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Govt pushed for laws on money laundering

May 05. 2012
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By Sucheera Pinijparakarn
The Na

Business groups demand action before February 2013 to get Kingdom off 'Dark Grey List'

Key business organisations are pressuring the government to promulgate new anti-money-laundering laws by next February so Thailand can be quickly removed from an international “Dark Grey List”, which has had negative repercussions for the economy.

Twatchai Yongkittikul, secretary general of the Thai Bankers Association, told a news conference yesterday that since the Financial Action Task Force on Money Laundering (FATF) put Thailand on the list in February this year because of the lack of such laws, the Thai business sector had experienced negative consequences.

The FATF is responsible for setting the global standards combating money-laundering and the financing of terrorism.

Since the move by the task force a few months ago, some financial institutions overseas have avoided transactions with their Thai counterparts. Some institutions have pressed for more information on transactions originated by Thai banks. Exporters’ clients have pondered whether they should transfer money to Thailand for trade settlements.

Twatchai envisaged that should the country remain on the list after February 2013, one of the negative consequences could fall on Thai individuals, who may be unable to use credit cards overseas.

While pressure regarding this issue was originated by financial institutions in Europe, he foresees it spreading to other parts of the world. Institutions have to take into account risks – or higher costs – associated with transactions with Thai banks. That explains why some institutions have decided to suspend transactions with Thailand, he added.

“Thai businesses have started feeling the pinch, and the consequences will remain until Thailand shows progress in the enforcement of anti-money-laundering laws. We’re hopeful that the laws will be promulgated by January, ahead of the annual review of the FATF’s International Cooperation Review Group in February,” said Twatchai, who is chairman of a working committee of business organisations.

Pushing for government action are several key organisations including the Board of Trade, the Federation of Thai Industries and the Federation of Capital Market Associations.

In February, the FATF put Thailand on its Dark Grey List because of the country’s failure to enact more anti-money-laundering laws aimed at countering terrorism.

Thailand was one of five countries added to the list, along with Indonesia, Pakistan, Ghana and Tanzania. Thailand was on the Grey List in 2010 and the subsequent failure to follow up on enacting new laws countering terrorism financing and money-laundering led to the FATF’s latest decision to downgrade the country.

According to Twatchai, the Anti-Money Laundering Office has completed a new draft law complying with the standards of the International Monetary Fund and the FATF. Of the nine steps towards become law, the draft has completed the fourth step, he said.

He expects the Cabinet to endorse the draft by June, and the Council of State should spend another months or two scrutinising it. Then it will be up to the parliamentary vetting process, which if dragged out for political benefit will worsen the impact on the economy, he said.

“Thai banks stand ready to confiscate and suspend suspicious transactions, but that is not legally supported. Fast actions are required by the FATF, but this needs a supporting law,” Twatchai said.

He added that the private sector would this month seek a discussion with Prime Minister Yingluck Shinawatra on the issue.

“I hope that all parties will lend a hand and that Thailand will be pulled out of the list within a year,” he said.

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