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THAILAND: Exporters of Potential Dual Use Items to Face Increased Customs Scrutiny

Exporters of items with a potential dual use – such as goods that are ostensibly designed for commercial use but could have a military application – will now have to comply with a number of additional customs requirements. While wide-ranging, these new regulations will impact most directly on exporters of electronics, semiconductors, computers, medical equipment and automotive components.

Overall, the legislation will extend to goods listed on one of two international protocols – the Export Control Classification Numbers (ECCN) system (as used by the EU) and the Harmonised Commodity Description and Coding System (HS) (as adopted by the World Customs Organisation). In the case of items specified under the terms of the ECCN, a prior license will have to be secured on a shipment-by-shipment basis before any export can be authorised. For those goods covered by the HS list, a license will not be required. Exporters, however, will have to complete a self-certification process, as specified by the Department of Foreign Trade, confirming that all such items do not have any illicit application.

With the new regulations not coming into effect until 1 January 2018, there is still the possibility that the regime will be extended to include technology transfer, software exports and a number of other trade-related activities, such as re-exports, transhipment and brokering services. This is particularly likely if the proposed Trade Controls on Weapons of Mass Destruction Act (TCWMD Act) is approved by the Thai parliament before the end of 2017. As something of a lifeline for exporters, however, the draft legislation proposes that bulk licenses can be granted in the case of multiple shipments. Applications for bulk licenses, however, will only be accepted from those companies able to demonstrate that they have in place in-house compliance systems for the management of any exports with a potential dual use.

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