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Thailand has recently overhauled its AML and CTF laws. The need for such a step was dictated by the huge volumes of money laundered that took place before the new legislation came into force. According to the Anti-Money Laundering Office, the annual amount of money laundered in Thailand was about 12% of the country's GDP.

The flow of money laundered in Thailand was formed due to such illegal types of business as:

  • gambling;
  • production of counterfeit products and piracy;
  • fraud;
  • tax evasion;
  • bribery;
  • illegal arms trade;
  • drug trafficking;
  • smuggling;
  • prohibited transactions with securities and a number of others.

At the same time, illegal income from gambling accounted for more than half of all money that was legalized in the country. Thailand's new AML legislation is designed to stop this vicious practice.

When planning to register a business in Thailand, pay attention to the main changes:

1. Publication of the updated AML Law

  • Revision of certain KYC and Customer Due Diligence requirements in Thailand. Companies are now committed to maintaining full CDD records and training staff on AML law knowledge and practical application;
  • The registration of a financial institution in Thailand is now subject to an amendment that affects, among others, operators involved in retail lending, digital asset business, P2P lending and crowdfunding.

If you are looking to register a crowdfunding platform in Thailand, it is advisable to enlist the support of qualified experts. By contacting IQ Decision UK specialists, you will receive professional advice on the creation of a crowdfunding platform based on lending in Thailand, as well as support in selecting the optimal jurisdiction for creating a P2P platform.

2. Key updates to the CTF Law

For those planning to obtain a financial services provider license in Thailand, it will be helpful to know about the changes in the legislation on the financing of financial crimes. A key update is to provide an exemption for financial institutions regarding the processing of frozen funds and assets in the event that interest and other income are received in an illegal manner.

New CDD rules

Before starting a financial activity in Thailand, it is important to consider that the new Regulation replaces the previous rules for customer due diligence. Substantial amendments have been made to improve current regulation in line with international standards and to provide specific guidelines for certain requirements.

From 2020, the regulation of Thai financial companies is carried out according to the new Regulation, which includes:

  • A more thorough assessment of risks, customer risk levels and CDDs that must comply with international standards (for example, additional restrictions on the use of simplified CDD procedures, mandatory for beneficial owners who are foreign politically exposed persons);
  • Changing the threshold at which CDDs must be performed to comply with international standards.

By the way, if you are interested in registering an SFI in Thailand, our specialists are ready to provide the necessary assistance.

Finally

The FATF noted that the Kingdom has made significant progress in implementing generally accepted strategies to prevent money laundering and has removed Thailand from the list of countries with high levels of money laundering. Now the state is in the second group of the FATF special control list. Local authorities are open to partnerships in countering illegal financial operations.

If you have any queries on the topic of the article, IQ Decision UK experts will provide comprehensive advice on business regulation in Thailand in accordance with AML/CTF rules. Reach out to us by filling out a short form below.