THAILAND
Summary
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Sanctions

None

FAFT AML Deficient

No

Higher Risk Areas

 

Compliance with FATF 40 + 9 Recommendations

US Dept of State Money Laundering assessment

Not on EU White list equivalent jurisdictions

Failed States Index (Political Issues) (Average Score)

Medium Risk Areas

Corruption Index (Transparency International & W.G.I.)

World Governance Indicators (Average Score)

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Thailand is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Latest FATF Statement - 21 June 2013

The FATF welcomes Thailandís significant progress in improving its AML/CFT regime and notes that Thailand has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Thailand is therefore no longer subject to FATFís monitoring process under its on-going global AML/CFT compliance process. Thailand will work with the APG as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report.

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Thailand was undertaken by the Financial Action Task Force (FATF) in 2007. According to that Evaluation, Thailand was deemed Compliant for 2 and Largely Compliant for 4 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

 

APG Yearly Typologies Report - 2015

Emerging Trends; Declining Trends; Continuing Trends (INCSR)

Emerging trend: use of a nominee to hold assets or accounts, especially by corrupt politicians.

Declining trend: smurfing has declined because money launderers now know that authorities are monitoring this type of transaction.

Continuing trend: buying precious metals or gems and real estate.

In general, the same methods are still being used. However, there is a tendency for criminals to make their techniques more complex such as combining methods e.g. using of non-related nominee to open an account to receive the proceed and use the fund to buy precious metal or stones and carried overseas, and thus make it more difficult for authorities to detect.

 

US Department of State Money Laundering assessment (INCSR)

Thailand was deemed a Jurisdiction of Primary Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).

Key Findings from the report are as follows: -

 

Perceived Risks:

Thailand is a centrally located Southeast Asian country with extremely porous borders. Thailand is vulnerable to money laundering within its own economy, as well as to many categories of cross-border crime, including illicit narcotics, wildlife trafficking, and other contraband smuggling. Thailand is a source, transit, and destination country for international migrant smuggling and trafficking in persons, a production and distribution center for counterfeit consumer goods, and a center for the production and sale of fraudulent travel documents. The proceeds of illegal gaming, official corruption, underground lotteries, and prostitution are laundered through the countryís financial system. The Thai black market includes a wide range of pirated and smuggled goods, from counterfeit medicines to luxury automobiles.

Money launderers and traffickers use banks, non-bank financial institutions, and businesses to move the proceeds of narcotics trafficking and other criminal enterprises. In the informal money changing sector, hawaladars service Middle Eastern travelers in Thailand. Thai and Chinese underground remittance systems are also prevalent.

 

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SANCTIONS

There are no international sanctions currently in force against this country.

 

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

35

World Governance Indicator Ė Control of Corruption

44

 

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INVESTMENT CLIMATE - Executive Summary (US State Department)

Despite unresolved internal political tensions, Thailand continues to maintain an open, market-oriented economy and encourages foreign direct investment as a means of promoting economic development, employment, and technology transfer. In recent decades, Thailand has been a major destination for foreign direct investment, and hundreds of U.S. companies have successfully invested in Thailand. Thailand continues to welcome investment from all countries and seeks to avoid dependence on any one country as a source of investment. Resolving Thailandís current political crisis peacefully will be critical to maintaining investor confidence. Economic impacts to tourism and retail businesses resulting from a political impasse extending over several months eroded growth expectations for 2014. Investors, however, remain cautiously confident that the Thai economy will retain its well-known resiliency and resume growth once the impasse is resolved. Government plans for $75 billion in infrastructure projects over a seven-year period, viewed as critical to maintaining Thailandís competitiveness in the region, were shelved in early 2014 and will require re-approval once a new government is seated.

Reforms implemented after the 1997-98 Asian Financial Crisis were designed to foster a more competitive and transparent climate for foreign investors. The Foreign Business Act (FBA) of 1999 continues to govern most investment activity by non-Thai nationals. Many U.S. businesses also enjoy investment benefits through the U.S.-Thailand Treaty of Amity and Economic Relations (AER), originally signed in 1833. The Treaty allows U.S. citizens and businesses incorporated in the United States or in Thailand that are majority-owned by U.S. citizens to engage in business on the same basis as Thai companies (national treatment) and exempts them from most restrictions on foreign investment imposed by the Foreign Business Act, although some types of business remain excluded under the Treaty. Notwithstanding their Treaty rights, many Americans also choose to form joint ventures with Thai partners who hold a majority stake in the company, leveraging their partnerís knowledge of the Thai economy and local regulations. The Board of Investment (BOI) is Thailand's central investment promotion authority and offers investment incentives uniformly to both qualified domestic and foreign investors through clearly articulated application procedures. Since Parliament dissolved in November 2103 and courts annulled February 2014 national elections, the BOI has been unable to issue new investment licenses due to an inability to appoint new Board members without legislative approval. BOI has been working with the Thai Government to find a legal mechanism to restart operations, and hopes to be able to renew issuing licenses even if the political impasse continues. Although a small number of U.S. companies have been affected, other foreign investors have been hit harder.

Consistent and predictable enforcement of government regulations remains problematic for investment in Thailand. Gratuity payments to civil servants responsible for regulatory oversight and enforcement remain a common and inefficient practice. Firms that refuse to make such payments can be placed at a competitive disadvantage when compared to other firms in the same field. However, most observers believe that the overall trend toward transparency in regulatory enforcement is positive, especially for foreign-owned businesses.

The Thai government maintains a regulatory framework that broadly encourages investment and largely avoids market-distorting support for specific sectors. Government policies generally do not restrict the free flow of financial resources to support product and factor markets, and credit is generally allocated on market terms rather than by "directed lending." Legal, regulatory, and accounting systems are largely transparent, with the Thai government investing considerable effort to bring these systems into line with international norms and achieving significant progress.