Thailand's new Anti-Money Laundering Act (No. 3) B.E. 2552, which came into effect on 22 October 2009, obliges nine new businesses and professions to report certain transactions to the Anti Money Laundering Office (AMLO).
In addition to the financial institutions and the land offices which are originally statutorily required to report their customer's transactions to the AMLO, the Act specifies additional businesses and professions who are required to report the details of their customer's transactions if (i) the value of such transaction is THB 2 million or more; (ii) such transaction involves property amounting to THB 5 million or more; or (iii) if such transaction is considered suspicious. These businesses and professions include:
- Non-financial institutions conducting consultation and advisory services on investments or capital transfer related businesses
- Juristic persons conducting businesses involving gems, jewellery and gold
- Juristic persons conducting car leasing businesses
- Juristic persons who operate real estate agencies and brokerage businesses
- Juristic persons conducting antique trading under public auction and antique trading control law
- Non-financial institutions providing personal credit (retail financing)
- Non-financial institutions providing electronic cash card services
- Non-financial institutions providing credit card services
- Persons providing electronic fund payment and settlement services
The Act also provides that the above businesses and professions must verify the identity of their clients before doing any business with them. In addition, these businesses and professions must adopt a new client policy that includes a background check on a new client and periodic investigations throughout the duration of the professional's relationship with the client.
Finally, these businesses and professions must also keep records of the investigations for a period of five years from the date that the account with that client has closed. This period of time can be extended by the Secretary-General of AMLO.
The punishment for failure to comply will be a maximum fine of THB 500,000 and also a daily fine of THB 5,000 throughout the period of violation.
Since the legislation to prevent and suppress money laundering was introduced in 1999 in Thailand, it has become apparent that alternate channels for money laundering have been used in place of heavily regulated financial institutions. The new amendments present new administrative obligations and costs to the relevant businesses and professions in demanding a "know-your-customer/customer due diligence" policy, but in doing so they aim to deter specific types of money laundering. Therefore, the above entities must establish, or amend, such policy to ensure that they are in compliance with the Act. This is not a reflection on the professionals or individuals involved but simply a reaction to the fact that certain professions have unwittingly been the conduit for inappropriate financial transactions.
For inquiries related to this Client Alert, please contact:
Chitanong Poomipark (firstname.lastname@example.org)
Maythawee Sarathai (email@example.com)
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