The new Customs Act, which was published in the Government Gazette will become effective on 13 November 2017. This Act will replace the current Customs Act B.E. 2469 (1926) and its subsequent amendments. Key changes in the new Customs Act include provisions on the limitation period on post-clearance audit timelines, criminal penalties for offenses, presumed liability for company directors and/or authorized persons, the timeframe for consideration by the Appeals Committee, and many other points.
According to the current Customs Act of 1926, once counterfeit goods (i.e., those that infringe copyright and/or trademark) are imported into Thailand, Customs must rely on Section 27 to penalize the importer and the others liable. Under Section 27, the maximum penalty that may be imposed on an importer who imports counterfeit goods into Thailand is imprisonment for a term not exceeding 10 years and/or a fine equal to four times the duty-paid value of the goods. For transit and transshipment of “illegal” goods under Notification Nos. 210/2558 and 211/2558 (as discussed in our previous Client Alert from September 2016), there is still no clear definition to clarify whether the term “illegal” include goods that violate Thai intellectual property law.
The new Customs Act of 2017 significantly expanded maximum penalties for import of counterfeit goods. It also includes penalties for the transit and transshipment of counterfeit goods, which it clearly establishes as offenses thereunder. Section 244 provides that an importer of fake goods into Thailand, including for transit or transshipment, will be subject to imprisonment for a term not exceeding 10 years and/or a fine not exceeding THB 500,000 (approx. USD 14,285). Section 244 also makes “attempting” to import counterfeit goods an offense subject to the same penalties prescribed therein.
Section 245 provides that an instigator, supporter, and/or principal of importation of fake goods will also be subject to the prescribed act in Section 244. Using Section 245, it may even be possible to hold a shipping company jointly liable with the true importer if that shipping company had knowingly conducted Customs clearance processes for counterfeit products on behalf of importers. However, it remains to be seen how this will be practically applied.
Finally, while the current Customs Act of 1926 does empower Customs to take action against a person who knowingly re-sells or purchases imported counterfeit goods, the maximum penalties imposed under the current Act are imprisonment for a term not exceeding 5 years and/or a fine equal to four times the duty-paid value of the goods. Section 246 of the new Customs Act of 2017, however, maintains the offense while the maximum penalties for violations are changed to imprisonment for a term not exceeding 5 years and/or a fine not exceeding THB 500,000 (approx. USD 14,285).
The key takeaway is that while the Customs Act will bring forth many changes, Thailand’s commitment and that of Customs to the suppression of copyright and trademark infringement via import through Thai ports remains as strong as ever, with Customs officials now empowered by broader options for enforcement and deterrence.