Cabinet approves Amlo's funds scrutiny draft regulation

Cabinet approves Amlo's funds scrutiny draft regulation

Deputy government spokeswoman Rachada Dhnadirek poses for photos with Thai Journalists Association president Mongkol Bangprapa on Sept 11, 2019. (Photo by Apichart Jinakul)
Deputy government spokeswoman Rachada Dhnadirek poses for photos with Thai Journalists Association president Mongkol Bangprapa on Sept 11, 2019. (Photo by Apichart Jinakul)

The cabinet has approved a draft regulation which would allow financial institutions to scrutinise their customers' sources of money, in a move to combat money-laundering and terrorist financing.

Deputy government spokeswoman Rachada Dhnadirek said the cabinet on Tuesday approved the draft regulation proposed by the Anti-Money Laundering Office (Amlo), which is intended to bring its performance at par with international standards.

"The draft contains a set of improved criteria to examine the information of financial institutions' customers," said Ms Rachada. 

The regulation would require financial institutions and business operators as listed under Section 16 of the Anti-Money Laundering Act to thoroughly assess their customers' activities in order to reduce the risk of money laundering and/or terrorist financing.

This requirement would affect investment consultants, gem and gold traders, real estate brokers, electronic payment service providers, antique traders under the law governing auctions and the antique trade, and non-bank credit companies.

Under the regulation, the aforementioned businesses would be required to suspend business transactions with customers whose financial activities were deemed suspicious, and report them to Amlo.

"For cross-border wire transfers exceeding 50,000 baht, both the ordering and the recipient institution will be required to have information about the origin of the funds, as well as both the benefactor and beneficiary," said Ms Rachana.

The draft regulation was proposed after Thailand failed to meet International Standard for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), with seventeen areas listed as needing further improvements.

In order to improve Thailand's score, the government must begin requiring financial institutions to examine the financial activities of customers who hold political positions, and ban financial institutions from approving transactions that might be related to terrorist activities.

"The problem is that Thailand's current anti-money laundering law only covers financial institutions, but not other businesses," said Ms Rachada.

It was not known when the regulation would become effective. That will be announced by Amlo.




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