Thailand
was yesterday identified by an intergovernmental organisation as uncooperative
in the global efforts to combat money-laundering and terrorism financing.
The move came only days after bomb blasts in
Bangkok and discovery of explosive devices linked to terrorism.
The Paris-based Financial Action Task Force
(FATF), in its statement on Thursday (yesterday Bangkok time), said Thailand
was one of 15 countries that have begun taking steps to combat terrorist
financing and money-laundering but have yet to make sufficient progress in
addressing the deficiencies in their regulations.
Deputy Premier and Finance Minister Kittiratt
Na-Ranong yesterday expressed concern that the move could adversely affect
Thailand's image and its economy. He said the government would ask the Anti-Money
Laundering Office to explain the situation. "As far as I know, Thailand
has been requested by the FATF to issue an anti-money-laundering law that
complies with international standards but we have failed to do so, which led to
the country being blacklisted," Kittiratt said.
Songtham Pinto, director of the Bank of
Thailand's macro-economy division, said he expected short-term negative impact
on tourism as a result of the FATF move and the earlier bomb scare in Bangkok,
which was linked to international terrorism.
Siam Commercial Bank president Kannika
Chalit-aphon urged the government to expedite the legislation. She expected the
impact on investor confidence to be short-term. "There could be some
worries and impacts on investments in certain industries. It is not a big
problem," she said.
Tevin Vongvanich, chief financial officer of
PTT, said the company was evaluating the expected impact on the company's
financial transactions after Thailand was listed among watch-list countries
that are not active in enforcing legislation to combat money-laundering and
terrorism financing. In general, the transactions may take a longer time for
financial scrutiny. However, PTT is confident that the downgrade will not
affect its financial-transaction costs. "At PTT, we believe that our
existing customers understand this matter, and this will not affect the
financial transactions between us and existing clients. But we may have to
explain more to new clients," he said.
Paiboon Nalintharangkul, chairman of the Federation
of Thai Capital Market Organisations (FeTCO), said the government would have to
pay attention to this and proceed with an amendment to its money-laundering
law.
Being on such a blacklist could affect the
competitiveness of the private sector, he said, while investing overseas may
require more complicated procedures.
Foreign investors may not be concerned about
this and foreign capital will continue to flow in, seeking higher returns as
the country's economic fundamentals are sound, he explained.
On the contrary, there may be a problem for
capital outflow, he said. For example, wealth management and private funds or
funds with overseas investment policies may find difficulties investing
overseas due to likely more complicated procedures for checking sources of
investment.
Opposition Democrat politician Korbsak
Sabhavasu, formerly a deputy prime minister, said this latest development was
not good for Thailand's reputation, as most of the countries identified by the
FATF as uncooperative had a negative image regarding money-laundering and
terrorism financing.
The Ministry of Foreign Affairs yesterday
cancelled its news conference on the matter.
In its statement, the FATF said: "Despite
Thailand's high-level political commitment to address its strategic
deficiencies, Thailand has not made sufficient progress in implementing its
action plan, and certain strategic deficiencies remain."
It recommended that Thailand should adequately
criminalise terrorist financing, establish and implement adequate procedures to
identify and freeze terrorist assets, and further strengthen supervision of
money-laundering and terrorism financing. In addition to Thailand, the other
countries on the latest FATF list of non-cooperative countries are Bolivia,
Burma, Cuba, Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, Sao Tome and
Principe, Sri Lanka, Syria, Tanzania, and Turkey.
News Desk
The Nation
Business & Investment Opportunities
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