Thailand Cracks Down on Export Fraud While Opening Doors to Foreign Investment

Prime Minister Paetongtarn Convenes Key Agencies While Cabinet Approves Foreign Business Law Reforms

Thailand’s government is taking decisive action on two economic fronts that could significantly impact the country’s trade relations and investment climate. Prime Minister Paetongtarn Shinawatra has initiated a crackdown on “origin fraud” to protect Thai export credibility, while the Cabinet has approved reforms to long-standing foreign business ownership restrictions.

Short-Term Measures: Strengthening Verification

Under leadership from the Department of Foreign Trade, immediate steps include:

• Consultations with U.S. Customs and Border Protection to benchmark and refine criteria for issuing origin certificates.
• Expanded monitoring across 65 product categories under 224 tariff codes, targeting the interception of non-compliant goods attempting entry under Thai branding.
• 90-day oversight window, during which the Prime Minister forecasts a significant reduction in fraudulent claims, bolstering opportunities for legitimate exporters—especially SMEs—to compete on a level playing field.

Long-Term Vision: Legal Reforms & Tougher Penalties

Looking beyond the initial crackdown, the government plans comprehensive legal reforms:

Measures designed to restore global trust in “Made in Thailand” labels, reinforcing Thailand’s reputation as a reliable trading partner.

Harsher penalties for companies found guilty of origin fraud, including fines and suspension of export privileges.

Enhanced enforcement mechanisms, such as random audits and digital tracking of origin certificates.

Combating Origin Fraud to Protect Thai Exports

In a significant move to safeguard the reputation of Thai exports, Prime Minister Paetongtarn Shinawatra assembled representatives from four crucial agencies on April 22 to address the growing problem of “origin fraud.” This deceptive practice involves falsely labeling products as Thai-made to gain preferential trade benefits and market access.

The high-level meeting brought together officials from the Ministry of Commerce, the Customs Department, the Federation of Thai Industries, and the Thai Chamber of Commerce. Their collective focus was on strengthening enforcement mechanisms for Certificates of Origin, which serve as essential credentials for Thai products in international markets.

“The integrity of our export certification system is fundamental to maintaining Thailand’s credibility in global trade,” explained a government spokesperson. “When products falsely claim Thai origin, it undermines legitimate Thai businesses and threatens our trade relationships.”

The Department of Foreign Trade has been tasked with spearheading immediate interventions, including direct consultations with U.S. Customs and Border Protection to establish more rigorous criteria for issuing origin certificates. The government is also expanding its monitoring scope to encompass 65 product categories across 224 tariff codes, with particular attention to preventing non-compliant goods from being marketed internationally under Thai branding.

Looking ahead, the administration plans to implement legal reforms that will impose stricter penalties on companies found guilty of fraudulent origin claims. These legislative changes aim to strengthen enforcement capabilities and restore international confidence in Thai products.

The Prime Minister expressed optimism that enhanced verification procedures and oversight would substantially reduce fraudulent claims within a 90-day timeframe. These improvements are expected to create more equitable opportunities for legitimate Thai exporters, particularly small and medium-sized enterprises, to compete fairly in international markets.

Cabinet Approves Foreign Business Law Reforms

In a parallel development that signals Thailand’s evolving approach to international investment, the Thai Cabinet has approved in principle amendments to the Foreign Business Act, which has been criticized as overly protective and increasingly out of step with global economic realities.

The Law Reform Commission, operating under the Council of State, had recommended updating the 25-year-old legislation, arguing that its protectionist framework no longer aligns with Thailand’s economic objectives in an increasingly interconnected global marketplace.

Following Cabinet approval, the Ministry of Commerce has been directed to draft amendments that would eliminate regulations hindering economic growth and innovation. Deputy government spokesman Karom Polpornklang emphasized that these changes are particularly crucial for Thailand’s emerging startup ecosystem, which relies heavily on technological transfer and foreign capital investment.

“The development of future-oriented businesses and industries represents a potentially significant contributor to Thailand’s GDP,” Polpornklang noted. “We need a regulatory environment that facilitates rather than impedes this growth.”

The proposed amendments have received broad support across government institutions, including the Ministries of Finance, Commerce, Interior, and Labour, as well as the National Economic and Social Development Council and the Board of Investment.

The Ministry of Finance has specifically highlighted the need to reconsider both the types of businesses currently restricted to Thai ownership and the existing 49% cap on foreign shareholdings in Thai-registered companies. This limitation has frequently resulted in the controversial use of Thai nominees to hold shares on behalf of foreign investors.

Under the Ministry of Commerce’s direction, a new framework will be developed that shifts focus from “protecting” domestic businesses to “supporting” their competitive development, regardless of ownership structure.

Looking Forward

These dual initiatives reflect Thailand’s strategic efforts to balance protection of its economic interests with the need for greater openness to global investment and trade. By addressing origin fraud while simultaneously reforming foreign business regulations, the Thai government appears to be pursuing a more nuanced approach to economic policy that acknowledges both the challenges and opportunities of international commerce.

The coming months will be critical as these initiatives move from policy development to implementation, with significant implications for Thailand‘s position in regional and global markets.

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