Financial Crime World

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THAILAND: MONEY LAUNDERING LEGISLATION GETS A BOOST WITH LATEST AMENDMENTS

Thailand’s Anti-Money Laundering Act (AMLA) and Counter Terrorism and Proliferation of Weapons of Mass Destruction Financing Act (CFTA) are set to be updated following a recent public hearing on June 15, 2020. The proposed amendments aim to bring Thailand’s anti-money laundering regulations in line with international standards, as recommended by the Financial Action Task Force (FATF).

KEY AMENDMENTS TO THE AMLA

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

  • Expanded Definition
    • 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

Additionally, the definition of “professions” (formerly known as “section-16 professions”) is being expanded to include additional occupations and businesses, such as:

  • Expanded Professions
    • Accounting
    • Auditing
    • Auto trading and leasing
    • Legal consulting
    • Others

For cash transactions exceeding a prescribed threshold, parties in these professions will be assigned record-keeping duties in addition to their current reporting duties.

KEY AMENDMENTS TO THE CFTA

A channel is being established for section-6 designated persons (i.e. individuals listed as terrorists 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 will be 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 came into force on August 12, 2020. Key updates include:

  • Updated Definitions
    • Politically Exposed Person (PEP)
    • Senior management
    • Family member
    • Intimate person
    • Business relationship
    • Risk
    • Reliable source of information
  • Streamlined Measures
    • Assess, manage, and relieve risks for consistency with international standards
  • Enhanced CDD and Know-Your-Customer Measures
    • Foreign PEPs and customers from any country in the FATF list of high-risk jurisdictions are treated as high-risk customers

These amendments aim to give more certainty to many issues that were ambiguous before, making it easier for regulators and the public to apply the regulations. Additionally, Thailand’s anti-money laundering regulations are becoming more relevant and better suited to fighting modern money laundering schemes.

Entities Affected

Entities included in the definition of “financial institution” and “profession” will need to be more aware of their obligations under the updated laws. Compliance with these new regulations is crucial for financial institutions operating in Thailand, both domestically and internationally.