28 October, 2016
After years of debate and various drafts proposed by interested parties, the Cabinet has finally approved the draft Trade Competition bill, proposed by the Department of Internal Trade, at its 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 under the Department of Internal Trade, the Ministry of Commerce, into an independent state organization, and the inclusion of a fine of 10 percent of the total income of the fiscal year before the year an offense is committed for cartel cases, in addition to the existing criminal penalty (i.e. 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 to the above, mergers and acquisitions that fall within the criteria set out by the Trade Competition Commission must be reported to the OTCC within seven days post-completion of the transaction (instead of pre-merger clearance).
For softcore cartels and unfair trade practice, the draft bill removes the criminal penalty and imposes an administrative penalty instead (i.e. a fine of 10 percent of the total income for the fiscal year before the offense 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 percent to 30 percent, and sales turnover from THB1 billion to THB500 million.
For further information, please contact:
Pornapa Thaicharoen Partner, Baker & McKenzie
pornapa.thaicharoen@bakermckenzie.com
