BOT tightens checks on foreign-currency inflows and gold transactions

The Bank of Thailand (BOT) has tightened documentation requirements for foreign-currency transactions, requiring banks to verify the source of specified inflows worth US$200,000 or more and demanding supporting documents for gold-related transactions regardless of value.

The revised rules are set out in Exchange Control Officer Notification No. 38 on rules and procedures for foreign exchange transactions. They apply to the purchase or deposit of foreign currency received from abroad by customers who are residents of Thailand.

The BOT said the changes are intended to ensure that foreign-exchange transactions are consistent with their declared purposes and relate to genuine trade and investment.

US$200,000 threshold for general transactions

For foreign currency received for general purposes, including payments for goods and services, direct investment, portfolio investment and loans, banks must obtain documents showing the source of funds for individual transactions worth US$200,000 or more.

An exemption applies where the customer has passed the bank’s Know Your Business (KYB) process.

Customers regarded as meeting KYB requirements include those with established bank facilities, such as foreign-exchange hedging or trade-finance lines, as well as customers without such facilities who have at least one year of transaction history with the bank.

The BOT’s current rules state that Thai individuals and companies conducting foreign-exchange transactions worth at least US$200,000 per transaction are generally required to provide supporting documents unless they have passed KYB and the transaction is not subject to additional scrutiny.

Stricter checks for watchlist transactions

Transactions classified under the BOT’s watchlist face stricter requirements.

For watchlist inflows of US$200,000 or more, banks must obtain documents showing the source of the foreign currency for every transaction. KYB cannot be used to waive the documentation requirement.

The watchlist covers proceeds involving Thai property sold to foreigners, digital assets and certain other forms of capital that do not fall under direct investment, securities investment or loans, as well as other specified sources outside ordinary payments for goods, services or income.

Transactions below US$200,000 generally require customers only to state their purpose, while those reaching or exceeding the threshold require documentary evidence of the source of funds.

For proceeds from digital assets, customers must also provide evidence showing either the source of the money originally used to acquire the assets or the source of the digital assets themselves.

Gold transactions require documents at any value

Gold-related transactions face tighter treatment, with banks required to obtain supporting documents regardless of the amount involved.

The same requirement applies when proceeds from gold transactions are transferred into Thailand in baht through a Non-resident Baht Account.

The BOT had earlier proposed requiring supporting documents for every gold-related foreign-exchange transaction, irrespective of value, as part of the revised rules.

Cash purchases capped at US$15,000 without additional proof

For foreign currency in cash, banks may purchase up to US$15,000 per customer per day under the standard procedure.

For amounts above US$15,000, customers must produce evidence showing that the foreign currency was brought into Thailand or documents showing that it was obtained from an authorised foreign-exchange business.

The BOT’s regulations separately require foreign-currency banknotes or negotiable instruments worth more than US$15,000 or the equivalent to be declared to Customs when brought into or taken out of Thailand.

The same documentation requirements for immediate foreign-currency purchases also apply when foreign currency is deposited into a foreign currency deposit account.

The BOT has revised banks’ operating guidelines for foreign-exchange transactions and supporting documentation to bring them into line with the new requirements.

Notification No. 38 was published in the Royal Gazette on October 7 and took effect the following day. The BOT had circulated the revised requirements to financial institutions on September 29.