Thailand's long-standing customs law, which has been in force since 1926, has been replaced with the Customs Act B.E. 2560 (2017) effective Monday 13 November 2017. The new Act is intended to better facilitate international trade and to modernize (and simplify) Thai customs procedures.

According to Mr. Kulit Sombatsiri, the Director-General of Thai Customs Department: "The Customs Department will change its role from being a regulator to being a trade facilitator."

Key elements of the new Act include:

  • new prescription period for customs audits
  • changes to the appeals process
  • new penalty structure for violations of the Act
  • new limitation on surcharge amount
  • power to seize goods of other shipments
  • power to seize other assets
  • power to confiscate goods
  • update on return of duty

More information in relation to these changes is provided below:

(1) New prescription period for Customs audits

The new Customs Act specifies a maximum period of three (3) years for performing a customs audit after the importation date. This period may be extended by a further two (2) years with the permission of the Director-General; and by another five (5) years if there are grounds to be believe that fraud has been committed.

(2) Changes to the appeals process

In order to accelerate the appeals process, the new Customs Act permits the establishment of more than one appeals committee.

Under new Act, the appeals committee must grant its decision within 180 days of receiving a completed application (this period may be extended for a term not exceeding 90 days). If the appeals decision is not granted within the prescribed period, then the operator may take the case to Court.

The appealer is now also able to submit a request to prevent execution of payment during the appeals process. In order to do so, however, the appealer is required to deposit cash or a bank guarantee (or the equivalent amount in property) equal to the amount of the claim.

(3) New penalty structure for violations of the Act

The new Customs Act restructures the penalty system that is used in case of any violation of the Act. Key updates in this regard include:

  1. Any false declaration in a submitted customs-related document is subject to a penalty in the maximum amount of THB 500,000;
  2. Smuggling (including attempted smuggling) is subject to punishment by imprisonment for a maximum period of ten (10) years, and/or a fine of up to four (4) times the total cost of the price of the smuggled goods and the duty payable thereupon;
  3. Importing with the intention to evade paying customs duty (including attempted evasion) is subject to punishment by imprisonment for a maximum period of 10 years, and/or a fine from 0.5 times but not exceeding four times the payable deficit duty. The Court may also order the forfeiture of the goods;
  4. Importing prohibited/restricted goods (including attempted importing) is subject to punishment by imprisonment for a maximum period of 10 years, and/or a fine of up to THB 500,000.

Remark: any director, manager, or other person responsible for importing/exporting who should, but does not, prevent the violations specified under the new Customs Act are liable to be punished equally with the importer/exporter.

(4) New limitation on surcharge amount

The surcharge imposed on the deficit amount of payable duty at the rate of 1% per month is now limited to an amount that is equal to the duty deficit.

(5) Power to seize goods of other shipments

The Director-General of the Thai Customs Department has the power to seize goods of other shipments to pay outstanding duty. This power appears in the old Customs Act; however, its reiteration in the new Act suggests that it may be utilized more frequently.

(6) Power to seize other assets

If the value of the goods of other shipments that are seized (as per (5) above) are insufficient to pay the outstanding duty, then the Director-General is authorized to issue an order to confiscate or seize any other assets of the operator to pay the amount of insufficient duty;

(7) Power to confiscate goods

In addition to being authorized to seize goods, customs officials are now able to confiscate goods in the following specific circumstances as well:

  1. In case of any delay in exporting goods after export declaration and failure to remedy the delay within a specified period;
  2. Goods in transit: (i) that are intended to be used for terrorist (or terrorist-related) purposes; (ii) that may impact public order/peace or international safety and security; (iii) whose declared country of origin is forged; (iv) that are in violation of laws concerning the transfer/transit of goods;
  3. Containers/packages of goods that are under the protection of the Customs Department, which are relocated without the permission of a customs officer;
  4. Goods that are under the protection of the Customs Department, which are compiled, designated, divided, relocated, or repackaged before having been inspected by a customs officer;
  5. Ships that move goods in violation of laws concerning the transfer/transit of goods; and
  6. Goods that are imported in violation of customs law by the evasion of duty or by being prohibited, restricted, or smuggled goods.

(8) Update on return of duty

If an operator pays duty in excess of the required amount, then the operator may request for the return of such overpaid duty within three (3) years of the importation/exportation date, with interest at the rate of 0.625% per month.

Under the new Customs Act, the Customs Department also offers the following facilities to operators:

HS codes verification

The Thai Customs Department has created a mobile application "HS Check," which makes available precedent rulings on HS codes verification to operators for preliminary reference when determining HS codes for their products; and

HS codes consultation

The option to request for HS codes confirmation prior to importation is still available.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.