RESTRICTED
WORLD TRADE G/TRIMS/N/1/THA/1
28April 1995
ORGANIZATION(95-1098)
Original: English Committee onTrade-Related Investment Measures
NOTIFICATION UNDER ARTICLE 5.1OFTHE AGREEMENT
ONTRADE-RELATED INVESTMENT MEASURES
Thailand
Thefollowing communication, dated 30March 1995, hasbeenreceived fromthePermanent
Mission ofThailand.
_______________
1. TRIMs thatarecurrently applied byThailand fallswithin themeaning ofcategory 1(a)ofthe
Illustrative ListofAnnex oftheAgreement onTRIMs. These TRIMs arenotgeneral innature as
Ministers incharge haveauthorities under respective legislations concerned todetermine product sectors
upon which TRIMs areapplicable.
2. TRIMs could beinitiated under eachofthefollowing legislations.
2.1 Factory Act(B.E. 2535)
Section 32oftheFactory Act(B.E. 2535) empowers theMinister ofIndustry todetermine,
upontheapproval oftheCabinet ofMinisters, product items, quality, ratiooftherawmaterials, sources
ofrawmaterials, factors and/or thekinds ofenergy tobeusedintheproduction ofcertain finished
goods. Uptothepresent administrative ruling intheform ofMinistry 'sAnnouncements havebeen
issued under thisauthority imposing onlythelocalcontent requirement fordomestically assembled
motor vehicles, withtheobjectives ofestablishing anddeveloping thedomestic automotive partsindustry
inThailand.
2.2 Investment Promotion Act(B.E. 2520)
Section 20oftheInvestment Promotion Act(B.E. 2520) authorizes theBoard ofInvestment
tograntspecial investment incentives toindustries andfirms thatagree tocomply withcertain production
conditions. Oneofthose conditions isforthefirms tousethepre-determined proportions oflocally
produced rawmaterials intheproduction ofcertain product items. Thetypes ofrawmaterials orinputs
andthepercentages oflocalcontent requirement could bechanged toencourage theestablishment of
different industries foreconomic development purposes.
3. Specific details ofthenature, conditions, andlistofproducts under TRIMs areprovided in
Attachment A,B1,B2andB3.
4. Thailand intends tomaintain theapplication ofTRIMs during thefive-year transitional period
given under Article 5.2oftheAgreement onTRIMs.G/TRIMS/N/1/THA/1
Page2
5. Copies oftheEnglish version oftheFactory ActB.E. 2535 andtheBoard ofInvestment
Announcement No.1/1993 andNo.2/1993 which contain details ofcurrent TRIMs willbemaintained
bytheSecretariatforfurtherreadingbyinterestedMembers.Sinceofficialdocumentsareonlypublished
intheThailanguage, other notifications bytheMinistry ofIndustry andExcise Department areonly
available inThaiandcould betranslated upon request byinterested Members. Thenature ofthe
measures announced inthese notifications, however, aresufficiently provided intherelevant parts
oftheAttachments.
6. TRIMs areapplied bytheCentral Government ofThailand. Theimplementing agencies include
Ministry ofIndustry, Office oftheBoard ofInvestment andtheExcise Department.G/TRIMS/N/1/THA/1
Page3Notifications under Article 5.1oftheTRIMs Agreement
Attachment A
Measure/Application Criteria Effective date Reference Remark
General criteria forgranting incentives
Granting ofanother yearofcorporate income tax
exemption contingent upon theuseofdomestic
suppliesAnother yearofcorporate income taxexemption
shallbegiven iflocal agricultural products are
usedasmajor rawmaterials ordomestic supplies
usedaccount foratleast50%oftotalproduction
costs, excluding wages andsalaries, interests,
depreciation andpublic utilities service charges.10January 1983 Announcements
(Board of
Investment)
No.1/2526Atpresent, these criteria arenolonger
applied, butprojects approved during the
period these criteria were inusearestill
subject totheTRIMs applied atthattime.
Granting ofanother yearofcorporate income tax
exemption contingent upon theuseofdomestic
supplies(1)Anadditional yearofcorporate income tax
exemption shallbegiven toprojects in
designated areas iflocal agricultural products
areusedasmajor rawmaterials ordomestic
supplies account foratleast60%ofthetotal
value ofrawmaterials used.
(2)Anadditional yearofcorporate income tax
exemption shallbegranted toprojects located
ininvestment promotion zones (67designated
provinces) ifdomestic agricultural products
areusedasmajor rawmaterials ordomestic
supplies usedaccount foratleast50%ofthe
totalvalue ofrawmaterials.1September 1987 Announcements
(Board of
Investment)
No.2/2530
No.3/2530
No.4/2530Atpresent, these criteria arenolonger
applied, butprojects approved during the
period when these criteria were inusearestill
subject totheTRIMs applied atthattime.
Granting ofadditional incentives contingent upon the
useofdomestic supplies(1)Exemption ontaxes onimported machinery
shallbegranted toprojects incertain areas
(Zone 2)iflocal agricultural products areused
asmajor rawmaterials ordomestic supplies
account foratleast60%ofthetotalvalue of
rawmaterials used.
(2)Anadditional yearofcorporate income tax
shallbegranted toprojects located inZone 2
ifdomestic agricultural products areusedas
major rawmaterials ordomestic supplies
account foratleast60%ofthetotalvalue of
rawmaterials used.1January 1989 Announcements
(Board of
Investment)
No.5/2531Atpresent, these criteria arenolonger
applied, butprojects approved during the
period when these criteria were inusearestill
subject totheTRIMs applied atthattime.G/TRIMS/N/1/THA/1
Page4Measure/Application Criteria Effective date Reference Remark
(3)Anadditional yearofcorporate income tax
shallbegranted toprojects located inthe
investment promotion zoneiftheprojects
involve agro-based activities, orencourage the
useofdomestic agricultural products, oruse
domestic agricultural products asmajor raw
materials, ordomestic supplies account forat
least50%ofthetotalvalue ofrawmaterials
used.
Note: Zone 1covers Bangkok, Samut Prakarn, Samut Sakhon, Sakorn Pathom, Nonta BuriandPathum Thani. Zone 2covers Samut Songkhram, Raichburi,
Suphan Buri, AngThong, Ayutthaya, Saraburi, Nakhon Nayok, Chachengsao, Chor BuriandMaptapat Industrial Estate. Theremaining 57provinces
aredesignated asInvestment Promotion Zones.G/TRIMS/N/1/THA/1
Page5Notifications under Article 5.1oftheTRIMs Agreement
Attachment B1
B1. Thefollowing TRIMs areapplied toproducts thatarecompulsed touselocally parts andcomponents.
Measure/Application Criteria Effective date Reference Remark
Local Content Requirement byproduct
Passenger cars Notlessthan54%ofdomestic auto-parts must beused. 18January 1994 Notification of
Ministry ofIndustry
No.1(1994)
Vans andother types ofpassenger cars Theuseofdomestic parts isimposed andtheadditional parts may
befrom overseas combinations ofcompulsory parts tobeassembled
should bedone inthismanner:
-Notlessthan40%ofChassis withengine areimported;
-Notlessthan45%ofChassis withengine andwindshield are
imported;
-Notlessthan50%ofChassis withengine andcapareimported.25December 1979 Notification of
Ministry ofIndustry
Small vansandtrucks Local engines areparts maybeused:
-With theengine capacity higher than1,000 cc;
-With theengine capacity isnotexceeding 1,350 ccisrequired
tousesince 1July1993;
-With weight between 3,000 -4,000 kilograms;
-Seven local items areencouraged tousenamely, radiator,
silencer andexhaust pipes, battery, front-rear leaf,typeandtube
wheel, safety glass andfront-rear drum brake.3May1991 Notification of
Ministry ofIndustry
Motorcycles Notlessthan70%ofdomestically produced parts must beused
some ofthelocally made items.19July1977 Notification of
Ministry ofIndustryG/TRIMS/N/1/THA/1
Page6Measure/Application Criteria Effective date Reference Remark
Dairy product Ministry ofAgricultural andCooperatives hastheauthority to
certify thatdomestic rawmilkhasbeenpurchased inproportion to
anyimported skimmed milkpowder usedtomanufacture milkor
milkproducts. Theproducers arerequired tobuypowdered milkat
least50tonsoflocal rawmilkperdayinthefirstyearofoperation
andtoincrease thepurchase ofrawmilkatleast20percentper
year.27June1986 Notification of
Ministry ofIndustry
Note: Originals ofallnotifications ofMinistry ofIndustry areinThai.G/TRIMS/N/1/THA/1
Page7Attachment B2
B2. Thefollowing products aresubject tothelocalcontent requirement.
Measure/Application Criteria Effective date Reference Remark
Local Content Requirement byproduct
Manufacture ofmilkanddairy products Local fresh fluidmilkmust beusedinproportions assetbythe
Board ofInvestment.16April 1986 Announcement
(Board of
Investment)
No.S.3/2529
29June1987 Announcement
(Board of
Investment)
No.S.11/2530
1April 1993 Announcement
(Board of
Investment)
No.S.2/2536
Coated aluminium sheets forprinting Only local aluminium sheets maybeused. 16December 1983 Announcement
(Board of
Investment)**
TVpicture tubes Local rawmaterials andparts usedmust account forthefollowing
percentages ofthetotalvalue ofinputs used.
Year 1:5%
Year 2:15%
Year 3:30%
Year 4andyearafter: 35%21January 1987 Board resolution **G/TRIMS/N/1/THA/1
Page8Measure/Application Criteria Effective date Reference Remark
Engines forautomobiles (1)Locally manufactured parts andcomponents shallaccount for
thefollowing shares ofthetotalparts andcomponents used:
Year 1:20%
Year 2:30%
Year 3:40%
Year 4:50%
Year 5:50%
Year 6:60%
Year 7:70%12January 1987 Announcement
(Office oftheBoard
Investment)
No.P.1/2530 and
Board resolution
(2)Certain parts arerequired tobelocally manufactured. The
manufacturing process ofthese compulsory parts must start
from forging andcasting.
Engines formotorcycles (1)Locally manufactured parts andcomponents shallaccount for
thefollowing shares ofthetotalparts andcomponents used:
Year 1:30%
Year 2:40%
Year 3:60%
Year 4:70%
Year 5:80%30April 1986 Announcement
(Office oftheBoard
ofInvestment)
No.2/2529
(2)Certain parts arerequired tobelocally manufactured.
Diesel engines foragriculture (1)Locally manufactured parts andcomponents shallaccount for
thefollowing shares ofthetotalparts andcomponents used:
Year 1:20%
Year 2:40%
Year 3:60%
Year 4:80%19January 1978 Board resolution
(2)Certain specific parts arerequired tobelocally manufactured.
Multi-purpose benzene engines Locally manufactured parts andcomponents shallaccount forthe
following shares ofthetotalparts andcomponents used:
Year 1:30%
Year 2:50%
Year 3:70%
Year 4:85%23July1986 Announcement
(Office oftheBoard
ofInvestment)
No.P.3/2529G/TRIMS/N/1/THA/1
Page9Measure/Application Criteria Effective date Reference Remark
Transformer (1)Locally produced parts must account foratleast80%ofthe
totalvalue ofrawmaterials used.12September 1980 Announcement
(Office oftheBoard
ofInvestment)
No.P.3/2529**
(2)Asregards theproduction ofpower transformers, theminimum
local content shallbe30%since thefirstyearofoperation.25June1990 Announcement
(Office oftheBoard
ofInvestment)
No.P.3/2529
(3)Transformer producers must produce certain parts themselves.
Gaspressure thermostat Locally produced parts andcomponents shallaccount forthe
following shares ofthetotalrawmaterials used:
Year 1:30%
Year 2:30%
Year 3:60%
Year 4:60%
Year 5andthereafter: 70%31October 1968 Announcement
(Board of
Investment)
No.S15/2531**
Polystyrene sheet andfilm Only domestic rawmaterials shallbeused. 27June1980 Announcement
(Board of
Investment)
No.S/2523
Transmission assembly Locally produced parts andcomponents shallaccount forthe
following shares ofthetotalrawmaterials used:
Year 1:20%
Year 2:35%
Year 3:50%
Year 4:65%
Year 5:80%21January 1987 Board resolution **
Compressors forair-conditioners Locally produced parts andcomponents shallaccount forthe
following shares ofthetotalrawmaterials used:
Year 1:60%
Year 2:60%
Year 3:80%25February 1988 Announcement
(Board of
Investment)
No.S.5/2531**G/TRIMS/N/1/THA/1
Page10Measure/Application Criteria Effective date Reference Remark
Paper Locally produced pulpandscrap paper shallaccount foratleast
50%ofthetotalvolume ofpulpandscrap paper used.29August 1984
25November 1988Announcement
(Board of
Investment)
No.S.19/2531
Announcement
(Board of
Investment)
No.S.21/2527**
**
Motorcycle assembly (1)Production process shallstartfrom theassembly ofmotorcycle
frames andpainting.
(2)Theuseoflocally produced parts andengines shallbein
accordance withtherequirements setbytheMinistry of
Industry.16September 1993 Announcement
(Board of
Investment)
No..S.1/2536
Note:** These localcontent requirements havebeenabolished since 1April 1993; however, projects approved under these criteria arestillsubject tothese
TRIMs.G/TRIMS/N/1/THA/1
Page11Attachment B3
B3. Thefollowing TRIM isapplied toproducts thataresubject toexcise taxexemption.
Measure/Application Criteria Effective date Reference Remark
Passenger carsandpick-up trucks withchassis and
windshieldNotlessthan60%ofdomestic parts andcomponents must beused
toanymodification.2March 1994 Announcement (the
Excise Department)