It has taken a while, but Thailand is now actively enforcing its anti-money laundering legislation of 1999 under the scrutiny of European ad...

It has taken a while, but Thailand is now actively enforcing its anti-money laundering legislation of 1999 under the scrutiny of European advisers and its regime is, in some ways, much tougher than western models. The Anti-Money Laundering Act 1999 is aimed at the proceeds of a wide range of crimes. There was initial delay in enforcement while the Anti-Money Laundering Prevention and Suppression Office was being set up and ministerial regulations were being framed.

Enforcement began in earnest in October 2000 when three suspect bank accounts were frozen and the first case began. Between then and March, assets worth $3.5m were seized. Thai banks are now submitting an average of 10,000 suspicious transaction reports a week. Transactions are classified as suspicious if they relate to one of the listed crimes, if they are more complex than normal, if they lack economic plausibility or if they seem to have been undertaken to avoid compliance with the legislation.

The law that the AMLO is enforcing does not apply on an all crimes basis, putting Thailand behind European and North American states. Despite this, the range of crimes on the list is extensive. These are: the narcotics trade; prostitution and other sexual offences; fraud against the public; fraud involving financial institutions; governmental corruption; extortion, and trade in contraband. Few Western money laundering cases do not at least involve one of these crimes, unless they relate to tax.

The $4,000 limit

Launderers commit a crime under Thai law when they transfer, convert, or receive the transfer of funds or property arising from the criminal offences for the purpose of hiding or concealing the source of the funds. Violators, i.e. those who commit or attempt to commit a money laundering offence, or aid another person in doing so, are punishable by imprisonment of up to ten years plus a fine of up to 200,000 baht ($4,381).

Civil forfeiture

In one way, the Thai law is ahead of the game. Government law enforcers no longer need a warrant to seize money or property connected with the commission of one of the seven specified crimes, or with a money laundering offence. The owner of the seized property can only recover it if he can demonstrate that it is not related to the commission of one of the enumerated crimes or to a money laundering offence. UK legislators are currently wringing their hands over whether to introduce such a law; in the US such a development would be out of the question.

The bank reporting requirement

All banks and financial institution are obliged to report all cash transactions over 2m baht ($43,815) to the AMLO. Individuals, their banks, estate agents and others must also report property transactions involving cash in excess of 5m baht ($109,850). The reporting institutions, most of them banks, must tell their customers to provide a detailed record of the transaction. If a bank fails to comply with the reporting rules it can be punished with a maximum fine of 300,000 baht ($6,593). If it makes a false report, it can pay up to 500,000 baht ($11,000) and the relevant officer can be incarcerated for up to two years.

Border checks and EU monitoring

The AMLO expects to issue a new regulation soon which will require all persons crossing the border into or out of Thailand to declare the amount of all currencies in their possession. Meanwhile, the European Union has asked the Thai government if it can set up a regional office in Bangkok to coordinate its own AML efforts in South East Asia. The answer to this question is expected imminently.