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.
-The Nation/Asia News Network
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