Financial Crime World

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Addressing Legal Problems Surrounding Thailand’s Anti-Money Laundering Act

The Anti-Money Laundering Act of Thailand (AML Act B.E. 2542) has several legal problems that need to be addressed. This paper identifies key issues with the current law, particularly in relation to HAWALA, a method of transferring money without using financial institutions.

Key Issues with the Current Law

  • Definition of Money Service Business: The AML Act only defines money service business as certain professions conducting financial businesses under the law on exchange control, which is not comprehensive. Non-registered money service businesses, including HAWALA providers, are not covered.
    • This creates a loophole that allows unregistered businesses to operate without any reporting duties or regulations.
  • Reporting Duty: Only registered money service businesses must report transactions to the Anti-Money Laundering Office (AMLO) under section 16(10). This leaves a gap for unregistered businesses to avoid reporting suspicious transactions.
    • As a result, it is difficult to track and prevent money laundering activities in Thailand.
  • Lack of Cooperation with Foreign Countries: The AML Act does not have a Memorandum of Understanding (MOU) with foreign countries, making it challenging to exchange information and cooperate in combating money laundering.
    • This hinders the ability of Thai authorities to investigate and prosecute money laundering cases that involve international transactions.
  • Presumption of Money Laundering Offenses: The current law does not unconditionally assume money laundering activities for professions conducting financial businesses who carry on HAWALA.

Recommendations for Addressing these Issues

To address the above issues, we recommend:

  • Expanding the Scope of Law: Define and extensively prescribe the provision for non-registered money service businesses to have duties to report under section 16(10) of AML Act B.E. 2542.
    • This will ensure that all money service businesses are subject to regulations and reporting requirements, regardless of their registration status.
  • Signing MOU with Foreign Countries: Sign an MOU with foreign countries connected with Thailand to prescribe definitions of money service providers, reduce tax avoidance through transfer pricing, and improve the stability of the report system.
    • This will enhance international cooperation in combating money laundering and help prevent cross-border financial crimes.
  • Amending Presumption of Money Laundering Offenses: Unconditionally assume money laundering activities for professions conducting financial businesses who carry on HAWALA.
    • This will strengthen the law’s ability to detect and prevent money laundering activities related to HAWALA.

Conclusion

The paper highlights the need for updates to Thailand’s AML Act to cover non-registered money service businesses and enhance international cooperation to combat money laundering. By addressing these issues, we can improve the effectiveness of anti-money laundering laws in Thailand and contribute to a more secure financial system.