From January to November this year, over 1,100 projects with a combined investment value of Bt507 billion have been approved by the Board of Investment (BOI). These projects have generated more than 200,000 jobs to date. By year-end, the BOI is expected to approve applications of more than bt510 billion in total investment. Accounting for most of the investment is the service and infrastructure sectors (Bt133.3 bn), followed by the sector with chemical products, paper and plastics, and petrochemical products (Bt111 billion). The third-largest sector is in electronics and electrical appliances (Bt80 billion). Japan is the main investing country with 308 approved projects worth Bt94.3 billion, followed by the United States with 33 approved projects worth Bt34 billion. In 2005, the investment promotion agency will focus on cost-oriented investment projects such as those planning to import energy-saving equipment, and attracting investment from Asia, Europe and United States.

A US-based energy conglomerate has agreed in principle to an out-of-court settlement in a human rights abuse case. The company has been sued by 14 Burmese villagers for allegedly condoning rights abuse during the construction of a US$1.2 billion (Bt 49.2 billion), 62-kilometre long pipeline that carries natural gas from Burma to Thailand. Under the settlement, the company will help to fund improvements in living conditions, education, health and human rights for villages along the pipeline. The tentative agreement was reached under the Alien Tort Claims Act, a contentious law that permits foreigners to sue companies alleged to be indirectly responsible for overseas rights violations in US courts.

A new regulation by the Securities and Exchange Commission (SEC) is stipulating that all listed companies include subsidiaries in which they hold a "controlling stake" in their consolidated financial statements, even if the stake is less than 50 per cent. The objective of this new regulation is to prevent listed companies from evading the need to consolidate their subsidiaries' financial statements, thus making the group's overall financial statement more plausible. The current regulation does not require firms owning 49 per cent or less of their subsidiaries to include their subsidiaries' financial statement in the group's consolidated statement. The SEC plans to implement the new rule as soon as possible to make it applicable to listed firms for their 2005 financial statements. If any listed company does not adhere to the new measure, its financial statement will not receive endorsement from the SEC. If the listed company fails to redo the financial statement within a timeframe stipulated by the Stock Exchange of Thailand, the company will be subject to fines.

The government has announced that tax cuts on personal income and small businesses are in the pipeline, some of which may be implemented ahead of the general election due in February 2005. Sources from the Revenue Department has disclosed that the first Bt100,000 of net income will not be taxable, thus exempting all six million taxpayers from the five per cent tax. Currently, net annual income up to Bt80,000 is exempted from tax, income between Bt80,001 and Bt100,000 is taxed at five per cent, between Bt100,001 and Bt500,000 at 10 per cent, between Bt500,001 and Bt1,000,000 at 20 per cent, between Bt1,000,001 and Bt4,000,000 at 30 per cent, and amount exceeding Bt4,000,000 at 37 per cent. There are also plans to grant tax reduction on profits for businesses with registered capital of below Bt5 million. The measure will levy a 10-per-cent tax on profits less than Bt1 million, down from 20 per cent based on the current law. Profits above Bt1 million and not exceeding Bt3 million will stay at the 25-per-cent tax rate, and the tax on profits more than Bt3 million will also remain. Sources from the Finance Department said that there are proposals to exclude small shops and other small businesses with an annual turnover of less than Bt1.8 million from the value-added tax system.

A new deposit insurance agency has been approved by the cabinet, pursuant to a draft law. The agency, to be set up with an initial capital of one billion baht, will offer insurance coverage on bank deposits in the event of a bank collapse and is intended to replace the blanket guarantee extended by the central bank's Financial Institutions Development Fund since the 1997 crisis. The agency may have the right to demand confidential information from financial institutions in cooperation with the Bank of Thailand and other financial regulatory agencies. It may also supervise the liquidation of license-revoked institutions. For budgetary purposes, the agency will not have the classification of a state agency or state enterprise. As members of the planned organization, financial institutions such as commercial banks, finance companies and credit fonciers will be provided with insurance coverage. For the first year after the act takes effect, coverage will commence at 50 million baht. This is planned to be reduced to one million baht by the fourth year. Participating members are planned to be subjected to insurance premiums paid to the agency of up to one per cent of deposits per annum.

Six Asean countries - Brunei, Malaysia, Indonesia, Philippines, Singapore and Thailand - have signed a pact to abolish tariffs in 11 major sectors by 2007. This would be three years ahead of the scheduled plan. The move will bring the countries closer to becoming a European-style single market amidst increasing competition from China and India. The pact will see the lifting of tariffs in areas that include cars, electronics, air travel and wood-based products. Tariffs would also be dropped in sectors such as fisheries, healthcare, rubber-based products, tourism, e-commerce and textiles and apparels. These 11 sectors make up more than half of all intra-Asean trade. The other four member countries - Cambodia, Myanmar, Laos and Vietnam - will have to abolish the tariffs in the autos, textiles and electronics sectors by 2012.

State agencies and the Board of Investment (BOI) have come together to offer incentives to firms affected in the violence-stricken South. The BOI will be extending investment incentives - including tax and import tariff reductions - to manufacturing plants in economic zones for eight more years. In addition, plants applying for privileges through 2007 would enjoy the same privileges on the new projects. State agencies would provide other benefits to all eligible companies in the region. The Finance Ministry is contemplating waiving value-added taxes and excise taxes for all businesses in the South. Insurance companies that provide life and asset coverage for investors will benefit from the incentives by the Insurance Department. The Small and Medium Enterprise Development Bank will render financing assistance. Infrastructure leading into the Halal Industrial Estate would be constructed by the Industrial Estate Authority. The Provincial Electricity Authority will also grant a power tariff cut of 20 per cent.

Over a million pirated CDs, VCDs and DVDs have been seized by the police in a nationwide bid to eradicate illegal disc production and distribution. The commission set up to prosecute intellectual property offenders had disclosed that there are at least 50 disc factories in the country, and while some are legally authorized to produce specific disc quotas, they broke the law when unauthorized copies and pirated materials are manufactured. The commission added that owners of such illegal activities would be prosecuted under the anti-money laundering law. Under current law, the police is prohibited from arresting any illegal manufacturers unless formal complaints from aggrieved parties have been filed. In the future, however, the intellectual property law would sanction the police to make arrests without prior complaints.

Thai bio-diversity advocates are calling the cosmetic applications patent of the indigenous Thai herb, kwao kreu, by two Japanese companies an act of "biopiracy". They are claiming that the Japanese companies have violated the UN Convention on Bio-diversity and two Thai laws on bio-diversity protection and traditional medicine. The patent, registered in the US in 2002, encompasses about 20 procedures for kwao kreu extraction and production. The advocates are saying that the patent could seriously hinder local research on the herb found in the North of the country. At present, patents for kwao kreu products have been issued in the US, Japan and South Korea. Thai advocates are aware that some patents could have originated from Thai research but were registered by foreign companies.

Instructions have been issued by the Bank of Thailand, asking financial institutions to clarify their procedures for loan write-offs to avert potential fraud and malpractice. In a notification dated in November, the central bank has asked financial institutions to allow bank examiners to have access to the criteria set for loan write-offs. The write-offs would also have to be approved by bank directors, senior executives, shareholders and related parties. Financial institutions would be required to write off the entire amount of the outstanding loans. In cases where the borrowers are unable to service the debt following the judicial process and no personal guarantee or collateral was pledged against the debt, the central bank would allow a partial write-off.