Thailand’s cabinet approves trade competition act


After years of debate and various drafts proposed by interested parties, Thailand’s Cabinet finally approved the draft Trade Competition bill, proposed by the Department of Internal Trade, at a meeting on 11 October 2016.

This draft bill is an overhaul of the existing Trade Competition Act, enacted in 1999. The major changes include the spin-off of the Office of the Trade Competition Commission (OTCC) from a division of the Department of Internal Trade, under the Ministry of Commerce, into an independent state organization, and the inclusion of a fine of 10% of the total income of the fiscal year before the year an offence is committed for cartel cases, in addition to the existing criminal penalty (imprisonment of not more than three years). The spin-off is said to eliminate past enforcement issues attributed to political influence, and to provide more flexibility in managing the organization.

In addition, mergers and acquisitions that fall within the criteria set out by the Trade Competition Commission must be reported to the OTCC within seven days of completion of the transaction (instead of pre-merger clearance). For soft-core cartels and unfair trade practice, the draft bill removes the criminal penalty and imposes an administrative penalty instead (i.e., a fine of 10% of the total income for the fiscal year before the offence is committed).

The draft bill will have to be approved by the National Legislative Assembly before it can be passed as law. Next in line is an amendment of the criteria for dominant business operators, which would lower the current threshold of market share from 50% to 30%, and sales turnover from 1 billion baht (US$28.25 million) to 500 million baht.

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Additional copy regarding new treaties with India was compiled by Nishith Desai Associates (NDA), a research-based international law firm with offices in Mumbai, New Delhi, Bangalore, Singapore, Silicon Valley and Munich.