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NEWS UPDATES Asean Affairs    4 July 2012

Thai laws not adequate to counter money-laundering


After its recent revision by the Thailand Parliament, the Joint Private Standing Committee has expressed deep concern over the vagueness and weakening of the draft of the anti-money laundering law aimed at countering terrorism, which it says will be unacceptable internationally because of problems over effective enforcement.

The committee, which comprises the country's three most powerful private organisations - the Federation of Thai Industries (FTI), the Board of Trade of Thailand and the Thai Bankers Association - yesterday called for the government to make more stringent the draft law on increasing the transparency of financial transactions.

FTI chairman Payungsak Chartsuthipol said the Asia-Pacific Group on Money Laundering under the Financial Action Taskforce on Money Laundering (FATF) had voiced concern that the revised draft was weaker than its predecessor in terms of both implementation and punishment.

The government should listen carefully to the suggestions of the Asia-Pacific Group, which has extensive experience in drawing up laws in participating FATF countries, as adoption of its ideas would lead to better acceptance of Thailand's new law in the international community, Payungsak said.

"If the government continues [to press ahead and] to pass the current revised draft law, Thailand will still have a bad [international] image in tackling money-laundering and preventing support for terrorist activities, as the law will be ineffective in terms of enforcement," he said.

As a result, Thailand could be downgraded to the FATF's "Black List" because of the non-transparency of its procedures, or at best remain on the organisation's "Dark Grey List", Payungsak added.

The Asia-Pacific Group has expressed particular concern about the level of detail in Article IV of the revised draft, saying that Parliament has inserted a set of circumstances that would make it very difficult for violators to be punished if involved with money-laundering in support of terrorism.

For instance, the draft says that money-laundering under the law must entail action that damages morality in society, or have an impact on national security, international relationships or the financial system, and must be undertaken by a criminal organisation.

Payungsak said the Joint Private Standing Committee would seek a meeting with government agencies and the panel responsible for drafting the law with a view to removing some of the worrying detail and increasing the effectiveness of its implementation.

Board of Trade chairman Phongsak Assakul said the private sector would also write to Prime Minister Yingluck Shinawatra expressing its concern over the potential ineffectiveness of the draft law as it currently stands.

He said that although Thailand could pass the law before the FATF deadline of February next year, the organisation could still downgrade the country's status, which would damage Thai companies doing foreign business and engaging in overseas financial transactions.

Thailand has been on the FATF's Dark Grey List since early this year because of a lack of anti-money-laundering laws aimed at countering terrorism.

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