International Blacklisting Of Thailand May Push Up Local Bank Costs

[webfact]

MONEY LAUNDERING

Blacklist may push up local bank costs

SUCHEERA PINIJPARAKARN,

PIYANUCH THAMNUKASETCHAI

THE NATION

BANGKOK: -- The Bank of Thailand said yesterday the international blacklisting of Thailand has not yet caused any problems with financial transactions, but local banks fear costs will rise for them and their customers.

"We will closely monitor the situation and will also have discussions with commercial banks to see if they have had difficulties from this move," said Pongpen Ruengvirayudh, an assistant governor of the central bank.

Thailand would likely win a rating review after it issues the required laws to demonstrate its readiness and ability to join global anti-money laundering efforts, he said.

Banthoon Lamsam, CEO of Kasikornbank, said the setback highlights Thailand's failure to comply with international standards. Though the damage is unclear, Thailand's image is already blemished.

The House should look at the issue urgently and also at other pending bills, or this could pose hurdles to the nation's social and economic development.

"We need a clear legal framework to facilitate fair business activities and efficiency. Now, the House is a barrier, as it is tasked to pass all laws," the veteran banker said.

Somkiat Sirichatchai, a senior executive vice president of KBank, said banks would be required to launch deeper inspections of customer transactions. This could push up operating costs for the bank as well as for customers.

Subhak Siwaraksa, president and CEO of CIMB Thai Bank, said financial transactions could take longer to complete with detailed examination of documents needed. Still, it is too early to say how the blacklist would increase banks' operating costs, he said.

The Anti-Money Laundering Office called for new legal weapons to combat money laundering and terrorism financing so that Thailand can be removed from the list of "uncooperative" countries.

New laws could be passed by Parliament this year "if there is a serious effort to push them through", Sihanart Prayoonrat, the acting secretary-general of AMLO, told a press conference yesterday.

However, he could not tell when the Paris-based Financial Action Task Force (FATF), an intergovernmental body, would drop Thailand from its list of uncooperative countries.

"According to the FATF, Thailand still has flaws in 400 areas," he said without elaborating.

Meanwhile, AMLO would rely on expedient measures to help ease the situation, including a ministerial regulation to make it more difficult for terrorists or money launderers to use nominees to open bank accounts.

There are three reasons why Thailand was included among the uncooperative countries, he said.

Its law against money laundering does not comply with international standards. It lacks measures to prevent terrorists or money launderers from using financial institutions in their money laundering or terrorism financing. And it lacks the means to punish terrorism financiers.

The FATF move would cause havoc for Thailand's international business transactions in the near future, he said. Lengthy examinations of documents would slow down the transaction process, and fees would be higher.

"In general, Thailand's competitiveness will be diminished, and Thais will have problems conducting financial transactions with foreign countries," he said.

The ripples could reach the monetary, capital and stock markets. However, it remained unclear how serious the impacts would be, he said.

The Senate yesterday voted 82-50 to endorse Sihanart as the AMLO secretary-general after meeting more than three hours behind closed doors.

-- The Nation 2012-02-21

[exeter]

It would seem a good time to ask for some outside help with how best to combat this situation. This would go a long way to removal off the black list.

This is an opportunity for Thailand to look and learn from the the rest of the world and not just put their heads in the sand and proclaim that that Thailand knows best, we do things differently ( sweep it under the carpet and no one loses face ). Well up to you, the world surprisingly has things to teach and it wont cost anything apart from the reputation of Thailand.

[necronx99]

It would seem a good time to ask for some outside help with how best to combat this situation. This would go a long way to removal off the black list.

This is an opportunity for Thailand to look and learn from the the rest of the world and not just put their heads in the sand and proclaim that that Thailand knows best, we do things differently ( sweep it under the carpet and no one loses face ). Well up to you, the world surprisingly has things to teach and it wont cost anything apart from the reputation of Thailand.

The FATF recommendations for an AML/CTF regime are not particularly difficult nor onerous for banks to impliment, though the Thais will no doubt introduce hundreds of new forms. More costly for businesses. Ensuring compliance is a more difficult process.

The problem with the FATF diretions is that in a compliant system much of the more "unusua" traditionall transactional activity that many at the top of the tree partake in will be more difficult to conceal.

[Valentine]

The spin is already operating so the banks can increase their fees. They already have a large spread between deposit & loan interest rates. It is long overdue for them to offer more attractive & wider range of financial packages.

[webfact]

AMLO: Thailand Not on Money Laundering Blacklist

BANGKOK: -- The Anti-Money Laundering Office insisted that the Financial Action Task Force intergovernmental organization has not added Thailand to its blacklist.

Anti-Money Laundering Office, or AMLO, Acting Secretary-General Seehanart Prayoonrat clarified the recent decision made by the of Financial Action Task Force or FATF.

Last week, the FATF issued a statement announcing that Thailand has been put on a blacklist. It blasted Thailand, saying it is an uncooperative country in terms of the global effort to combat money-laundering and terrorism financing.

However, Seehanart stated that the FATF has not put Thailand on the actual blacklist but claimed that the FATF only named Thailand as a country at risk of financing terrorist activities.

The FATF stated that Thailand has yet to pass laws concerning money laundering and terrorism financing that meet international standards. However, he conceded that the FATF's decision would adversely affect the private sector in terms of money transactions in the international arena.

Moreover, the FATF announced that Thailand being on the blacklist has nothing to do with the triple bombs that went off in Sukhumvit 71's Soi Pridi Banomyong last week. He asked people not to confuse the two issues.

Seehanart suggested that Thailand could be removed from the FATF blacklist soon, assuming that the government passes new laws that strengthen the rules against money laundering and the financing of terrorist activities.

He added that the two draft bills regarding terrorism financing and other money-laundering will be proposed to the cabinet for its approval soon.

-- Tan Network 2012-02-21

[LomSak27]

the Paris-based Financial Action Task Force (FATF), an intergovernmental body, would drop Thailand from its list of uncooperative countries."According to the FATF, Thailand still has flaws in 400 areas," he said without elaborating.

Strange how other posts have the conspiracy theorists crawling out from under rocks in Nakhon Nowhere but this draws nary a whisper.

It's been alleged for a long time that Bangkok provides banking, documents and is a travel hub for some of the black money types including terrorists - as long as they do not commit terror acts on Thai soil it is allowed to continue. A good cut is taken for this service. It has also been speculated that both US and Israeli intelligence groups look at various transactions, again for a fee, and so this relationship was tolerated. Taking a payoff from both sides. After this latest incident those happy days might be over.

[animatic]

Hub of delusional official face saving denial, at international levels.

400 areas with problems state FATF and this " official" tries to spin it

as a misinterpretation of a VERY clear statement.

Oh and FAFT uses the word terrorism,

but don't confuse it with the recent bombings.

Which of course another " official " stated it is "...not terrorism! "

Hub of dueling delusions!

Edited February 21, 2012 by animatic

[chainarong]

Not up to International standards, any other area's that need looking at?

[Suradit69]

Not up to International standards, any other area's that need looking at?

Maybe Greece in particular or the Eurozone ministers more generally could come to explain how financial management and banking oversight work in developed countries. At least it would give them the opportunity to escape the riots, looting and burning, strikes etc that are the fruits of their stellar financial shenanigans ... I mean international standards of financial management.

[belg]

will normal thais suffer from this? i don't think so, as they have hardly money on any bank with an average of 6000-8000 baht of income per month... so i doubt they have any savings and even less that they are doing international transactions... the only moneyflow is into the country from all those poor farangs that thinks they are supporting their tee-rak and their families

[BlackJack]

heres the test for you all

try to sign up for xe.com currency exchange

where you can get at least 1 baht more by using their system

but then only to be told that Thailand is a no no and that it does not comply with the ML rules

[pepi2005]

It would seem a good time to ask for some outside help with how best to combat this situation. This would go a long way to removal off the black list.

This is an opportunity for Thailand to look and learn from the the rest of the world and not just put their heads in the sand and proclaim that that Thailand knows best, we do things differently ( sweep it under the carpet and no one loses face ). Well up to you, the world surprisingly has things to teach and it wont cost anything apart from the reputation of Thailand.

dream on, man! That's exactly what they will NOT do, NEVER!

However, I guess the reason for this 'press release' is just to prepare customers for another rise in fees, Thai banks belong to the world masters in giving bad conditions to customers, particularly foreigners. Now with this great new excuse, they can raise their fees just another time.

[Kered]

This is Bulls..t the money laundering rules are very clear and simple to implement particularly as far as personal customers are concerned. The real problem is that the majority of Thai bankers and particularly the executives in the Bank of Thailand have very little real Banking experience and few are qualified hence they do not understand the simple requirements of the Anti Money Laundering legislation.

Perhaps they will learn but there is no excuse for increased charges.

[rotary]

What a crap spin......money laundry. is that another way to say TAX or SERVICE CHARGE? What a scam.

[nikkoid66]

Morgan Stanley to expand their empire in Asia....

[TallGuyJohninBKK]

Maybe Greece in particular or the Eurozone ministers more generally could come to explain how financial management and banking oversight work in developed countries. At least it would give them the opportunity to escape the riots, looting and burning, strikes etc that are the fruits of their stellar financial

Oh, I'd say lots of folks in Thailand, including some associated with the current government, have a fair amount of experience with riots, burning and looting... I don't think they need to turn to international help in that regard.

[koolbreeze24]

How in God's good earth could they possibly raise the fees? Their system is so dam_n archaic that it would take years to catch up to the rest of the world. Of course this is Thailand where any excuse is used to make more money. lol

[4evermaat]

How in God's good earth could they possibly raise the fees? Their system is so dam_n archaic that it would take years to catch up to the rest of the world. Of course this is Thailand where any excuse is used to make more money. lol

How is the banking system archaic? It isn't the most consumer friendly if you make a mistake, or lose your debit card and someone charges up a storm before you realize it. But assuming you properly safeguard the account, what is so archaic.

This is a very recent move by the FAFT, yet the cash-based banking system in thailand has been the way it is for many years. I'm sure it's more of a political move, as the FAFT has had plenty of opportunities over the years to blacklist Thailand. More of a scare tactic to discourage "normal people" from investing (moving their money) to Thailand.

Edited February 22, 2012 by 4evermaat

[EyesWideOpen]

This massive corruption based economy here needs to have an easy movement of cash. I have stood in a Thai bank line many times, and watched some Thai guy pull millions of baht in 1000 baht bricks out of a large bag. The teller does not bat an eye, and takes it over to the cash counting machine which is a fixture in every Thai bank.

I am a bit confused by an international body having an issue with what seems to be in internal matter. I find it hard to believe some Iranian terrorist is flying over here to do banking. Unless they also want to head over to Soi Allah and do a bit of boinking when the banking is done...... :-)

[Baerboxer]

This massive corruption based economy here needs to have an easy movement of cash. I have stood in a Thai bank line many times, and watched some Thai guy pull millions of baht in 1000 baht bricks out of a large bag. The teller does not bat an eye, and takes it over to the cash counting machine which is a fixture in every Thai bank.

I am a bit confused by an international body having an issue with what seems to be in internal matter. I find it hard to believe some Iranian terrorist is flying over here to do banking. Unless they also want to head over to Soi Allah and do a bit of boinking when the banking is done...... :-)

Hmmm - yet the Financial press (Bloomberg) just commented that Thailand is after China the best of the emerging markets to invest in. Still, no doubt the cynics will gripe about the current financial mess etc etc. Reallity is the so called developed world isn't the paragon of justice, virtue, sound education and financial prudence some comments would have us believe. We've seen how morally corrupt and greed driven their banks are.