Implications of Thailand’s Licensing Facilitation Act 2015
The Licensing Facilitation Act B.E. 2558 (2015) (the “Act”) was introduced in July in order to simplify the bureaucratic systems that control how licenses, permits, registrations and other notifications are granted under Thai law. The Act represents a key step in the fight against government agency inefficiency and corruption, providing for greater efficiency, accountability, continuity, public confidence and transparency.
The Act introduces a number of measures in order to help increase government agency efficiency. The substantive part of the Act prescribes that it is the duty of the relevant authority to prepare a licensing manual for public use, which must contain all rules, procedures and conditions (if any) that must be complied with in order to successfully file applications. Such licensing manual must be made available to the public in hard copy and in electronic form (Section 7). The Act also provides that applications themselves may be filed electronically. Furthermore, the Act directs the competent officer who receives the application to fix any incompleteness in the application and in any evidence, either at the time of filing or within a fixed period of time, that is required to be recorded. The competent official is given only one opportunity to request further submission of documents from the applicant in order to fulfill the application (Section 8).
In addition, the Act sets a deadline of seven (7) days for the consideration of the license application, which can only be extended on the condition of accountability of the authority; the authority must clarify the reason for any delay to the applicant and report such clarification to the Public Sector Development Commission (the “Commission”), the monitoring body under the Licensing Facilitation Act, every seven days until the decision is made (Section 10). The Act empowers the Commission to monitor compliance with the rules, procedures and conditions of the licensing manual regarding work-flow and period of time for granting the license, together with the option of proposing revisions to the authority’s work to the Council of Ministers.
Continuity is promoted for licensed businesses by allowing the Council of Ministers to authorize the licensee to pay a renewal fee instead of having to file for renewal of the license (Sections 11-12).
The Act provides for greater public confidence by protecting the applicant from subsequent changes to the law or to the rules, regulations and procedures, on condition that the application has been legally submitted prior to such alteration coming into force, unless otherwise prescribed by law, and on condition that the change can only affect applicants if it is to their benefit. Effectively, once the licensing manual has been publicized, it becomes the framework for both the applicant and the authority who receives the application. Applicants will be able to adhere to the framework as set by the manual even after changes are made to the rules, regulations and procedures under the abovementioned conditions. The Act also provides applicants with the option of submitting a new application in case of failure to comply with the competent official’s suggestions and to appeal when applications are returned (Section 9).
The obligations stated under the Act are designed to harmonize the practices of different government bodies by making them subject to the same mechanisms and meet the same standards. The organizational structures that are promoted under the Act are intended to provide for greater transparency. Each government agency is required to establish a Service Link Center to manage applications for licenses, as well as a One Stop Service Center, a central body for receiving applications under laws related to licensing. These bodies, especially the One Stop Service Center, should benefit the public by facilitating license applications and improving access to information by making it available online.
However, the material scope of the Act excludes licensing under the law in relation to natural resources and the environment as well as licensing in connection with military strategic operations, amongst others (Section 5). Thus, some applications are not open for acceleration and will need further consideration by the national authority before any licenses are granted.
It is too soon to make any meaningful prediction about the success of the Act. Thai government agencies began making licensing manuals publicly available prior to the Act’s effective date, which should serve as good preparation for the introduction of the ASEAN Economic Community in 2016. The Act highlights efforts currently being made to tackle government agency inefficiency and corruption. It seeks to implement more efficiency in the Thai licensing system by establishing a framework with predictable steps, and also more options for applicants. The Act is geared towards making Thailand a more investor-friendly market, raising its competitiveness, and attracting greater investment to serve the Thai economy as a whole for the long term.
For more information, contact Mr. John P. Formichella at: [email protected].