Thailand

Thailand has well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries. In addition to that, the economy of Thailand also benefits from Thailand’s industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. Unemployment, at less than 1% of the labor force, stands as one of the lowest levels in the world, which puts upward pressure on wages in some industries. Thailand also attracts nearly 2.5 million migrant workers from neighboring countries.

Thailand is a transit and destination country for illicit narcotics. Heroin and methamphetamine move from Burma directly across Thailand’s northern border and indirectly via Laos and Cambodia for consumers in Thailand and for export markets. Most marijuana consumed in Thailand is grown along the Laos-Thailand border. 2011 saw a significant growth in the seizure of heroin, methamphetamine tablets, crystal methamphetamine, and MDMA (ecstasy).

Thailand is one of the preferred destinations for money launderers in Southeast Asia as it is very vulnerable to money laundering due to its massive underground economy.[1] Thai banks and alternative remittance systems are illegally used to shelter and move funds produced by various illegal activities including illicit narcotics, illegal gambling, illegal lotteries, and prostitution. The majority of reported money laundering cases is narcotics-related; there is no pervasive evidence of money laundering ties in Thailand with international terrorist groups. The Thai black market for smuggled goods includes pirated goods as well as automobiles from neighboring nations.

Thailand’s anti-money laundering legislation, the Anti-Money Laundering Act (AMLA) B.E. 2542 (1999), criminalizes money laundering for the following predicate offenses: narcotics trafficking, trafficking in women or children for sexual purposes, fraud, financial institution fraud, public corruption, customs evasion, extortion, public fraud, blackmail, and terrorist activity. However, the scope is arguably inadequate.[2]

The AMLA created the Anti-Money Laundering Office (AMLO), Thailand’s financial intelligence unit (FIU), which became fully operational in 2001.[3] The AMLA also established the Anti-Money Laundering Board, which is comprised of ministerial-level officials and agency heads and serves as an advisory board that meets periodically to set national policy on money laundering issues and to propose relevant ministerial regulations. Under the authority of MOUs with other domestic agencies as well as with 23 foreign entities, a total of 57 convictions was a result of 1,215 financial crimes investigations in 2005. AMLO, the Royal Thai Police Special Branch, and the Royal Thai Police Crimes Suppression Division are responsible for investigating financial crimes.

The Bank of Thailand (BOT), Securities Exchange Commission, and AMLO are empowered to supervise and examine financial institutions for compliance with anti-money laundering/counterterrorist financial laws and regulations. Anti-money laundering controls are also enforced by other Royal Thai Government regulatory agencies, including the Board of Trade, Securities and Exchange Commission, and the Department of Insurance. Financial institutions that are required to report suspicious activities are broadly defined by the AMLA as any business or juristic person undertaking banking or non-banking business. The land registration offices are also required to report on any transaction involving property of five million baht or greater, or a cash payment of two million baht or greater, for the purchase of real property.

In February 2006, the AMLO Board starts to consider the issuance of an announcement or regulation to subject gold shops, jewelry stores, and car dealers to either mandatory transactional reporting requirements and/or suspicious transactions reporting requirements over a specified but as of yet undetermined amount. The proposal will also subject those who fail to report to a maximum fine of Bt 300,000 (approximately $7,875). The relevant ministries and regulatory authorities would then issue orders consistent with the AMLO Board pronouncement. Thailand has more than 6,000 gold shops and 1,000 gem traders that would be subject to these reporting requirements.

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[1] Thailand is vulnerable to money laundering from its significant underground economy as well as from all types of cross-border crime including illicit narcotics, contraband, and smuggling. Money launderers use both the banking and non-banking financial institutions and private businesses to move funds from narcotics trafficking and other criminal enterprises. As the amount of opium and heroin produced in the Golden Triangle region of Burma, Laos, and Thailand decreased during the past decade, drug traffickers transitioned to importing and distributing methamphetamine tablets, and began using commercial banks to hide and move their proceeds.

[2] The current list of predicate offenses in the AMLA does not comport with international best practices, consistent with Recommendations 1 and 2 of the Forty Recommendations of the Financial Action Task Force (FATF), to apply the crime of money laundering to all serious offenses or with the minimum list of acceptable designated categories of offenses.

[3] When first established, AMLO reported directly to the Prime Minister. In October 2002, pursuant to a reorganization of the executive branch, AMLO was designated as an independent agency under the Minister of Justice. AMLO receives, analyzes, and processes suspicious and large transaction reports, as required by the AMLA. In addition, AMLO is responsible for investigating money laundering cases for civil forfeiture and for the custody, management, and disposal of seized and forfeited property. AMLO is also tasked with providing training to the public and private sectors concerning the AMLA.