The Anti-Money Laundering Office (AMLO) and the Bank of Thailand (BOT) are intensifying efforts to mitigate risks within the Thai financial sector, particularly those related to money laundering, terrorism financing, and the proliferation of weapons of mass destruction. These efforts are critical as ongoing international conflicts and sanctions, often linked to human rights violations, increase scrutiny on global financial systems.
Over the past year, certain key trading partners of Thailand have been designated as high-risk countries by the Financial Action Task Force (FATF). In response, the AMLO has mandated financial institutions to conduct strict verification processes for customers originating from these regions. These measures include verifying the Ultimate Beneficial Owner (UBO) of accounts using reliable data sources beyond customer-provided information and ensuring that transactions align with the stated purpose of the business relationship.
The AMLO and BOT jointly monitor transactions involving high-risk countries and have found that Thai financial institutions have generally adhered to the Anti-Money Laundering and Counter-Terrorism and Proliferation of Weapons of Mass Destruction Financing (AML/CTPF) standards. Moreover, many institutions have implemented practices that exceed the baseline regulatory requirements set by the AMLO.
However, recent reports from the Office of the United Nations High Commissioner for Human Rights (OHCHR) have highlighted concerns regarding financial services provided by certain Thai institutions. The report alleged that these services facilitated the Myanmar military government’s procurement of weapons in 2023, which were used in acts of violence against civilians and human rights violations.
In response to these allegations, the AMLO and BOT took immediate action by instructing financial institutions to review their transactions and enhance caution. Joint investigations were conducted into the practices of these institutions, particularly regarding correspondent banking relationships, account openings, and money transfer transactions. While the investigations confirmed that some institutions had conducted transactions with individuals named in the OHCHR report, no evidence linked these transactions to arms procurement. All reviewed activities were found to be compliant with existing regulations.
Despite compliance, the investigations revealed inconsistencies in the rigor of operational guidelines across financial institutions. This underscores the need for enhanced due diligence practices to prevent financial systems from being exploited for illegal activities or human rights violations.
The AMLO and BOT are urging financial institutions to elevate their AML/CTPF protocols to address emerging risks. These include stricter monitoring of high-risk transactions and the introduction of measures to block potential channels for funding activities that could harm international peace and human rights.
To ensure accountability, the AMLO and BOT have committed to closely monitoring the progress and implementation of these enhanced measures. Institutions found to be non-compliant with established standards will face strict penalties under the respective authorities of the AMLO and BOT.
These actions emphasize Thailand’s commitment to maintaining the integrity of its financial system and its alignment with global standards. By addressing these challenges proactively, the AMLO and BOT aim to safeguard the Thai banking sector from being exploited for illicit purposes, reinforcing trust and stability in the financial ecosystem.