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Risk Assessment Methodology for Money Laundering, Terrorism Financing, and Proliferation Financing in Thailand

The Financial Action Task Force (FATF) ML/TF/PF risk assessment methodology provides a framework for identifying and evaluating the risks associated with money laundering (ML), terrorism financing (TF), and proliferation financing (PF) in Thailand. This article summarizes the key points of the risk assessment methodology used in Thailand.

Risk Assessment Methodology

The risk assessment methodology used in Thailand consists of three stages:

1. Identification

Identify threats and vulnerabilities by determining potential risks or risk factors that Thailand faces.

2. Analysis

Analyze the nature, sources, likelihood, and consequences of identified risk factors using a likelihood and consequence index.

3. Evaluation

Prioritize risks and consider appropriate risk avoidance and mitigation measures.

Data Collection

The study uses both qualitative and quantitative data collection methods from various sources:

  • Documentary research: Analysis of official documents and reports.
  • Analysis of official crime and ML/TF/PF statistics: Examination of data on crimes, ML, TF, and PF.
  • Case studies: In-depth analysis of specific cases related to ML, TF, and PF.
  • Typology analysis: Study of the characteristics and behaviors of individuals or groups involved in ML, TF, and PF.
  • In-depth interviews and focus group interviews with experts and officials: Gathering of information from experts and officials in the field.

Additionally, the Thailand National Risk Assessment uses innovative methods such as:

  • The Detection Capacity Model: Estimation of the size and value of ML by calculating criminal income from the National Crime Victimization Survey 2021 and comparing it with detection capacity data.
  • Big data analytics techniques: Consideration of potential risks of unfair trade and price manipulation.

Risk Analysis

The risk assessment analyzes predicate offenses, non-predicate offenses, and illicit financial flows related to:

  • Money laundering (ML): Thefts, bribery, tax evasion, and other crimes that involve the concealment or disguise of criminal proceeds.
  • Terrorism financing (TF): Support or funding for terrorist activities or organizations.
  • Proliferation financing (PF): Funding for the development or acquisition of weapons of mass destruction.

For each type of offense, the analysis considers:

  • Chances
  • Methods
  • Size and value
  • Use of payment methods or businesses in placement, layering, and integration

Vulnerability Analysis

The vulnerability analysis assesses the likelihood and consequences of identified risk factors using a likelihood index with four indicators:

  • Number of detectable cases
  • Amount of seizure
  • Frequency of crime
  • Level of control

And a consequence index with seven indicators:

  • International impacts: Effects on international relations, trade, or security.
  • Impacts on the financial system and financial institutions: Consequences for banks, insurance companies, and other financial institutions.
  • Impacts on the economy: Economic effects on Thailand, including inflation, unemployment, and economic growth.
  • Impacts on public trust and confidence: Effects on public perception of ML, TF, and PF risks.
  • Impacts on national security: Consequences for Thailand’s national security, including terrorism and cyber threats.
  • Impacts on global reputation: Reputation effects on Thailand’s international image and relationships with other countries.
  • Compliance risks: Risks associated with non-compliance with ML, TF, and PF regulations.