You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

March 21, 2014

The DSI’s Right to Investigate Customs Violations

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Business operators in Thailand should be familiar with the many administrative agencies that have regulatory and investigative authority. For example, under the Customs Act B.E. 2469, the Customs Department has the right to investigate any customs transaction that might not comply with the customs law.

By law, a customs officer may invite a business operator for one or more interviews, and may visit the operator’s office to audit and possibly attach documents and goods for further investigation, if the officer believes those documents need to be reviewed by the customs team at their office.

The Customs Department has the authority to levy very substantial taxes, duties, and fines if it concludes that the business operation is non-compliant.

Due to recent developments in Thai administrative law, in addition to the Customs Department and other agencies directly responsible for regulating business operators, the Department of Special Investigation (DSI) also has the mandate to investigate what it deems to be customs infractions or other criminal activity related to business. This means that business operators who have never been investigated by the Customs Department might still be investigated for customs violations by the DSI.

The DSI was established under the Special Case Investigation Act of 2004 and accompanying announcements (the SCI Act). The DSI is overseen and directed by the Board of Special Cases, and it is charged with investigating and examining “special cases,” which include the following:

  • Complex criminal cases that require special inquiry, investigation, and collection of evidence;
  • Criminal cases that might have a serious effect on public order and morals, national security, international relations, or the country’s economy or finance;
  • Criminal cases that involve serious transnational crime or that were committed by an organized criminal group;
  • Criminal cases involving an influential person as a principal, instigator, or supporter;
  • Certain criminal cases against administrative officials or senior police officers; or
  • Any criminal case that the Board of Special Cases determines by majority vote to investigate.

If a matter is judged to fall within the definition of the above “special cases,” the DSI will normally send the business operator a written request to attend an interview at the DSI and/or provide the DSI with a list of documents for review.

The DSI may invite the business operator to be interviewed as an accused person or as a potential witness, depending on the amount of evidence already assembled. It is possible for a business operator or members of its management to be called as witnesses, and later to be charged with the suspected crime.

Technically, a person summoned as a witness to give information to the DSI is not entitled to have a lawyer present at the interview (although discretionary exceptions are sometimes granted) and, as a general rule, anything said by a witness and recorded at the interview may be used against him or others. It is always advisable to consult legal counsel as soon as the company is first contacted by the DSI.

When there are reasonable grounds, the DSI official also has the authority to access and search any dwelling place or premises; search any person or vehicle; issue a summons or subpoena to a financial institution, government agency, or state enterprise to provide documents; and seize and attach property that is authorized under the SCI Act.

Under section 41 of the SCI Act, any person who does not facilitate lawful requests for information or evidence by the DSI is subject to imprisonment of up to one year and/or a fine of up to THB 20,000.

The above list of “special cases” might not seem very relevant to many business operators, but the Board of Special Cases recently refocused DSI resources on other business-related investigations when it issued its Announcements of the Board of Special Cases No. 4 and No. 5 in 2011 and 2012. Under those announcements, “special cases” eligible for DSI investigation now include possible infractions involving (among others) the following list of laws, entities, and agencies:

  • Consumer protection;
  • Trade competition;
  • Government agency bidding;
  • Customs, liquor, and tobacco;
  • Exchange controls, currency, Bank of Thailand and financial institutions;
  • Export tax reimbursement;
  • Trademarks and patents;
  • Industrial product standards;
  • Public companies and foreign businesses;
  • Food, pharmaceuticals, cosmetics, and hazardous substances; and
  • Minerals.

One would be hard-pressed to identify a business operator that does not fall under the purview of the recent announcements from the Board of Special Cases. Thus, almost every business could potentially be subject to a DSI investigation, even when other directly responsible agencies (such as the Customs Department or the Department of Mineral Resources) have passed on the investigation.

All business operators should keep systems in place to help them respond to the DSI and other investigations. They should also consult legal counsel as soon as they become aware of an investigation in order to help them navigate the procedural and substantive requirements, while minimizing exposure.

Download Full Article
Related Professionals

Practices

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

November 27, 2024
In Thailand, a business rehabilitation plan in court-supervised rehabilitation proceedings is a crucial element of the business rehabilitation process that outlines how a debtor’s assets will be managed. It also provides guidance for resolving a debtor’s business challenges so that the business can survive and continue to generate returns, increasing the likelihood that its creditors will be repaid. Key Plan Components The Bankruptcy Act B.E. 2483 sets forth the following components to be covered in a rehabilitation plan: The reasons for rehabilitation; Details about the debtor’s assets, liabilities, and other binding obligations at the time the court-ordered rehabilitation; Principles and methods of the rehabilitation; Redemption of collateral when there are secured creditors and guarantor liabilities; Ways to resolve problems arising from a temporary lack of liquidity during plan implementation; Action to be taken when a claim or debt is assigned; Name, qualifications, and letter of consent of the plan administrator, as well as information on compensation; Appointment and release of the plan administrator; Period in which the plan will be implemented (maximum of five years); and Refusal of the debtor’s assets or refusal of contractual rights if the debtor’s assets or contractual rights have obligations that exceed the benefits they yield. Considering the diverse nature and challenges of each debtor’s business, the details listed here are only general guidelines for what should be included in a rehabilitation plan. The planner has the flexibility to create a plan with different details or guidelines than those outlined above to best suit the nature and challenges of the debtor’s business. The planner can also omit some of the mentioned requirements if they are not relevant to the debtor’s business. Concerns of Relevance Court approval of the rehabilitation plan. Once the plan is approved by a meeting of the creditors, it is necessary
Read More
November 15, 2024
Vietnam’s new Decree No. 147/2024/ND-CP on the management, provision, and use of internet services and online information (“Decree 147”), which will come into effect on December 25, 2024, replacing Decree No. 72/2013/ND-CP (“Decree 72”), introduces several changes to the regime for domain name dispute resolution. The new decree aims to clarify the legal framework and address some longstanding inconsistencies between Vietnam’s laws on intellectual property and information technology. The main changes related to domain name dispute resolution under Decree 147 are summarized below. Removal of Prescriptive Actions Decree 147 no longer lists specific actions for resolving domain name disputes. Decree 72 had outlined three methods: negotiation/mediation, arbitration, and court. However, IP practitioners had long criticized this approach, arguing it conflicted with the IP Law, which additionally allows administrative action. By omitting these methods, the new decree implies an acceptance of administrative action as provided in the IP Law. However, Decree 147 remains silent on establishing a dispute resolution forum aligned with the CPTPP’s requirement for a UDRP-like model. Currently, Vietnam’s available forums do not fully conform to the UDRP framework. An anticipated circular may provide further guidance on this aspect. Deactivation of Domain Names Decree 72 does not have any provision on the deactivation of a domain name. However, Decree 147 has stipulated some situations where domain names will be deactivated, such as when there is a request from an authority, or when it is discovered that incorrect information was used for registration. Clearer Criteria for Dispute Resolution Article 16 of Decree 147 sets out three clear criteria that must be met for domain name dispute resolution to proceed: (i) confusing similarity with the plaintiff’s trademark, trade name, or personal name; (ii) the defendant’s lack of legitimate rights or interests in the domain name; and (iii) bad faith. Previously,
Read More
October 21, 2024
Thailand’s Central Intellectual Property and International Trade (IP&IT) Court has delivered a favorable ruling for Sumitomo Rubber Industries, Ltd., a major player in the tire manufacturing industry, regarding the registration of its motorcycle tire design patent. In this case, Tilleke & Gibbins represented Sumitomo in successfully advocating for recognition of the unique design elements in the company’s motorcycle tire products. Case Overview The case revolved around Sumitomo’s two design patent applications for motorcycle tire designs, which were initially rejected by the Department of Intellectual Property (DIP) on the grounds that they were similar to prior art. Based on an examination of the design elements, primarily focusing on the tire tread patterns, the DIP’s Patent Board had concluded that Sumitomo’s designs were not sufficiently unique to warrant patent protection, as the tread patterns of the new designs were deemed too similar to one found in prior art for tire products. In response, Tilleke & Gibbins filed a complaint with the IP&IT Court on behalf of Sumitomo, seeking a revocation of the Patent Board’s decision and requesting that the court compel the DIP, as the defendant, to proceed with the registration of Sumitomo’s design patents. The complaint emphasized that the designs were novel and distinct, warranting patent protection under Thai law. Legal Strategy The firm’s legal argument focused on the interpretation of Thai patent law, particularly regarding the protection of a product’s external appearance, and emphasized that the determination of a design’s novelty must consider the product’s overall appearance rather than isolating individual features. This approach is consistent with international guidelines on design patents, which require the evaluation of novelty and distinctiveness based on how an informed user would perceive the design as a whole. While Sumitomo’s tire tread patterns may share some superficial similarities to existing designs, the overall impression
Read More
October 2, 2024
As Thailand is a contracting state of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, international arbitral awards can, in principle, be enforced in Thailand. However, not all awards will necessarily be enforceable. The Arbitration Act BE 2545 (2002) gives courts the discretion to deny the enforcement of an award if the court determines that enforcing it would be contrary to “public order or the good morals of the people” (often referred to as “public policy”). Similarly, the Arbitration Act allows a court to set aside a domestic award if its recognition would violate public policy. This discretionary power of the court is prescribed by the law and does not require any party to make an argument on public policy grounds to trigger such power. A recent Supreme Court judgment demonstrates that a court considering an award will review the legality of the arbitral proceedings as well as the content of the award. In this case, the Supreme Court set aside an award on the grounds that it violated public policy because it was the result of arbitration that did not proceed in accordance with the relevant law. Under Thai bankruptcy law, after the Bankruptcy Court accepts a request for rehabilitation of a debtor, all civil proceedings against that debtor, including arbitration proceedings, must be stayed until the court orders otherwise or until the rehabilitation case ceases. In this matter before the Supreme Court, however, the arbitrator continued with the arbitration and went on to render an award even after the court had accepted the request for rehabilitation. The award was later challenged to be set aside on the grounds that continuing with the arbitration was against public policy. While setting aside the award was arguably unnecessary, in this case (as the relevant bankruptcy law
Read More