Thailand adheres to international standard of creating a national financial intelligence unit, and that is the Anti-Money Laundering Office (AMLO). AMLO is supervised by the highest level of government with the Prime Minister as Chairman and the Ministers of Justice and Finance as Vice Chairmen.
In June 2013, Thailand was taken off the FATF’s ongoing AML/CFT compliance process monitoring list in recognition that it had taken sufficient measures to rectify deficiencies identified in the 2010 plenary. On 9 October 2015, Thailand’s Anti-Money Laundering Law was further strengthened to bring it in line with international standards and as a response to the global money laundering situation. The changes included an expanded scope of what constitutes an AML offense, and stricter requirements for conducting due diligence, as well as providing compliance training. There were guidelines around the timeline of record-keeping stipulating that records of customer due diligence be kept for a period of 10 years. The AMLO was also empowered to turn offenders over to other regulators for action to be taken against them.
The AMLO is a powerful regulator in Thailand. AMLO Acting Secretary General, Pol. Col. Seehanat Prayoonrat, made it clear that Thailand is determined to crack down on corruption by preventing money laundering in Thailand.
The penalties are stiff for those who violate its regulations. For instance, any entity that is found guilty of money laundering is subject to 10-year jail terms and fines of 200,000 bahts. The penalty for not reporting suspicious transaction would open these entities to fines of 500,000 baht and 5,000 baht for each day until they report it.
After the AMLO has made an arrest with a probable cause under money laundering offense, they have the authority to seize assets in a civil case. Between the BOT and AMLO, it is clear that the AMLO has stiffer penalties, and money changers should aim to steer clear of all offenses.
BOT announced the Capital Account Liberalization Master Plan on 30 April 2015 which affected money changers in Thailand. One year later on 18 April 2016, BOT relaxed foreign exchange rules further. Currently, each individual is allowed to buy foreign currencies of up to US$5 million, and this amount is expected increase further next year.
Despite the expected increase in business volume, Thai money changers should be aware that they should comply with AML/CFT standards in Thailand, and flag suspicious amounts and transactions so as not to fall afoul of the AMLO.
The proper method to avoid such stiff penalty is to conduct proper Know Your Customer/ Customer Due Diligence (KYC/CDD) measures especially if they have been flagged by compliance services as a politically exposed person (PEP).
Section 13 states that:
When a transaction is made with a financial institution, the financial institution shall have the duty to report that transaction to the Office when it appears that such transaction is:
(1) a cash transaction exceeding the threshold prescribed in the Ministerial Regulation;
(2) a transaction connected with the asset worth more than the value prescribed in the Ministerial Regulation; or
(3) a suspicious transaction, whether it is the transaction under (1) or (2) or not.
In the case where there appears any fact which is relevant or probably beneficial to the confirmation or cancellation of the fact concerning the transaction already reported by the financial institution, that financial institution shall report such fact to the Office without delay.
Section 13 also applies to money changers and they have a regulatory obligation to report suspicious transactions to the Anti Money Laundering Office (AMLO) quickly.
Section 60 states that:
Any person who commits an offense of money laundering shall be liable to imprisonment for a term of one year to ten years or to a fine of twenty thousand Baht to two hundred thousand Baht or both.
For money changers to avoid money laundering penalties, they should screen their clients thoroughly for each transaction.
Section 62 states that:
Any person who fails to observe Section 13, Section 14, Section 16, Section 20, Section 20/1, Section 21, Section 21/2 paragraph one, Section 22, Section 22/1, Section 35 or Section 36 or orders issued under Section 16/1 or Section 21/2 paragraph two shall receive a fine not exceeding one million Baht and an additional amount not exceeding ten thousand Baht for each following day until rectification is made.
A reporting entity under Section 13 or Section 16 who fails to observe Section 21/3 paragraph two shall receive a fine not exceeding five hundred thousand Baht.
Section 62 makes it clear that even if money changers are not guilty of money laundering offenses, they will be slapped with heavy penalties just by failing to report suspicious transactions.
Money changers should also note section 13 which states that
For the benefit of implementing this Act, the Office shall have the following powers and duties;
(1) to provide guidance for persons on obligations in taking action under this Act;
(2) to monitor, evaluate, examine, and supervise proper compliance with this Act as well as taking legal action with those who violated or failed to observe the provision of this Act;
(3) to receive or disseminate report or information useful to implementation of this Act or other laws;
(4) to gather , collect information and evidence for the assets freezing, seizure or confiscation under this Act or other laws;
The only way to avoid potentially financing terrorists is to screen clients diligently. Only by doing that, can money changers safeguard their assets from confiscation and other penalties.