Since it came into force more than three years ago, the Customs Department has endeavored to impose and amend departmental notifications and regulations in compliance with the Customs Act, B.E. 2560 (2017) (the “Customs Act”). However, due to the COVID-19 pandemic and the Revenue Department’s enforcement of the transfer pricing regulation in 2020, the Customs Department is now carrying out stricter post-clearance audits and is more likely to challenge importers on complex issues – meaning customs valuation and utilization of customs and trade privileges – in addition to conventional issues like tariff classification, origin of goods, and import and export requirements. The transfer pricing regulation closely interacts with customs valuation, which is the procedure to determine the import value to calculate the duty to be paid on imported goods. Therefore, it is essential that the transaction value, which is the first and primary method to assess and determine the import duty, is the actual price paid or payable in a transaction between a seller and buyer. In a relationship between affiliated companies, the transaction value of goods may be below the normal market price. The concern over whether the value of imported goods, in a transaction between affiliated companies, is legally accurate, has led the Customs Department to focus more on customs valuation in the post-clearance audit. Therefore, importers must meticulously check the transaction value declared to the Customs Department, as well as the transfer pricing measure, to avoid a challenge or dispute concerning customs valuation – the risk of which has increased significantly at this time. In this respect, Baker McKenzie, Bangkok will hold a webinar on the updates of customs audit trends and getting to know about your customs and trade risks in April 2021. Please contact us for further information or assistance.