ASEAN Today – Regional Legal and Business News – April 2018

ASEAN Today – Regional Legal and Business News for April 2018 and an Important Update on Work Permit and Visa regulations for Foreign Workers in Thailand

 

ASEAN Economic Community News

32nd ASEAN Summit
The 32nd Association of Southeast Asian Nations Summit was held this month in Singapore. ASEAN leaders adopted the ‘Vision of a Resilient and Innovative ASEAN’ which sets the year’s goals. Informal discussions were held on regional issues including potential trade wars, Korean denuclearization, the humanitarian crisis in Myanmar, and the South China Sea disputes. As Chairman of ASEAN for the year, Singapore is particularly interested in promoting economic integration and connectivity to keep increasing prosperity for ASEAN’s people. Managing and effectively using digital technologies and cybersecurity are also Singapore’s objectives for the year.

Smart Cities Network
At the recent ASEAN Summit, Singapore proposed the formation of the ASEAN Smart Cities Network (ASCN) and named 26 regional cities as pilot cities for the network. In the concept note, ASEAN states that regional growth will continue to be driven by urban centers, but that rapid urbanization also creates difficulties including congestion, pollution, poverty, and safety. The ASCN will help the cities address the challenges of rapid urbanization. 40% of ASEAN’s economic growth is forecast to come from cities with 200,000 to 2 million residents.

Cambodia Update
European Patent Protection
Cambodia is now the first ASEAN country to recognize European patents in its territory. An agreement between Cambodia and the European Patent Organization (EPO) came into force on March 1, 2018. Now, European patents granted by the EPO and validated in Cambodia will have the same legal effect as a Cambodian patent and be subject to Cambodia’s patent law.

Indonesia News
Cash Transaction Cap
The Indonesia government wants to set a daily cap on cash transactions as part of its anti-graft campaign and to also encourage the country to move towards becoming a cashless society. Under the proposed legislation, cash transactions by individuals and companies will be limited to 100 million rupiah (US$ 7000) a day. Indonesia is the second largest cash based society in the world.

Vietnam Watch
Trade Growth
One in 10 of all smartphones is produced in Vietnam and mobile phones are the country’s number one export and generated US$45 billion in export revenue in 2017. Trade in Vietnam has risen from 70% of GDP in 2007 to 190% in 2017. Experts attribute Vietnam’s manufacturing successes to enthusiastic trade liberalization, domestic reforms including deregulation and lowering the cost of doing business, and heavy investment into its human capital and infrastructure.

Singapore Bulletin
Corporate Profits
A local business intelligence provider and a global credit reference agency released their yearly ranking for Singaporean corporations and small and medium-sized enterprises (SMEs). For the corporate sector, the top 1,000 Singaporean companies had a combined profit of US$ 137 billion, up 10.5% year on year. However, combined profits in the SME sector fell by 17% to US$2.2 billion.

Laos News
Agriculture Assistance
The World Bank approved a US$25 million assistance project to help Laos increase agricultural productivity and produce crops for commercial purposes. The project will support 28,000 farming households to improve quality and yields and increase labor productivity and crop sales.

THAILAND IMMIGRATION UPDATE

On March 28, 2018, the Emergency Decree on Managing the Work of Foreigners B.E. 2561 (2018) (Chapter 2) came into effect. It consolidates the Emergency Decree on Managing the Work of Foreigners B.E. 2560 (2017) dated June 23, 2017. Chapter 2 of the Emergency Decree makes major changes to the penalties for non-compliance due to the numerous complaints from the business operators and employers over the high and serious penalties announced in the 2017 Emergency Decree. The Government realized this was going to cause an unfriendly atmosphere for business investors. So, the penalties stipulated in Chapter 2 were drastically reduced from the penalties specified in 2017. However, due to the delayed processing of migrant workers (Laos, Cambodia and Myanmar nationals), the Government has postponed the enforcement of the penalties for defaulting employers and employees who are not complying with work authorization regulations under Chapter 2 until June 30, 2018. This means the penalties under Chapter 2 will become effective on July 1, 2018. The delay in enforcement is to minimize the negative impact on employers and migrant workers during this time period when the Government is still working on completing the paperwork for work authorization for the migrant workers. The goal is to complete this for the whole country by June 30, 2018.

As a result, the enforcement of all penalties will be delayed until July 1, 2018. During this grace period, there will be no arrests or crackdowns on illegal workers except for those who violate human trafficking laws. Please note that although Chapter 2 was issued on March 28, the implementing regulations are still pending and have been delayed due to the interpretation of the relevant Labour Authorities. Furthermore, some of the rules require the use of the new application forms. The new forms just came into use on May 2. To make matters more complicated, these rules only apply for regular companies, not for BOI or IEAT companies, and at this time, the rules are only used at the OSSC, but not the Employment Department.

Our summary of the significant changes in the Emergency Decree on Managing the Work of Foreigners B.E. 2561 (Chapter 2) is as follows:

I) Exemption for work permit.
1. Persons who enter Thailand to occasionally perform the duties of organizing, setting up, participating in, giving opinions, conducting lectures or demonstrations in a conference including providing training, seminars, or business invitation work for artistic, cultural, sportive or other purposes as designated by the Cabinet. The Cabinet has not yet designated the period of time for work and conditions as deemed appropriated. Note: As to this point, the Government has not yet released any regulations designated by the Cabinet. The current rules shall apply until the regulations by Cabinet have been released.

2. Persons who are a representative of a foreign juristic person that has received a Foreign Business Operation License according to the Foreign Business Act. In this case, a foreigner who is registered as a responsible person for the following entities with the Ministry of Commerce is exempted from obtaining a work permit provided that the following entities received a Foreign Business Operation License: A) Branch Office, B) Representative Office, or C) Regional Office.

II) Work Commencement Notification
Both the Employer and Employee must notify the Registrar of the Employment Department within 15 calendar days from the date of employment commencement. A fine payment of not more than Baht 20,000 shall be imposed on anyone who fails to submit the notification as per the above timeline. Note: The enforcement of the penalties for defaulting employers and employees who are not complying with notification regulations under Chapter 2 will be delayed and will become effective on July 1, 2018. The Employer must submit the BT 8 form for such notification. As per the current practice, the Labour officer requires a BT 8 form to be included in the new Work Permit or PWPA applications. The BT 8 form must be signed by the Employer when filing the new application.

The Employee must submit the BT 11 form for such notification when obtaining his/her work permit booklet from the Authority.

III) Work Termination Notification
The Employer (ONLY) must notify the Registrar of the Employment Department within 15 calendar days from the date of termination of employment. A fine payment of not more than Baht 20,000 shall be imposed on anyone who fails to submit the notification as per the above timeline. Note: The enforcement of the penalties for defaulting employers and employees who are not complying with notification regulations under Chapter 2 will be delayed and will become effective on July 1, 2018. Employers must submit the BT 10 form for such notification. Upon receiving the BT 10 notification, the officer will issue the receipt to confirm the acknowledgement of notification.

IV) Extension of Urgent Work Permit.
A foreigner who enters Thailand to perform necessary and urgent work as prescribed in the Notification of the Director General must notify the Registrar and complete such necessary and urgent work within 15 calendar days. If such necessary and urgent work is not completed within the notified period, the foreigner may request an extension of no longer than 15 calendar days. The extension request must be made before the first notification period ends.

V) Change of Work Details & Work Location.
1) The work permit holder may change or add a location of work which is for employment by the current employer without notification or obtaining permission from the Registrar provided that such location is the location/ place where the employer has registered (with the Ministry of Commerce) or has a legal obligation to work (for example, having a Service Agreement to work at the client site)

2) The work permit holder may change or add work details (job title, job description) which are for employment by the current employer without notification or obtaining permission from the Registrar provided that such change or additional work is permitted under the Emergency Decree. To elaborate, the work permit holder is not allowed to work in any of the listed prohibited professions.

VI) Employer and Employee Compliance
Below is a summary of the penalties that will be imposed on the Employer (the company) and the Employee:

1) In case the foreigner has a work permit, but engages in any work in the Prohibited Lists prescribed by the Emergency Decree:

Employee: Subject to a fine payment of Baht 5,000 but not exceeding Baht 50,000

Employer: Subject to fine payment of Baht 10,000 but not exceeding Baht 100,000 per 1 employee

2) Employers who hire foreigners or allow foreigners to work without valid work permits and foreign nationals who do not possess valid work permits will be liable for the following:

Employee: Subject to a fine payment of Baht 5,000 but not exceeding Baht 50,000

Employer: Subject to fine payment of Baht 10,000 but not exceeding Baht 100,000 per 1 employee

Note: The enforcement of the penalties for defaulting employers and employees who are not complying with work authorization regulations under Chapter 2 will be delayed until June 30, 2018. This means the above penalties will become effective on July 1, 2018

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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