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The new act, which will take effect from Nov 13, 2017, repeals the outdated and controversial Customs Act BE 2469 (1926) and its prior amendments and seeks to address many of its shortcomings.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​ 

November 13, 2025
The Land Department in Thailand’s Ministry of the Interior (MOI) plays a central role in ensuring the stability and legality of real estate transactions in the country. Its core responsibilities include issuing land title deeds, registering transactions (e.g., sales, mortgages, leases), conducting surveys for subdivision or consolidation of land, and providing information and guidance on land and property development laws. These administrative functions secure investor confidence and support transparency in the Thai property market, so any delay can have a significant impact. This is especially true for investors who depend on timely registration to secure or transfer property rights. Delays can create liquidity risks, postpone project timelines, and even reduce Thailand’s attractiveness as a real estate investment destination. This article explores the nature of these challenges, the legal framework governing the timelines for administrative actions, and remedies available under Thai law. Sources of Delay Procedural delays at land offices can arise for a variety of structural and operational reasons. These include approval processes that require several levels of internal review, heavy staff workloads, and occasional communication gaps within the bureaucratic chain. Many processes still rely upon manual documentation, which can prolong administrative steps and increase the likelihood of bottlenecks. Some delays stem from ongoing investigations into the legality of land titles. For example, a land title deed may have an annotation indicating that the title deed is under investigation to verify its legality. Even though this annotation does not legally prohibit the sale or transfer of the land, in practice, most prospective purchasers are reluctant to proceed with a transaction until the annotation is removed. As a result, the land can become effectively illiquid during the investigation period, leading to significant investment delays. While such investigations are essential to maintaining the integrity of Thailand’s land registration system, prolonged inquiries
Read More
October 30, 2025
Thailand has introduced a comprehensive overhaul of its tax litigation procedures that will significantly impact how tax disputes are handled. The Regulations for Tax Cases B.E. 2568 (2025) take effect on November 24, 2025, and repeal the prior B.E. 2544 (2001) regulations in full. These regulations support the implementation of the Act on the Establishment of the Tax Court and Tax Case Procedure (No. 3) B.E. 2568 (2025), which expands the Tax Court’s jurisdiction to certain criminal tax matters. Published in the Government Gazette on October 14, 2025, the regulations have been reorganized into three parts covering civil cases, criminal cases, and forms, and are designed to accelerate proceedings, tighten evidentiary discipline, and modernize court operations. Structural Reform and Scope The prior regime governed only civil tax disputes. Under the new framework, the regulations introduce a dedicated chapter for criminal cases alongside updated civil procedures, as the Tax Court now has express authority to adjudicate specified criminal tax offenses. Select mechanisms applied in civil case proceedings, such as electronic communication, recording testimony, and appointing experts, also apply to criminal proceedings mutatis mutandis where they do not conflict with criminal procedure. Civil Cases: Evidence Submission, Deadlines, and Scheduling Parties must submit, together with the witness list, originals of all documentary evidence, media, or electronic data (such as files, USB drives, or CDs), and all physical evidence in the party’s possession. Failure to submit any original within the deadline (see below) results in a loss of the right to adduce that item at trial, subject only to narrow exceptions where submission is impossible due to force majeure or where receipt of the evidence is indispensable to the interests of justice. The practical impact is that parties are now obligated to assemble and verify all original documents and data at the very
Read More
October 24, 2025
The Thai Arbitration Institute (TAI), a division of Thailand’s Office of the Judiciary, has taken a step toward harmonizing the tools available for dispute resolution. On August 8, 2025, the institute formally launched the TAI Mediation Center (TAI-MC). Although the amendments to TAI’s Arbitration Rules that will govern the TAI-MC have not yet been finalized, the framework now under consideration suggests that TAI is positioning itself to become a more attractive venue for commercial dispute resolution. In the regime contemplated under the current version of the amendments, TAI proceedings will adopt an “arbitration-annexed mediation” mechanism—commonly termed the “Med-Arb” model—while preserving the procedural safeguards indispensable to arbitral neutrality. Mediation will be entrusted to a separate, dedicated mediator appointed under the TAI-MC who is precluded from serving on the arbitral tribunal in the same matter. By clearly separating the functions of mediator and arbitrator, the institute eliminates any risk that confidential information disclosed during mediation could influence the adjudicatory outcome if the parties do not settle. Only when all parties subsequently make a request may that same mediator assume arbitral duties in the case. The parties will retain substantial autonomy in selecting the mediator. They may either designate a mediator by mutual consent or invite the TAI-MC to appoint one from its authorized panel. TAI has announced its intention to curate that panel with particular emphasis on commercial expertise and cross-cultural negotiation skills, supplemented by ongoing professional training. Where the parties cannot agree on remuneration, the mediator’s fee will default to a tariff comparable to the TAI-MC’s cost schedule, which under the current version of the amendments will be approximately THB 45,000 for disputes in which the aggregate claims do not exceed THB 10 million, with incremental increases tied to higher claim values. This predictable cost matrix is aimed at enhancing
Read More
October 24, 2025
In Vietnam, litigation is generally treated as a last resort in dispute resolution. Businesses often strive to avoid court proceedings, given the potential for disrupted relationships, higher costs, and lengthy timelines. Yet, litigation is sometimes unavoidable, whether to secure a remedy or respond to a claim. Familiarity with Vietnam’s court system and procedures is therefore crucial for any party involved in such matters. Civil Litigation in Vietnam offers a concise overview of the country’s civil court system and litigation process. The guide a highlights essential points for navigating legal disputes in Vietnam, whether as a plaintiff or a defendant. Tilleke & Gibbins also publishes a similar guide for Thailand. The full Civil Litigation in Vietnam guide is available as a PDF through the button below.
Read More