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Cablegate: Update On Thai Customs and Alcoholic Beverages

VZCZCXYZ0000
RR RUEHWEB

DE RUEHBK #5405 2880930
ZNR UUUUU ZZH
R 150930Z OCT 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 0180
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS BANGKOK 005405

SIPDIS

INFO ASEAN MEMBER COLLECTIVE

SIPDIS

STATE FOR EAP/MLS AND EB
STATE PASS TO USTR
TREASURY FOR OASIA
COMMERCE FOR EAP/MAC/OKSA

E.O. 12958: N/A
TAGS: ECON ETRD EINV TH
SUBJECT: UPDATE ON THAI CUSTOMS AND ALCOHOLIC BEVERAGES

REF A) SECSTATE 57887, B) BANGKOK 2535

1. (SBU) Summary. During recent introductory calls at the Thai
Customs Department, the Ministry of Finance, and the Ministry of
Commerce, Econ Counselor, econoff and CommAtt followed up with the
RTG regarding Thai customs treatment of alcoholic beverages.
Although Customs said it will conclude its evaluation within three
months and Commerce said that responses to the 21 questions have
been drafted, the companies' concerns about 100 percent application
of deductive valuation have not been resolved. End summary.

2. (SBU) Newly arrived Econ Counselor took advantage of introductory
calls to highlight for Thai officials U.S. concerns about customs
valuation of alcoholic beverages. Natina Santiyanont, Director of
Customs Standard Procedure and Valuation Directorate, said the gap
between the declared value and the duty-free retail price of the
alcoholic beverages involved attracted Thai government concern. She
said that Customs is doing an intense analysis of the pricing
factors and plans to come to a conclusion within three months,
"maybe sooner." Natina envisages the outcome as a precedent for
future, similar cases, "so we do not have to go through this every
time." She said that the Ministry of Justice's Department of Special
Investigations (DSI) believes that alcoholic beverage importers may
be undervaluing their shipments by submitting inaccurate invoice
prices. She said she is working with the companies to evaluate
pricing data, but the "the data is very complex."

3. (SBU) Sommai Phasee, Deputy Minister of Finance, reiterated the
RTG concern over transfer pricing. He said the RTG suspected that
some alcohol producers simply make up the invoiced price, but that
the authority to deal with these cases rests with the Customs
Department. Sommai also expressed concern that foreign producers'
pricing methods are undermining domestic competition.

4. (SBU) Pimchanok Vonkhorporn, Director of Multilateral Trade
Negotiations at the Ministry of Commerce, said that general draft
responses to the 21 questions (Ref. A) have been prepared, but that
detailed responses still require input from the Customs Department.
The RTG is aware that customs valuation issues will be raised again
at the meeting in Geneva later this week, but, Pimchanok said, it is
not clear that much more will be reported beyond what was said at
the last meeting in June. The official RTG response to the questions
from the WTO is still being decided "at high levels."

5. (SBU) All three officials noted that many policy decisions will
await formation of a new government after the elections scheduled
for December 23, but did not indicate the RTG response to the WTO
Customs Valuation Committee would have to wait until that time.
Natina, in particular, left the impression that resolving this case
is essentially a technical matter not waiting on policy decisions at
the top.

Boyce

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