The AML / CFT laws have recently been changed in Thailand. Before the new legislation, money laundering precedents were not rare which led to the need of updating the existing laws. The Anti-Money Laundering Office stated that the amount of money laundered reached the point of 12% of Thailand’s GDP.
Several illegal types of business were involved in money laundering in the country:
- Bribery;
- Fraud;
- Gambling;
- Smuggling;
- Drug trafficking;
- Illegal trade of arms;
- Counterfeit products and piracy;
- Tax evasion;
- Prohibited securities transactions and others.
Meanwhile, the income generated in illegal gambling represented a major part of the money that was legalized in Thailand. From now, the new AML legislation is aimed at stopping such illegal activities.
The main novelties
Firstly, it is important to keep in mind when registering a business in Thailand that the AML law has been changed. The updates include:
- Certain KYS and Customer Due Diligence requirements have been revised. From now on in Thailand companies are obliged to maintain full CDD records and instruct their personnel about the AML law and its application;
- Financial institution registration now falls under the application of the amendment that is also relatable to operators in retail lending, P2P lending, crowdfunding, and digital asset business.
For those interested in opening and registering a crowdfunding platform, experts from COREDO are here to provide their help. The advice of qualified specialists is truly necessary for such situations. Contact COREDO to receive a professional consultation about choosing the right jurisdiction for creating a P2P platform or about starting a crowdfunding platform in Thailand.
Secondly, do not forget about the changes made to the CFT law. The updates on the legislation governing the financing of financial crimes are crucial to take into account before obtaining a financial services provider license in Thailand.
The main update in this category involves providing an exemption to financial institutions when it comes to the processing of frozen funds and assets if interest or other income are not received legally.
Customer Due Diligence rules
The CDD rules in Thailand have been replaced as well. Before starting a financial activity in the country make sure to learn about the differences of the new legislation compared to the previous one. The financial authorities of Thailand have amended Customer Due Diligence rules in order for them to line up with international standards and give comprehensive guidelines for the presented requirements.
Starting from 2020, financial companies in Thailand are required to:
- Change the threshold for performing CDDs in accordance with international standards;
- Process a more detailed assessment of risks, customer risk levels, and CDDs in accordance with international standards (to illustrate, beneficial owners who are considered persons exposed in foreign politics now face additional restrictions on the use of simplified CDD procedures).
The final statement
The inter-governmental body the Financial Action Task Force has stated that the Kingdom of Thailand has been amending its anti-money laundering strategies significantly. Thanks to this progress Thailand has been removed from the list of countries with high money laundering levels. The country has since moved to the second group on the list of FATF’s special control. Moreover, local authorities of Thailand demonstrate openness to cooperation in fighting illegal financial activities.
Do you still have any questions about the legislative amendments in Thailand and wonder how they will influence the businesses there? You can contact COREDO and arrange a personal consultation on this topic.