29 Dec Dej-Udom & Associates Newsletter – December 2016Download PDF
The Dej-Udom & Associates Thailand ASEAN Newsletter for December 2016
ASEAN Economic Community News
Progress Made in the AEC’s First Year
The Deputy Secretary-General of ASEAN for the ASEAN Economic Community (AEC) reports that AEC made good progress in its first year. The National Trade Repositories were established in all ASEAN member states which allow traders to better comply with all prescribed regulations. Additionally, the protocol to implement the Ninth Package of Agreements for the ASEAN Framework Agreement on Services was signed. The ASEAN Open Skies agreements were fully ratified and now allow for unlimited air transport for passengers and cargo through specified international airports. Economic mechanisms to support the AEC Blueprint were also completed including the ASEAN Trade Facilitation Framework (ATFF), the ASEAN Food Safety Regulatory Framework (AFSRF), and the ASEAN Institutional Framework on Access to Finance for Micro, Small and Medium Enterprises (MSME
Taiwan Pivots to ASEAN
The Taiwanese government approved its New Southbound Policy this month, a pillar in the county’s national development strategy. Taiwan wants to lessen its economic dependence on Mainland China and pivot towards ASEAN and other regional allies. The new policy aims at strengthening economic trade, human exchange, resource sharing, and regional connectivity. Projects to support these goals will be put into practice by 20 ministries and organizations starting in January 2017.
While banking experts agree that the ASEAN Banking Integration Framework (ABIF) could be highly beneficial for ASEAN, they warn that the refusal of the ASEAN member states to concede any part of their sovereignty will challenge the chances of the ABIF’s success.
Dumping Duties Lifted
The United States has lifted dumping duties on certain steel products from Vietnam, namely, Circular Welded Carbon-Quality Steel Pipe (CWP). The U.S. initiated a dumping investigation on the import of CWP into the U.S. from the United Arab Emirates, Pakistan, and Vietnam in 2015 and began levying anti-dumping duties. The investigation concluded that Vietnam CWP satisfied the required conditions and the duties were lifted.
Provision of Land Titles
To help reduce conflicts between small farmers and plantation owners, Cambodia has been expediting the provision of millions of land titles to farmers. Authorities have issued over 4 million official land titles in the last 20 years and plan to issue an additional 3 million by 2023. More than 700,000 small farmers, 5% of the population, have been affected by land disputes over the last 15 years.
Laos expects a trade surplus for 2016. The value of exports is expected to be 10% over target with the value of imports only reaching 76% of the targeted amount. Exports of goods and services saw considerable growth in 2016 including banana production which increased by 345%, cassava by 160%, and electricity by 57%.
Economic Growth Warning
A recent survey by an international consultancy firm maintains that Myanmar’s lack of transparent economic policies will hamper the country’s future economic growth. The survey says that Myanmar’s unpredictable legislative environment, selective enforcement of regulations, and deficiency in intellectual-property rights protection are the most problematic for future growth.
The telecom sector was the biggest source of foreign investment in Myanmar in the current fiscal year with 47% of total investment. The industrial sector was next and took in 25%.
The Cassava Management and Policy Committee released its new strategy to develop Thailand as the leading cassava producer in ASEAN over the next ten years. The strategy promotes the use of innovation and technology that will allow Thailand to add value to its cassava products and rely less on the export of cassava.
Advertising Market Losses
Advertising expenditures in most traditional media channels in Thailand dropped by 12% in 2016 with advertising on cable and satellite TV dropping the most at 43%. Newspaper and magazine advertising expenditures also decreased by 20% and 30% respectively. Expenditures in cinema, outdoor, transit, in-store and internet media advertising remained positive.
Securities and Exchange
New Act Takes Effect
Thailand’s new Securities and Exchange Act took effect this month and now includes heavy civil penalties for stock market manipulation and insider trading. The civil penalties can be applied retroactively and include a fine equivalent to two times the damages, return of the ill-gotten gains, and a ten-year ban or suspension.
Revised Computer Crime Law
The National Legislative Assembly unanimously passed the amendments to the 2007 Computer Crime Act. The revised law sets up to 5 year prison terms for entering false or distorted information into a computer system that jeopardizes national security, public safety, national economic stability or public infrastructure, or causes panic. A five-person committee can now approve the removal of online content deemed counter to public morals. Also authorities can request user and traffic data from internet service providers without a court warrant. The court can order information found to be false or to have caused damage be removed from the internet and deleted from computer systems.
The impact of the Foreign Account Tax Compliance Act (FATCA) enactment by the U.S. government and the Financial Action Task Force on Money Laundering (FATF) practice directed by European Union (E.U.) has requested the Thai government and relevant enterprises into the following substantive adjustments:
1) Thailand’s establishment of the Asia Pacific Group on Money Laundering (APG) on April 26, 2016 which rendered the revision of the Anti-Money Laundering Act B.E. 2542 to follow the standards set out by the FATF as per the Cabinet resolution dated May 19, 2016.
2) Compliance with FATCA and the FATF by the Thai Revenue Office with the implementation of the e-Payment system by the Ministry of Finance and the Bank of Thailand. Now, all financial transactions made by Thai financial institutions or non-financial foreign entities and any accountholders with U.S. nationality must be reported to the Revenue Office in order to be forwarded to the U.S. Internal Revenue Service (IRS) and the APG.
3) Due to the above requirements set out by FATCA and the FATF, the improvement of the Thai tax payment system is thus in demand.
4) The SME single account scheme was implemented by the Revenue Office to enforce compliance with 430,000 enterprises.
5) The September 2016 deadline resulted in the Revenue Office proposing that the amended Revenue Code stipulate the tax payment of entrepreneurs with earnings above THB500 million per annum. The earnings will be subject to the e-Payment system via commercial banks from October 1, 2016 onward.
Amended Bankruptcy Act
The Cabinet approved new amendments to the Bankruptcy Act which will come into force in July 2017. The new law will improve efficiency in the handling of bankruptcy cases in line with international standards. The new Act will allow for the seizure of debtors’ assets abroad and deal with international bankruptcy cases. More power is given to the authorities to trace a debtor’s assets and financial status.