MONEY LAUNDERING

Thailand risks watch-list downgrade

Siriporn Chanjindamanee

The Nation

Global task force, capital market concerned about delay in legislation

BANGKOK: -- Capital-market representatives have urged the government to speed up legislation against money-laundering, concerned over a possible slowdown of foreign-capital inflows and long-term development of the real sector.

The issue was raised as the annual meeting of the Financial Action Task Force (FATF) on money-laundering kicked off yesterday in France. The meeting, which runs until Friday, could downgrade Thailand on the matter. The rating will be officially announced on February 20.

Paiboon Nalintharuangkul, chairman of the Federation of Thai Capital Market Organisations, said yesterday that the FATF might raise Thailand from its second watch list to the first group, which currently includes Burma, Sri Lanka, Cuba, Bolivia and Ethiopia. The second group includes Vietnam, the Philippines, Indonesia and Thailand.

"The main reason for the possible downgrade is the delay in legislating anti-money-laundering and anti-terrorist-financing laws," he said.

Paiboon added that Thailand would send representatives to the meeting and explain the delay in the legislation.

He said that if the rating were downgraded, it would be worrisome for the capital market.

"If the government does not hurry to fix this, it will either have an impact on the country's capital outflow or reduce foreign direct investment in the long term, affecting the country's competitiveness."

He noted that the first watch list was close to the FATF's blacklist, for so-called non-cooperative countries such as North Korea and Iran.

Pattera Dilokrungthirapop, chairwoman of the Association of Securities Companies, said combating money-laundering and terrorist financing was part of the financial sector's good governance, to which the Group of 20 industrial countries had given importance. Countries that are downgraded would face more difficulty in financial transaction, as they would be required to comply with customer due diligence with a higher degree of restrictions. This would have an impact on that country's overall economy. In addition, some funds are limited against investing in countries on a watch list.

Worawan Tharapoom, president of the Association of Investment Management Companies, said that if Thailand were downgraded, it would get harder to trade with G20 countries, which account for as much as 90 per cent of the world's economy.

-- The Nation 2012-02-14

This group have a lot of nerve asking for changes which could stiffle some of the play house antics of so much ill gotten gain. Next someone may suggest that all income be reported and taxed.

According to this wikipedia article around 36 countries are members of the FATF; maybe Thailand ought to join the FATF group to have a vote in its recommendations.

Downgrades seem to be the order of the day.

This group have a lot of nerve asking for changes which could stiffle some of the play house antics of so much ill gotten gain. Next someone may suggest that all income be reported and taxed.

Sounds like nearly the same thing the French (and Ed Balls) were saying about the UK. Different fundamental issue, but still it might "stiffle [sic] some of the play house antics."

DOW JONES NEWSWIRES

Moody's Investors Service downgraded six European nations and warned its top ratings on Austria, France and the U.K. could be at risk, citing the area's weakening prospects for an overhaul.

The ratings service downgraded Italy a notch to A3, which is four rungs above speculative-grade territory, and maintained a negative outlook on the euro-zone's third-biggest economy.

Malta, Portugal, Slovenia and Slovakia also received one-notch downgrades and still have negative outlooks, Moody's said. Spain was downgraded two notches.

The sterling ratings of Austria, France and the U.K. received negative outlooks. The U.K. move demonstrated Moody's belief that the crisis is having serious effects on countries outside the euro zone.

Edited February 14, 201214 yr by Suradit69

Capital market execs? Start investigating them first.

"Paiboon added that Thailand would send representatives to the meeting and explain the delay in the legislation."

How are these representatives going to explain that the government has to wait until they figure out how to get there 25%