unless a deposit is given, or part performance is undertaken.  For this discussion, it is assumed that the other formulations necessary to form a on-line contract (i.e. intention of the parties, contractual capacity and purpose of entering into a contract) are complete and legal. 

Contract terms/liability

Similar to the common law approach on the issue of contract terms/liability, Thai law also recognizes the principle of freedom of contract. 

Digital authentication and Enforceability

Authentication is a major factor of legal enforceability both substantively and procedurally.  On the substantive law notion, authentication is an element of formation of a contract whereas in the procedural law respect it concerns the law of evidence and the issue of admissibility in the court.  Under the Thai legal system, formalities are required in some special types of contracts.  The formalities of a contract can be indicated as in writing and with signature.

Signature

Where a writing is required by law, it automatically means that a signature is essential.  To facilitate international trade via on-line contract, the reliability and security for electronic commerce have been developed.  Digital signature is a widespread practice in on-line transactions.  As a technology importing country, public key encryption is practically accepted in on-line transactions in Thailand.

The existing laws which may be applicable to electronic commerce are the Telegraph & Telephone Act 1934 (B.E. 2477), the Radio & Television Broadcasting Act 1955, the Consumer Protection Act 1979 and the Civil & Commercial Code (CCC).

The Telegraph & Telephone Act 1934 (B.E. 2477)

The purpose of the Telegraph & Telephone Act 1934 is to regulate the provision of telegraphic and telephonic services.  The rationale underlining this provision is to protect the integrity of telegraph and telephone service as a reliable system which will contribute benefit to the public as a whole.  Certainly, this provision would well be applicable to on-line transactions.

The Radio & Television Broadcasting Act 1955

Data communications of which an on-line commercial transaction is a type can be transmitted by means of leased lines or radio wave.  Under technical criteria, data communications is categorized as telecommunications service and it has never been legally classified as broadcasting.  Moreover, the Radio & Broadcasting Act is aimed to regulate a broadcasting station set up domestically.  The Act has no extra-territorial enforcement to any broadcasting station outside its jurisdiction.

The issue which is defendable is that electronic commerce does not fall within the definition of “broadcasting” under the Radio & Television Broadcasting Act.  Moreover, the Radio & Broadcasting Act is aimed at regulating a broadcasting station set up domestically.  The Act has no extra-territorial enforcement to any broadcasting station outside its jurisdiction.

The Consumer Protection Act 1977

The Consumer Protection Act applies to all kinds of commercial advertisement.  Under section 22 of the Consumer Protection Act, advertisements must not contain any statement taking unjust advantage of the consumer, or any statement which may cause harmful effect to the society as a whole, regardless whether such statement is on the origin, condition, quality, or appearance of the goods or services through the delivery, procuring or application of the goods or service.

The Civil & Commercial Code (CCC)

Similar to the common law principle of tort, the liability for wrongful acts under the CCC is a remedy for non contract-based relationship.

The National Electronics and Computer Technology Center (NECTEC) announced in early January 1998 that it would appoint committees to study and draft the following laws:

Organizations Responsible for Policy Implementation

NITC supports use of IT policy in public and private sectors to develop our country to catch up with other modernized countries.  Its main duty is to make IT policies. 

The committee further appointed 7 sub-committees to be responsible for different duties; and one of these would take care of EDI.  The 7 sub-committees are as follows:

Subcommittee on EDI for International Trade

Its main duty is to be responsible for EDI development.  It is chaired by the Director General of the Customs Department.  The representative members are from various public and private agencies as follows:

The subcommittee has done some steps towards the development of EDI in Thailand.  Accomplishments consist of:

An EDI project proposal was developed and presented to the National IT Committee (NITC) in December 1992.  The committee approved the project in principle.  Further, it recommended that a more detailed study be conducted before any decision has been made regarding EDI implementing.  To respond to the recommendation, NECTEC as a committee’s secretariat coordinating with the subcommittee proposed five alternatives for review.  Subsequently, Andersen Consulting was chosen to conduct the feasibility study for a period of six months.

The study has completed and been forwarded for approval from the NITC and subsequently to the Cabinet.  It included:

1.      A private, for profit, national EDI service for international trade in Thailand should be established.  This service will use public data networks rather than establishing its own.  The name for this service is TradeSiam.

2.      TradeSiam should start with A Regulatory System for communication with government bodies involved in international trade; and an Air Cargo Community System (ACCS).

3.      International trade organizations that will be pivotal in the effectiveness of EDI in Thailand should choose TradeSiam as a sole domestic supplier of EDI services.  The examples of international trade organizations are Customs, Thai Airways International, Port Authority of Thailand, and the Ministry of Commerce.

4.      Funding for TradeSiam should come from a consortium of public and private business partners who could either benefit directly from EDI or have a vested interest in international trade in Thailand.

5.      TradeSiam should be a private company with no more than 49 percent government ownership.  No single party, either government or private, should own more than 25 percent.

6.      Establish a Thailand EDI Council (TEDIC).  This would also represent Thailand on the Asian EDIFACT Board.  TEDIC should endorse EDIFACT as the sole standard for domestic EDI messages.  TradeSiam would have a close relationship with TEDIC.

7.      Initially, TradeSiam should keep its EDI service charges below cost, as an incentive for organizations to use it.  Over a period of time the charges should be increased until they are in line with those of other EDI providers in Thailand.

For technology concern, there must have privacy which is there is no eavesdropping on communications, authentication which is there is no impersonate of network computers, and integrity which is there is no tampering with data as it was transmitted by the sender.

Elements of a security scheme comprise of:

Besides, the messages to be sent and received must be standardized.  There will be a neutral organization to manage EDI for business.  It is “TradeSiam”.  This will be responsible for EDI Value-Added Network (VAN) and will operate EDI to serve the users’ needs.  It acts like the public switching between trading partners and the international trade organizations.

To respond to the study, the establishment of TEDIC has been proposed, by the former subcommittee on international trade EDI, and got approval from NITC in December 1993.

Thailand EDI Council (TEDIC)

TEDIC includes a number of new committee members representing strategic operations such as chairman of each affiliated working group, managing director of the national EDI service provider, and representatives from public agencies.  Under the chairmanship of the Customs Director General, TEDIC composes of representatives from:

TEDIC has the following mandates:

1.      Establish policies and objectives on EDI for the country,

2.      Set up working groups to develop EDI, support EDI utilization, develop message 
         standards study and recommend EDI-related legal framework,

3.      Facilitate and monitor the operations of the working groups and other relevant 
         agencies on EDI to follow the government policy and objectives,

4.      Manage the establishment of the national EDI service provider according to the 
         government’s direction,

5.      Represent Thailand in coordinating and consulting with other nations in international 
         EDI development,

6.      Carry out other EDI-related activities, and

7.      Carry on work, study result and development plan from the former subcommittee on 
         EDI.

Under TEDIC, there are 3 functional groups of people working together, namely,

1.      Service & Support group (SSG),

2.      Messages Development Group (MDG), and

3.      Legal working group (LWG).

SSG is a working group responsible for promoting awareness and education both in public and user communities, as well as preparing all necessary standards and materials for them.

MDG has to look after its industrial sector’s electronic messages development.  It will work jointly with Thai Industrial Standard Institute (TISI) technical committee and Ministry of Transport and Communications (MOTC) EDI Subcommittee on Multi-modal Transport.

It has a mission to help matured users to cope with legal problems.  That is to seek for interim solutions while related laws have to be reformed e.g. to prepare a standard agreement for trading partner, etc.  The LWG is expected to work closely with the NITC subcommittee on IT Legal Infrastructure.

Agencies involved with EDI in Thailand

The Customs Department

The Customs Department is one of public agencies that deals with trading.  The clearance process here is said to be important since import and export do affect the country’s economics.  The government has been trying to reduce the bureaucratic processes by introducing EDI.

The Customs Department realized that the appropriate technology was essential to support international trading at this moment (Tax & Business Law Magazine 21, November 1999).  This is not only responsive to the government policy to plan for economic growth and international trade but also to increase Customs Department’s management efficiency.  The agency spent more than 1,000,000,000 Baht. for this issue including purchasing high efficient computers ranging from PCs to mainframe.

The Customs Department uses only one database for import-export oriented e.g. VAT refund, compensation to contact with Ministry of Industry, Ministry of Commerce, Bank of Thailand, etc.  For The Customs Department, they aim for themselves that this should be used for quick information services concerning import-export value.  The trading partners should gain the benefits as follows:

1. The clearance process should be fast,

2. The errors should be reduced,

3. The inventory management cost should be reduced,

4. The paper cost should be reduced,

5. The time should be more saved,

6. The information should be up-to-date, and

7. Entrepreneurs using EDI will be more advantageous than outside system entrepreneurs.

The agency tries to most facilitate EDI users resulting that the process for Non-EDI users would be slower.  The outside system users must spend more money for the clearance process.  There may be data mistakes while in customs clearance process.  Moreover, The process steps will not be reduced.

EDI has been fully implemented on November 1, 1999 mainly aiming to ease custom clearance for international trade entrepreneurs.  All custom brokers must unavoidably enter an EDI system.  The Customs Department would not facilitate the private sector if they are using a non-EDI system for clearance process.  Besides, the central part of Customs Department would cancel a manual system within November 1999.  EDI is expected to reduce people involved around 80 percent.  In order to use EDI system with the Customs Department, trading partners must have resources, equipment, and time as follows:

1. PC, printers, modem

2. Computer programs according to Customs Department standard

3. Data entry program according to Customs Department standard

4. EDI software package according to UN/EDIFACT

5. EDI Van Service Provider

6. Registration (Free of charge)

7. Testing (Free of charge)

8. Implementing (Customs Department will not charge their users for this)

The Port Authority of Thailand (PAT)

The overview of inward container EDI system can be described as follows:

1.   Marine agent sends the manifest via EDI system six hours in advance of the custom clearance.  The examples of EDI data are shown in Figure 3.1 and 3.2.

2.         Terminal 1 and 2 retrieve and check the data for correctness. The diagram of translation from text file of to EDI file of trading partner in order to send to PAT is shown in Figure 3.4. 

The diagram of translation from EDI to text file at PAT is shown in Figure 3.5. 

Figure 3.5  Translation from EDI to Text File

3.   If there are no errors, the data will be uploaded to mainframe and every concerned function can access the data.  Otherwise, the computer will inform the exporter to retransmit the correct data.

4.   Inspectors check the merchandise.

In order to implement an EDI, PAT trading partners must prepare

1.      Personnel computer (CPU 386 onward) with 4 MB RAM, HD at least 50 MB, DOS       
         version 3.0 up.

2.      Asynchronous data modem and serial cable

3.      Expedite/PC or Expedite/Base programs

4.      Standard translation program

5.      Telephone line

6.      CAT/IIN (IBM Information Network) membership fee

The estimated cost is as follows:

1. Computer                                                                          30,000   Baht.

2. Asynchronous modem                                                           6,000    Baht.

3. Expedite program                                                                 6,320    Baht.

4. Standard translation program                                     20,000-50,000    Baht.

The estimated CAT/IIN network cost is as follows:

1. Yearly

1.1  Membership                                                                  15,630    Baht.

1.2  Mail Box                                                                        7,383    Baht.

1.3  Minimum usage                                                               7,200    Baht.

2. One payment

2.1  Registration, installation, linkage, test                               50,800    Baht.

Transaction Cost is as follows:

PAT inward manifest data transmission is diagramed as shown in Figure 3.6.

Thai Airways International Plc. (THAI)

The EDI first phase has been targeted to implement about freight.  THAI involves in EDI project because it has air transportation to carry cargo.  TradeSiam will play the important role in connecting to every partner and being the interface among these partners to Customs. 

THAI has two kinds of cargo customers.  The first kind of customer is freight forwarders which are cargo agents and the other kind is airline partners. 

Freight forwarders will contact Customs concerning customs declaration and contact THAI to send the cargo.  The customs declaration is aimed to send by EDI CUSDEC, the standard name of customs declaration EDI.  This is implementing.  Message Implementation Guideline for General Customs Declaration Message on Export (GDEX) is shown in Appendix.

For other airlines, normally, among airlines, they send and receive document via EDI but with the different standard called CARGO-IMP.  This standard has been using for more than 20 years.  However, to contact with the Customs Department via TradeSiam, THAI has to use UN/EDIFACT standard.  In other countries, there must be a conversion software to convert these standards back and forth.  The organization who does the conversion is the interface organization and it is TradeSiam in this case.

Before setting up TradeSiam, there were several partners who are interested in being shareholders including IATA and GE (Thailand).  IATA is the expert organization about airline affairs since it is the International Aviation Organization and it knows well about EDI standard conversion.  Finally, GE is the shareholder but they cannot implement the EDI standard conversion.  They have asked the consultant from India and in the stage of implementing.  Therefore, THAI is unable to participate in the EDI with Customs via TradeSiam for Export so far and still wait for TradeSiam to complete the conversion.