Fair Trade Practices Relating to Period of Credit Term in the Case SME Operators are Sellers of Goods or Providers of Services

In brief
Government has a policy on sustainably reducing gap and creating fairness in business operation for small and medium enterprise (SME) operators, it is then deemed suitable to prescribe standard criteria on credit term for a period of 30 days to 45 days for SME operators as proposed by the National Economic and Social Development Council and the Bank of Thailand.
On 18 June 2021, the Government Gazette website has published the Notice of Trade Competition Commission Re: Guidelines on Consideration of Fair Trade Practices Relating to Period of Credit Term in the Case SME Operators are Sellers of Goods or Providers of Services, dated 24 May 2021, issued under Trade Competition Act, B.E. 2560 (2017).
This Notice shall be enforced after the lapse of 180 days from the day following the date of its publication in the Government Gazette onwards, which is on 15 December 2021.

Nature of SME business
Small and Medium Enterprise (SME) operators means business operators whose natures of business are as follows:

No.	Matters		Details
1.	Manufacturing goods	Employment:	Not exceeding 200 persons
		Income:	Not exceeding 500,000,000 Baht per year
2.	Providing of services, wholesale, or retail business	Employment:	Not exceeding 100 persons
		Income:	Not exceeding 300,000,000 Baht per year

Definition

Terms	Definition
Trade Credit	An agreement on granting trade credit between a SME operator who is a seller of goods or services and a buyer of goods or services, including consignment or buying/selling of any other description, and there will be made payment for the goods or services thereafter according to the conditions and the period of time agreed upon in writing.
Credit Term	A period of time given by a seller of goods or services to a buyer of goods or services within the period of time agreed upon as evidenced in writing.

The Fixing of Credit Terms
Any business operator who is a trading partner and a small and medium enterprise (SME) operator is subjected to the guidelines on consideration of fair trade practices as follows:

No.	Matters		Details
1.	Credit terms	a) Trade sector, production sector, and service sector	Not exceeding 45 days, unless already agreed in lesser credit term
		b) Trader sector, production sector, and service sector, especially those concerning agricultural produces or initial processed agricultural products	Not exceeding 30 days, unless already agreed in lesser credit term
2.	Counting of Credit Terms	a) Regularly	Counted from the date of delivery of goods or the providing of services according to the quantity, category, quality/standard of the goods or services duly agreed upon and the documents thereof have been handed over correctly and completely
		b) In the case of consignment	Counted as from the date of sale of goods in full quantity or at the rate agreed upon according to normal trade practices.
3.	Payment of Trade Credit	a) Any business operator (trading partner)	Must be shown clear steps of payment according to normal trade practices.
		b) SME Operator	Must present documentary evidences of labour employment; or documents showing incomes to confirm its status as a SME operator to any business operator who is its trading partner for information

Unfair Trade Practices
Any acts involving the granting of credit term which may be described as unfair trade practices are:

No	Detail
1.	Delaying payment of goods or services exceeding the specified credit term without reasonable grounds therefor.
2.	Change of credit term or other conditions under the contract without reasonable grounds therefor, or no prior notice is given at least 60 days in advance.
3.	Other acts which are unfair enforcements by any business operator who is a trading partner of a small and medium enterprise operator, such as, setting special conditions concerning the granting of trade credit which may cause a burden to the contractual party unnecessarily, etc