Bangkok (The Nation/ANN) - The Financial Action Task on Money Laundering (FATF) has put Thailand on its blacklist due to the country's inability to enact more money laundering laws aimed at countering terrorism.
Thailand is one of five new countries added to the FATF blacklist, which includes Indonesia, Pakistan, Ghana and Tanzania.
In fact, Thailand was put on the FATF's grey-list back in 2010 and the subsequent failure to follow up on enacting new laws on anti-terrorism and money laundering led to the FATF's latest decision to put the country on the blacklist.
The FATF is responsible for setting the global standards on anti-money laundering and combating the financing of terrorism.
Police Colonel Sihanart Prayoonsri, the acting secretary-general of the Anti-Money Laundering Office (AMLO), said the FATF wants other countries to adopt these laws to prevent money laundering activities in connection with international terrorism.
Thailand already has an anti-money laundering law, but FATF requires a new version that meets its standards. In addition, FATF requires new legislation to combat international terrorism.
Last year's massive floods have contributed to the slowness in issuing these new laws, as the government was busy tackling the immediate problem and is now carrying out flood-prevention projects to prepare for this year's rainy season.
Thailand's international financial transactions could be affected in the near future if the country remains on the FATF blacklist.
According to the AMLO acting chief, Thai authorities have drafted bills on anti-terrorism money laundering but the country has faced political conflict over the past few years as well as last year's massive floods, resulting in the delay in enacting the laws.
Thai authorities will have to explain this situation to the FATF.
Once a country is put on the blacklist, there are serious implications for the economic system and investment sector. First, foreign investor confidence will be affected. The short-term effects will not be serious, but the medium- and long-term implications could be far-reaching. Second, Thai exporters and importers will be required to provide more documents to verify their international transactions, thus affecting their competitiveness and the cost of doing business.
According to the United Nations, Thailand is also required to enforce anti-terrorism money laundering laws.
General Yutthasak Sasiprapha, deputy premier, said Thailand is not a centre for money laundering, but the country could be used as a transit point.
Earlier, the Group of 20 industrialised and developed countries, or G-20, urged developing countries to strengthen their anti-money laundering laws in connection with international terrorism.
Thailand was cited as one of the countries that still lacks effective laws consistent with the G-20's standards.
In November last year, the chairman of the FATF also sent a letter to Thailand's justice minister informing that there are still weaknesses in Thai laws regarding this issue.
According to the FATF, which sets the global standards on anti-money laundering legislation and combating the financing of terrorism, a total of 17 countries, including the latest five, are now on the blacklist. These countries include Bolivia, Cuba, Iran, Kenya, Burma, North Korea, Syria, Turkey and Sri Lanka. In addition, another 22 countries are on its grey-list, such as Angola, Argentina, Brunei, Cambodia, Mongolia, Vietnam and the Philippines.
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