Embracing Diversity in the ASEAN Economic Community
27 August 2015, Raffles City Convention Centre, Singapore

To celebrate its first anniversary, ASEAN Plus Group organised a conference on “Embracing Diversity in the ASEAN Economic Community”. The aim of the conference was to provide industry players with first hand insight into the potential growth opportunities and challenges that the ASEAN Economic Community (AEC) 2015 has to offer. This conference was attended by over 100 representatives from various industries in Singapore; predominantly from Singapore SMEs.

 

On this occasion, our Managing Director, Mr. Chavalit Uttasart, was on one of the panels for the discussion on the subject of ‘Preparing for the Integration: Where are we Right now?’ There was also Mr. Nizam Ismail from RHTLaw Taylor Wessing (Singapore) and Mr. Benjamin Li from Lee & Li (Vietnam) on the same panel.

 

Mr. Chavalit Uttasart updated the audience on several significant legislations in Thailand that have been amended in order to facilitate the implementation of the AEC, as follows:

 

Free Flow of Goods (AEC Blueprint Article 1): this emphasises the free flow of goods focused on to eliminating Non-Tariff barriers. Some of the laws that are currently in place are listed below:

 

  1. Export and Import of Goods Act AD 1989 (BE 2522): Thailand does not have to amend the law because the Commerce Minister, with the approval of the Cabinet, can issue the Notification of the Ministry of Commerce:
    1. to waive the import permit for certain products, provided that the Certificate of Origin shows that they are produced in ASEAN countries; and
    2. to allow the exporters to issue the Certificate of Origin by themselves (self-certification), provided that they have to register with the Foreign Trade Department.
  2. National Single Window (NSW): Thailand is working on this NSW and should be able to have it in place before the end of this year; and it will comply with the ASEAN Single Window (ASW) AD 2008 (BE 2558) (Export & Import of Goods Act AD 1989 + Electronic Transaction Act AD 2001 (BE 2544/2551 respectively).
  3. Anti-Dumping & Subsidies:
    1. ASEAN countries must abide by Article 87 of the ATIGA to adopt the anti-dumping measures under the GATT & WTO; and
    2. Thailand has the Anti-Dumping and Anti-Subsidies Act AD 1999 (BE 2564), which allows the Foreign Trade Department to investigate into market dumping and damage caused.
  4. Standard Export Products: Thailand has the Standard Export Products Act AD 1960 (BE 2503).

 

Free Flow of Services (AEC Blueprint Article 2)

 

There will be fundamentally no restrictions to ASEAN service suppliers in providing services and in establishing companies across national borders within the region, subject to domestic regulations.

 

Free Flow of Investment (AEC Blueprint Article 3)

 

  • To attract foreign direct investment (FDI); and
  • To sustain new investment and reinvestment that will promote and ensure dynamic development of ASEAN economies.

 

In the Framework Agreement on the ASEAN Investment Area (AIA), AD 1998 (BE 2563), certain industries shall be open and national treatment shall be granted to investors with some exceptions.

 

Foreign Business Act 1999 (2542) FBA

 

By relying on the ASEAN Framework Agreement on Services (AFAS), each member country shall liberalise most sectors and modes of supply but may issue regulations to control the quality of the services.

 

Based on AFAS, Thailand has amended the Annex attached to the FBA in order to increase the percentage of foreign shareholding in companies carrying on different sectors of business.

 

Free Flow of Skilled Labour (AEC Blueprint Article 5)

 

The Foreign Work Permit Act AD 2008 (BE 2551) imposes certain restrictions.

 

The Investment Promotion Act AD 1987 (BE 2520) allows skilled labour and experts to work in BOI promoted companies.

 

Intellectual Property Right (IPR) (AEC Blueprint Article B3)

 

  • The Copyright Act AD 1994 (BE 2537), which was enacted over 20 years ago

 

The laws in each ASEAN country/member state are different:

 

To illustrate this point, Thailand copyright law imposes criminal penalties on copyright piracy on a commercial scale; whereas in other countries copyright law imposes criminal penalties on copyright piracy if the infringement is significant or the infringer commits the act in order to obtain a commercial advantage.

 

E-Commerce (AEC Blueprint Article B6)

 

Copyright Act AD 1994 (BE 2537) has no provision on the liability of an ISP.

 

Copyright Act AD 2015 (BE 2558) (No. 2) and (No. 3), which came into force on 4 August 2015, introduces:

 

  1. Additional exceptions to copyright infringement – First Sale Doctrine;
  2. Liabilities of ISP;
  3. Moral right of the performer’s right;
  4. Right Management Information (RMI);
  5. Technological Protection Measures (TPM);
  6. Punitive Damages – in case where the copyright or the performer’s right is infringed intentionally, or with the intention to cause the work to be accessed by the public; courts can order punitive damages but not more than twice the amount of damages;
  7. Camcorder Provision – fair use or private use is no defence; and
  8. Copying or adapting for the benefit of the handicapped, such as the blind – adapting from normal written text into Braille.

 

Trademarks Act AD 1991 (2534) (Blueprint Article B3 – IPR)

 

Thailand has yet to amend the law to comply with the Madrid Protocol.

 

Effective 2 May 2015.

 

International headquarters (IHQ).

 

A regional operating headquarters (ROH) can be converted into an IHQ.

 

Conditions:

A company registered in Thailand

Baht 10 million capital (approximately USD 450,000) as operating expenses in one accounting year

Application filed with and approved by the Director General of RD

Any of the three main services must be provided to associated enterprises established under foreign laws:

 

  1. Managerial Services;
  2. Technical or general supporting services; or
  3. Financial Management.

 

International Trade Company/Centres (ITC)

 

Key factors of businesses qualifying for an ITC

 

  1. Business of buying and selling goods, raw materials and parts to a foreign company; or
  2. Provision of service related to an international trade service to foreign entities, which is received in or from a foreign country, e.g. procurement, warehousing, goods insurance or technical consulting, as well as services and product related training.

 

Key conditions to apply for an ITC under Thai Law

 

  1. A company must be incorporated under Thai law;
  2. The paid-up capital on the last day of an accounting period must be at least Baht 10 million (approximately USD 300,000);
  3. ITC’s operating expenses paid to recipients in Thailand must not be less than Baht 15 million Baht (approximately USD 460,000); and
  4. An ITC application, together with certain supporting documents, must be submitted and approved by the Director General of the Revenue Department.

 

 

This panel discussion gave the audience a good review of the readiness of Singapore, Thailand and Vietnam, as well as recent legal and regulatory developments in the region. There was a very good response from the audience and we are very proud that our Managing Partner was part of this event.

 

This get together with other APG members is definitely a positive move towards enhancing our presence, both in Thailand and the ASEAN region. We very much look forward to welcoming the AEC at the end of this year.

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