Supachai pushes Trade Competition Commission to close loopholes as large firms delay payments to SMEs, overhauling credit term rules
RegulationMacro
Supachai Suthamphan, Deputy Prime Minister and Minister of Commerce, is pushing for a revision of the rules on credit terms, or the period for granting trade credit, to address the problem of large businesses delaying payment for goods and services, which leaves small and medium-sized enterprises, or SMEs, short of working capital. The Trade Competition Commission has already approved the draft announcement revising these rules. Lalida Pherdwiwattana, Deputy Spokesperson for the Prime Minister's Office, disclosed that the draft announcement retains the payment period framework for SMEs: no more than 30 days for agricultural goods or primary processed agricultural products, and no more than 45 days for general trade, manufacturing, and services, unless there are justifiable business reasons that can be explained. These 30-day and 45-day frameworks already exist in the current rules. This revision therefore aims to close enforcement loopholes and increase clarity on the obligations of large operators. Large buyers must clearly state their payment procedures, must not delay payment without justification, and must not change credit terms or contract conditions without giving at least 60 days' advance notice. In addition, if the facts or evidence concerning a complaint are within the knowledge of the large buyer, the buyer is obliged to present the facts and evidence to the Trade Competition Commission, which helps reduce the burden of proof on SMEs. Operators that violate the rules and are deemed to have engaged in unfair trade practices may face administrative fines of up to 10 percent of their revenue in the year the offense was committed. The draft announcement is still in the processing stage and is not yet in effect. It is set to take effect 30 days after the day following its publication in the Royal Gazette.
