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Dirty-Money Reform Urged in Thailand



Twatchai Yongkittikul, secretary-general of the Thai Bankers' Association


CHIANGRAI TIMES – Thailand’s delay in strengthening laws against money laundering and terrorist financing activities have had a direct impact on international business and could undermine designs to link Asean capital markets later this year, say business leaders.

European financial institutions have already begun rejecting financial transactions with Thai parties due to perceived risks, said Twatchai Yongkittikul, secretary-general of the Thai Bankers’ Association.

In February, the international Financial Action Task Force named Thailand as of 15 “high risk” countries because of the failure of Parliament to enact tougher laws against money laundering and terrorist financing.

The list puts Thailand on a similar footing as Cuba, Ethiopia, Indonesia, Pakistan and Syria. It is warning to global financial institutions to exercise special care when conducting transactions with parties in those countries.

Mr Twatchai warned that Thai consumers could ultimately see their credit cards rejected when travelling abroad and businesses could be unable to trade because of the Financial Action Task Force action.

“Some European financial institutions have already received orders to cease transactions with Thailand,” they said on Friday. “And local bank customers have already had to bear additional reporting requirements when dealing with abroad counterparties.

“Transaction costs will also likely increase, as plenty of banks have said that the costs of gathering and analysing the added knowledge due to the Financial Action Task Force decision have increased.”

Mr Twatchai called for authorities to demonstrate progress on addressing the legal loopholes outlined by the Financial Action Task Force by the finish of the year. Otherwise Thai consumers and companies will face even greater difficulties in conducting business abroad, they said.

The Financial Action Task Force in February downgraded Thailand’s status due to the dearth of “sufficient progress in implementing its action plan” to strengthen laws against money laundering and terrorist financing.

The organisation urged Thailand to adequately criminalise terrorist financing, establish procedures to identify and freeze terrorist assets and strengthen the general legal framework.

Mr Twatchai said the TBA and other industry groups had earlier submitted a letter to Prime Minister Yingluck Shinawatra about the FATF downgrade, but would seek a brand spanking new meeting this month to stress the necessity for progress.

Jaruporn Viyanant, a member of the Anti Money Laundering Office (Amlo) board and a director of the Stock Exchange of Thailand, said a draft amendment strengthening the anti-money laundering law ought to be submitted to the cabinet for review next month.

They said that if Thailand hoped to be removed from the Financial Action Task Force blacklist, the new law would must take effect by January, ahead of the annual meetings the following month.

Mrs Jaruporn said a major worry was that the Asean Linkage programme, due to be launched in August by the Thai, Malaysian and Singaporean stock markets, could be affected by the Financial Action Task Force warning.


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