Thailand’s Anti-Money Laundering Regulations: Significant Amendments with Expanded Scope and Enhanced Compliance
Date: December 8, 2020
Thailand is taking strides in combating money laundering and terrorist financing through updated regulations, following the Financial Action Task Force’s (FATF) recommendations. The Anti-Money Laundering Act B.E. 2542 (1999) (AMLA) and the Counter Terrorism and Proliferation of Weapons of Mass Destruction Financing Act B.E. 2559 (2016) (CFTA) are set to undergo critical amendments.
Key Changes to the Anti-Money Laundering Act (AMLA)
Expanded Definition of Financial Institutions
The upcoming changes to the Thai anti-money laundering law will have a substantial impact on various sectors. The definition of “financial institutions” is expanded to include:
- Asset management and digital asset businesses
- Trustees in capital market trusts
- Derivatives businesses
- Authorized juristic persons under foreign exchange controls
- Personal loan businesses
- Nano- and pico-finance businesses
- Peer-to-peer lending businesses
- Crowdfunding platforms
- Regulated e-payment systems and services
- Non-bank credit card service providers
Additional businesses related to financial services or financial technology services will be announced through ministerial regulations.
Broader Definition of Occupations (Section-16 Professions)
The definition of “occupations” or “section-16 professions” is broadened to cover:
- Accounting
- Auditing
- Auto trading and leasing
- Legal consulting
More professions will be determined through ministerial regulations. These professions will be subject to additional recordkeeping duties for cash transactions exceeding a prescribed threshold.
Expanded Authority and Powers of the Anti-Money Laundering Office (AMLO)
The authority and powers of the Anti-Money Laundering Office (AMLO) have been expanded to include acting as Thailand’s central financial intelligence agency. AMLO is now responsible for checking and rating the operations of companies and branches within and outside the country.
Upcoming Changes to the Counter-Terrorism and Proliferation of Weapons of Mass Destruction Financing Act (CFTA)
Petition for Reconsideration and Delisting
Designated persons can submit a petition for reconsideration and delisting to the United Nations Security Council via the Ministry of Foreign Affairs.
Exemption for Frozen Funds and Assets
If the funds and assets of designated persons are frozen, there will now be an exemption. Qualifying financial institutions and professions can deposit funds earned prior to the freeze into the frozen account.
New Updates to Customer Due Diligence Regulations
Since August 12, 2020, the Ministerial Regulation on Customer Due Diligence B.E. 2563 (2020) has been in effect. Key amendments include:
- Clearer and more straightforward definitions of Politically Exposed Persons (PEPs)
- Additional definitions such as “senior management,” “family member,” “intimate person,” “business relationship,” “risk,” and “reliable source of information”
- Streamlined measures for assessing, managing, and relieving risks
- Enhanced CDD measures for certain types of customers, such as juristic persons, trusts, and others
These revisions aim to provide greater clarity and ease of compliance, making the regulations more effective and consistent with international standards for combating financial crimes.
Conclusion
Thailand’s comprehensive updates and amendments to its anti-money laundering regulations and counter-terrorism financing act are crucial steps in creating a more robust and responsive framework for addressing modern money laundering and terrorist financing schemes. The expanded scope and enhanced compliance measures will impact various professions and financial institutions, placing greater emphasis on adhering to the regulations to maintain a crime-free financial system.