A UNITED STATES DEPARTMENT OF COMMERCE PUBLICATION

August 1973

901 5 103

1

OBR 73-37

Foreign Trade Regulations of Thailand

Supersedes OBR 69-13

Prepared by Joseph E. Payne, Jr. Far East Division

Office of International Marketing Bureau of International Commerce

Trade Policy

With balance of payment surpluses for most of the past 10 years, the Government's role in foreign trade regulation is a relatively minor one. There are no consular and only a minimum of commercial documents required for imports. Marking and labeling requirements are minimal. Import and export licenses are not required for the majority of goods and since 1955 exchange controls have been greatly relaxed. The major control feature of the exchange system is that all foreign exchange transactions must take place through an authorized agent of the Bank of Thailand. However, the objective of the system is overall exchange surveillance rather than restriction of imports.

Tariff rates and other internal taxes that apply to imports are designed primarily to generate Government revenue rather than to protect local industry. But in recent years import duties have been modified to promote

local industry, especially those industries producing for export.

Import Tariff System

Tariff Structure

Since 1960, the Thai customs tariff has been based on the Brussels nomenclature. Most duties are ad valorem and specific. When the tariff lists both specific and ad valorem rates for an item, the rate yielding the higher revenue applies. The ad valorem duties range from zero to a high of 80% with more than 80% of the tariff items having duties of 30% or less. Thailand does not grant preferential duties. It is not a contracting party to the General Agreement on Tariffs and Trade (GATT).

Information regarding Thailand's custom duties applicable to specific products may be obtained free of charge from the Far East Divison, Office of International Marketing, U.S. Department of Commerce, Washington, D. C. 20230; or from any Department of Commerce district office. Inquiries should contain a complete product description, including BTN, SITC, or U.S. Schedule B Export Commodity numbers, if known.

Basis of Duty Assessment

Ad valorem duties are assessed on the "wholesale cash price (exclusive of import duty) for which goods of like kind and quality are capable of being sold without loss at the time and place of importation, without deduction or abatement." Specific duties are calculated on the unit, volume, or weight. Duties based on weight refer to the net weight ex

Entry, Transit, and Reexport

Entry. Most goods exported from the United States to Thailand, whether by sea or air, enter at Bangkok. Provincial ports such as Phuket and Songkhla play small roles.

All merchandise entering Thailand except for transshipment or transit is subject to customs examination. Customs entry forms must be prepared and submitted, together with original or duplicate shipping documents, to the Chief of the Import and Export Division, Department of Customs, Bangkok, or to the designated official at any other entry point. Entry forms are required in quintuplicate, plus a single copy of the Customs delivery order form. A certificate of payment from an

authorized agent of the Bank of Thailand is required in order to clear shipments exceeding 10,000 baht in value through customs.

In addition, advance payments in excess of US$1,400, opening revolving letters of credit or letters of credit with an expiration date exceeding 9 months, all require the specific approval of the Bank of Thailand.

Customs officials accord priority treatment to shipments covered by forms showing complete information.

Normally all entry papers must be completed before goods are examined by customs. However, if the entry papers cannot be completed because of lack of documents, the goods may, at the discretion of the customs officials, be entered in one of two ways, depending on the type of duty applicable. If the goods are subject to an ad valorem duty, they may be entered provisionally provided the importer agrees to an official appraisal and promises to submit the commercial invoice within 2 months. If the goods are subject to a specific duty, they may be entered on a bill of sight. After approval of the bill, the shipment is examined and cleared in 3 days. In both cases, release of goods may be obtained by posting a bond.

If there is a question about the duty assessed, the importer should make provisional payment using a special customs clearance form. Decisions of the individual customs officers on valuation and penalties may be appealed to the Director General of the Customs Department. The Director General's decisions. on valuation are final; on penalties, his decisions may be appealed to the courts.

Abandoned goods.-Goods held in customs custody become subject to Government disposal if not claimed within 4 months of entry or if in arrears in rent or warehouse charges. The agent of the importing vessel is given a 14-day option of either clearing the goods through customs or reexporting them. If no action is taken, the customs authorities or a designated agency or firm may destroy the goods or sell them at public auction. While the agent is liable for storage and other charges pertaining to abandoned goods, the usual practice is to apply the auction proceeds first on rent and warehouse charges and then on customs duties. Any remaining surplus is paid to the owner of the goods when he makes application.

Transshipments are cleared through customs upon application submitted on special forms by the intermediate consignee. Physical examination of the goods is usually waived. In Bangkok, it is always waived for goods in direct transit to and from Laos on a through bill of lading if the goods are lightered to a special warehouse.

Reexport.-Thai customs regulations provide for the drawback of seven-eighths of the import duty paid when goods, identified to the satisfaction of customs, are reexported within 2 years from the date of importation. No drawback, however, is allowed on the following: (1) goods which have changed owners while in Thailand, (2) goods which have been used to make a profit except articles brought in by visitors for personal use, and samples, (3) goods involving drawbacks of less than 20 baht, and (4) goods reexported apart from other goods of the same import shipment.

Prior to September 3, 1971, imported raw materials used in manufacturing for export were eligible for the seven-eighths import duty drawback. But as of that date, raw materials destined for export products were granted a reduction in duty to 10% of the former import duty. Thai manufacturers wishing to take advantage of the duty reduction must notify the Customs Department prior to importing the raw materials.

Samples and Advertising Matter

Samples of commercial value are dutiable under the applicable tariff category while those of no commercial value are admitted duty free. Commercial travelers bringing in dutiable samples may either post bond or pay the duty. If the samples are then reexported within 6 months, the bond is cancelled or the deposit refunded. In exceptional cases, the 6-month period may be extended by another 6 months upon written application to the Director General of Customs. Unless specially authorized, samples brought in through the mail must also be reexported within 6 months in order to be eligible for a duty refund.

Advertising matter, whether for sale or free. distribution, is subject to the applicable duty; that for printed advertising matter is 10% ad valorem or 2.75 baht per kilogram, whichever is higher.

Advance Rulings on Customs Classification

Importers may request an advance ruling

from the Tariff Classification Section of the Customs Department. The request may be accompanied by samples, illustrations, a description of the goods, and a narrative justifying a certain classification. If the Classification Section seeks advice from outside technical experts, the cost of obtaining this advice is charged to the applicant.

Fines and Penalties

The Legal Division of the Customs Department is responsible for levying and enforcing any fines or penalties with regard to cases of fraud. Very seldom do these cases involve fraudulent intent but instead result from carelessness, confusion or general misunderstanding. Rewards are given to employees who detect cases of fraud which result in investigations. Often, however, detection and mistakes occur in the normal process of checking or in the course of inquiries regarding other matters. These cases can always be established and resolved without difficulty. The Director General may waive proceedings on payment by the offender of a fine as set by the Director General. Since these powers are widely used, cases are concluded more rapidly than if legal proceedings were utilized.

Thailand adopted antidumping legislation in 1964. The Antidumping Act, B.E. 2507, applies to the importation and sale of merchandise at less than its normal price which might cause damage to domestic industry.

Internal Taxes

The business tax is the most important internal tax as far as exporters to Thailand are concerned. In addition, there are excise taxes levied on certain articles such as tobacco, alcoholic beverages and playing cards. All business transactions, including imports which involve the issuance of receipts and similar instruments, are subject to a small stamp tax. A municipal surtax of 10% is levied on the amount payable under the business tax.

As a tax on sales, the business tax is levied on almost all imports. With certain exceptions the tax rate is the the same for both imported and locally produced goods of the same type, varying from 1.5% on educational matter to 25% on alcoholic beverages. For cars and buses the rate is 20%; electric lamps and shades and motorcycles, 10%; precious stones and metals, 3%; refrigerators, air conditioners, washers and dryers, vacuum cleaners, floor polishers, scrubbing machines, electrical

and gas appliances for cooking, clocks, television sets, phonographs, radio receivers, recorders and recording tape, records, musical instruments, and cameras and camera equipment including film, 12%. Most other imported consumer goods are taxable at 5% and raw materials at 1.5%.

The base of the business tax is gross receipts, although the definition of gross receipts for imported and domestic articles differs. For domestic products, gross receipts is total sales for a given period. For imported products, gross receipts, in most cases, is the c.i.f. value of the article plus import duty, unloading charges, and a standard rate of profit (defined by the Revenue Department). In the case of imported cars, motorcycles, bicycles, mineral oil, certain petroleum products, brake fluid, gunny sacks, spirits, beer, and tobacco products, gross receipts is calculated on local market prices.

While most imported products are subject to the business tax, the following are exempt: donations to public charities; goods exempt from customs duties; goods imported by registered private and Government schools; goods imported by nonprofit-seeking Government and Municipal agencies; and machinery, parts, accessories, raw materials, instruments and tools, prefabricated structures and accompanying construction equipment imported under the Promotion of Industrial Investment Act of 1962. Certain exports are also exempt from the business tax.

Under the business tax, importers must be registered with the Revenue Department and are required to file a return with the Department after each shipment is received. Payment of the business tax is due by the fifteenth of the month following that in which the goods were cleared through customs. By permission of the Revenue Department, an extension may be secured if the importer agrees to pay an additional one half of one percent per month of the amount due. After the extension expires, the surcharge increases to one percent per month or fraction thereof.

Shipping Documents

The documents normally required for shipments are a commercial invoice, bill of lading, sanitary certificate if appropriate, and any other documents prescribed in the instrument of payment. Packing lists are recommended as a service to the customer.

The commercial invoice must be in triplicate. Beginning in early 1971, the Thai Customs Department stipulated the information required on the commercial invoices in order to expedite customs clearance of imports. Most of this information is routinely provided by U.S. exporters. The commercial invoice must include the foolowing information: Country of origin, country from which goods purchased and the country of destination; date of purchase; information showing that goods have been sold, are on consignment or have been shipped to a branch office; markings, numbers, amounts and description of packages as well as gross weight thereof; detailed listing of goods including net weight and the ratio of different goods if the goods are mixed; the unit selling price of each good in the currency of the exporting country; any export subsidies; discounts; itemized expenses that make up the c.i.f. value of the goods; name and address of the consignor and the consignee; certification that the above information is true and correct.

To facilitate customs clearance, bills of lading should show the importer either as the consignee or the person to be notified. This does not prevent bills to be drawn to the order of the shipper provided the importer is shown as the person to be notified.

A sanitary certificate is required for imported seeds, fruits, and live animals.

See section headed "United States Controls" for U.S. documentation requirements.

Marking and Labeling Requirements

Whenever weights and measures shown on containers or merchandise offered for sale are in foreign systems, the equivalent in the metric system carried out to one decimal place must also be given. The Thai language must also be used.

Certain products must meet special labeling requirements. For example, canned milk must be labeled to show the kind, trade mark of the milk, name of the manufacturer, and location of the factory. In the case of skimmed milk, the label must state in Thai script of not less than 7 millimeters: "Skimmed milk. Not to be used for nursing babies."

Most food products must now be labeled in the Thai language to show the name of the food and its registration number, the name and address of the manufacturer, date of