A group of Japanese companies imported Phenolic Resin, an important compound widely used for manufacturing disc brakes and grinding wheels in the automotive industry. Such Phenolic Resin contains Hexamethylenetetramine, listed as a type of armament (explosive item) under the Armament Control Act B.E. 2530. The import of such Phenolic Resin was therefore prohibited unless the import license is obtained from the Ministry of Defense (“MOD”). Thai Customs charged the clients for importation of Phenoric Resin without import licenses, causing delays in importation and a large sum of duty shortfalls and penalties. The clients approached us to assist in mitigating the risk with Thai Customs.
We gathered facts and obtained academic opinion from a university professor that the amount of Hexamethylenetetramine extracted from Phenolic Resin is less than 20% which is insignificant to be used as an explosive item, and the extraction process required high-level expertise. We also collaborated with relevant stakeholders, such as the Japan Chamber of Commerce and Industrial Council of Thailand, in developing rationales for advocating the Armament Committee under the Ministry of Industry to issue a Ministry of Defense Notification to delist Phenolic Resin containing less than 20% Hexametrilenetetramine from the requirement to obtain an import license.
We were able to successfully advocate for the issuance of MOD Notification which grants exemption to Phenolic Resin containing less than 20% Hexamethylenetetramine in year 2009. Thus, the clients’ potential customs liability relating to the importation of such products without import licenses are waived.