Thailand: Export control of dual-use items due in 2018

The government in Thailand aims to enforce export controls on goods that have both a commercial and military use, so called dual-use items, with commencement in 2018. The draft law, titled “Trade Controls on Weapons of Mass Destruction Act”, is currently being considered by the Council of State but is expected to pass the legislative process by the end of this year. It will become effective 180 days after it has been published in the Royal Gazette. The initiative is based on a Commerce Ministry notification regarding criteria and licensing requirements issued in October 2015.

Requirements for companies

Companies will be required to monitor whether their exports are covered under two lists. List I is the list of Export Control Classification Numbers (ECCN), which is largely based on European Union regulations. The goods on this list require a specific license (on a shipment-by-shipment basis) before they can be exported. It is expected that under the new regulations companies will be allowed to apply for bulk licenses to cover multiple shipments, rather than on a shipment-by-shipment basis under the current notification. Such bulk license applications could be issued to companies proving a proper internal compliance system to manage exports of dual-use items. List II is wider and based on harmonized system (HS) classification codes. Companies exporting goods under list II do not need an export license but must follow certain procedures before exporting. These procedures include

registration with the Foreign Trade Department and
self-certification that such goods are not eligible for dual-use.

Consequences and impacts

Non-compliance with the export control regime may lead to significant penalties and fines, or even imprisonments, delay in shipments, financial loss and reputational damage. The new rules will likely have impact on various industries. Those to be expectedly mostly affected include automotive, chemicals and pharmaceuticals, computers, electronics, medical equipment, semiconductors, steel and telecommunications. In order to avoid sanctions or obstacles in their trading activities companies should start as soon as possible with the checking and verifying whether their products are considered dual-use items under list I and/or are listed as products that require self-certification under list II.

Updated 11 August 2017