Analyst praises Thailand’s new export controls

Thailand Focus week of July 13, 2015

One of the world’s leading financial and management consulting firms has praised new export controls proposed by Thailand’s Ministry of Commerce that will help monitor and prevent the unauthorized exports of dual use technologies, as leading Thai industrialists said they were ready to invest in a special economic zone on the border with Myanmar where export traffic has been increasing.

Deloitte Consulting said that the new controls will increase compliance burdens on companies, but will boost investor confidence and trading relationships. Dual use technologies are those that are sought by civilian and military buyers. They can be used for peaceful purposes or as components in arms such as missiles, or weapons of mass destruction such as chemical, biological or even nuclear weapons.

Stuart Simons, the customs and global trade leader for Deloitte, said that the Cabinet’s approval in principle of Ministry of Commerce proposal was the strongest message that controls would finally be introduced. With increasing concerns about global security, governments worldwide, including Southeast Asian governments, had introduced or intend to introduce export controls on dual-use goods. This will align them with the global trading community’s emphasis on maintaining secure supply chains.

Sectors that would be principally affected by dual-use controls include aerospace, marine and defense, special materials and related equipment, material processing equipment and technology, and biotechnology, Simons said.

Although the Ministry of Commerce has yet to publish its draft list of dual-use goods, the Ministry has hinted that it will use the same list, or one similar to that used by the European Union. Singapore and Malaysia have already implemented controls on dual-use goods and technology.

Companies exporting dual-use goods will need to obtain permission from the Ministry of Commerce. Simons urged exporters to stay abreast of the Ministry’s lists, rules and requirements and ensure that they have the ability to monitor where their goods are being used and for what purpose.

To boost exports and manufacture more competitively, several large Thai firms are ready to invest in the Mae Sot Special Economic Zone on the border with Myanmar, vice chairman of the Federation of Thai Industries (FTI) said last week.

The zone, however, has not yet officially opened. The government is rapidly putting the finishing touches on the zone and it will officially raise it curtain during the final quarter of this year.

“We are more than ready to go in to Mae Sot’s Special Economic Zone,” said Nilsuwan Leelarasamee, vice chairman of the FTI. “Once the SEZ is well-established in Mae Sot, the setting up of other SEZs in the East, Northeast and the South will be easy. It will take around four to five years for the zone to be well-established enough to help with the economic expansion but it can become a role model starting from year one.”

Thailand is preparing to open several Special Economic Zones in border areas with all its neighbors in order to make use of workers in those countries who would otherwise migrate illegally and possibly fall into the hands of human traffickers.

Migrants from neighboring countries will be able to work legally in the zones should employers choose to hire them. That will provide manufacturers with more competitively priced labor, help increase development in border areas, and provide a platform for cross-border exports, which have been rising and are becoming a larger percentage of Thailand’s exports than in the past.

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