additional declaration 
must be provided certifying that the consi gnment is free from certain pest and disease. 
124. The Animal Epidemics Act B.E. 2499 (1956) wa s last amended in 1999 with a view to 
harmonizating of animal disease control measures;  the amendment, inter alia , introduced regulations 
on activities involving embryos;  strengthened the au thority of veterinarians and the Department of 
Livestock Development to control animal diseases;  and strengthened of penalties.  The Animal Feed 
Quality Control Act B.E. 2525 (1982) was also am ended in 1999.  Two Ministerial Notifications 
under the Plant Quarantine Act B.E. 2507 (19 64), issued on 14 October 2003 and 17 March 2004, 
specify GM plants as prohibited articles with exce ptions for imports for research purpose as well as 
for corn and soybean used as raw material for human food or anim al feed or industrial use.  
Ministerial Regulations under the Animal Epidem ics Act B.E. 2499 (1956) were promulgated in 
2001;  they stipulated requirements for import, expo rt, and transit of animals and carcasses thereof.  
An amendment in 2002 stipulates controls on import, export, and transit of dogs and cats in order to 
prevent diseases such as rabies and leptospirosis;   A 2003 amendment (dated 27 May 2003) added 
aquatic animals and amphibians.  Another Minister ial Regulation under the dated 24 December 2004, 
added more animal diseases, and made it compulsory to report the incidence of the diseases listed. 
                                                      
133 USTR (2006). WT/TPR/S/191/Rev.1 Trade Policy Review 
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125. A health certificate issued in the exporting c ountry must accompany imports of certain food 
products.  Health certificates are required for imports  of certain live animals and their products, and a 
phytosanitary certificate is needed for the prohibited and restricted materials.  As from 1 June 2003, 
Thailand has levied import fees on meat products, at approximately US$114 per tonne on beef and 
pork, US$227 per tonne for poultry, and US$114 per tonne on offal, to cover the cost of quarantine 
procedures such as laboratory inspection, waste treatment, disinfection, and labour costs. 
(d) Labelling requirements 
126. A ministerial announcement on genetically modifi ed food products has been in force since 
May 2003.  Food products derived from GM or engin eered maize and soya in whole or in part must 
be labelled as such in legible form134;  the announcement also prohibits labelling such as GM free or 
non-GM food.  
(vi) Intellectual property rights 
127. Thailand is a member of the World Intellect ual Property Organization and a party to the 
Berne Convention.  However, it has not acceded to the Paris Convention for the Protection of 
Industrial Property, the Patent Cooperation Treaty, or the Rome Convention (International Convention 
for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations).  The 
authorities indicate that although Thailand is not a member of the Rome Convention, most of the 
principles therein are already inco rporated in its current copyright  legislation, in accordance with 
Article 2 of the TRIPS Agreement.  Reportedly, Th ailand began preparations in 2005 to accede to the 
Paris Convention and the Patent Cooperation Treaty135;  it seems that there were to apply to join the 
latter in 2007.136  
128. Since its previous Review in 2003, Thailand has made submissions to the TRIPS Council on, 
inter alia,  the stage of implementation of its obligati ons under the TRIPS Agreement and replies to 
questions on its national legislation posed by Members, as well as a joint communication on the 
relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD) and 
the protection of traditional knowledge.137 
(a) Legislative and institutional developments 
129. Since its previous Review, Thailand has take n further action to strengthen its IPR legal 
framework and to implement the WTO TRIPS Agre ement by enacting the Geographical Indications 
Act (2003) and the Optical Disc Production Act B.E. 2548 (2005).  The Department of Intellectual 
Property (DIP) at the Ministry of Commerce is, inter alia,  entrusted with implementing the laws on 
patents, trade marks, copyrights, and other relevant legislation as well as promoting, developing and 
protecting IPRs.138  Furthermore, as part of Thailand's genera l regulatory reform plan (Chapter II), the 
DIP has started the process of amending laws on trad e marks, copyrights, patents, and trade secrets. 
                                                      
134 The requirement applies to food products containing more than a certain amount of modified or 
engineered DNA.  The requirement do es not apply to small producers th at sell food products directly to 
consumers. 
135 USTR (2006);  and EIU (2006b). 
136 As a signatory of this treaty, Thailand's inventions and intellectual property would be protected 
automatically in several countries under a single international patent application. 
137 WTO documents:  IP/Q/THA/1 IP/Q2/THA/1 IP/Q3/THA/1 IP/Q4/THA/1, 12 February 2004;  
IP/C/38, 21 November 2005;  IP/C/38, 21 No vember 2005;  and IP/C/44, 4 December 2006.  
138 IPR Service Center online information.  Viewed at:  http://www.ipthailand.org/en/ 
index.php?option=com_content&task=view&id=58&Itemid=52 [23 February 2007]. Thailand WT/TPR/S/191/Rev.1 
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Copyright and related rights 
130. There has been no change in Thailand's copyri ght legislation in the period under review.  
Under the Copyright Act (1994), protection is for the life of the creator, plus 50 years139, except in the 
case of works of applied art, which are protected for 25 years from the date of creation140;  under Thai 
law, a copyright is considered to exist upon crea tion of a work and registration is not required.  
Protection extends to literary works (including com puter programs), dramatic, artistic, musical, audio-
visual, photographic, cinematographic works, sound  recordings, broadcasting works, and all other 
materials in the literary, scientific, and artistic doma ins.  Authors' moral rights and performers' rights 
are also protected. 
131. In the case of infringement, copyright holders have the right, under the Act, to seek 
injunctions, compensation for damages, and to r ecover investigation costs and legal expenses.  
Competent authorities under the Copyright Law have the right to seize pirated goods upon the request 
of the copyright holder and to enter any premis es 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 
research and study of computers, and personal use by the owner of a copy of the software, provided 
that the purpose is not for profit.   Between 2002 and 2006, annual copyri ght notifications more than 
tripled, passing from 12,714 to 39,511;  they mostly  consist of musical, artistic, sound recording, and 
audiovisual works. 
Trade marks 
132. Following its latest amendment in 2000, the Trademarks Act B.E. 2534 (1991) contains, 
inter alia , the principle of national treatment, the registration of colour marks and three dimension 
marks.  Owners of registered trade marks are gran ted protection for ten years;  registration may be 
renewed every ten years.  Trade marks that are id entical 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". 
133. Applications for trade mark registration must be filed with the Department of Intellectual 
Property.  To qualify, a trade mark must meet the requirements of distinctiveness, differentiation from 
other registered trade marks, and not be in vi olation of public order or morality.  Thailand's 
Trademark Act adopts the International Classificati on of Goods and Services, in accordance with the 
Nice Agreement.  Statistics on trade mark and appli cation registration in Thailand indicate a rise since 
2002,  despite a drop in registrations in 2003  (Table III.13);  applications and registrations by Thai 
firms exceeds those involving foreigners. 
Patents 
134. There has been no change in Thailand's patent legislation since its previous Review.  The 
Patent Act B.E. 2522 (1979), as amended, grants pr otection 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 im portation of patented products by the patentee is considered as 
                                                      
139 In the case of a work of joint au thorship, copyright lasts for the life of the 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 for 
50 years from its first publication. 
140 If the work of applied art is published within 25 years of its creation, copyright endures for 50 years 
from first publication. WT/TPR/S/191/Rev.1 Trade Policy Review 
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"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.
141  Under the Patent Act, an 
invention is defined as any innova tion or invention that creates a new product or process, or any 
improvement on a known product or process.  A produc t design is defined as any form or composition 
of lines or colours that gives a special appearance to a product and can serve as a pattern for an 
industrial or handicraft product.   
135. Applications for patents must be submitted to the Department of Intellectual Property at the 
Ministry of Commerce.  Statistics on patent registration in Thailand s how diverging tre nds with patent 
applications rising while patents granted d eclining to record lows between 2002 and 2006 
(Table III.13). 
Table III.13 
Trade mark and patent statistics, 2002-06  
 2002 2003 2004 2005 2006 
Trade marks       
Total applications 30,109 33,049 36,968 36,423 33,572 
Thai 21,518 23,335 26,414 24,275 21,171 
Foreigner 8,591 9,714 10,554 12,148 12,401 
Total registrations 23,146 17,983 23,532 27,445 24,115 
Thai 13,281 11,440 15,918 18,497 15,595 
Foreigner 9,865 6,543 7,614 8,948 8,520 
Patents       
Total applications 7,726 8,574 8,942 10,885 9,821 
Thai 3,030 3,426 3,428 4,258 3,564 
Foreigner 4,696 5,148 5,514 6,627 6,257 
Total patents granted 2,466 2,326 2,044 1,322 1,878 
Thai 635 797 867 505 568 
Foreigner 1,831 1,529 1,177 817 1,310 
Source: Department of Intellectual Property .  Viewed at:  http://www.ipthailand.or g/en/index;  and in formation provided 
by the authorities.  
Layout designs of integrated circuits   
136. 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.  The layout 
design must be registered with the Department of Intellectual Property; protection enters into force 
upon registration and issuance of a certificate.  The cer tificate is valid for ten years from the date of 
filing or the date of the first commercial exploitatio n, within or outside Thailand, whichever occurs 
first, but not longer than 15 years from the date of the completion of the layout design's creation. 
Trade secrets 
137. Protection of undisclosed information under the Trade Secrets Act B.E. 2545 (2002) requires 
that the information must not be generally known among or readily accessible to persons in the 
business, must have value attributable to its secrecy, and must be in the control of persons who have 
taken measures to keep it secret;  the Act allows  government agencies to disclose information to 
                                                      
141 These terms of protection can be extended twice for periods of two years.   Thailand WT/TPR/S/191/Rev.1 
 Page 91 
 
 
protect any public interest that does not have co mmercial objectives.  The protection lasts as long as 
the information remains confidential.  No  registration is required under the Act. 
138. The Department of Intellectual Property recei ved 1,801 notifications under the Trade Secrets 
Act in 2005, up from 1,013 in 2003;  in 2006, there was a considerable drop to 508.142  Reportedly, all 
processed foods must be accompanied by a detailed list of ingredients and a description of the 
manufacturing process, disclosure of which c ould jeopardize an applicant's trade secrets.143 
Geographical indications 
139. Thailand's Geographical Indications Act B.E. 2546 (2003), which entered into force on 
28 April 2004, protects domestic and overseas geog raphical indications from abuse in Thailand.144  
The registration of geographic indications prevents registration of similar or identical terms and the 
use of names that may cause confusion as to geographi cal origin, quality, reputation or characteristics;  
prevents use of the name on goods not emanati ng from the geographical area in question, unless such 
use has taken place continuously for ten years prior to  15 April 1994, or earlier, in good faith;  and 
allows for penalties/fines of up to B 200,000 (about US$5,500).  Registration is valid until it is 
cancelled.  In November 2006, the DIP had register ed 11 products under the Act:  nine Thai products, 
Pisco (Peru), and Champagne (France), the firs t European geographical indication to obtain 
registration.145 
Protection of plant varieties 
140. Protection under the Plant Varieties Protecti on Act B.E. 2542 (1999), which entered into 
force in December 1999, is for up to 27 years.146  
(b) Parallel imports 
141. Parallel imports are allowed for goods protect ed by copyrights or by registered or 
unregistered trade marks.  By contrast, under the Pa tent Act, the patentee has an exclusive right to 
import patented products or products produced by th e patented process.  However, after a patented 
product has been produced or sold by a third party w ith the authorization or consent of the patentee, 
the patentee's rights over these products are deemed exhausted, including the ri ght to prevent parallel 
imports.  Right holders under the Prot ection of Layout Designs of Integr ated Circuits Act also have an 
exclusive right to import the protected layout design. 
(c) Government use and compulsory licensing 
142. There has been no change to Thai legislation on government use and compulsory licensing.  
Regarding copyright, any interested person may appl y for compulsory licensing  to translate a work 
into Thai or to reproduce a translation published in Thai, under special circumstances, for example for 
                                                      
142 EIU (2006b). 
143 USTR (2006). 
144 Details on the Act, published in the Government Gazette  (Volume No. 120, Part 108 Kor.) on 
31 October 2003, are available in Asia Law online information, "Thailand Adds Geographical Indications Law 
to IP Law Stable (IP Review January 2004)".  Vi ewed at:  http://www.asialaw.com/default.asp?Page= 
20&PUB=68&ISS0=10970&SID=433835 [23 February 2007];  and Rouse & Co International online information, "Champagne – the first EU 'geographical indication' to be registered in Thailand", July 2006.  
Viewed at:  http://www.ipr ights.com/publications/alerts/alerts.a sp?alertID=291 [23 February 2007]. 
145 EIU (2006b). 
146 WTO document IP/N/1/THA/P/1, 13 November 2000.  WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 92 
 
 
study, teaching or research without a profit-seeking purpose.  Under the Section 46 (Annex III) of the 
Patent Act any person may apply for a licence three year s after the grant of a patent or four years from 
the date of application, whichever is earlier.147  In addition, Section 51 provides for the grant of 
licences for government use purposes, inter alia , to carry out any service for public consumption or to 
prevent or relieve a severe shortage of food, drugs or other consumption items.  Thailand is amending 
the Patent Act to insert provisions on compulsory licensing in line with the flexibilities provided by 
the WTO Decision of 30 August 2003 on the Implemen tation of Paragraph 6 of the Doha Declaration 
on the TRIPS Agreement and Public Health. 
143. Based on Section 51 of the Patent Act, Thailand has issued three compulsory licences:  one 
heart disease drug and two HIV/AIDS drugs.148  The Government Pharmaceutical Organization was 
granted the rights relating to these patent-protected inventions agai nst payment of a royalty fee of 
0.5% of total sales value to the right holder.  Re portedly, the compulsory licences will not affect the 
patented market as the medicines would be distributed  to those unable to pay, including those already 
covered by the government;  the cheaper drugs will not be exported.149  Following the issue of these 
licences, one of the pharmaceutical firms concerne d announced that it woul d cut the price of the 
medicine in question in low-and medium-income countries, including Thailand;  it would be less 
costly than any generic on the market  and 55% less than the current price.150  
(d) Enforcement 
144. Thailand has made efforts to tackle piracy a nd counterfeiting.  The authorities indicate that 
the DIP, the Royal Thai Police, and relevant pub lic and private agencies have taken systematic 
measures to stem all aspects of IPR violation;   production, distribution, and import/export.  
Nevertheless, according to the authorities, wiping out IPR violation remains difficult as counterfeit or 
pirated goods are much cheaper than genuine goods, a decisive factor for consumers' decision-making. 
145. Upon request or suspicion, customs officers 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.  In case of suspect ed smuggling of IPR-infringing products, Customs may 
invite the IPR owners to inspect the goods.  So me representatives of IPR owners join Customs 
officers to inspect shipments at Klong Toey Port on  a regular basis.  In order to strengthen border 
enforcement, the Customs Department has proposed  a draft amendment of the Customs Act, which 
would empower customs officers to inspect goods in  transit, and transhipments, and broaden the 
scope of border enforcement to cover all IPRs. 
146. The Government has taken various actions in th is area since Thailand's previous Review in 
2003.  The Royal Thai Police in coordination with the DIP has monitored and raided major shopping 
                                                     
 
147 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).   
148 Under a compulsory license, th e government can itself produce (e .g. Government Pharmaceutical 
Organization of Thailand) - or authoris e a third party to do so - a subject matter that is still under patent without 
the consent of the patent holder, or without having made efforts to obtain authorisation from the right holder, 
under certain conditions such as it being for non-commer cial use, according to Article 31 of the TRIPS.  
According to the 2001 Doha  Declaration on the TRIPS Agreement and public health, each member is free to 
determine the grounds upon which such licences are granted.  Intellectual Property Watch (2006) and (2007). 
149 Ministry of Public Health and National Health Security Office (2007).  
150 International Herald Tribune, "Thailand takes on drug industry, and may be winning", 
11 April 2007.  Viewed at:  http://iht.co m/articles/2007/04/11/news/pharma.php. Thailand WT/TPR/S/191/Rev.1 
 Page 93 
 
 
centres and CD factories reputed for IPR infringe ment.  Coordination has been improved under a 
December 2002 Memorandum of Understanding on th e Cooperation of the Relevant Government 
Agencies on the Enforcement of Intellectual Property Rights.  In another attempt to curb sales of 
pirated goods, the Ministry of Commerce signed a Memorandum of  Understanding on 
16 August 2006 with a number of private-sector representatives and law-enforcement groups to 
coordinate efforts and cooperation.151  Under the Import and Export Law, the Optical Disc Production 
Law and other relevant laws, the Government h as strictly monitored the OD production business by 
licensing the importation of OD production machin ery and keeping track of the OD production 
process. 
147. Thailand officially launched the Prevention and Suppression of Intellectual Property 
Infringement Committee in April 2005, though it had been meeting since 2001.152  This Committee 
helps coordinate efforts to crack down on piracy an d run intellectual property education programmes.  
In September 2004, the Department of Justice a nnounced the formation of a new Department of 
Suppression Investigation (DSI), responsible for inv estigating crimes affecting national security and 
involving organized crime and money-laundering153;  around 200 of its 1,000 officers were assigned 
to the Intellectual Property Case Offi ce, which investigates IPR cases. 
148. Since 1997, the Intellectual Property and International Trade (IPIT) Court, separate and 
specialized court of original jurisdiction, has e nhanced IPR enforcement.  The IPIT Court employs 
specially trained judges (career and associate judges) , has its own rules and procedures to expedite the 
processing of cases (such as continuous hearings wit hout adjournments), and equitable remedies, such 
as preliminary injunctions.154  Reportedly, around 5,300 criminal IPRs cases were dealt with the IPIT 
Court in 2005 (average of six months for a decision).155  Generally a fine is imposed and the goods are 
destroyed (Table III.14).  Reportedly, this has had little  deterrent effect as:  fines are often reduced by 
50% for a guilty plea or first time infringements;  th e level of fines does not meet the cost of taking 
criminal action, and is not a deterrent for infringe rs, as shown by the number of recidivists;  and 
prison sentences are invariably suspended. 
149. According to replies to a 2006 EC questionnaire156, local production of IPR-infringing items 
includes music, car parts, pharmaceutical products , software, bags and accessories, clothes, and 
luxury goods.  Local sales (both to locals and to th e growing tourist industry) of these products take 
place in street markets, wholesale and retail in shops, as well as via the internet for certain counterfeit 
pharmaceutical products.  Thailand has become appare ntly a transit/transhipment/smuggling point for 
infringing goods from other countries, notably Chin a, Cambodia, Viet Nam, and Myanmar, due to 
deficient border enforcement.  According to the Business Software Alliance, software piracy has 
                                                      
151 The most important aspect of the memorandum is the obligation of department stores and landlords, 
when advised by the DIP that a tenant has been prosecuted for IPR infringement, to terminate immediately the 
tenant's lease.  Failure to abide by this provision coul d pave the way for civil liability for landlords and tenants 
alike.  Similar proceedings have had some success in China and Malaysia, though in November 2006, pirated 
software, music and films remained easily and widely available in Bangkok (EIU, 2006b). 
152 The committee groups representa tives from 27 domestic and foreig n companies, industry groups, 
and law firms (EIU, 2006b). 
153 EIU (2006b). 
154 Bali (2006). 
155 Report cited in replies to an EC questionnaire, viewed at:  http://trade.ec.europa.eu/doclib/docs/ 
2006/october/tradoc_130595.pdf [23 February 2007]. 
156 EC online information.  Viewed at:  http://tr ade.ec.europa.eu/doclib/docs/2006/october/tradoc 
_130595.pdf. WT/TPR/S/191/Rev.1 Trade Policy Review 
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remained high as a result of widespread  ignorance or disrespect of the law.157  Compared with the 
global software piracy rate of 35%, and 54% for Asia, the rate in Thailand was 80% in 2005, an 
increase of 1 percentage point over 2004 and 2 per centage points over 2003.  Allegedly, software 
industry revenue losses due to piracy in Thailand in 2005 alone were estimated at a B 10 billion. 
Table III.14 
Activities against intellectual pr operty rights violation, 2002-05 
Legislation 2002 2003 2004 2005 
Copyright Act B.E. 2537      
Arrests 3,363 4,142 5,179 5,647 
Materials seized (items) 743,724 1,134,552  802,496 1,388,274 
Trademark Act B.E. 2534      
Arrests 1,295 1,338 2,602  1,995 
Materials seized (items) 1,409,848 3,008,012 1,384,923  850,106 
Patent Act B.E.2522      
Arrests 16 26 9  3 
Materials seized (items) 150,376 1,104,809  3,279 6 
Cassette Business and Television 
Devices B.E.2530      
Arrests 114 3 36 44 
Materials seized (items) 10,911 2,312 30,347 23,181 
Total      
Arrests 4,788 5,509 7,826 7,989 
Materials seized (items)  2,314,856 5,249,685 2,221,045 2,261,567 
Source:  Department of Intellectual Pr operty online information.  Viewed  at:  http://www. ipthailand.org.  
150. Although conviction rates are high, corruption and a cultural climate of leniency can 
complicate prosecution of cases.158  Reportedly, the frequency of raids compromised by leaks from 
police sources remains a concern.  Pirates have resp onded to intensified enforcement by intimidation 
of right holders' representatives and enforcement aut horities.  Thai officials generally lack sufficient 
resources to undertake enforcement actions apart fr om those initiated by right holders.  Effective 
prosecutions can be labour-intensive for right holders, who often investigate, participate in raids, and 
assist in the preparation of documentation for prosecution.   
151. IPR enforcement remains a concern for some of Thailand's major trading partners.  In 
June 2003, the United States provided Thailand w ith a proposed IPR Action Plan, which included 
detailed proposals for action to be taken on enforcemen t, legislative/regulatory, and judicial issues.  
The EC plans to offer more t echnical assistance and cooperation.159 
                                                      
157 Business Software Alliance  press release "Software Piracy Reports Increase By 7 Fold After Re-
Launch of Anti-Piracy Campaign", 24 October 2006.   Viewed at:  http://www.bsa.org/thailand/press/ 
newsreleases/leads-increase-7-fo ld.cfm [26 February 2007]. 
158 USTR (2006), and EIU (2006b). 
159 Thailand was placed on the USTR's Special 301 Wa tch List in November 1994, and remained there 
in November 2006.  Thailand was elev ated to the Special 301 Priority Watch List in 2007, based on concerns 
about lack of adequate enfo rcement in the area of copyright and weakening of respect for patents, referring 
specifically to the decision to gr ant compulsory licences for severa l patented pharmaceutical products 
(section (4)(vi)(c)).  In an IPR report released by the European Commission in October 2006.  Thailand was 
listed in Category 3, which comprises countries with hi gh levels of production, transit and consumption of 
illegally copied goods.  USTR  (2006);  and EIU (2006b). Thailand WT/TPR/S/191/Rev.1 
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(vii) State involvement in production and trade 
152. State involvement in the econom y persists.  The current 59  state-owned enterprises (SOEs) 
can be grouped into nine broad sectors:  agricu lture and natural resources, energy, manufacturing, 
financial, telecoms, transportation, infrastructure,  social and technology, and other services activities 
(Table III.15).  These enterprises, which had a to tal of around 266,500 employees (0.7% of labour 
force) in February 2007, contributed B 77 billion (1.0% of GDP) in revenue to the Government in 
fiscal year 2006;  these revenues are forecast to ri se to B 90 billion in FY2007 and B 95 billion in 
FY2008.160 
Table III.15  
State involvement in the economy, 2007  
Sector Function and trade-related privileges 
Agriculture and natural resources  
Forest Industry Organization (F.I.O) Plantation management, re-afforest ation, logging, sawmilling and forest 
industries.  According to the author ities:  not responsible for export or 
import; generates income from fore st industry and related activities; 
without special privileges; and freely competes with the private sector 
Botanical Garden Organization (BGO) Responsible for the establishment and administration of botanical, country 
and regional plant collection centres, and botanical museums 
Dairy Farming Promotion Organization of Tha iland (D.P.O.) Promotion of dairy farming in cluding sales of domestic output to meet  
domestic-content requirements;  no external trade 
Marketing Organization for Farmers (MOF ) Marketing of agricultural products a nd supply of services;  no external 
trade 
Fish Marketing Organization (FMO) Fish marketing facilities;  no external trade 
Office of the Rubber Replanting Aid Fund (O RRAF) Promotes good quality rubber plants  to farmers by using new technology 
and develops fair market mechanis m for farmers selling their products 
Rubber Estate Organization (R.E.O) Pr oduction, purchase, and distribution of rubber and rubber by-products;  
no external trade 
Energy  
PTT Public Company Limiteda (PTT)   Oil and gas production, distribution,  and import.  According to the 
authorities:  PTT operates as a norma l private enterprise;  receives no 
special privileges from the Governmen t;  and freely competes with other 
international and domestic enterprises.  Source for government purchases 
Electricity Generating Authority of Thailand (EGAT) Sole rights for distribution and trade in el ectricity;  owns and operates 
several types and sizes of power plants  
Provincial Electricity Authority (PEA) S upply of electricity;  no external trade 
Metropolitan Electricity Authority (MEA) S upply of electricity;  no external trade 
Industry  
Thailand Tobacco Monopoly (T TM) Supply and produc tion of cigarettes (domestic monopoly);  imports of 
tobacco 
Playing Cards Factory (PCF) Monopol y supply and production of playing cards;  exclusive import rights 
Liquor Distillery Organization (LDO) Production and supply of alcohol (sol e domestic producer), and production 
of liquor;  exclusive production rights for 95% ethyl alcohol 
Battery Organization of Thaila nd (B.O.T.) Battery production 
The Tanning Organization (TTO) Producti on and sale of tanning products 
Police Printing (P.P.) Printing business to serve public and private sectors 
Table III.15 (cont'd) 
                                                      
160 TMC Net, "Thailand:   The operating environment (Executive Briefing Via Thomson Dialog News 
Edge) from the Economist Intelligence Unit",  10 January 2007.  Viewed at: http://www.tmcnet.com/usubmit/ 
2007/01/10/2238481.htm. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 96 
 
 
Sector Function and trade-related privileges 
Social and technological  
Public Pawnshop Office (OOP) Government pawnshop for low to medium income earners with low interest 
rates 
Sports Authority of Thailand (SAT) Aims to supervis e and promote sports in Thailand. Conducts studies, 
analyses, evaluation, project impl ementation, project planning, and 
statistics on sport promotion;  it also acts as the centre for sports coordination domestically  and internationally 
Zoological Park Organization (ZPO) Caters for endangered species and participates in animal breeding 
programmes;  facilitates visitors and community education, biological 
research and wildlife conservation 
Thailand Institute of Scientif ic and Technological Research 
(TISTR) Conducts research for the development of science and technology in 
accordance with national policy and plan ;  promotes knowledge in science 
and technology to the public 
National Science Museum (NSM) Operates science and technology museum to promote public awareness and 
importance of science and technology a nd to encourage participation in the 
development of science and tec hnology to support and sustain the 
development of the country 
Government Pharmaceutical Organization  Procurement of  drugs, and drug manufacture;  source for government 
procurement 
Services  
Government Lottery Office (GLB) State lottery operator,  responsible for managing,  marketing and conducting 
lotteries in Thailand 
Marketing Organization (MO) Distribution center for ag ricultural and OTOP products with fair prices;  
promotes marketing network amongst producers and buyers 
Public Warehouse Organization (P.W.O.) Purchase and distribution of agricultu ral products;  exclusive import rights 
for potatoes and tea 
Tourism Authority of Thailand (TAT) Promotes tourism and the tourist industry 
Syndicate of Thai Hotels and Tourists Enterprises Limited (THAI HO) Leases land to hotel development operators 
Transportation  
Airports of Thailand Public Company Limitedb (AOT) Provides facilities and related services to airline operators 
Port Authority of Thailand (PAT) Main organization to  manage and supervise both central and regional ports 
State Railway of Thailand (SRT) Administers and op erates all railway functions throughout Thailand 
Bangkok Mass Transit Authority (BMTA) Bus se rvice operator in Bangkok and metropolitan areas 
Aeronautical Radio of Thailand Limited (A EROTHAI) Provides air traffic control a nd aeronautical communication services for 
airlines operations 
Express Transportation Organization of Thailand (E.T.O.) Liquidated in 2006 
Thai Maritime Navigation Co. Limited (TMN) Sea freight forwarder 
Thai Airways International Public Co. Limited (THAI) Air carrier and related services 
Transport Co. Limited (TCL) Domestic bus service operator 
Civil Aviation Training Center (CATC) Responsible for do mestic and international tr aining, and operates related 
aviation services 
New Bangkok International Airport Co. Limited (NBIA) C eased operation and handed over responsibilities to AOT 
Mass Rapid Transit Authority of Thailand (MRTA) Operates ma ss rapid transit systems within the greater bangkok area and 
other provinces 
Expressway and Rapid Transit Au thority of Thailand (ETA) Provides alternative ro ad facility with safety and high quality servic es to 
Bangkok commuters 
Bangkok Dock Company Limited Shipbuilding and ship repairs 
Telecommunications   
TOT Corporation Public Company Limitedc (TOT) Provides telecommunications and othe r related services through sole 
operation and/or joint vent ures with other entities 
Cat Telecom Public Company Limited (CAT) Provides teleco mmunications and other relate d services both locally and 
globally 
Thailand Post Co. Limited (THAILAND POST) Postal service provider 
MCOT Public Co. Limited (MCOT) Mass communication businesses, including TV, radio broadcasting, news 
service, and other joint operations with private parties 
Table III.15 (cont'd) Thailand WT/TPR/S/191/Rev.1 
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Sector Function and trade-related privileges 
Infrastructure  
Metropolitan Waterworks Authority (MWA) Provides good quality supply of water to residents, business, and industries 
in Bangkok and its surrounding cities 
Provincial Waterworks Authority (PWA) Provides good qua lity supply of water to people residing in provinces, 
besides Bangkok and its surrounding cities 
Industrial Estate Authority of Thailand (IE AT) Provides services for the facility a nd utility systems necessary for industrial 
and business operations;  develops su itable locations for industrial estates 
Waste Water Management Authority (WMA) Manage wastewater treatment system 
National Housing Authority (NHA) Hous ing provider for people in low to medium income groups.  Engages in 
urban development, urban renewal and slum problem solving, in order to 
bring about better quality of life, society and environment 
Financial  
Krung Thai Bank (KTB) Provides all kinds of financ ial services and competes with private banks 
Government Saving Bank (GSB) Provides all kinds of financial services, guaranteed by the Government 
Government Housing Bank (GHB) Provi des housing finance for domestic consumers, especially low and 
medium income borrowers 
Bank for Agriculture and Agricultural Coopera tives (BAAC) Provides financial assistance to help farmers and farmer institutions  
increase productivity and incomes and offers deposit services to farmers throughout the country 
Export-Import Bank of Thailand (EXIM) Offers short and lo ng-term credits, in domestic and overseas markets, in 
local or foreign currencies. Issues  short- and long-term financial 
instruments for sale to financial institutions and the public;  does not accept deposits from the general public 
Small and Medium Enterprise Development Bank of Thailand (SME) Provides financial services and c onsultancy for small and medium 
enterprises in Thailand 
Secondary Mortgage Corporation (SMC ) Secondary mortgage finance and an y other businesses that supports and 
develops secondary mortgage finance 
Small Industry Credit Guarantee Corporation (SICGC) Provides cred it guarantee service to help small industrial enterprises obta in 
greater amounts of credit fr om financial institutions 
a PTT Public Company Limited was incorporated as a public co mpany on 1 October 2001 on corporatization from the Petroleum 
Authority of Thailand under the Cor poratization Act of B.E. 2542 (1999). 
b The Airports of Thailand Public Company Limited was established on 30 September 2002. 
c TOT was transformed from an SOE under the Ministry of Tran sportation and Communications (MoTC) into a public company, 
on 31 July 2002, under the control of the Ministry of Information and Communication Technology (MICT). 
Source:  Information provided by the Government of Thailand;  and Ministry of Finance (2005), Thailand Economic 
Outlook 2005 , 27 June, Fiscal Policy Offi ce.  Viewed at:  http://www. thailandoutlook.co m/NR/rdonlyres/ 
FE757436-5B84-46DA-82F8-F08DEE127869/0/ChapterIV.pdf [27 February 2007]. 
153. There are various laws and regulations ai med at enhancing implementation of the 
privatization programmes, including the Trade Competition Act (1999), the Foreign Business Act 
(1999), Taxation Laws (amended in 2002), and the Corporatization Act (enacted in 1999).  The 
Cabinet's 7 April 2004 resolution increased the im portance of effective regulatory oversight and 
prevention of abuse of monopoly power of corporatized entities.161  It adopted the policy to create 
systematic regulatory mechanisms to control monopoly power and abuse thereof in respect of 
consumers and other operators, as part of the principl es to protect the interests of the nation, people, 
consumers, and state enterprise employees.  As a re sult, the Government must maintain a 50% stake 
in all state enterprises and a 75% holding in power and water utilities162;  and with the exception of 
state agencies and enterprises, no shareholder, Thai or foreign, is allowed to hold more than a 5% 
stake in a privatized company.  Total foreign shareholdings are limited to 25%. 
                                                      
161 APEC (2006b), Chapter 10. 
162 TMC Net, "Thailand:  The operating environment (Executive Briefing Via Thomson Dialog News 
Edge) from the Economist Intelligence Unit", 10 Janu ary 2007.  Viewed at:  http://www.tmcnet.com/ 
usubmit/2007/01/10/2238481.htm. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 98 
 
 
154. Under the Corporatization Act 1999, SOEs se t up by law are being corporatized (i.e. 
transformed into companies).  Five SOEs were co rporatized and six companies were formed in the 
period 1999-06:  the Petroleum Authority of Tha iland (presently PTT Public Co. Ltd.);  Airport 
Authority of Thailand (AOT Public Co. Ltd.);  Telephone Organization of Th ailand (TOT Public Co. 
Ltd.);  Communications Authority of Thailand (restructured and corporatized into CAT Telecom 
Public Co. Ltd. and Thailand Post Co. Ltd.) and Mass Communications Authority of Thailand 
(MCOT Public Co. Ltd.).  The authorities still wholly own TOT Public Co. Ltd., CAT Telecom Public Co. Ltd., and Thailand Post Co. Ltd.  In November 2006, the authorities signed a two-year contract with a Thai rating agency to evaluate th e performance of SOEs, with an eye to improving 
efficiency and thus their competitiveness. 
155. Privatization in Thailand has met with strong resistance from labour unions and parts of civil 
society.
163  In 2006, the privatization programme suffered a major setback when a Supreme 
Administrative Court decision effectively reversed the corporatization and the planned listing of the 
Electricity Generating Authority of Thailand (EGAT), the country's largest power company 
(Chapter IV).  The original privatization plan, under which 16 SOEs were to  be privatized by end 
2006, was abandoned after the EGAT decision.  Th e listing of all 16 firms would have added an 
estimated B 1.5 trillion to the capitalization of the Stock Exchange of Thailand.   
156. The Government has proposed the preparation of a new law to replace the Corporatization 
Act, which will combine fundamental guidelines and pr inciples.  The first is criteria on the selection 
of SOEs to be corporatized.  The second is an im proved corporatization process, which will be more 
transparent and accountable by prescribing mandatory public hearings at key stages, the establishment 
of relevant independent regulators prior to cor poratization and share listi ng, and abolishing legal 
privileges and powers previously enjoyed by the SO Es.  The third is clear guidelines on the offering 
of shares.  No corporatization or privatization w ill be undertaken until the new legislation is enacted. 
157. Thailand's latest notification to the WTO Work ing Party on State Trading Enterprises covered 
the Public Warehouse Organization (PWO);  the Liquor Distillery Organization (LDO);  and the 
Thailand Tobacco Monopoly (TTM).164  In addition, a number of other publicly owned companies are 
directly or indirectly involved in trade of goods or services (Table III.15).  No statistics on annual 
imports, exports, procurement or domestic sales of these corporations were available from the 
authorities. 
(viii) Regulation of corporate practices 
(a) Competition policy and price controls 
158. Thailand's laws and regulations on competition policy remain unchanged since its previous 
Trade Policy Review in 2003.165  According to the previous Constitution of the Kingdom of Thailand 
B.E. 2540 (1997) (Chapter II), the Government mu st support a market-based economy, and regulate 
and ensure fair competition, consumer protecti on, and anti-monopoly practices through direct and 
indirect means;  the authorities indicate that desp ite the repeal of the Constitution they still support 
these principles.  The Trade Competition Act B.E.  2542 (1999) remains the main law defining 
Thailand's competition policy framework.  The Department of Internal Trade (DIT) of the Ministry of Commerce is responsible for implementing the le gislation and ensuring fair competition in the 
domestic market. 
                                                     
 
163 There remain comprehensive statutory state mon opolies in some key service sectors, such as 
petroleum and electricity. 
164 WTO document G/STR/N/11/THA, 17 August 2006. 
165 APEC (2006b), Chapter 8. Thailand WT/TPR/S/191/Rev.1 
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159. Under the Price of Goods and Services Act (1999) the authorities ensure the fair price of 
goods and services, and adequate supply of go ods to meet domestic demand.  The Central 
Commission on Price of Goods and Services was esta blished to prevent price manipulation or other 
unfair business practices, where these may affect consumers directly.  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 fix the purchase or distribution prices of controlled goods or services, 
and to maintain the prices at a certain level. 
160. Items controlled under the Prices of Goods and Services Act 1999 are contained in the 
Controlled List (Table III.16)166, and the Monitored List167, and are enforced primarily at the 
manufacturer and distributor level.  The Controlled List is revised at least once a year and approved 
by the Cabinet before implementation;  each item can be subjected to any of the eight prescribed legal 
measures (Table III.16).  An approval from the DIT must be obtained to raise prices on most products 
in the Controlled List and the Monitored List.  Th e DIT can request manufacturers to review their 
prices if they are deemed too high or too low after a technical cost analysis for the product.  In 
general, most manufacturers follow the DIT’s reque sts as the DIT may take legal or administrative 
actions against those who do not and if the manufactu rers still do not comply, their products will be 
reclassified into the Controlled Li st to more stringent requirements. 
Table III.16 
Legal measures applied to products in  the Controlled List, as of March 2007 
Measures Products 
Report selling prices;  and mu st obtain approval before 
increasing prices Milk powder and fresh milk;  fertilizer;  pesticide;  milk product including 
condensed milk, low fat milk, coffee creamer;  canned food;  electrical wire 
Report selling prices and inform of price changes 7-15 days in advance  Liquid detergent;  dish detergent;  sanitary napkins;  tyres;  cement;  
detergent;  soap;  shampoo;  vehicles  like passenger cars, motorcycles and 
trucks;  craft paper;  corrugated cardboard 
Report selling price 1-2 days after pr ice change Liquefied petroleum gas 
Report services charge and cost Copyright services provider 
Maximum-price control Sugar 
Report selling prices monthly Plastic in primary form (i .e. plastic resin);  printing and writing paper;  paper 
pulp 
Report cost, inventories, and stock holding Palm oil 
Restrict transportation Palm oil (re port monthly stockpile, i nventories and import plan);  rice (report 
monthly quantity movements above 10 tonnes in the restricted areas) 
Source:  Department of Internal Trade (DIT). 
161. According to the authorities price control mechanisms are based upon the "analysis of 
updated assumptions".  The Central Commission on Pr ices of Goods and Services reviews the list of 
controlled goods or services at least once a year to ensure price conformity with economic conditions, 
having regard to:  the cost of production;  pro duction, import, export, purchasing, and distribution 
expenses;  "appropriate" profits;  and effects on i nvestment geared to expand production capacity at 
subsequent stages. 
                                                      
166 World Bank (2006c). 
167 The 200 products and 20 services under the Monito red List are regulated by the DIT's administrative 
measures and divided into three sub-groups:  the sensitive list (gasoline oil, diesel oil, milk powder, fresh milk, 
wire/cable, and delivery services) for which domestic and international prices are m onitored closely every day; 
the priority watch list (sugar, fertilizer, animal feed, tyres,  cement, galvanized iron, steel rod, section, steel sheet 
(hot/cold/roll and stainless) and repair services) for wh ich domestic prices and the general market situation are 
monitored twice a week;  and the watch list (186 items and 18 services) for which product prices are monitored 
every two weeks.  The entire mon itored list is available from the Department of Internal Trade online 
information.  Viewed at:  http://www.dit.go.th/upl oadnew/2007118E367_200_items.pdf [21 February 2007]. WT/TPR/S/191/Rev.1 Trade Policy Review 
Page 100 
 
 
162. According to a 2006 World Bank study, the two lists cover slightly less than half of 
Thailand's manufacturing sector value-added;  they also account for less than 20% of the CPI basket.
168  These price controls allegedly depress profita bility and private investment while having a 
relatively small impact on inflation.  Furthermore, th e sharp rise in energy prices coupled with firms' 
inability to adjust prices, partly due to price cont rols, also seem to have negatively affected firms' 
production and total factor productivity.  Reporte dly, price controls on some products are not 
transparent because determinations are sometim es based on outdated assumptions, including exchange 
rates, and go for long periods without review, ev en upon repeated petition for review by affected 
parties.169  Since 2003, only sugar has been subject to a retail price ceiling; the authorities indicate that 
this was aimed at maintaining fairness among to the producers of sugarcane, sugar refineries, 
middlemen, and consumers. 
163. In September 2006, due to the political situa tion, the Council for Democratic Reform under 
Constitutional Monarchy issued a notification to proh ibit the hoarding of goods or raising prices of all 
kinds of goods;  this notification was lifted in April 2007. 
164. Under the Trade Competition Act, which ente red into force in April 1999, the Trade 
Competition Commission is responsible for carrying out research and monitoring competitive 
conduct, and implementing competiti on legislation and regulations.  The Commission consists of the 
Minister of Commerce (chairperson), the Permanent-Secretary of Commerce (vice-chairperson), the Permanent-Secretary for Finance, and 8 to 12 "q ualified persons" appointed by the Council of 
Ministers.
170  The Director-General of the DIT 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 pri ces, establishing unfair trading conditions, limiting 
supply, and intervening in other businesses wit hout 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 coll uding in order to create  "monopolistic" power or 
reduce competition;  any act that may restrict a person in Thailand from pur chasing goods or services 
directly from business operators outside Thailand fo r personal consumption;  and any act that has 
negative effects such as impairing or obstr ucting business operations of other businesses. 
165. The Trade Competition Commission has the author ity to issue written orders to business 
operators deemed to be in violation of the provi sions of the Trade Competition Act;  the orders may 
involve suspension, cessation or correction of unfai r business practices.  Failure to abide by the 
provisions of the Trade Competition Act may result in ja il terms of one to three years, and/or fines of 
up to B 6 million.  An Appellate Committee appoi nted by the Council of Ministers in December 2000 
is empowered to consider and decide on appeal s against Trade Competition Commission orders.  
Business operators governed by other laws and re gulations, such as SOEs (under the State-owned 
Enterprise Law) and groups of farmers (under th e Agricultural Cooperatives Law) are exempted from 
the Act.
171 
                                                      
168 World Bank (2006c). 
169 USTR (2006). 
170 No less than half of the qualified pe rsons must be from the private sector. 
171 More specifically, Section 4 of the  Trade Competition Act, 1999 exempts:  the Central 
administration, provincial administration or local administration;  state enterprises under the law on budgetary procedures;  farmers' groups, cooperative societies reco gnized by law and having as their object the operation of 
business for the benefit of the occupation of farmers;  and businesses prescribed by the Ministerial Regulation, 
which may provide for exemption from the application of this Act in whole or only in respect of any particular provision thereof. Thailand WT/TPR/S/191/Rev.1 
 Page 101 
 
 
166. Since its inauguration, the Office of Trade Competition Commission has made decisions in 
three cases;  one involved alleged excessive pric ing by a cable television monopoly and one alleged 
tie-in sales of beer with whisky;  no penalties were imposed in either case.  The third case, which is still in process, involves alleged exclusive "dealing" in motorcycle business. 
167. To make its law enforcement more transp arent and effective, the Trade Competition 
Commission has set the threshold for a business ope rator with market domination, indicated by 
market share and sales volume.  The threshold w as approved by the Council of Ministers and entered 
into force in January 2007.
172  The Commission issued the Guideline for Wholesales and Retail 
Business, effective October 2006, to deal with unfair trade practices in wholesale and retail 
businesses.  The guideline attempts to set principles of and rules for fair trade practices in wholesale 
and retail businesses, including issues such as coerci on, non-discrimination, trade barriers, clearance 
rules, advance agreement, and fair competition.  In  addition, to strengthen implementation of the law, 
the Commission has improved the procedure for complain ts and verifying information.  According to 
the authorities, the weak enforcem ent of the competition legislation can also be attributed to 
institutional, procedural, legal or resource limitati ons in the Office of Trade Competition, including 
lack of funds for staff-training, pub lic relations, and investigative activities.173  
(b) Corporate governance:  accounting and disclosure practices   
168. Thailand's successful economic restructuring a nd long-term development depends on creating 
an efficient capital market capable of mobilizing savings and channelling them into the most productive uses.  Good corporate governance is essen tial for the establishment of such a market;  
studies show a positive correlation between the qualit y of corporate governance and share prices in 
the local market, which are, in turn, a key determin ant of companies' cost of capital.  Inadequate 
standards of corporate governance could jeopardize other reforms, notably corporate and financial 
restructuring as well as privatization.  
169. 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 strate gy for economic recovery has included various 
measures to remedy these shortcomings.  
170. The Accounting Act, which entered into for ce in August 2000, required all companies to 
register the names of their accounting officers.  The Act also gave legal force to the accounting 
standards pronounced by the Federation of Accoun ting Professions (FAP) (Institute of Certified 
Accountants and Auditors of  Thailand (ICAAT) until 2004).
174  There are 71,328 qualified company 
accountants. 
171. The 2002 Securities and Exchange Commission (SEC) Action Plan on Good Corporate 
Governance includes:  amending relevant laws, issu ing a set of best practices, introducing incentive 
schemes, and an educational programme.  The Plan  is aimed at promoting shareholders' rights, 
                                                      
172 No details on these thresholds were available fr om the authorities.  In February 2005, the Trade 
Competition Commission seems to have settled on the following definition of dominant player:  a firm with 
more than a 50% share of its market (subject to a minimu m turnover of B 1 billion);  any three companies with a 
combined market share exceeding 75% and combined sales of more than B 1 billion also are classified as dominant if each has a market shar e of at least 10% (EIU, 2006b). 
173 WTO document WT/WGTCP/W/188, 29 May 2002. 
174 Online information on accounting standards viewed at:  http://www.iasplus.com/country/ 
thailand.htm#0511 [1 March 2007]. WT/TPR/S/191/Rev.1 Trade Policy Review 
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transparency and accounting standards, good cor porate governance, directors' accountability, a good 
corporate governance rating programme, and e ducational and public relations programmes.175  These 
were last updated in March 2006;  more principles have been added to make it comprehensive and 
comparable to the OECD Principles of Co rporate Governance as well as to include the 
recommendations in the World Bank, Report on the Observance of Standards and Codes related to 
Thailand corporate governance (CG-ROSC).176  The 2006 principles and recommended best practices 
cover the rights of shareholders, equitable treatment  of shareholders, role of stakeholders, disclosure 
and transparency, and responsibilities of the Board.  Other recent SEC activities include prevention of 
money siphoning by listed companies, monitoring of auditors' performance, su rveillance of financial 
statements of companies under rehabilitation,  appointment of an "auditor watchdog", ongoing 
issuance of accounting guidelines, launching co rporate governance report on listed companies, 
enhancing roles of independent directors, and striving for law reform. 
172. The SEC maintains various 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 documents 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.  In this context, at the time of th e previous TPR the SEC was to announce names of listed 
companies that had accomplished a high level of in formation disclosure, a nd information concerning 
investigation of complaints, and inappropriate act s of companies under SEC supervision.  Between 
2004 and 2006 the SEC received 1,964 complaints, 85% (1,668) of which were processed.  Listed 
companies that accomplish high level of information disclosure are awarded with the Best Corporate 
Governance Report Awards arranged by the SET;  th ere were 11 such companies in 2004, 11 in 2005, 
and 8 in 2006. 
173. The number of listed companies in the SET and Market for Alternative Investment (MAI) 
rose from 421 in 2003 to 522 in May 2007;  during the same period, 25 companies were de-listed, mainly as a result of merger or non-compliance w ith SET rules and regulation.  None of these 
companies was de-listed as a result of failure to  observe standards or codes of good corporate 
governance.  The authorities are of the view that, in the interest of retail investors, mandatory delisting 
should be a last resort;  the SEC and the SET focu s 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 governance practices;  no such list was available from the authorities.  
The SEC sanctions target a wide range of actio ns, including insider trading and negligence by 
company directors in their fiduciary duties, which ca n be considered related to corporate governance.  
In 2005, the SEC imposed various measures such as notices for rectification, warning, probation, and 
suspension or revocation of approva ls.  In 2005, the SEC presented 48  cases involving 62 offenders to 
the its Settlement Committee;  total fines of B 15. 3 million were imposed and this amount more than 
doubled (i.e. B 32.7 million) in the period from January to September 2006.
177  According to the 2005 
World Bank CG-ROSC, Thailand had taken important  steps to address weaknesses in its corporate 
governance framework although challenges, esp ecially those concerning the protection of 
shareholders' rights, remained;  225 out of 433 co mpanies participating in the September 2005 Annual 
General Assembly meeting received "Good" rating.178  
                                                      
175 SEC online information.  Viewed at:  http ://www.sec.or.th/secen1/ne ws/secnews/10-2002.doc. 
176 SET (2006). 
177 Securities and Exchange Commission (2005). 
178 SEC online information.  Viewed at:  http ://www.sec.or.th/en/cg/agm/agmupdate_e.shtml 
[1 March 2007]. Thailand WT/TPR/S/191/Rev.1 
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174. Reforms in the corporate governance legal frame work have been slow and need to be 
expedited.179  There is a lack of a range of sanctions – criminal, civil and administrative – to facilitate 
effective enforcement.  The National Corporate Governance Committee has assigned the Ministry of 
Justice to set up a steering group to draft a bill enabling the imposition of civil sanctions in securities 
offences.  International Financial Reporting Standa rds (IFRS) have yet to be adopted;  the Federation 
of Accounting Professions has set the timeframe for fu ll adoption of IFRS by the end of 2007.  Private 
sector awareness of the potential benefits of improved corporate governance may need to be enhanced.  Further steps need to be taken to im prove protection of shareholder rights, including the 
introduction of cost-effective legal channels for shareholders seeking redress.  The focus should 
remain on implementation and on completing the legislative and regulatory agenda, improving 
enforcement (prosecution process), enhancing financ ial reporting and disclosure consistent with 
international standards, and promoting business ethics and best practices. 
(c) Bankruptcy procedures 
175. Major amendments to the Bankr uptcy Act in 1998, 1999, and 2004
180, on bankruptcy and 
foreclosure procedures, allow creditors to seek pa yment 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. 
                                                      
179 World Bank (2005a). 
180 For further information on the Bankruptcy Act (No. 7) 2004, which entered into effect in July 2004, 
see:  http://www.insolvencyreg.org/s ub_member_profiles/thailand/index.htm.