Thailand Corruption Report

(Want to receive more corruption report updates? Subscribe here!)


Thailand_230x152.pngAll levels of Thai society suffer from endemic corruption. Even though Thailand has the legal framework and a range of institutions to effectively counter corruption, companies may regularly encounter bribery or other corrupt practices. Ousted former Prime Minister Yingluck recently went on trial for negligence and other offences related to the allegedly corrupt implementation of a rice subsidy scheme that reportedly cost the state USD 16 billion. The Organic Law on Counter Corruption criminalises corrupt practices of public officials and corporations. The Thai Penal Code criminalises active and passive bribery of public officials by persons operating in the public or private sector but excludes facilitation payments. Anti-corruption legislation is inadequately enforced, and facilitation payments and gifts are common in practice. 

Last updated: November 2015
GAN Integrity

Judicial System

Corruption in the judiciary is a significant risk for businesses operating in Thailand. The legal system does not function as a deterrence to corruption and litigants sometimes influence judgments through extra-legal means, including bribes (ICS 2015). Only few public officials have been effectively prosecuted on corruption charges, which have led to a decrease in public trust in the judiciary (BTI 2014). Twenty percent of surveyed citizens feel that the judiciary is corrupt (GCB 2013). Even though the process can be slow at times, the judiciary is generally efficient in enforcing property and contractual rights (ICS 2015). With an average of 449 days, enforcing a contract takes less time and is much less costly than elsewhere in the region (DB 2015). Companies need to be aware that decisions by foreign courts are not recognised by the local courts, and thus cannot be enforced. Disputes that need to be settled and recognised by the court, have to go through the Thai justice system (ICS 2015). The military established a junta called the National Council for Peace and Order after a coup d'état, and suspended the constitution (HRR 2014). The judiciary retained its functions, but can be overridden by the NCPO in order to defend national security (HRR 2014). The military junta has set up military courts that severely infringe civil rights, as they operate in secret fashion and lack independence (HRW, May 2015). Thailand is a signatory to the International Centre for the Settlement of Investment Disputes.


Corruption is pervasive in Thailand's police sector. It has a reputation of being the most corrupt institution in the country, partly due to its entanglement in politics and a patronage system (The Guardian, Nov. 2014). Police impunity is reported to be a problem (HRR 2014), and companies consider them to be fairly unreliable (GCR 2014-2015). Following the August terrorist attacks in Bangkok, an investigation was launched into the Thai immigration police, as suspects had crossed the border with fake passports in exchange for bribes (Sputniknews, Sept. 2015).

Public Services

Companies should take note of corruption risks when acquiring public services in Thailand. Irregular payments, bribes and especially gifts are commonly exchanged (GCR 2014-2015). Due to its frequency, forty-eight percent of surveyed Thais expect financial losses from bribery and corruption (pwc 2014). This can be attributed partly to low wages of public officials, and partly to a cultural inclination to accept gifts as a natural part of doing business (ICS 2015). Facilitation payments to civil servants are common to the extent that if companies refuse to make such payments, they may create a competitive disadvantage relative to other firms in the same field (ICS 2015). Inefficient government bureaucracy and political instability make for fertile ground for corruption, and present obstacles to doing business (GCR 2014-2015). Starting a business takes on average 27 days and is significantly less costly than the regional average (DB 2015).

The Licensing Facilitation Act (unofficial English version) came recently into force. It targets red tape and corruption by providing a one-stop shop service through an information center on public services that deals with licensing procedures and complaints against state agencies. Further, a website and a hotline are established, that are said to be available in English in the future (Thai Visa News, July 2015). 

Land Administration

There are no reported corruption risks when dealing with the Thai land administration. Thailand's land services are one of the most efficient in the world, with the administration having implemented a one day service for registering property (WB & FAO, DB 2015). This creates a competitive advantage against other countries in South Asia and the Pacific, where it takes an average of 77 days (DB 2015). Thailand is among the highest ranking countries in terms of cost and time efficiency when dealing with construction permits (DB 2015)

Tax Administration

There are no reports of corruption risks in Thailand's tax administration. Tax rates are lower than elsewhere in the region, but take more time than the regional average (DB 2015). The Thai Revenue Department has increasingly encouraged citizens to pay their taxes online, lessening the possibility of bribery. As of recent, the National Anti-Corruption Commission reported to investigate several revenue officials in a Bt4.3 billion tax-refund case (NationMultimedia, Aug. 2015).

Customs Administration

Burdensome import procedures and corruption at the border are obstacles to doing business in Thailand (GETR 2014). Irregular payments are commonly exchanged, both in import and export (GETR 2014). Businesses voice concerns about the amount of discretionary power exercised by customs authorities and the arbitrary application of Thailand's transaction valuation methodology (ICS 2015). Efficiency and transparency of the border administration is rated as low (GCR 2014-2015, GETR 2014).  

Public Procurement

Corrupt practices are likely to be an obstacle in Thailand's public procurement processes. The regulatory framework for public procurement is weak, fragmented and does not reflect international legislative practices (UNDP, Jan. 2015). Unlike common practice in most countries, Thailand's public procurement is not regulated by law (UNDP, Jan. 2015). Companies are at high risk of encountering procurement fraud, which frequently occur when potential vendors initially provide requested quotations (pwc 2014). Procurement fraud reportedly occurs through unverified vendors that had undeclared relationships with their employees (pwc 2014). Respondents report of bid rigging, which involve cooperation from employees who provided inside information or confidential pricing knowledge that leads to unfair competition (pwc 2014). Public funds are often diverted and favouritism has a considerable influence on decisions of government officials (GCR 2014-2015). State-owned enterprises compete with private enterprises under the same conditions in terms of market share, products/services, and incentives in most sectors, but with some exceptions, such as the fixed line operation in the telecommunications sector (ICS 2015). Government agencies may reject bids or modify the terms during the bidding process if corruption is suspected, which gives them considerable latitude to alter the procurement process in favour of certain firms (ICS 2015). Companies are recommended to implement special due diligence procedures to counter the likelihood of encountering corruption in the procurement process.

Natural Resources

Corruption is a big risk in the fishing industry. Slavery and human trafficking have played a big role in the Thai fishing sector, especially in the supply chain of farmed shrimps (The Guardian, July 2015). This form of organised crime has been made possible with the collusion of the authorities and government inaction (TPR 2015).


Thailand's anti-corruption laws offer an extensive framework, but its enforcement varies. As of late, the military junta replaced the 2007 constitution with an interim constitution (Bloomberg Business, July 2014). The anti-corruption framework remains intact and enforceable pursuant a Military Junta Notification, which orders the Organic Act on Counter Corruption to remain in force (Herbert Smith Freehills [HSF], 2015). Corrupt offences are captured primarily in the Organic Act, the Penal Code and the Offences Relating to the Submission of Bids to State Agencies Act. The Organic Act on Counter Corruption criminalises corrupt practices of public officials, expect for the acceptance of benefits "on an ethical basis" in accordance with the NACC Supplemental RulesThe Thai Penal Code criminalises active and passive bribery of public officials by persons operating in the public or private sector. Active bribery concerns benefits to public officials with the aim of inducing delays or non-performance of an act which conflicts with their position. A facilitation payment to induce the performance of an act in accordance with their function is excluded from the provision, thus not technically illegal (HSF 2015). Benefits are loosely defined as anything that contains value (HSF 2015). Companies should note that they are likely to encounter the practice of facilitation payments and giving gifts in Thailand. Legal entities, such as a company, can be criminally liable for the bribery offenses of its employees or others acting on behalf of the company, with a maximum punishment of twice the actual damage or amount of benefits obtained (Tillieke&Gibbins, Aug. 2015).

The Act on Offences Relating to the Submission of Bids to State Agencies defines corrupt practices in relation to public procurement such as bid collusion. Finally, the Anti-Money Laundering Act (AMLA) prohibits money laundering and is implemented by the Anti-Money Laundering OfficeIndividuals, as well as legal entities, may be prosecuted for offences concerning corruption, however, there is no example of a prosecution of a company (HSF 2015). Protective measures and rewards are offered for whistleblowers (HSF 2015). Thailand has recently extended capital punishment for corruption to foreigners and foreign officials, and upped the statute of limitation from ten to twenty years (The Guardian, July 2015). Thailand is a signatory to the United Nations Convention Against Corruption (UNCAC) but not the OECD Anti-Bribery Convention.

Civil Society

Intensifying political tensions in Thailand negatively impacts freedoms and rights of the civil society. The Internet and press are both considered "not free" (FoN 2014FoP 2015). The military regime enforces existing anti-defamation and lèse-majesté laws, and imposes harsh new orders to prevent criticism of the coup (FoP 2015). To the same effect, several media outlets are shut down and journalists reportedly face intimidation, summonses from authorities, and arbitrary detention (FoP 2015). The political tensions and anti-defamation laws spread anxiety in Thailand's vibrant civil society and several attacks have been reported (FiW 2015).


Topics: East Asia & The Pacific