A significant new procedural law for fines in Thailand results in the mass removal of certain types of fines for criminal penalties and alters procedures for certain administrative monetary penalties.
There are generally two types of fines imposed under Thai law: criminal fines and administrative fines. However, there will soon be a type of fine that exists outside of the criminal or administrative legal mechanisms: the phinai fine, which is neither a criminal penalty nor an administrative fine. Instead, a phinai fine—which must be paid to the state—is one assessed in lieu of criminal penalties for less-serious offenses.
Perhaps the closest equivalent to a phinai fine would be a “civil” fine, but there is no official translation of Thailand’s first law dedicated to these fines, the Act on Phinai Fine Proceedings B.E. 2565 (2022) (ACFP), which was published in the Government Gazette on October 25, 2022. Before proceeding further to discuss the significance of the new law, a note should be made regarding the term phinai. As there has been no official translation of the ACFP, there is currently no official translation of phinai. Under the ACFP, “to seek a phinai fine” (or prap pen phinai) was determined to have the specific meaning of ordering a phinai penalty offender to pay a phinai fine. The meaning of the term as defined reflects a type of phinai penalty, which is neither a criminal penalty nor an administrative fine. In the future, there is a possibility that the official translation of the ACFP may use a different term.
The passage of the ACFP provides Thailand with a special procedural law for all phinai fines, ultimately resulting in a significant change in the categorization and collection of fines and administrative monetary penalties. Other than two sections on administrative preparations that took effect the day after publication, the ACFP comes into full effect on June 22, 2023.
The ACFP clarifies that any proceedings related to seeking a phinai fine will not be considered as an administrative act, but also that a phinai fine is not a type of criminal penalty. By separating these types of proceedings from the usual administrative and criminal legal mechanisms, the ACFP provides a separate set of legal procedures applying to violations for which the law specifically imposes a phinai fine.
The imposition of a fine is a criminal sanction under criminal law in Thailand. Along with death, imprisonment, confinement and forfeiture of property, a fine is categorized as one of the five types of criminal penalties stipulated by section 18 of the Penal Code. For certain criminal offenses, this recent development would change the fines for those offenses to become phinai fines or (or kha prap pen phinai)—making the offenses no longer criminal. Moreover, certain administrative monetary penalties determined by law to proceed in a criminal court by filing a complaint could also be affected by the ACFP. These changes would eliminate the risk of having criminal records for offenders and provide clear prerequisites for the courts when administrative monetary penalty offenses are to be filed with the Courts of Justice.
The ACFP identifies 204 pieces of legislation—in three separate lists—that are affected by these changes. The first list consists of 168 laws, the second of 33 laws, and the third of 3 laws.
The most significant of these are identified below according to which of the three lists they fall under.
- List 1. In these laws, criminal offenses that are punishable only by a fine will be considered as phinai fine offenses, with phinai fines replacing the previously stipulated fines one year after publication of the ACFP. Notable laws (as amended) on this list include:
- Determining Offence Relating to Registered Partnership, Limited Partnership, Limited Company, Association, and Foundation Act B.E. 2499
- Direct Sales and Direct Marketing B.E. 2545
- Alcoholic Beverage Control Act B.E. 2551
- Tobacco Product Control Act B.E. 2560
- Labor Protection Act B.E. 2541
- Trademark Act B.E. 2534
- Civil Liability for Oil Pollution Damage Caused by Ships Act B.E. 2560
- Life Insurance Act B.E. 2535
- Social Security Act B.E. 2533
- Land and Building Tax Act B.E. 2562
- Labor Relations Act B.E. 2518
- Bankruptcy Act B.E. 2483
- List 2. For the laws in this list, offenses subject only to a fine can be changed to a phinai fine offense only by a royal decree. Some of these laws (as amended) include:
- Air Navigation Act B.E. 2497
- Foreigners Working Management Emergency Decree B.E. 2560
- Emergency Decree on Digital Asset Businesses B.E. 2561
- Immigration Act B.E. 2522
- Factory Act B.E. 2535
- Narcotics Code
- Securities and Exchange Act B.E. 2535.
- List 3. Administrative monetary penalties stipulated in the legislation on this list become phinai fines 365 days from publication of the ACFP. This list includes the following laws (as amended):
- Community Forrest B.E. 2562
- Thai Vessels Act B.E. 2481
- Social Enterprise Promotion Act B.E. 2562
The ACFP also singles out two cases in which offenses will not become phinai offenses, despite being in laws in lists one and two and having only a fine as a penalty. The first of these is offenses limited to a fine imposed on a juristic person but for which the same offense has both imprisonment and a fine for an ordinary person. In the second scenario, if the offense is indicated as one that is subject to a greater penalty than a fine for repeat offenses—or there is any other reason stipulated by the law—then the offense will not be made a phinai offense.
One year after publication of the ACFP, local administrative organizations will no longer be able to issue a fine as a penalty under local legislation. Instead, offenses for which a fine may be imposed in local legislation will be considered as phinai fine offenses.
The ACFP reclassifies various violations as phinai fine offenses. This means that offenders subject to one of these phinai fines will not have a criminal record, as the underlying offense is no longer considered a criminal offense. Furthermore, this reclassification also applies to relevant offenses that were committed in the past—that is, people who committed one of the criminal offenses mentioned above will also benefit from the ACFP, as their previous criminal record for the offense – while not being completely expunged or erased—would no longer have any negative effect on the person. Additionally, anyone currently undergoing proceedings or being punished, criminalized, or imprisoned in lieu of the fine will be released.
Many of the laws affected by the ACFP are of special concern to businesses and include legislation relating to employment, factories, environmental issues, and insurance. The enactment of the ACFP has a far-reaching effect on the offenses or wrongdoing addressed in those laws. In order to have a full understanding of the sanctions provided in them, entrepreneurs and their counsel need to read those laws in conjunction with the ACFP. Conduct that was punishable by criminal penalties may no longer be a criminal offense, and the corresponding punishment may differ procedurally under the ACFP. In any case, conscientious legal advisors will be able to identify and explain the most relevant details of the ACFP, as well as its potential implications for your business.
For further information, please contact:
Suruswadee Jaimsuwan, Tilleke & Gibbins