Thailand ­- New Guarantee Requirement For Direct Sales And Direct Marketing Businesses.

Legal News & Analysis - Asia Pacific - Thailand - Regulatory & Compliance

4 December, 2018

 

A new Ministerial Regulation was published in the Royal Thai Government Gazette on November 20, 2018, requiring business operators who are engaged in direct sales or direct marketing activities to place a guarantee with the Office of the Consumer Protection Board of Thailand (OCPB) within 90 days.

 

The new regulation, which was issued under the authority of the updated Direct Sales and Direct Marketing Act (No. 3), B.E. 2560 (2017), affects registered direct sales and direct marketing business operators and new applicants alike. New applicants will be required to pay a fixed fee, while operators who are already registered will be subject to rates based on their gross revenue.

 

The key requirements of the Ministerial Regulation are set out below:

 

  • New applicants must place the required guarantee with the OCPB within 30 days of receiving a notification letter from the OCPB. Failure to place the required guarantee within the prescribed timeframe will result in the OCPB rejecting the application.
  • All registered operators must place the required guarantee with the OCPB within 90 days of November 20, 2018.
  • When placing the guarantee, the applicant or the registered operator must use the applicable official form, to be announced by Direct Sales and Direct Marketing Committee.
  • Every registered operator must inform the OCPB of its gross annual revenue within 60 days of the end of each fiscal year. The OCPB registrar will then determine whether the registered operator’s guarantee should be increased. If an increase is necessary, the OCPB will notify the registered operator accordingly, either in writing or electronically. The registered operator will then have 60 days to comply by placing an additional guarantee.
  • Registered operators can change the form of a guarantee placed with the OCPB (excluding cash), by submitting a request and a new guarantee.

 

The rates of guarantees under the Ministerial Regulation are as follows:

 

Guarantee rate for new direct sales applicants:

THB 25,000

Guarantee rate for new direct marketing applicants:

THB 5,000 for a natural person

 

THB 25,000 for a juristic person

 

 

Annual gross revenue (THB)

 

Guarantee rates for existing registered operators (THB)

Direct sales

Direct marketing

< 25,000,000

25,000

-  5,000 for natural person

-  25,000 for a juristic person

25,000,001 – 50,000,000

50,000

50,000

50,000,001 – 100,000,000

100,000

100,000

> 100,000,000

200,000

200,000

 

Guarantees under the new regulation can be made in cash, government bonds, state-enterprise bonds, and by bank guarantee.

 

Direct sales and direct marketing business operators should ensure that they take all necessary steps to comply with the Ministerial Regulation by the required deadline. Failure to do so may negatively affect their registration status.

 

 

For further information, please contact:

 

Nutavit Sirikan, Tilleke & Gibbins

nutavit.s@tilleke.com