There was an increase in the trade value of luxury goods in Thailand in June, which a Customs Department official believes was “partly motivated by bigger profits from the firmer baht.” In total, the Customs Department “made arrests in 1798 cases with a combined value of 514 million baht in seized goods” in June. According to Tada Choomchaiyo, director of the enforcement division, 45 of the cases consisted of “smuggled brand-name goods worth 42.9 million baht in total” which is more than double the 20-million-baht average in the last year.

Why was there such a drastic increase? Mr. Tada believes the “stronger baht resulted in a higher profit from importing goods such as luxury watches and bags for domestic sale.” Imported goods are susceptible to smuggling due to their extra costs when they are processed through customs. Mr. Tada provides the example that “a luxury bag is subject to a 20% import duty plus the 7% value-added tax (VAT).” This means that smuggling the product allows a person to evade not only the list price of that good, but also additional costs in duties and taxes.

If smuggled goods are found in customs areas, they will be seized, however, “smugglers are subject to a fine of two times the product price and tax if they are arrested outside of customs checkpoints.” Of the 1,798 arrests last month, the Bangkok Post reports that “451 were involved with smuggling goods worth 73.4 million-baht, 1,233 evaded tax worth 201 million baht and imports of restricted and prohibited goods made up the rest.

A Customs Department spokesperson, Chaiyuth Khamkun, said last week that “The Department urged businesses to use its ‘one-stop-service’ centers to speed up customs and to abide by the laws.” In order to enforce the law, the Department “had collaborated with police and the Department of Special Investigation.”