Thread: 'Legal changes won't violate WTO rules'

INVESTMENT / FOREIGN OWNERSHIP

'Legal changes won't violate WTO rules'

PHUSADEE ARUNMAS
Authorities insist Thailand can go ahead with plans to change the Foreign Business Act, under which both voting rights and shareholdings would be used to determine whether a business is considered foreign, without breaching its commitments to the World Trade Organisation (WTO).

Such changes were within Thailand's rights, said Chutima Boonyaprapas, the head of the Trade Negotiations Department at the Commerce Ministry.

The WTO, she said, had few explicit conditions outlining what individual countries should do in opening their local businesses to foreigners.

''Thailand has commitments only to open freely certain businesses such as consulting services under the General Agreement on Trade in Services (Gats), a key part of the WTO,'' she said.

''We may reconsider those businesses again to see whether the changes will affect them and whether any compensation needs to be paid if those businesses are really affected.''

Officials said the country had made no commitments under the WTO to fully liberalise key businesses such as wholesale and retail trade for foreigners.

They were responding to comments by some analysts who warned that proposals to change the Foreign Business Act (FBA) might run counter to Thailand's commitments to the WTO and free trade agreements on market liberalisation.

Commerce Minister Krirk-krai Jirapaet hoped to forward the proposed amendments to the 1999 FBA to the Cabinet in early January, according to a ministry source.

A ministry-appointed committee headed by Pramon Sutiviong on Tuesday presented its recommendations for legal amendments.

Mr Pramon, who is also the chairman of the Thai Chamber of Commerce, said the revised law would say that companies controlled by foreigners in terms of voting rights would be classified as foreign, even if their direct shareholdings were in a minority.

The ministry had previously only used direct shareholdings in assessing compliance with the FBA, which limits foreign shareholdings to 49% in a number of key service sectors including telecommunications.
The FBA has been in the spotlight since early this year when Temasek Holdings of Singapore took over Shin Corp, the telecoms conglomerate founded by former prime minister Thaksin Shinawatra. Officials claimed Temasek used a complex structure involving Thai nominees to effectively gain majority control, a contention Temasek has denied.

Originally Posted by William

FBA limits foreign shareholdings to 49% in a number of key service sectors including telecommunications.

ahem yes AIS, Singapore ahem etc etc

Lords of the ring don't want no competition.