ASEAN Today – Regional Legal and Business News – March 2017

ASEAN Today – Regional Legal and Business News for March 2017

 

ASEAN Economic Community News

ASEAN Law Association
The 39th ASEAN Law Association (ALA) Governing Council Meeting was held in Brunei this month. Chief Justices, Supreme Court Justices, Attorney Generals, deans of law faculties, legal practitioners, and government legal officers from all ASEAN member countries attended. The main objectives of the meeting were to prepare for the coming ALA General Assembly in 2018 and to emphasize the ALA’s work on the harmonization of laws for the fast track of effective channels of legal communications throughout the ASEAN Economic Community. Regional dispute settlement mechanisms, including alternative dispute resolution, were identified as an essential component of a thriving economic community that the ASEAN member states needed to secure.

New Anti-Trafficking Convention
The ASEAN Convention against Trafficking in Persons, Especially Women and Children (ACTIP) came into force this month in the six member states that have ratified it – Vietnam, Myanmar, Thailand, Singapore, Cambodia, and the Philippines. ACTIP will provide common standards in the criminalization, investigation, and prosecution of trafficking in persons and effective safeguards and protections for trafficking victims.

Single Aviation Market
Senior transport officials and government agencies met to continue working on the ASEAN Single Aviation Market (ASAM), a key component to the further growth of the ASEAN Economic Community. The officials focused on significant decisions from a previous meeting; specifically, completing the key ASAM economic and technical elements for implementing the open-skies policy and beneficial air-transport agreements.

Myanmar Watch
State-Owned Banks Audit
Myanmar and the World Bank began a comprehensive audit of the country’s four state-owned banks, the first in decades, as part of the modernization of Myanmar’s financial system. Challenges facing state-owned banks include poor IT infrastructure, outdated accounting practices, and ambiguity in the classification of assets and provisioning for bad loans. The state-owned banks’ assets make up a fifth of the country’s GDP.

Indonesia Update
Tax Amnesty
Under Indonesia’s tax amnesty scheme that ran from July 1, 2016 to March 31, 2017, residents and expatriates declared US$342 billion in previously unreported wealth. 897,000 taxpayers participated in the amnesty which has generated US$9.6 billion in revenues. However, less than half of the government’s target participated in the amnesty and only one-fifth of its financial target was generated. There are only 32 million registered taxpayers in Indonesia and only 8.9 million submitted tax returns last year.

Malaysia News
IP Rankings
In the latest US Chamber of Commerce International IP Index, Malaysia now ranks second in ASEAN, behind Singapore, and 19th globally for intellectual property protection. Of note was the creation of the Khazanah Harta Intelek Malaysia, a central Intellectual Property Rights repository, to facilitate and encourage the commercialization of intellectual property. Malaysia’s Intellectual Property Office has also streamlined the trademark application and registration processes.

Vietnam Bulletin
New Emissions Standards
Vietnam’s Ministry of Transport announced that all new diesel vehicles must follow Euro-4 emission standards before the end of 2017. All other newly manufactured, assembled, and imported cars have been required to meet Euro 4 standards since January 1, 2017 onwards to be eligible to register in Vietnam.

THAILAND UPDATE

Taxation
E-Commerce Tax
Thailand’s Revenue Departments says it will start enforcing a new law on the taxation of cross-border e-commerce transactions in April 2017. The number of cross-border e-commerce transactions continues to rise in Thailand for which merchants currently do not have to pay value added tax (VAT). E-commerce operators with a presence inside and outside of Thailand will now be liable for tax. The Revenue Department plans to tax revenues from digital marketing and advertising next.

Health
Tobacco Control Bill
The National Legislative Assembly passed the Tobacco Control Bill which will now replace the Tobacco Control Act of 1992 and the Non-Smokers’ Health Protection Act of 1992. The new minimum age to legally buy cigarettes is now 20 years, up from 18, and the sale of individual cigarettes has been banned. Items considered tobacco products now include water pipes and electronic cigarettes. All advertising and marketing of tobacco products are now prohibited.

Digital Economy
New Online Database
The Finance Ministry wants to create a single online database for importing and exporting through a national single window by 2018. This is part of a government effort to avoid potential corruption and bribery in processes where the state and private sectors meet. A single online database will also give the private sector reliable access to greater consolidated information resources and facilitate import and export procedures.

E-Payments
A global leader in e-payment systems says that Thailand’s e-payment market will continue to grow rapidly in 2017 due to increased government support. At the end of 2016, Thailand had 475,000 electronic data capture (EDC) devices and will double the number in 2017.

Trade
Anti-Dumping Tariffs
Anti-dumping tariffs on steel pipes from China and South Korea and coiled and uncoiled hot-rolled steel from Brazil, Iran and Turkey will be extended until May 15, 2017 to protect local industries. Thailand’s dumping policies conform to the World Trade Organization’s standards on dumping.

Processed Food Hub
The Japan External Trade Organization (JETRO) is increasing its collaboration with the Thai government to help make Thailand the regional hub for processed food. Under a new agreement, the two countries will engage in consultancy, information resources, business matching, and business expansion between Japanese and Thai food entrepreneurs.

Energy
Solar Grid Parity
An international consulting and engineering company says that Thailand will reach wholesale solar photovoltaic (PV) grid parity by 2024. Residential and commercial solar grid parity will also happen by the mid-2020s, but industrial parity could happen as soon as 2019. Grid parity happens when the cost of solar PV drops to match the cost of electricity from the grid. Grid parity will also spur a drastic increase in solar deployment.

Transport
Aviation Reform Plan
The government approved an aviation reform plan that will further Thailand’s goal of being the region’s aviation hub. A center for aircraft maintenance, repair, and overhaul will also be established. Under the plan, THB406 billion will be invested into Thailand’s airports over the next ten years in order to raise passenger capacity from 130 million a year to 277 million.

Finance
SME Support
The Ministry of Industry (MI) will release billions of baht in 2017 to help bolster small and medium-sized enterprises (SMEs). The MI is also engaged in talks with Japan and Korea, the model countries for SMEs, to assist in strengthening and modernizing Thailand’s SMEs.

Thailand Legal Review

Anti-Corruption Act
Amendment 3 of Thailand’s Anti-Corruption Act came into effect on July 10, 2015. The amendment was influenced by the U.K. Anti-Bribery Act and by the U.S. Foreign Corrupt Practices Act (FCPA) and its enforcement agencies. Under the Act, Thailand now complies with international standards for anti-corruption. Taking bribes in return for malfeasance is now punishable with a term of 5-20 years of incarceration, life incarceration, or the death penalty, and a monetary penalty of 100,000 to 400,000 baht (about US$2,855-$11,420) may also be imposed.

Thailand’s original anti-corruption act, the Organic Act on Counter Corruption B.E. 2542 (1999), only prohibited parties from offering bribes to state officials. The Act now prohibits foreign and public international officials or “intermediaries” to solicit the use of personal authority to wrongfully perform duties. The definition of official for anti-corruption purposes now includes foreign officials and officials of international organizations. The Act defines a foreign official as a person who holds a legislative, executive, administrative, or judicial position for a foreign country or any other person who works for the government of a foreign country including an employee of a government agency or state enterprise, whether they are elected or appointed, holds a permanent or temporary position or receives a salary or any other benefits. An official of an international organization is defined as a person who works for an international organization or who is appointed by an international organization to act on its behalf. A foreign official’s request for or acceptance of a bribe has also been criminalized.

Under the new Act, if an agent of a company commits a corruption offense in the interest of a company, that company will be held liable for the corruption offence; unless that company can prove it had the appropriate internal control measures in place to prevent the corrupt act. If a corruption offense is committed by a party related to a juristic person and in their interest, such juristic person will be deemed guilty of the offence and be liable for a fine.

Article 44 for Patent Backlog

The government is exploring the use of Article 44 of Thailand’s interim charter to help clear a backlog of pending patent applications. However, the use of Article 44 is only intended as a short-term solution. At this time, the Department of Intellectual Property (DIP) is also considering amendments and modernizing Thailand’s Patent Act B.E. 2552 (1979). The DIP has also taken on more patent examiners.

Under the Article 44 program, applicants could request a modified substantive examination if a request for a substantive examination has already been filed with the DIP and the patent has been granted by an intellectual property office(s) in other countries. The Thai patent claims must then be changed to match the overseas patent claims. Even with the modified examination, the patent must still conform to Thailand’s patent eligibility rules. If the patent fulfills all of the above requirements, the patent will be granted. An applicant has a limited time period from the start of the program to submit the request for a modified examination.

However, even after a patent is successfully granted under the modified substantive examination, it can still be challenged through the reexamination process. The patent will be revoked if it is found to be unpatentable after reexamination.

Disclaimer
The material contained herein is only provided for information purposes. No part thereof may be deemed to constitute legal advice or the opinions of this law firm or any of its attorneys. Whilst every effort has been made to verify the contents of the material contained herein, we do not represent, warrant, undertake or guarantee that the information contained in this newsletter is correct, accurate, or complete. Legal advice must be sought before acting on any information contained herein.

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