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

September 1, 2017

New and Improved Penalty Scheme Under the 2017 Thai Customs Act

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Businesses involved with the Thai customs clearance process have been anxiously awaiting changes aimed at improving customs laws. These long-awaited changes come with the passage of the Customs Act BE 2560 (2017).

The new act, which will take effect from Nov 13, 2017, repeals the outdated and controversial Customs Act BE 2469 (1926) and its prior amendments and seeks to address many of its shortcomings. This article focuses on the substantial revisions to the Customs Act’s penalty scheme, revisions that will have a direct impact on both businesses and individuals.

Previously, most criminal penalties relevant to business operators were prescribed under Section 27 of the Customs Act. For example, all customs offences, including smuggling and attempting to commit a customs offence, were classified together under Section 27. This offered little flexibility in terms of punishment and frequently failed to account for the considerable differences in the range of wrongdoing by an offender. The new Act seeks to deal with this classification problem by having penalties governed by three distinct sections: 242, 243 and 244.

Another key change is an amendment to the requirements of intent for claims of customs duty evasion. Under the previous act, Section 27 presumed strict liability for all included offences, even where violations may have been due to error rather than intentional or negligent misconduct.

Section 252 of the new Act, while still retaining some strict liability presumptions, now eliminates the highly controversial presumption of intent for customs duty evasion claims under Section 243. This is critical to supporting an accused party’s presumption of innocence by shifting the burden back to the prosecution to show “wilful intent” or “negligence”.

The new Act also revises the penalty scheme to distinguish between degrees of customs offences and prescribes new methods for calculating criminal fines. Previously, under Section 27, penalties were calculated at four times the combined price of goods plus the customs duty, and/or imprisonment for up to 10 years. While some discretion existed for claims settled before reaching court, once at the trial court stage the only penalties the court could impose were the four-times fine and/or imprisonment. Because these stringent penalties did not distinguish between types of offences and offered the courts no discretion in calculating fines, penalties were often out of proportion with the wrongdoing.

Under the new Act, penalties are set forth in Sections 242, 243 and 244. Section 243 applies to duty evasion and calculates criminal penalties using only the actual amount of duty evaded. The penalty multiplier is also limited to a range of one-half to four times the base amount. Penalties can still include imprisonment for up to 10 years, instead of or in addition to the fine.

The new Act also introduces different degrees of penalties for different levels of offences. For example, the penalty for smuggling is more severe than for duty evasion. Section 242 prohibits importing or exporting items that have “not duly passed through customs”. The penalty is four times the price of the article including the duty, and/or imprisonment for up to 10 years. In addition, the item will be forfeited regardless of whether the person is punished.

Section 244 prohibits customs evasion (importing items for the purpose of evading “restrictions or prohibitions with respect to such article”) and imposes a penalty of 500,000 baht, and/or up to 10 years in jail. The court may also order the article forfeited regardless of whether there is anyone to be punished.

It is important to note that, once the new Act becomes effective on Nov 13, it will apply retroactively to the benefit of any pending case, including claims that have not yet been subject to final settlement or judgement. This may provide a welcome opportunity for companies and individuals currently facing criminal customs claims.

The new Act substantially improves the customs clearance process by improving clarity and fairness. A priority for lawmakers was the overhaul of the penalty scheme, including the removal of strict liability, separate penalties for different types of offences, and reduced penalties compared with the previous scheme.

Ultimately, these improvements stand to benefit both the public and the private sectors. With supporting regulations expected to be announced in the near future, further clarity is also expected.

While there are still opportunities to improve the new law further and some existing challenges for companies seeking to ensure customs compliance, it goes a long way towards clarifying and correcting many of the shortcomings of its predecessor.

The authors would also like to thank Mark Hsien for his valuable contribution in preparing this article.

Download Full Article
Related Professionals

Practices

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

August 24, 2026
Significant economic challenges facing Thailand in recent years have placed financial pressure on both individuals and businesses. As a result, many debtors may find themselves unable to meet their repayment obligations, leading to bankruptcy proceedings. When an individual or corporate debtor in Thailand is subject to bankruptcy proceedings, the Thai Bankruptcy Act B.E. 2483 (1940) provides a legal framework for collecting a debtor’s assets and using them to repay creditors. Under the Bankruptcy Act, creditors wishing to recover outstanding debts must file a debt repayment application (DRA), which is the primary mechanism for asserting claims in bankruptcy proceedings. However, the filing of a DRA is subject to specific legal requirements, procedural rules, deadlines, and supporting documentation. Failure to comply with these requirements may adversely affect a creditor’s ability to recover its claim. This article highlights the key considerations that creditors should be aware of when filing a DRA in a bankruptcy case in Thailand. Filing a DRA In a bankruptcy case, after the court issues an absolute receivership order, the debtor loses the authority to manage or dispose of its assets. Control over the debtor’s assets is transferred to the official receiver, a government official responsible for administering the bankruptcy estate in accordance with the Bankruptcy Act. Creditors seeking repayment of their debts must file a DRA with the official receiver within two months of the absolute receivership order being officially published in the Government Gazette. For creditors outside of Thailand, the official receiver may extend the filing period by up to an additional two months. These filing deadlines are strictly enforced. Failure to file within the prescribed period may result in the claim being barred, except in limited circumstances permitted by the Bankruptcy Act. Where a late filing is accepted due to force majeure, the creditor may only
Read More
August 20, 2026
Vietnam’s Law on Bankruptcy and Rehabilitation No. 142/2025/QH15, passed by the National Assembly on December 11, 2025, does something many regional counterparts do not yet attempt: it instructs parties and arbitral tribunals on exactly what happens to an arbitration once a debtor becomes insolvent. Together with the Law on Commercial Arbitration No. 54/2010/QH12, the new law improves upon what used to be an uncertain area of practice, now providing an explicit, mandatory sequence of procedures. Suspension and Termination of Arbitration Proceedings Under article 40(2) of the law, once a Vietnamese court accepts a bankruptcy petition, any arbitration that concerns the debtor’s financial obligations must be temporarily suspended as soon as the tribunal receives the court’s notification. If the court subsequently issues a decision commencing bankruptcy proceedings, article 59(2) takes a further step: the suspended arbitration is terminated outright, and the underlying case file is transferred to the court handling the insolvency for resolution. The two provisions work as a sequence: first suspension, then termination and transfer, rather than as independent triggers. Meanwhile, article 60(4) reinforces this effect by vesting the bankruptcy court with exclusive jurisdiction over all claims against the debtor from the date the petition is accepted. Notably, this mechanism operates automatically, without the need for the insolvency court to issue a separate anti-arbitration order. The tribunal simply suspends or terminates the proceeding by operation of law once notified; however, Vietnamese law currently provides no procedure by which a party can apply to the insolvency court for permission to continue the arbitration despite the statutory effect. Practitioners with a Vietnamese counterparty in arbitration should treat notification of a bankruptcy filing as something to flag to the tribunal immediately since continuing to arbitrate a claim that has become subject to article 40(2) or 59(2) risks producing an award vulnerable
Read More
August 20, 2026
Thai law contains no provision that speaks directly to what happens to an arbitration when one of the parties becomes insolvent. The interaction between arbitration and insolvency is derived instead from the general operation of two separately drafted laws: the Bankruptcy Act B.E. 2483 (1940) and the Arbitration Act B.E. 2545 (2002). Because Thai courts have had few opportunities to interpret how these two statutes apply together, the practical answer to many questions, such as who represents an insolvent party in arbitration, whether an award will be enforced, and what happens to a foreign proceeding, depends on inference from general principles of insolvency, arbitration, and procedural law rather than on settled rules. Liquidation and Restructuring The Bankruptcy Act governs both liquidation, which winds up a debtor’s affairs, and restructuring (rehabilitation), which aims to preserve a business. The consequences for arbitration differ accordingly. In liquidation, the debtor’s assets vest in the official receiver, who alone can conduct or continue any arbitration affecting the estate; the debtor loses the authority to act on its own behalf. In restructuring, the plan preparer or administrator takes over that role, but there is more room for the debtor to remain involved, since the objective of rehabilitation is to keep the business operational. Restructuring carries an automatic stay that takes effect once the Bankruptcy Court accepts the restructuring petition. This stay can halt an arbitration regardless of where it is seated. In contrast, liquidation does not work through a stay; instead, the debtor’s loss of authority over its own assets and disputes is what constrains the arbitration. Neither proceeding provides a party a formal route to apply for permission to continue arbitrating—the Bankruptcy Act contains no such mechanism—though in restructuring cases the Bankruptcy Court may allow proceedings to continue where doing so will not prejudice
Read More
August 20, 2026
As part of its membership in Lex Mundi, Tilleke & Gibbins has released the latest edition of its Guide to Doing Business in Thailand, providing an overview of the legal, regulatory, and commercial considerations for companies establishing or expanding operations in Thailand. The 2026 edition offers practical insight into the country’s business environment, investment framework, and operational requirements. The guide covers a wide range of topics relevant to foreign and domestic investors, including: Investment incentives and promotion schemes Financial facilities and banking regulations Exchange controls and money transfers Import and export regulations Business structures and incorporation options Requirements for establishing a business Operational and compliance considerations Business cessation and insolvency procedures Employment and labor laws Taxation Immigration and visa requirements Prepared by Tilleke & Gibbins lawyers across multiple practice areas, the publication outlines key aspects of doing business in Thailand, including foreign investment restrictions, regulatory compliance obligations, corporate structures, employment requirements, and recent legal and economic developments affecting investors. The publication forms part of Lex Mundi’s Country Guides series, a global collection of jurisdiction-specific reference materials prepared by member firms around the world. Together, these guides help companies evaluate opportunities, compare regulatory environments, and plan international business activities across multiple markets. The full Guide to Doing Business in Thailand 2026 is available through the button below.
Read More