Nod for new financial checks

Nod for new financial checks

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

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

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

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

This requirement will 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 draft regulation, the businesses will be required to suspend business transactions with customers whose financial activities are 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 obtain information about the origin of the funds, as well as both the sender and recipient," said Ms Rachana.

The draft law was proposed after Thailand failed to meet the International Standard for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), with 17 areas listed as needing further improvements.

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

"The problem is the current anti-money laundering law only covers financial institutions, not other businesses," said Ms Rachada.

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