THAILAND'S ANTI-MONEY LAUNDERING LAW
In the light of the proliferation of illegal activities involving large sums of money, Thailand's legislative body has implemented a comprehensive anti-money laundering law.
The Anti-Money Laundering Act was passed in March of 1999 with the aim of eradicating the drug trade, as well as combating other activities like corruption, fraud and prostitution.
Recent amendments to the Act were made in March 2008, broadening the overall scope of criminal liability and increasing powers to conduct investigation and seizures. The amendments can also be seen as an attempt to address the issue of perceived government corruption.
The Anti-Money Laundering Prevention and Suppression Office ("AMLO") established under the Act, has confirmed cooperation from financial institutions in reporting potentially illegal transactions. However, AMLO has also reported the number of transactions previously subject to mandatory reporting under the Act have decreased sharply through time. This may be an indication that suspect transactions previously made directly with reputable financial institutions are now being divided into in smaller, more diversified amounts or transmitted through other methods entirely.
WHAT ARE TARGETED CRIMES?
Thai officials initially proposed the implementation of a money laundering act to address the widespread transfer of money and property from the trade in illegal narcotics, as well as to comply with requirements for membership in the 1988 Convention against Illegal Traffic in Narcotic Drugs and Psycho-toxic Substances.
A list of additional criminal offences were added as the law was finalized and during the March 2008 amendments. Currently, the Act now covers the transfer or conversion of funds or property obtained from:
- Drug trafficking
- Prostitution and other related sexual offenses
- Public fraud
- Fraud involving financial institutions
- Abuse of power by government officials
- Trade involving contraband items
Gambling offenses listed under gambling laws, most particularly the large-scale organization of gambling games.
PROVISIONS OF THE ACT
Under provisions of the Act, it is considered a crime to transfer, convert or receive the transfer of funds or property arising from the above targeted criminal offenses for the purpose of concealing the source of such funds. Under the Act, violators are defined as individuals who commit or attempt to commit a money laundering offence or who serve as an accomplice in such commission. Punishment can be imprisonment of up to 10 years and the payment of a fine of up to 200,000 baht.
The March 2008 amendments to the Act included provisions addressing the perceived corruption of government officials, with fines doubled for both the principals and the accomplices should they be government officials.
The Act also provides for the thorough investigation of banking transactions along with other related financial transactions, giving enforcement officials the power to seize, without warrant, money or property that has been proven connected with one of the listed criminal offences. To recover the seized property, the owner must be able to provide ample evidence to prove that the property is completely unrelated to the commission of one of the listed crimes or any money laundering offence.
One of the Act's key provisions requires banks and other financial institutions to report all cash transactions exceeding 2 million baht. This also includes property transactions, which must be reported if in excess of 5 million baht.
In the case of such transactions, the financial institutions must require their customers to provide a detailed record. This requirement is generally left to the practical discretion of the financial institution which must balance customer confidentiality concerns and compliance with the Act.
AMLO has also implemented a requirement for all persons entering or leaving Thailand to declare the amount of currency in their possession in order to investigate whether the amount exceeds certain statutory levels.
Failure to comply with these reporting requirements is punishable by a fine of up to 300,000 baht. Moreover, filing a false report can result in a fine of up to 500,000 baht and imprisonment of up to two years.