Customs plans tougher penalties for origin fraud to curb “trade circumvention” exports

Thailand’s Customs Department is preparing to tighten penalties for businesses accused of falsifying the origin of goods for export, in a move aimed at curbing “trade circumvention” practices and strengthening confidence among trading partners.

Customs Director-General Phantong Loykulnanta said the government and relevant agencies—particularly the Customs Department and the Department of Foreign Trade—are stepping up enforcement to address fraudulent claims of Thai origin.

He said Customs is now considering raising administrative settlement fine levels through its settlement committee, which includes representatives from the Royal Thai Police and the Finance Ministry. The revised criteria would be issued through a Customs Department announcement.

The push for tougher sanctions stems from what officials describe as a loophole in the current framework: many exported goods do not carry export duties, meaning penalties based on unpaid tax are often too low to deter wrongdoing. Past cases have frequently been handled under lesser offences such as making false declarations, resulting in fines that do not reflect the seriousness of origin fraud.

“To ensure the measures are truly enforceable, Customs plans to increase settlement fine criteria for cases involving origin falsification for export,” Phantong said. “Even if there is no tax evasion because it is an export, the offence should still carry a penalty. We may consider penalties comparable to tax-related offences, where fines can reach up to four times the unpaid duty.”

He added that state agencies have set up a joint working group and are now actively sharing information, focusing on several high-risk patterns, including:

1. Use of Free Zones: importing one type of product into a free zone and exporting the same product out, which may indicate an attempt to disguise origin.
2. Fake “Made in Thailand” markings: importing goods and printing “Made in Thailand” directly on the products to mislead buyers and authorities.
3. Risk-profile monitoring: scrutinising companies seen as high-risk—such as those importing and exporting identical goods with no processing or transformation—and passing risk information to the Department of Foreign Trade to strengthen scrutiny when issuing certificates of origin (CO).