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Implementing Catch-All Controls measures on Dual-Use Items in Thailand

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Implementing Catch-All Controls measures on Dual-Use Items in Thailand

The  Department of Foreign Trade (“DFT”), Ministry of Commerce, recently issued the Notification of the Ministry of Commerce, Re: Measures to control items in relation to the proliferation of weapons of mass destruction, and measures related to items with reasonable doubt concerning a connection between an end-use or end-user related to the proliferation of weapons of mass destruction B.E. 2564 (2021) (the “CAC Notification”). Said CAC Notification stipulates the measures to prohibit “items with reasonable doubt”, i.e. dual-use items[1] .(“DUI”) under the responsibility of the DFT[2] , in exports, re-exports, transshipments, border crossings and transfers of technology and software (Catch-all Control Measures or “CAC Measures”), in order to control the proliferation of weapons of mass destruction. According to the CAC Notification, procedures on the implementation of CAC measures are as follows:

(A)        Notifying the Director-General to examine information deemed ‘of-risk’ by a government agency

The government agency which has information regarding items with reasonable doubt may notify the Director-General of the DFT (the “Director General”) to investigate such information, as to whether there is the risk of proliferation of weapons of mass destruction. However, the investigation by the Director General shall only be executed if the following information is present:

              (1) Name and address of the person related to any operation contributing to the export, re-export, transshipment, or transfer of technology and software of item with reasonable doubt regardless of whether  such person is a buyer, seller, exporter, sender, transhipper, cross border item transhipper or technology and software transferrer or carrier (“related person”), who can be contacted in Thailand at least 1 person,  and documentary evidence showing the status of such relation.

              (2) DUI code according to List 1 and the Customs tariffs according to List 2, as annexed to the CAC Notification in the case of DUI; or the Customs tariff according to List 2 in the case of items that are classified as DUI, and any specific or other information that can be used to identify dual-use items. In the case of DUI that are technology and software, only the DUI code shall be notified according to List 1 and DUI code of the item related to such technology and software. In the case where said item is tangible media, the Customs tariff of such media shall be notified as well.

              (3) Name of the related person or consignees involved in the proliferation of weapons of mass destruction according to the United Nations Security Council Consolidated List, or name of a person or a group of people involved in the proliferation of weapons of mass destruction as coordinated by agencies involved in the implementation of UN Security Council Resolution 1540.

              (4) Name and address of consignee.

              (5) Transport route and address of the item’s destination.

(B)         Examining the Risk by the Director-General

When the risk information is notified, a risk audit shall be conducted against the proliferation of weapons of mass destruction. The criteria of such audit is as follows:

              (1) It is an export, re-export, transshipment, border crossing or transfer of technology and software of DUI according to List 1 or items that are classified as dual-use items according to List 2 annexed to the CAC Notification.

              (2) Related person or consignee is in the United Nations Security Council Consolidated List, or an individual or group of persons involved in the proliferation of weapons of mass destruction.

              (3) Related person cannot submit documentary evidence from inspections of export, re-export, transshipment or transfer of technology and software that has a mechanism in accordance with the criteria for accreditation of the item’s control system prescribed by the DFT, and it can be demonstrated that there is no risk of such item, including:

                            (i)   Determination of responsibilities and assignment of duties in administration;

                            (ii)  Usage and end-user monitoring system;

                            (iii) Training system;

                            (iv)  Document maintenance and retention system;

                            (v)   Inspection and improvement system; and

                            (vi)  Reporting system

              The details of such criteria is prescribed by the Notification of the Department of Foreign Trade Re: Criteria for the certification of item control system related to the proliferation of weapons of mass destruction B.E. 2564 (2021), which can be accessed at https://www.dft.go.th/th-th/Detail-Law/ArticleId/19807/19807.

(C)        Notification of CAC measures when encountering a risk

CAC measures will be implemented in the case where the Director-General finds that there is a risk of proliferation of weapons of mass destruction on the items with reasonable doubt. The Director-General shall issue a written notification of CAC measures together with the information of risk to the related person. Such measures shall be effective from the date of receiving the notice until the date notifying the repeal of such measures in writing from the Director-General. However, the person receiving such notification has the right to appeal in writing to the Minister of Commerce within 30 days from the date of receipt thereof.

(D)        Revision of the measures if the risks change

The Director-General may consider revising the CAC measures if the related person who has been notified as mentioned above shows the documentary evidence which proves that the risk of proliferation of weapons of mass destruction has been changed or disappeared.

If the Director-General deems to cancel the enforcement of all or part of the measures or imposes new measures, there will be a written notification of the measures’ repeal or the determination of such new measures to the related person who has been notified.

The CAC Notification was announced in the Government Gazette on 27 October 2021 and comes into force on 26 December. For more information, please visit https://www.dft.go.th/th-th/Detail-Law/ArticleId/20416/20416.

 

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact any of the authors.

Nuttaros Tangprasitti
Partner

Krid Pongprapaphan
Associate

 

  • 1 “Dual-use Items” means Items that could be utilized both civilly and militarily, and could be used to design, develop, manufacture, apply, modify, store, or transport Weapons of Mass Destruction or could be treated by any means in order to acquire Weapons of Mass Destruction.
  • 2 DUI under the responsibility of the DFT can be checked through List I and List II annexed to the CAC notification. However, please note that only items prescribed in List I are regulated as DUI under the CAC Notification. Regarding the items prescribed in List II, they are only provided for the purpose of reference or comparing to the items in List I by comparing with the Customs tariff. 

Authors

ナッタロス・タンプラシ

Nuttaros Tangprasitti specialises in corporate and commercial law. She regularly assists both international and domestic corporate clients (limited liability companies and partnerships, stock corporation in several industries) on the relevant laws of Thailand, which includes foreign direct investment, legal due diligence, M&A and cross-border M&A, joint venture, compliance, banking and finance. In addition to supporting clients on the above and a multitude of different legal formalities, she also has expertise in advising on various investment promotion policies of the Board of Investment (BOI), as well as compliance with foreign business, other laws on salient points for shareholders and joint venture agreements, which includes laws on immigration and foreign work under Thai law. Nuttaros speaks at many seminars and takes an active role in educating the clients on issues relevant to their businesses and her practice areas. She also writes various articles and newsletters on cutting-edge topics in several legal areas, which are widely distributed to existing and potential clients. Nuttaros aims to ensure the lawyers on her team are constantly developing and upgrading their skills, to ensure they meet or exceed the high professional standards of Nishimura & Asahi. She is committed to ensuring that both she and our firm deliver top-quality services to our clients and strong internal support for our colleagues. She recently began drafting a manual on several aspects of Thai law, as part of an “Investment promotion scheme,” and also wrote several newsletters on corporate law, and banking and finance laws. She also recently authored an article on the impact of Tax Reduction for Land and Buildings, which received excellent feedback from our clients, particularly those who are land and building owners. Nuttaros is committed to building a strong and progressive corporate and commercial practice, which also incorporates tax law, by adapting to new ideas in the legal industry.