Thailand AML/CTPF Measures Statement 2025

Regulation Name: Thailand AML/CTPF Measures 2025

Publishing Date: 30 December 2024
Region: Thailand
Agencies: AMLO and Bank of Thailand

Thailand’s Financial Authorities Strengthen Measures Against Money Laundering and Human Rights Violations

Thailand’s Anti-Money Laundering Office (AMLO) and the Bank of Thailand (BOT) have jointly reinforced their commitment to preventing the misuse of the Thai banking system for money laundering, terrorism financing, and activities supporting the proliferation of weapons of mass destruction. This announcement comes amidst escalating global conflicts and heightened scrutiny from international watchdogs.

Addressing Risks from High-Risk Countries

In response to the Financial Action Task Force (FATF) classification of some of Thailand’s trading partners as high-risk jurisdictions, the AMLO mandated rigorous verification of customers from these countries. Financial institutions are required to:

• Verify the Ultimate Beneficial Owner (UBO) using reliable and independent sources beyond customer-provided data.

• Assess the purpose of customer transactions to ensure alignment with legitimate business objectives.

These measures aim to mitigate the risk of financial institutions inadvertently facilitating illicit transactions.

Compliance and Challenges Highlighted

A joint review by the AMLO and the BOT revealed that Thai financial institutions have adhered to AML/CTPF measures, with no evidence of transactions involving individuals listed on UN or Thailand’s sanction lists. However, an OHCHR report implicated some Thai financial institutions in providing financial services linked to Myanmar’s military government’s procurement of weapons. While the investigation found no direct link to arms procurement, it underscored inconsistencies in operational rigor across institutions. This prompted authorities to call for enhanced AML/CTPF practices.

Key Enhancements to Strengthen Oversight

The AMLO and BOT have outlined a series of actions to bolster the Thai financial system:

1. Operational Standards Improvements:

o Stricter UBO Verification: The threshold for identifying UBOs has been lowered to include individuals owning less than 25% of a company’s shares.

o Enhanced Due Diligence (EDD): Financial institutions must obtain evidence from diverse sources to understand the nature of high-risk customers fully. Mechanisms to detect abnormal transactions are also required.

o Additional Documentation: For high-risk transactions, particularly those involving Dual-Use Items (DUI), financial institutions must gather comprehensive documentation to understand the transaction’s purpose.

2. Sanctions Risk Management:

o A new Joint Policy Statement requires financial institutions to enhance systems for assessing and detecting sanctions-related risks. This includes proportional scrutiny based on customer risk profiles.

3. Industry Standards Development:

o Associations representing Thai financial institutions are tasked with creating uniform industry standards for monitoring DUIs and other high-risk products. These standards will be implemented starting January 2025.

Enhancing Credibility and International Compliance

By implementing these measures, the AMLO and BOT aim to ensure that Thailand’s financial system is not exploited for illicit activities, including human rights violations and weapons proliferation. Financial institutions are expected to comply with the new guidelines starting December 27, 2024, with monitoring and strict enforcement promised for any violations.

The AMLO and BOT’s proactive steps reflect Thailand’s commitment to aligning with international AML/CTPF standards while safeguarding its financial integrity amidst global challenges. As these measures take effect, they are expected to enhance confidence in Thailand’s banking sector and reinforce its resilience against emerging threats.

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