Thailand’s legal framework for preventing transactions that are deliberately designed to conceal the unlawful origin of funds is primarily contained within the Anti-Money Laundering Act B.E. 2542 (1999) (AMLA), as amended. As international money laundering practices evolve and emerge over time, prevention measures must evolve with them. Therefore the Financial Action Task Force (FATF) recently recommended amendments to the AMLA, along with the Counter Terrorism and Proliferation of Weapons of Mass Destruction Financing Act B.E. 2559 (2016) (CFTA), in order to be consistent with the latest international standards. The amendments passed through the public hearing stage on June 15, 2020, and the laws will now continue through the cabinet and parliament.
Key Draft Amendments to the AMLA
The definition of “financial institution” is expanded to include operators of many financial technology services, including:
The definition of “professions” (formerly known as “section-16 professions”) is expanded to include additional occupations and businesses, such as accounting, auditing, auto trading and leasing, legal consulting, and additional professions at risk for money laundering (by further announcement in ministerial regulations).
For cash transactions exceeding the prescribed threshold, parties in the listed professions are assigned recordkeeping duties in addition to their current reporting duties.
The authority and power of the Anti-Money Laundering Office are expanded to include acting as a central financial intelligence agency to regulate, check, and rate the operations of companies and branches both within and outside of Thailand.
Key Draft Amendments to the CFTA
Additional Updates to CDD Regulations
In addition to the above draft amendments, the new Ministerial Regulation on Customer Due Diligence B.E. 2563 (2020) came into force on August 12, 2020. This repealed and replaced the former version from 2013 (as amended), and contains the following key updates:
The new amendments and additional updates to the anti-money laundering regulations give more certainty to many issues that were ambiguous before. This will be beneficial for both regulators and the public since less interpretation is needed in order to apply the regulations, and there is therefore less room for ambiguity or error. In addition, the amendments to the AMLA make Thailand’s anti-money laundering regulations more relevant and better suited to fighting modern money laundering schemes that utilize new technological innovations and financial technologies. As a result, entities that are now included in the definition of “financial institution” and “profession” will need to be more aware of the obligations that they will need to comply with. Finally, the amendments to the CFTA include the establishment of the petition submission channel, which has been a persistent obstruction to legal proceedings and will be a great relief for regulators and institutions alike.
We expect that these revisions will lead to positive changes for many financial institutions in Thailand, as well as for those foreign banks that operate (or wish to establish a presence) in Thailand. However, they make it more important than ever for such institutions to ensure strict compliance with the law.