Compliance with Thailand's Anti-Money Laundering Law

[Pib]

Here's a link to a PWC pdf document that covers Anti-Money Laundering "Know Your Customer" by country. Thailand is addressed on pages 89-93. Below is a partial quote from those pages talking new and existing customer verification due diligence. I'm about googled-out on this subject but the various things I've read seem to give companies considerable latitude in how and when they accomplish due diligence verification on new and existing customers....expect affected companies will handle it differently which means we'll be reading different customer experiences.

[delgarcon]

I believe this is a symptom of what happens when the US threatens every bank in the world who does US business with large fines unless they meet some very stringent banking rules and regulations / reporting requirements.

These relatively new rules have been causing problems for Americans all over the world, some banks have been refusing to open accounts for US citizens because of this issue, others in different places have been closing existing accounts and telling people to get their money out.

For once this is not the US alone. I'm British and have been asked for proof of address and identity by English and European banks. It's all part of International anti money laundering laws and you just have to comply and fill in the form and yes if you don't want to do it, cut up your Amex card, but don't forget to write to them to cancel the card.

[hawker9000]

So the money in the account won't just be confiscated, if the depositor is not around for 6 months. What you say makes sense. When I looked up the new foreign law last year, I think it had a higher allowance than $10,000. But now it appears to be $10,000.

When I told my accountant, in Florida, last tax season, about my foreign accounts, he said he couldn't find a place to enter it on the 1040 or any of the supplemental forms. Now I see it has to be done separately, on line. I'll deal with that when I get to U.S. I'm not going to worry about it. If the bank asks for my SS# I'll gladly supply it. I'll report to the IRS whatever my foreign deposits are. Thanx

"When I told my accountant, in Florida, last tax season, about my foreign accounts, he said he couldn't find a place to enter it on the 1040 or any of the supplemental forms. Now I see it has to be done separately, on line. I'll deal with that when I get to U.S. I'm not going to worry about it. If the bank asks for my SS# I'll gladly supply it. I'll report to the IRS whatever my foreign deposits are. Thanx"

You need to hire a better accountant. It's pretty simple. Tell him to check Part III ("Foreign Accounts and Trusts") on Schedule B, Lines 7a, 7b, and 8. They're at the bottom of the form. If you had any foreign accounts, but your aggregate foreign accounts never totaled more than $10K at any time during the year, then all you have to do is check 'Yes' on 7a and check 7b and 8 'No' - pretty darn painless compared to the potential pain of failing to do it... If there was interest from these accounts, then like any other interest it should be reported in Part I (Line 1).

If the aggregate value DID exceed $10K during the year, then Part III refers you to FinCEN 114 (already discussed in this thread - that's FBAR).

I think something else actually kicks in at the $50K level, but am not familiar with that. It might be something that affects bank, rather than individual, reporting requirements.

Edited November 5, 2014 by hawker9000

[charliebadenhop]

Gee Hawker, "scaremongering and bogus"!

Because I didn't know that one had to have more than $10,000 aggregate....

My accountant never mentioned the limit, so thus I did not know there was a limit.

Anyway, from my experience there are still a lot of US citizens who do not know about filing with FBAR, and my accountant tells me that the consequences can be severe.

So I was just trying to be of service.

Also, as far as I know Paypal and other similar online accounts also need to be reported, IF the aggregate of all accounts of any kind is over $10,000.

Edited November 6, 2014 by charliebadenhop

[hawker9000]

Gee Hawker, "scaremongering and bogus"!

Because I didn't know that one had to have more than $10,000 aggregate....

My accountant never mentioned the limit, so thus I did not know there was a limit.

Anyway, from my experience there are still a lot of US citizens who do not know about filing with FBAR, and my accountant tells me that the consequences can be severe.

So I was just trying to be of service.

Also, as far as I know Paypal and other similar online accounts also need to be reported, IF the aggregate of all accounts of any kind is over $10,000.

You would only ever have to have filled out a Schedule B, which anyone with interest or dividend income will have done, as it's right there in black & white.

Those who don't know the simple facts (e.g., the $10K threshold) really shouldn't be pretending to knowledge they don't have and spreading rumors about dire consequences, which, unfortunately, has far too often been the case here on TV when it comes to FBAR. If your accountant does all your taxwork, and you dont' know what you're talking about, then don't post. Do your homework before spreading financial misinformation, or yes, it's just scaremongering. Try and take some responsibility for what you post. Or at least qualify your post with a disclaimer that you're just speaking from hearsay and have no actual firsthand knowledge.

Edited November 6, 2014 by hawker9000

[Misty]

I see nothing in the two docs the OP posted linking this to FATCA as ukrules implies. The letter says it's related to compliance with Thailand's anti-money laundering law...and as we know Thailand has taken a lot of international heat over the last few years regarding money-laundering and lack of enforcement.

Just to partially quote the article regarding Thailand Anti-Money Laundering Regulation 2013 webpage: "....Thailand, which traditionally has had a reputation as a “crossroads” for numerous illegal activities and of the laundering of significant sums of tainted money."

Don't confuse FATCA which went into effect 1 Jul 14 with Anti-Money Laundering Laws which have been in effect for numerous years with little enforcement by Thailand...but apparently Thailand can no longer continue to turn a blind eye to money laundering due to pressure from the international community.

I'd agree with this - not related to FATCA or US regulations. Thailand as been under pressure to upgrade to meet FATF regulations which is a completely separate set of international requirements specifically dealing with anti-money laundering. A number of changes to Thai law governing financial institutions were completed in the last year or two, and are being implemented now.

[manarak]

I have no problems with my bank and credit card companies knowing that information about me, as long as:

1- it is kept secret within the company, meaning only very few employees can access it on a need to know basis

AND

2- the data does not travel across countries within the company/bank, it remains within the country I provided it and there is no remote access and no sending the data abroad for processing

AND

3- the data is never given to third parties without my written and specific authorization

AND

4- the data is made available to government agencies or law enforcement only based on a specific warrant (no fishing expeditions)

I think the above are common sense rules that should be applied everywhere, yet you would be surprised at how much of these confidentiality are rules breached on a daily basis.

[JimGant]

Anyway, from my experience there are still a lot of US citizens who do not know about filing with FBAR, and my accountant tells me that the consequences can be severe.

You've already shown that your accountant is incompetent, so forget the "severe" for no FBAR filing -- as long as you included your foreign bank account interest on line 8A of your tax return (IRS has recently said, if you declared your foreign income, not filing a related FBAR is non consequential).

But, apparently your accountant lumped your foreign interest with domestic, and thus used the under $1500 rule to avoid filing a Schedule B. Had he seen, or understood, the Bangkok Bank (or whatever) line item, for whatever amount, required a Schedule B to be filed -- being foreign -- well, as has been mentioned, you would have been escorted thru the Schedule B to arrive at, whether or not, a FBAR filing was required.

In any case, the IRS has no FBAR on file, to trigger looking for a related Schedule B. And no Schedule B, to look for a related FBAR. And FATCA reporting of foreign income (assuming some will report, even if below the $50,000 threshold) won't be backloaded to 2013 taxes. So, certainly expect no knock on the door. Which is too bad, 'cause then you could hang your accountant out to dry, with no 'willful' intent at all on your side.

[dapperdan]

To Hawker and Pib: Thank you for the information on this topic. You guys know a lot about it. I made a copy of all of this and will take care of it when I get back to the states. Thanx for sharing.

[charliebadenhop]

I lived in Japan for 30 years and had my own company the whole time.

About two years ago my accountant told me it had become mandatory to file FBAR and show how much money was held in each account worldwide.

He likely did not mention the minimum as I was way above the minimum.

I have two friends who also have companies in Japan, and when I told them what my accountant said, they told me that their accountants had told them the very same thing.

AND the accountants do not make an extra cent for passing on this info.

So it is a bit hard for me to believe that none of the three knows what they are talking about.

And yes, if you have say $1,000 sitting in an account in Thailand, and $2,000 sitting in Japan, the US government will have no interest in you.

My understanding is that the US govt. is working hard trying to insure that people are not either laundering money or hiding income that should be reported.

Anyway...

I was just attempting to pass on what I thought was useful info.

[hawker9000]

I lived in Japan for 30 years and had my own company the whole time.

About two years ago my accountant told me it had become mandatory to file FBAR and show how much money was held in each account worldwide.

He likely did not mention the minimum as I was way above the minimum.

I have two friends who also have companies in Japan, and when I told them what my accountant said, they told me that their accountants had told them the very same thing.

AND the accountants do not make an extra cent for passing on this info.

So it is a bit hard for me to believe that none of the three knows what they are talking about.

And yes, if you have say $1,000 sitting in an account in Thailand, and $2,000 sitting in Japan, the US government will have no interest in you.

My understanding is that the US govt. is working hard trying to insure that people are not either laundering money or hiding income that should be reported.

Anyway...

I was just attempting to pass on what I thought was useful info.

I don't care if you're the Queen of England, and I don't care whether it's you or your accountant who didn't know what he was talking about. YOU were the one that posted the bogus information. So again, either do your homework BEFORE you post rather than getting people stirred up needlessly, or disclaim what you're posting, so posters will realize maybe THEY should do their homework before they take you too seriously. Stop whining.

[charliebadenhop]

Wow, what a caustic, self righteous person you are!

Cheers

[hawker9000]

Wow, what a caustic, self righteous person you are!

Cheers

And what a self-absorbed scaremonger YOU are.

[charliebadenhop]

Here is what another (4th accountant has to say)

Certainly sounds potentially serious to me....

Have you recently discovered you have a FBAR filing requirement? Did you know that the IRS can inflict harsh penalties for noncompliance even if you didn’t know you had a filing requirement? Freed Maxick can help navigate the complexities of your FBAR filing requirements and address potential penalties.

There are two types of penalties applicable to FBARs – (1) Non-Willful and (2) Willful. It should be noted that the penalties are assessed per account and not per FBAR. Additionally, the penalties are assessed for each year there is a violation. For example, if you have 5 accounts that have not been reported for 5 years, there could be 25 separate penalties assessed. The penalty regime for violations after October 22, 2004 can be summarized as follows:

Non-Willful Penalty

• Up to $10,000 for each negligent violation

• No Criminal Penalties Assessed

Willful Penalty

• Up to the greater of $100,000 or 50% of the amount in the account at the time of the violation

• Criminal Penalties of up to $250,000 or 5 years in jail or both

Willful Penalty While Violating Certain Other Laws

• Up to the greater of $100,000 or 50% of the amount in the account at the time of the violation

• Criminal Penalties of up to $500,000 or 10 years in jail or both

While the penalties can be overwhelmingly high, there have been a host of Voluntary Disclosure Programs offered by the IRS that can potentially reduce or even eliminate the penalties noted above. Freed Maxick’s International tax team can help identify these programs to address your issues.

[JimGant]

Freed Maxick can help navigate the complexities of your FBAR filing requirements and address potential penalties.

Yeah, Freed hopes that you haven't heard all the latest re modified/dropped FBAR penalties, and that old, scary information will get you to hire him to get you clean with the IRS.

But, as has been said earlier (and in other, more accurate, FBAR threads), if you declared your foreign earnings on your US tax return (or if you weren't required to file a US tax return, as your gross income was below the threshold), you aren't subject to any FBAR penalties if you failed to file past FBARs.

Read this article end to end for details: http://www.forbes.com/sites/stephendunn/2014/07/20/all-you-need-to-do-is-file-your-delinquent-fbars/

Delinquent FBAR Submission Procedures continues, “The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign accounts reported on the delinquent FBARs

Oh, you didn't declare that $80 of Bangkok Bank interest? Well, you might want to investigate filing under the newly modified Streamlined Procedures guidance. Certainly less draconian than the stated FBAR penalties. Or, get in touch with Freed. He'll be glad to charge you for what's available on Google.

But, if you declared your foreign income (even if your accountant forgot to file a Schedule B ) , and it's included in Line 8a of your Form 1040, don't forget, when you get the time, to go on-line and file your delinquent FBARs. In the drop down box for "excuses," just check the one that says you'd never heard of a bloody FBAR. That's it.

[mitsubishi]

This thread is already rather long so excuse me if I am repeating what someone else has said-

If you are a US citizen you are required by law to file a report every year stating how much money you have had in each foreign bank account over the course of the year. The max amount over the course of the year....

Google for FBAR. I think that is the term.

If you don't do this then you can be subject to a whole lot of trouble.

I find your post very interesting, and as a UK citizen, there is no way I would tell the UK government of any of my Thai bank accounts except to get any pension I am entitled to transferred into it, and only that particular bank, not any other Thai bank accounts I have.

The USA is like the Rome of old, it likes to have a long reach and shadow over it's people.

US folks who are not wanting be under the 10k are quite creative at hiding the excess in other forms though