The Anti-Money Laundering Act B.E. 2542 (the “AML Act”) was recently amended by Amendment No. 5 which took effect on 9 October 2015. The new amendment makes changes to provisions to be in-line with the current anti-money laundering situation, to increase enforcement efficiency, and to conform to international standards. Key changes are as follows
1. Additional predicate offenses
Additional predicate offenses have been added such as offenses relating to human trafficking, online gambling, and offenses relating to unfair practices in relation to derivatives and agricultural commodity futures.
2. Expanded scope of money laundering offenses
The AML Act now includes “knowingly acquiring, possessing or using Assets Connected to Illegal Activities” as one of the acts that is considered as a money laundering offense.
3. Onboarding policy and customer due diligence
The AML Act now subjects all types of Reporting Entities under section 16 of the AML Act (instead of only Financial Institutions and certain types of Reporting Entities) to the obligations under section 20/1 to (a) stipulate a policy on onboarding clients and risk management and (b) conduct customer due diligence (CDD), in accordance with ministerial regulations.
4. Non-disclosure obligations
Financial Institutions and Reporting Entities are prohibited from disclosing information or conducting any action that may make customers or third parties aware of the CDD, the transaction reporting, or the sending of any information to the Anti-Money Laundering Office (AMLO), except in certain cases. Violation of this non-disclosure obligation carries a penalty (i.e., imprisonment not exceeding five years or fine not exceeding THB 100,000 or both).
5. Compliance by Trained Staff
The Anti-Money Laundering Office (AMLO) is obligated to hold training for Financial Institutions and Reporting Entities. Financial Institutions and Reporting Entities must arrange for trained staff to conduct or monitor report preparation, conduct the Know-Your-Customers (KYC) requirement, and CDD obligations in compliance with the AML Act, otherwise they will be subject to a penalty (i.e., fine not exceeding THB 500,000).
6. Extended CDD Record Keeping
The information and documents regarding CDD must be kept for a period of 10 years from the close of the account or termination of the relationship with the customer.
7. Coordination with other regulators
The AMLO is empowered to send a list of non-compliant Financial Institutions and Reporting Entities to the supervisory regulators for further proceedings under other relevant laws.
Additional amendments covered include; Assets Connected to Illegal Activities, reporting of transactions, composition powers and authorities of the Anti-Money Laundering Board and Transaction Committee, penalties, etc.