Volume 8 Issue 1
January - March 2006         
SGA Bulletin
Legal Assistance for Burmese Laborers
New Employment Initiative to Increase Worker's Deposit to Bt50,000
New Citizenship Plan Approved by Cabinet
14,000 Granted Thai Nationality
The SGA Bulletin is intended for informational purposes only. It does not constitute legal advice. Legal, business and other information is subject to change and no warranty is either expressed or implied.

For more information please contact:
Siam Global Associates Co., Ltd.
Suite 606 Nai Lert Building
87 Sukhumvit, Klongtoey
Vadhana, Bangkok 10110 Thailand
Tel: (66) (02) 650 3510 (-12)
Fax: (66) (02) 655 0655
email: sgalegal@cscoms.com
Thailand Law Firm and Attorneys

Manager: Joe Leeds
Layout and Design: Yupawadee Chaiya
Thai Legal Service: Chaninat Leeds

Copyright SGA 2000-2006

Amendments to the Credit Information Business Act

The credit information business act which was first enacted in 2002 has recently been amended in March 2006. Under this amended act, a Credit Information Protection Committee will be set up. Members of the credit information company will now have to notify their customers within a 30-day period if information pertaining to the customers is sent to the credit information company. Failure to do so will incur a fine not exceeding Bt500,000, in addition to a daily fine not exceeding Bt10,000 throughout the period of violation.

A written consent must be obtained from any information owner if such information is disclosed by the credit information company for purpose of credit analysis and issuance of credit card. The penalty for not doing so is imprisonment not exceeding one year, or fine not exceeding Bt100,000 or both.

TFA Calls for Establishment of Legal Framework

The Thai Factor Association (TFA) has urged the Finance Ministry to set up a legal framework to guide and set service standards for the factoring business in Thailand. Currently, factoring is governed by the commercial and civil code. Although the Commerce Ministry supervises the factoring business as a general trading service, the Revenue Department collects a 3.3% specific business tax from the business as it considers factoring a financial service.

At present, each company offering factoring business manages its own risks and sets its own interest rates. The TFA spokesperson believes that the new law should set interest-rate limits in ownership rights transfer concerning assets and reclassify the factoring business as a financial service. The new law should also encourage clear standards in terms of the capital and reserves required for factoring providers to account for all risks and losses, the spokesperson added.

New Internet Payment System Approved by Central Bank

The Bank of Thailand (BOT) has given its approval in December 2005 for the new national Interbank Transaction-Management Exchange (ITMX) established by the Thai Bankers’ Association. A BOT senior advisor said that the ITMX will provide businesses, individuals as well as banks with the use of electronic payment services on the Internet.

The national ITMX would enable electronic payment transactions and allow businesses to be conducted while following the legal framework and policies of the central bank. In addition, it would act as a switching centre for payment transactions for B2B and B2C businesses. The BOT said that the ITMX should be able to provide electronic payment services to businesses, banks, the financial sector and customers in 2007.

SGA Bulletin
Page 2

Five - Year Disappearance Period for Tsunami Victims

The Government Gazette has announced in March 2006 that for any person who has disappeared during the Tsunami disaster in December 2004 and whose existence is in doubt, any interested party or public solicitor may request for a court order to declare this person as having disappeared. However, this is applicable only if the person in question has disappeared for five years.

US-Thailand 6th Round FTA Talks

A 75-member delegation from the US met their Thai counterparts in Chiang Mai in January for the sixth round of FTA talks, amidst massive protests from the affected parties. A spokesperson from the Thai Foreign Ministry said that both countries are making progress in the talks, such as agreeing on the approach to determine the location of origin for export items including ceramics, glassware and jewelry.

The US also agreed to remove the tariffs for 74 per cent of all Thai imports totaling USD1.28 billion (bt51 billion) once the FTA has been implemented, and this will increase to 85 per cent over the next five years. Items such as canned tuna, rice, sugar, processed fruit, shoes and auto parts will be part of the 97 per cent of total Thai imports with tariffs removed over the next 10 years, totaling USD1.6 billion.

Kwao Krua Patent Delay Hinders Potential

An associate professor from the Department of Biology at the Chulalongkorn University has commented that the time involved in registering a patent in Thailand is having a damaging effect on local innovators. Mr Wichai Cherdshewasart, who has been involved in the scientific development of Kwao Krua, has submitted three patent applications relating to the development of Kwao Krua to the Intellectual Property Department since 1998. He has yet to receive any decision from the Department.

Kwao Krua is a herb well used by traditional Thai medicinal practitioners for its various properties, including breast-firming and treatment of erectile dysfunction. In the recent years, some Japanese companies have already patented Kwao Krua products in Japan and two US companies are also waiting for patent registrations to use Kwao Krua in their country. A source from the Intellectual Property Department has disclosed that it takes a minimum of three years for a patent to be processed on average.

Thailand and Burma signed Regional Treaty on Crime

Thailand and Burma joined eight other Asean countries on 17 January 2006 in a regional treaty to combat transnational crime including terrorism. This treaty provides members of the Association of Southeast Asian Nations (ASEAN) with the right to request and provide assistance in evidence collection for criminal investigations and proceedings. The idea of a regional treaty was first mooted by Malaysia, at a time where transnational crimes such as drug trafficking and migrant smuggling are increasingly prevalent in the Asean region.

Electronic and Electrical Industry to get
BOI Promotional Privileges

The electronic and electrical industry received a boost from the Board of Investment (BOI) on 8 December 2005 when the agency announced that it would increase promotional privileges for investment projects in the industry.

Investors in hard disk drives and parts, integrated circuits, and other electronic and electrical products in investment Zone 1 would receive a corporate income tax holiday of up to five years, instead of three years previously. Zone 2 projects for investments outside industrial estates, will receive a six-year tax waiver, compared with three years previously.

The BOI added that investors involved in the agency’s Skill, Technology and Innovation (STI) program would be given an additional tax waiver of between one and three years, depending on their total investment. Other privileges offered by BOI include exemptions on machinery import taxes and qualification for new promotions for expansion projects worth at least 15 billion baht for existing projects.

New Tariff Structure for Steel and Petrochemical Imports

A spokesperson from the Fiscal Policy Office has disclosed that import tariffs on steel and petrochemicals will be incorporated into a new simplified tariff structure for industrial goods by next year. Currently, tariffs on raw materials and finished products for both industries averaged around 6-7 per cent. Authorities said that tariff protection is affecting downstream industries dependent on steel and petrochemical products adversely.

Talks between the Finance Ministry and producers in both industries will be scheduled to discuss the new tariff rates and the need for tariff reforms to stimulate the country’s competitiveness in the long run. The Ministry would also implement tax cuts aimed at reducing average tariffs by up to 2% starting from this year. A new tax-structure framework for the next 10 years is also being drafted by the Ministry.

Legal Amendments Give Wives Right to
Demand Compensation

Wives of philandering husbands can now demand civil punitive damage payment from other women involved in extra-marital affairs with their husbands - a result of a series of landmark legal amendments approved by a government committee chaired by the Deputy Prime Minister on 11 January 2006. The new amendments would also widen the provision of the crime of rape to include sexual violations by men against men, women against women and women against each other.

Currently, the civil code allows only the husband to demand compensation from the male party who has an extra-marital affair with his wife, in addition to filing for divorce. Thai wives have no right to demand such compensation up till now.

SGA Bulletin
Page 3

Plea-Bargain Allowed in Draft Amendment of
Emergency Act

A draft amendment to the emergency act which includes plea-bargaining has been completed, said the Deputy Prime Minister in January 2006. The amendment would provide for reduced penalties for southern rebels who have confessed and thereby contributing to the peace-building process of the South.

The emergency law has been in force in the violence-stricken southern region for the last six months and the National Security Council is seeking cabinet approval to extend the enforcement of the law by another three months.

Four Royal Decrees for Internet Trading

Four Royal Decrees will be released by the National Electronics and Computer Technology Centre (Nectec) this year in its bid to encourage electronic transactions, internet security and electronic commerce in Thailand.

The first decree, which has been sent to the Cabinet for approval, covers electronic transactions in the private sector. The second decree, which will be ready by the third quarter of the year, involves electronic payment service providers.

The Certification Authority Decree is the third decree which will give businesses the authority to certify electronic transactions. The last decree is the Information Security Decree which aims to create trust and security in internet transactions.

Government Tax Incentives for Used-Home Buyers

The government’s move to grant a series of property tax incentives is set to boost the demand for used houses by 20 per cent this year. These incentives include the exemption of the three-per-cent special business tax on home sales and the reduction in mortgage fees for buyers, from 1% to 0.01%. The transfer fees paid by buyers or sellers are also cut from 2% to 0.01%.

In order to qualify for the tax and fee reductions, a homeowner must own the property for at least one year before selling the property. Home-sellers can also deduct up to bt50,000 of the capital gain from their taxable income if they buy another home within a one-year period. The used-home market is expected to be worth a total of bt85 billion this year.

Legal Assistance for Burmese Laborers

A legal counseling clinic has been set up in Mae Sot in December 2005 to provide aid for exploited Burmese laborers working in the region. There are currently more than 60,000 Burmese workers in Mae Sot, with the majority of them working in labor-intensive industries. Many of these foreign laborers suffered from severe exploitation including being underpaid, uncompensated for overtime work and working in harsh, sub-standard conditions.

New Employment Initiative to Increase
Worker’s Deposit to Bt50,000

The Labor Minister said on 5 December 2005 that all employers will be required to pay a Bt50,000 deposit for each unregistered immigrant laborer they employ under a new employment plan proposed by the Employment Department. The plan aims to increase employment standards and restrict the number of non-Thai workers in professions suited for Thai people. The new initiative, however, did not sit well with business owners who felt that such measures would lead to corruption and increased illegal employment of foreign workers.

New Citizenship Plan Approved by Cabinet

Around two million stateless people living in Thailand could become naturalized Thais under a new citizenship plan approved by the Cabinet on 10 January 2006. This plan aims to curb problems relating to the lack of legal rights and status of stateless people. People who fall under the plan include children studying in schools located in Thailand and immigrants who have been residing in Thailand for a period of 10 consecutive years or more. However, citizens of this plan would not be entitled to the government’s Bt30-per-visit medical scheme.

14,000 granted Thai Nationality

The biggest approval in the history of citizenship requests has taken place on 2 January 2006, where close to 14,000 migrants and their children became Thai nationals, said the Interior Minister. Of the 13,827 approved, 4,272 were migrants to Thailand and the remaining applicants were children who had been born in the Kingdom. The criteria to qualify for citizenship include having to display that you do not pose any risks to national security, you could benefit the country and that you have paid taxes.

(Disclaimer: The information provided on this site is for informational purposes only. No warranty is expressed or implied. Before taking any legal action, persons are advised to seek the advice of an attorney qualified in the area of law concerned.)
Company and Corporate Law Land and Property Law
Trademark, Copyright, Patent Board of Investment Promotion
Contracts Alien Business, Factory, School Licenses
US Immigration Law    

Suite 606, Nai Lert Building, 87 Sukhumvit (across from Landmark Hotel)
Klongtoey, Vadhana, Bangkok 10110 Tel: (66) (02) 650 3510 (-12)
Fax: (66) (02) 655 0655 email: sgalegal@cscoms.com