Further to our previous newsletter on the amendment to the Direct Sales and Direct Marketing Act B.E. 2545 (2002) (the DSDMA), significant changes include requirements for new business operators to place security with the Office of the Consumer Protection Board (the OCPB) upon applying for direct sales and direct marketing licenses. Since then, new applications have been put on hold and no new licenses will be granted until the ministerial regulation on required security is issued.
On 20 February 2018, the cabinet approved the draft ministerial regulation prescribing the rules, procedures, and conditions on provision of security for the operation of direct sales and direct marketing business (Security Regulation).
Applicants for direct sales and direct marketing licenses must provide security to the OCPB based on the size and revenue of their business. The amount of the security to be provided by a direct sale business operator ranges from THB 25,000 to THB 200,000, while the amount for a direct marketing business operator ranges from THB 5,000 to THB 200,000.
On the effective date of the Security Regulation, consideration and granting of direct sales and direct marketing licenses will resume. The Security Regulation will also apply to existing operators, who will need to place security at the required rate with the OCPB within the period specified by the regulation.
In addition, the cabinet also approved the draft ministerial regulation prescribing the rules and conditions on sale and purchase of goods or services through e-commerce that is not considered direct marketing.
The following e-commerce businesses will not be considered as direct marketing and therefore will not require a direct marketing license under the DSDMA:
- e-commerce businesses operated by natural persons with revenue before expenses of less than THB 1.8 million per year;
- e-commerce businesses operated by SMEs; and
- community enterprises.
These draft regulations has been passed to the Office of the Council of State for further approval and publication in the Royal Gazette.