Thai Customs Business Conference 7 July 2016

Thai Customs Business Conference

On Thursday 7 July 2016 I had the privilege of attending the first ever Thai Customs – Business Conference, which was held at the S31 Sukhumvit Hotel in Bangkok.

This conference, which was attended by around 100 conference participants from a broad range of interested stakeholders including many Chambers of Commerce, represented a refreshing outreach by the Thai Customs Department to the Thailand business community.

The recently appointed Director General of Thai Customs, K. Kulit Sumbatsiri, stated very clearly and concisely that Thai Customs needs to adjust and change from being a Tax Collector to become a Trade Facilitator, and no longer be an obstacle to trade and investment.

He also indicated in his opening remarks that Thailand can no longer count on customs tax collection as a significant source of revenue, because tariffs are being restructured to increase Thai trade competitiveness.

The Thai Customs Department is currently executing its new five year plan, titled “Future Customs 2020.” This plan will see the transformation of the Thai Customs Department to become a trade facilitator for Thailand business activities.

New initiatives that the Thai Customs Department is diligently pursuing include:

National Single Window: This has been discussed for more than ten years, but is now being diligently pursued. The National Single Window will effectively create a “One Stop Shop” for importers, where the Customs Department will be electronically linked to 36 related government agencies in a database, to allow importers to pursue import licenses from relevant agencies such as the Agricultural Department, Ministry of Industry, and even the Ministry of Public Health. The goal is to facilitate prompt and convenient import license approvals. A pilot program involving the five most frequently imported goods will soon be launched.

Pre-Arrival System: This is a system to expedite customs arrival formalities. Manifests from air and ocean shipments will be transmitted to Thai Customs six hours in advance of arrival. Thai Customs will analyze the manifests during a 4 hour period prior to shipment arrival, and pre-approve shipments for the Green Line or Red Line channels. The Pre-Arrival Process of Suvarnabhumi Airport is being used as a model. The goal is to expand this system to other airports and seaports based on the success of the Suvarnabhumi model.

Authorized Economic Operator Program (AEO): The AEO program is a successor to the previous 1999 Gold Card Scheme and the 2009 Licensed Customs Broker program. AEO was launched in 2013 upon the cancellation of the Licensed Custom Broker program. Today Thailand has 297 AEO Operators, including 147 Customs Brokers and 150 Importers / Exporters.

The advantages of AEO include exemption from physical examination except for related laws otherwise stated or in the case of suspicions. Also, AEO members will receive priority for conducting physical examinations when they are required.

Thailand is in the process of negotiating reciprocal “Mutual Recognition Arrangements (MRA)” with Hong Kong, Singapore, Malaysia, and S. Korea. Hong Kong and Thailand have already executed an MRA agreement, and a pilot operation will begin later this year.

Advanced Tariff Ruling (ATR): This is a service for importers to seek an advance ruling on tariff classification of goods prior to import into Thailand, upon a written request. This will provide certainty with regard to the correct tariff classification for imported goods. An ATR ruling is effective for two years from the date of the ruling, and will be issued within 60 official working days after application.

Digital Customs and Customs Mobile Application: The Thai Customs Department is working on a mobile application that will greatly facilitate the importation and customs clearance process.

During the conference, the Thai Customs Department officials also provided an update on recent and pending revisions to Thai Customs Laws, some of which are nearly 100 years old. Most noteworthy are incremental changes to the Rewards and Bribes laws, which will limit the size of rewards paid to Customs officials.

I very much appreciated the information and vision that was shared by the Thai Customs Department. I am cautiously optimistic that the Thai Customs Department can effectively transform itself into a modern, professional, world-class trade facilitator.

Frank T.

Thai IOD Chartered Director Class

Thai IOD CDC

The Thai Institute of Directors (Thai IOD) was founded in 1999 and has become the leading Thailand based organization promoting Director Professionalism and Corporate Governance.

www.thai-iod.com

I am a big fan of the Thai IOD, both for its significant contributions to leadership and Corporate Governance, and also for its strong commitment to anti-corruption and ethical behavior.

Last week I had the privilege of attending the Thai IOD’s “Chartered Director Class” (CDC). This is a two day course that is designed to “enhance directorship expertise by strengthening key knowledge and skills.” A prerequisite to attending the Chartered Director Class is the successful completion of the Thai IOD’s “Director Certification Program” (DCP), which is a 5 day intensive course covering the fundamentals of directorship and Corporate Governance.

The CDC class was organized as four (4) half day modules covering Accountability, the Art of Directorship, the Strategic Board, and Ethical Decision Making.

I’ve attended many professional development classes and seminars. However, with very few exceptions, the Thai IOD courses have consistently been the most rigorous and professionally managed programs I’ve had the privilege of attending. The Thai IOD prides itself on starting its programs on time, and fully utilizing the time allocated for each program module. Thai IOD programs are definitely not long coffee breaks periodically interrupted by brief lectures; these are intensive lectures and engaging professional dialogs with only brief interruptions for coffee and lunch. No, you won’t be going home early … sorry, you won’t beat the traffic. However, you can always be sure to derive maximum value from your time and monetary investment in a Thai IOD program.

The CDC program was facilitated by Dr. Bandid Nijathaworn, Banchong Chittchang, Professor Dr. Kriengsak Chareonwongsak, and Dr. Warapatr Todhanakasem. These four gentlemen each have very impressive professional and academic credentials, and are also quite gifted lecturers and facilitators. The facilitators, course materials, and case studies were all very well developed, organized, and presented.

Equally important to a professional development program is the quality of the participants. The Thai IOD is very successful in not only attracting and retaining the best quality facilitators, but also the best quality and diversity of participants. Our CDC class had fifteen men and women, Thais and foreigners, coming from a variety of professional and academic backgrounds. I felt privileged to have the opportunity to share this CDC experience with such distinguished and experienced peers.

The benefits of Directorship and Corporate Governance training are not limited to the Boards of Directors of Public or Listed Companies. Any professional manager, director, or leader of a listed or limited company can benefit from the skills, leadership, ethics, and governance fundamentals taught by the Thai IOD. These courses are not “cheap”, but they provide great value for both the individual participants and also for the organizations and teams of participants.

Frank T.

Thailand 6th National Conference on Collective Action against Corruption

Thai CAC ConferenceOn Thursday 15 October 2015 I had the privilege of attending “Thailand’s 6th National Conference on Collective Action against Corruption”. This conference was organized by the Thai CAC, formally known as “Thailand’s Private Sector Collective Action against Corruption”.

The Thai CAC was co-founded by eight of Thailand’s leading private sector organizations: the Thai Chamber of Commerce, the Joint Foreign Chambers of Commerce in Thailand, the Thai Listed Companies Association, the Federation of Thai Industries, the Federation of Thai Capital Market Organizations, the Thai Bankers’ Association, the Tourism Council of Thailand, and the Thai Institute of Directors (Thai IOD). The Thai IOD serves as the secretariat of the Thai CAC and takes a leading role in driving the program.

The CAC conference included three panel discussions which covered the topics of “Overcoming Anti-Corruption Challenges: International Experiences”, “Anti-Corruption Progress: How to Keep the Momentum Rolling”, and “Leveraging the Power of Collective Action”, and also included a powerful lunchtime presentation “Addressing Corruption Together – Strategy for Thailand.”

The CAC conference was concluded with a powerful and moving Closing Remarks presentation by His Excellency General Prem Tinsulanonda, President of the Privy Council. General Prem stated that corruption is the most severe problem plaguing Thailand, and a most shameful matter for the country. He also stated that taking part in corrupt schemes is equivalent to robbing the country. “Those involved are thieves.”

HE Gen Prem

Currently the Thai CAC has 521″Signatory Companies” which have signed a “Declaration of Intent”, and 122 Certified Companies who have implemented and audited anti-corruption programs.

I strongly encourage both Thai-owned and Foreign-owned companies operating in Thailand to join the Thai CAC and complete the certification process. Fighting corruption is a difficult task, and very few companies successfully escape the cruel sting of corrupt acts. Yes, your company may successfully avoid corrupt acts such as facilitation payments to government officials. However, your company is still subject to internal corruption, such as kickbacks to purchasing officers, kickbacks to maintenance personnel, fraudulent invoices, etc.

A well designed, communicated, and enforced anti-corruption program acts as a vaccination to inoculate a company against infection by corrupt influences. Sounds dramatic … but I firmly believe it.

The managers of foreign-owned companies often tell me that they already have compliance programs in place for FCPA (the US Foreign Corrupt Practices Act) and UKBA (the UK Bribery Act). I don’t disagree that compliance with FCPA and UKBA is important. However, I also remind these companies that they are operating in Thailand, which has a very strong cultural identity. Thailand is proud to have never been colonized, and correctly believes that its culture is unique and valuable. Adopting and complying with a Thailand based anti-corruption initiative is a far more powerful motivating force than asserting compliance with a foreign initiative, which has the effect of imposing foreign laws upon Thai nationals and organizations.

Corruption is a difficult problem to solve. No single tool will be sufficient to fix this problem; a full toolbox of powerful tools, and the skill and experience to use them, will be required to eliminate corruption. Join the Thai CAC, become a signatory, and diligently work towards CAC certification. Your company, as well as our Thai community, will benefit greatly from this anti-corruption initiative.

Frank T.