Bangkok Shipowners and Agent Association

Bangkok Shipowners and Agents Association
To represent and promote the views and policies of the Association to the Thai Government and all other governmental official and non-governmental bodies which may be concerned with shipping.
Home News BSAA Activities Payment of Freight Charges in USD
Payment of Freight Charges in USD PDF Print E-mail
Wednesday, 10 November 2010 07:47

With reference to recent news reported by various press and media on the issue of allowing exporters to pay ocean freight in US Dollar currency to foreign shipping companies which was said to be one of the measures from Bank of Thailand to reduce the burden of exporters on the loss of exchange rate due to the continued appreciation of Thai baht against US Dollars.


Bangkok Shipowners and Agents Association (BSAA) would like to inform exporters and parties concerned that some shipping lines and their agents have already facilitated the payment of ocean freight in US Dollars by allowing exporters to transfer the fund in US Dollar directly to the overseas bank accounts of the shipping lines for which exporters can enquire with shipping lines or their agents for such service and payment facility.

For the payment of ocean freight in US Dollar currency in Thailand, there are still some problems yet to be solved especially relating to the regulations of Revenue Department which all shipping lines have to comply with.  BSAA has seek clarification from the Revenue Department on the issue of which exchange rate to be used for the receipt and tax invoice issued by ship agents and the withholding tax receipt issued by exporters.  Under current practice, all ship agents apply one single rate of exchange for the collection of all prepaid ocean freight in Thai baht for one export vessel voyage  but as per regulations of Revenue Department, the exchange rate for exporters to apply for withholding tax deduction should be on the date of actual payment which will result in many different rates of currency exchange being used by various exporters who make payment in different dates to ship agents. The discrepancy of exchange rate applied by ship agents on freight collection and exporters on withholding tax deduction will be against the rules of Revenue Department which needs to be resolved before shipping lines and their agents can accept the freight payment in US Dollar currency in Thailand.

In addition to the above problem, Bank of Thailand does not have the check clearing system for US Dollar currency transaction as well as the fund transferring system among commercial banks in Thailand do not facilitate US Dollar transactions.  Hence, commercial banks have to transfer the US Dollar currency fund to overseas banking network first and then transfer back to the bank account of ship agents resulting in some delay.  

BSAA will continue to cooperate with authorities and parties concerned to solve all these problems to enable its members to facilitate and accept freight payment in US Dollar currency from exporters in Thailand.