Money Laundering in Thailand: Definition and Examples

Thailand’s Anti-Money Laundering Act B.E. 2542 (1999) has undergone significant amendments to keep pace with evolving international money laundering practices. The Financial Action Task Force (FATF) recommended changes to the act, along with the Counter Terrorism and Proliferation of Weapons of Mass Destruction Financing Act B.E. 2559 (2016), to ensure consistency with international standards.

Key Draft Amendments to the AMLA

The definition of “financial institution” has been expanded to include operators of various financial technology services, such as:

Asset Management and Digital Asset Businesses: Companies involved in managing digital assets like cryptocurrencies.
Trustees in Capital Market Trusts: Entities responsible for managing trust funds in capital markets.
Derivatives Businesses: Organizations that offer derivative products to clients.
Authorized Juristic Persons under Foreign Exchange Controls: Companies with permission to conduct foreign exchange transactions.
Personal Loan Businesses: Lenders offering personal loans to individuals.
Nano- and Pico-Finance Businesses: Microfinance institutions providing small loans to individuals.
Peer-to-Peer Lending Businesses: Platforms that facilitate lending between individuals.
Crowdfunding Platforms: Online platforms for raising funds from a large number of people.
Regulated E-Payment Systems and Services: Electronic payment systems like mobile wallets or online banking.
Non-Bank Credit Card Service Providers: Companies offering credit card services without being banks.

The definition of “professions” has been expanded to include additional occupations and businesses, such as:

Accounting: Firms providing accounting services.
Auditing: Entities conducting audits for clients.
Auto Trading and Leasing: Companies dealing with auto trading and leasing activities.
Legal Consulting: Law firms or individuals offering legal consulting services.

For cash transactions exceeding the prescribed threshold, parties in the listed professions are assigned recordkeeping duties in addition to their current reporting duties.

Key Draft Amendments to the CFTA

A channel has been established for section-6 designated persons (i.e., people who have been listed as a terrorist by the U.N. Security Council) to submit a petition for reconsideration and delisting to the U.N. Security Council via Thailand’s Ministry of Foreign Affairs.

If a designated person’s funds and assets are frozen, qualifying financial institutions and professions are given an exemption that enables them to deposit funds (e.g., due payments, interest, etc.) earned prior to the freeze into the frozen account.

Additional Updates to CDD Regulations

The new Ministerial Regulation on Customer Due Diligence B.E. 2563 (2020) came into force on August 12, 2020. This repealed and replaced the former version from 2013 (as amended), and contains the following key updates:

Definition of Politically Exposed Person (PEP): The definition has been clarified for easier compliance.
Risk Assessment and Management: Measures have been streamlined to align with international standards.
Customer Due Diligence (CDD) and Know-Your-Customer Measures: Enhancements have been made for certain types of customers.

These amendments provide more clarity on several issues that were previously ambiguous. This will benefit both regulators and the public by reducing the need for interpretation and minimizing the risk of ambiguity or error.

Moreover, the amendments to the AMLA make Thailand’s anti-money laundering regulations more relevant and better suited to combat modern money laundering schemes that utilize new technological innovations and financial technologies. As a result, entities included in the definition of “financial institution” and “profession” will need to be more aware of their obligations to comply.

Finally, the amendments to the CFTA include the establishment of the petition submission channel, which has been a persistent obstacle to legal proceedings and will be a great relief for regulators and institutions alike.