Money-laundering law still falls short

Banks told to gather, verify customer data

The Financial Action Task Force (FATF) has demanded Thailand improve the draft amendment of its anti-money laundering law and issue a new "Know Your Customer" law requiring banks to gather and verify customer information.

Anti-Money Laundering Office secretary-general Seehanart Prayoonrat yesterday said the FATF had removed Thailand from its list of high-risk countries for financial transactions, but has warned that more work needs to be done to stamp out money laundering.

The inter-governmental body, set up to curb money laundering and terrorist financing, agreed on Friday at a meeting in Paris to upgrade Thailand's status from "dark grey" to "grey" on its list of countries vulnerable to financial crimes.

But Pol Col Seehanart, who led the Thai delegation at the FATF meeting, said the agency stressed that legislation needs to be tightened further for the country to fully restore its image and prove it is serious about the issue.

FATF's decision came after Bangkok presented evidence to show it is attempting to fight money laundering. The recent introduction of two bills on money laundering and financial support for terrorism were a key part of Thailand's case.

The upgrade is seen as an initial success for Bangkok, but it would have to work harder to meet FATF standards, Pol Col Seehanart said.

Thailand must further tighten legal oversight of financial transactions by improving the anti-money laundering bill and passing a new law enforcing "Know Your Customers" and "Customer Due Diligence" policies, he said.

Know Your Customers, known as KYC, is a measure adopted by banks and financial institutions to gather information on their customers to better know or identify them.

It is meant to prevent attempts to launder money and commit financial crimes.

Customer Due Diligence, or CDD, involves steps to verify KYC records to ensure the integrity of customers.

Pol Col Seehanart said the content of the anti-money laundering bill "is not yet complete as required by international standards".

The law must be tightened to control money transfers across borders, order businesses to report their financial affairs to authorities and better monitor financial transactions.

Pol Col Seehanart said FATF experts are scheduled to visit Thailand in May.

At the conclusion of the Paris meeting the FATF said it will "conduct an on-site visit [to Thailand] to confirm that the process of implementing the required reforms and actions is underway to address deficiencies".

Pol Col Seehanart said he hoped Thailand can make progress in improving the two laws, particularly the proposed amendment of the anti-money laundering law which should be passed by parliament by June.

He said if progress continues apace "Thailand will even be removed from the grey list in the future".

About the author

Writer: King-oua Laohong
Position: Reporter