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 8, 2022

Thailand Tightens Definition of SMEs Eligible for Special Protection from Unfair Credit Terms

Subscribe to Updates

Thailand’s Trade Competition Commission has amended the guidelines prohibiting large purchasers from setting unfair credit terms for small and medium-sized enterprises (SMEs). The new guidelines, which were published in the Government Gazette on August 17, 2022, revise the definition of SMEs and clarify the duties of concerned parties.

The original guidelines, which took effect in December 2021, set a favorable maximum period for credit terms for SMEs selling products or services to a third-party purchaser. Prescribing longer credit terms than the mandatory period would constitute an unfair trade practice in violation of the Trade Competition Act B.E. 2560 (2017).

In defining what businesses are considered SMEs, the guidelines set thresholds for the number of employees and amount of annual turnover. The amended guidelines maintain these thresholds, but the new guidelines require that both employee-number and turnover thresholds be met in order for a business to be considered an SME. In contrast, the original guidelines only required either the employee-number threshold or the turnover threshold to be met. This amendment will likely mean that fewer business operators qualify as SMEs.

Accordingly, two types of businesses are defined as SMEs under the guidelines:

  • Manufacturers of goods with up to 200 employees and an annual turnover of no more than THB 500 million (approximately USD 13.5 million); or
  • Service providers or wholesale or retail businesses with up to 100 employees and an annual turnover of no more than THB 300 million (approximately USD 8.1 million).

To benefit from protection under the new guidelines against unfair credit terms, SMEs must provide documents proving the number of employees and the amount of annual turnover to trade partners that purchase goods or services from them.

The new guidelines come into force on September 16, 2022.

For more information on the unfair credit term guidelines, or on any aspect of compliance with Thailand’s antitrust and competition laws, please contact Kobkit Thienpreecha at [email protected] or +66 2056 5534, Nutavit Sirikan at [email protected] or +66 2056 5510, or Suphitsara Jaturaphitjaroen at [email protected] or +66 2056 5645.

Related Professionals

Practices

Antitrust and Competition

Corporate/M&A

Customs and International Trade

Location

RELATED INSIGHTS​ 

October 30, 2023
On October 9, 2023, Laos issued Presidential Decree No. 003, which raised excise tax rates for certain goods, effective immediately. The move to increase excise tax rates comes amid the marked depreciation of the Lao kip (LAK). The Lao government is trying to monitor and discourage imports of non-essential products in order to reduce the outflow of foreign currency from the country. Increasing the tax rate for some of these products is part of these efforts. The specific products and excise tax rates are listed in the table below.   This new rate policy is also in line with recent government efforts to encourage avoiding payment in foreign currency to prevent the depletion of foreign currency reserves in Laos. In this regard, commercial banks have already taken action to ration the supply of foreign currency by prioritizing imports of essential goods, such as fuel. The products listed above formalize this impetus to prioritize certain imports and discourage others deemed not essential. In addition, the increased excise tax rates on fuel-powered vehicles show the commitment of the Lao government to move toward electric vehicles, which would also lessen the country’s dependence on fuel imports. For more information on these excise tax changes, or on any aspect of Laos’ international trade regulations, please contact Tilleke & Gibbins at [email protected].
Read More
October 17, 2023
On June 20, 2023, Vietnam’s new Law on Protection of Consumers’ Rights (“CPL 2023”) was officially promulgated, followed two days later by a new Law on E-Transactions (“LOET 2023”). The new laws, which will both take effect from July 1, 2024, replacing the CPL 2010 and the LOET 2005, respectively, provide new regulations for e-commerce platforms and will impact e-commerce activities in Vietnam. Some of the more significant changes are outlined below. Law on Protection of Consumers’ Rights Regulation of offshore entities: Previously, the CPL 2010 regulated only organizations and individuals in the territory of Vietnam. Under the CPL 2023, both onshore and offshore agencies, organizations, and individuals related to protecting consumers’ rights are regulated. In other words, Vietnam intends to monitor and manage activities of platforms with no legal presence in Vietnam. Remote transactions: Previously, the laws on consumer protection regulated “remote contracts.” The CPL 2023 introduces and defines “remote transactions” as transactions made online, by electronic means or by other means wherein consumers cannot check or have direct contact with products, goods or services before participating in the transaction. In addition, the CPL 2023 also provides for additional responsibilities of business entities offering remote transactions such as adequately and precisely providing consumers with information when entering into these remote transactions, including the rights of consumers in case of incomplete or inaccurate provision of information and complaint handling mechanisms. Online businesses: The CPL 2023 introduces “online businesses,” which are defined as (i) those trading products, goods, and services via their self-established platforms or digital platforms or (ii) those establishing or operating intermediary digital platforms. According to the Vietnam Competition Commission in a recent workshop, the definitions of “digital platforms” and “intermediary digital platforms” can be referred to in the LOET 2023 (see below). Under this new category, online
Read More
October 4, 2023
Extended producer responsibility (“EPR”), a strategy whereby producers are held accountable for the environmental impact of their products throughout their entire life cycle, including disposal and recycling, has become more and more familiar to manufacturers in Vietnam. According to the director of the legal department of the Ministry of Environment and Natural Resources, EPR is an alternative financial solution for managing waste and increasing recycling without raising environmental protection taxes and fees, which may help Vietnam to maintain a closed loop of resources in manufacturing. New EPR Regulations Applicable to Producers and Importers In 2020 and 2022, the new Law on Environmental Protection 2020 and its guiding Decree No. 08/2022/ND-CP were promulgated, introducing a legal framework for EPR (“New EPR Regulations”) imposed on not only producers but also importers. Under the New EPR Regulations, producers and importers of certain types of products and packaging are responsible to collect and treat waste and recycle their products and packaging. The responsibility to collect and treat waste took effect on January 10, 2022, while there are different timelines being phased in from 2024 to 2027 for the recycling of products and packaging, depending on the type. For the purpose of compliance with the recycling requirement under the New EPR Regulations, the producers and importers can implement the recycling obligation by themselves, or engage a third party to recycle or organize the recycling, or make a financial contribution to the Vietnam Environment Protection Fund to support the recycling process. This will cause an increase in cost and, hence, an impact on prices of certain products in the near future. Exceptions to the recycling obligation include: Producers and importers of products and packaging for (i) export or temporary import for re-export or (ii) manufacture or import for research, study, or testing purposes. Packaging producers
Read More
September 26, 2023
Cambodia has issued a set of regulations that aim to encourage greater energy efficiency from appliances marketed in the country. The regulations follow Cambodia’s adoption of its National Energy Efficiency Policy, which sets out the government’s energy efficiency targets and policies to reach them by 2030, including the ambitious national target of reducing the country’s total energy consumption by at least 19%. This set of regulations for appliances marketed in Cambodia is contained in Sub-Decree No. 254 on the Management and Improvement of Energy Efficiency of Electrical Appliances, dated August 11, 2023. This sub-decree sets out product registration and energy efficiency labeling requirements for electrical appliances marketed in Cambodia. It further provides that appliances should meet energy efficiency standards and all other mandatory standards that apply to electrical appliances. During the product registration process, the appliances are checked against such standards, and registration is only granted if the standards are met. The sub-decree identifies the Ministry of Mines and Energy as the main ministry responsible for the implementation of the sub-decree. To assist with the wide scope of regulations as set by the sub-decree, it further appoints assisting ministries that may implement and enforce only certain aspects. These effective implementation and enforcement mechanisms suggest that once the sub-decree’s 12-month implementation period has passed, there is likely to be a rather strict enforcement approach to the requirements. Key Features of the Sub-Decree Several mandatory standards have already been applied to most electrical appliances over the past years, but the required product registration process to check for compliance with those standards has not always been completed by those importing, distributing, or manufacturing electrical appliances in Cambodia. The new sub-decree clearly mandates a product registration requirement as a check to verify the applicable standards are met, and sets penalties for non-compliance. Penalties
Read More