Thailand’s Ministry of Justice recently announced significant proposed amendments to the Anti-Money Laundering Act B.E. 2542 (1999). These amendments mark a substantial step forward in Thailand’s efforts to fight financial crime, corruption, and hidden foreign ownership structures. The draft was open for public feedback until April 25, 2025, and seeks to align Thailand more closely with global standards, addressing significant gaps in corporate transparency.

Thailand’s AML Overhaul: A Stronger Definition of Predicate Offenses

Central to Thailand’s AML reforms is the expanded definition of predicate offenses—crimes that generate illegal proceeds, later subjected to money laundering activities. Under the proposed amendments, Thailand now explicitly includes several previously neglected crimes within its AML framework.

Bribery of Public Officials:

Bribing both domestic and foreign public officials, including personnel in international organizations, becomes a predicate offense. This aligns directly with Article 23 of the United Nations Convention Against Corruption (UNCAC, 2003), emphasizing international cooperation against corruption-related money laundering.

Nominee Structures:

Thailand aims to criminalize arrangements where Thai nationals serve as proxies to bypass the Foreign Business Act (FBA). Specifically targeted are schemes where locals hold shares or operate businesses under misleading pretenses, concealing true foreign control. This step adheres to Recommendation 24 from the Financial Action Task Force (FATF), emphasizing transparency in beneficial ownership.

Extended Enforcement Period:

To enforce accountability effectively, Thailand introduces a substantial 15-year period within which authorities can prosecute predicate offenses. This move underscores the nation’s dedication to ensuring long-term compliance and addressing historical financial misconduct.

Increased Accountability for Foreign Investors

A significant provision of the proposed amendments removes prior legal protections that allowed foreign nationals to avoid liability through nominee schemes. Under the new joint accountability framework:

Foreign nationals deliberately using Thai nominees for prohibited activities face the same legal consequences as their Thai proxies. This shift is driven by the Department of Business Development’s (DBD) 2024 policy, emphasizing accountability regardless of nationality.

For foreign investors, this requires thorough due diligence and verification of ownership structures, minimizing risks of asset seizure or legal penalties.

Enhanced Beneficial Ownership Transparency

An essential component of Thailand’s AML reforms is the mandatory disclosure of Ultimate Beneficial Owners (UBOs). The draft mandates comprehensive transparency for UBOs, clearly defining them as individuals directly or indirectly exercising control over entities, including through trusts and asset management arrangements.

Financial institutions and designated professions will now be obligated to report UBO information to Thailand’s Anti-Money Laundering Office (AMLO). Failure to comply could lead to fines of up to B500,000 (approximately US$13,600), coupled with daily penalties for ongoing non-compliance.

These measures bring Thailand in line with FATF’s 2023/2024 recommendations, which praised Thailand’s ongoing improvements in addressing opaque corporate structures.

Targeting High-Risk Sectors for Financial Crimes

Thailand’s proposed amendments specifically target sectors historically vulnerable to misuse of nominee structures and financial crime, notably real estate, hospitality, and shell companies.

Authorities will now more rigorously scrutinize asset holdings, partnerships, and financial transactions in these sectors. This scrutiny extends to combating cross-border corruption, equipping prosecutors with enhanced tools to trace and prosecute bribery of foreign officials, critical in multi-jurisdictional cases.

The objective is clear: to dismantle illicit networks that undermine Thailand’s economic integrity and regulatory frameworks.

The Strategic Rationale Behind Thailand’s AML Amendments

Thailand’s rigorous AML revisions respond directly to increasing global pressures and domestic economic vulnerabilities:

• FATF Compliance: These amendments help Thailand avoid FATF’s “grey list” by aligning with international anti-money laundering and counter-terrorism financing (AML/CFT) standards.
• Enforcement of Foreign Business Act: By criminalizing nominee schemes, Thailand effectively strengthens enforcement of laws governing foreign-controlled sectors, protecting local industries such as agriculture, tourism, and media from illicit foreign domination.
• Regional Alignment: Following the footsteps of Singapore and Malaysia, Thailand is strengthening its AML laws, prioritizing transparency and accountability, particularly regarding cross-border corruption.

Business and Investor Implications

These changes carry significant implications for foreign investors and local businesses alike:

• Due Diligence Overhaul: Companies operating in Thailand must now intensively audit their shareholding structures, contractual agreements, and UBO declarations to ensure compliance.
• Increased Sectoral Risks: Industries that historically relied heavily on nominee structures, notably property development and hospitality, will encounter heightened scrutiny and enforcement actions.
• Higher Compliance Costs: Smaller enterprises and non-profits might face disproportionate challenges in meeting new reporting requirements. Governmental support may become necessary to mitigate these financial burdens.

Stakeholder Engagement and Next Steps

The initial public consultation provided a critical platform for businesses, legal professionals, and international investors to voice concerns and propose adjustments. Key debates have arisen surrounding:

• The extensive scope of UBO reporting requirements.
• The fairness and proportionality of penalties imposed for noncompliance.

Legislation finalization is anticipated by late 2025, pending necessary parliamentary approval. Stakeholders are encouraged to actively participate to ensure balanced regulatory outcomes.

Conclusion: Thailand’s Commitment to Fighting Financial Crime

Thailand’s proposed amendments represent a transformative shift in the nation’s AML and regulatory landscape. By criminalizing nominee structures, establishing joint liability frameworks, and mandating unprecedented transparency in beneficial ownership, Thailand not only aligns with global AML standards but also robustly defends its domestic economic interests. Active engagement from stakeholders remains crucial in shaping these reforms to ensure their effectiveness and fairness.

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Related Links

• UN Convention Against Corruption
• FATF Recommendation 24 on Beneficial Ownership
• Thailand’s Anti-Money Laundering Office (AMLO)
• Department of Business Development (Thailand)
• Thailand’s Foreign Business Act

Other FinCrime central News About Thailand

• Thai SEC Cracks Down on OKX for KYC and AML Violations in Crypto Compliance
• The Global Spread of Scam Farms and the Unstoppable Worldwide Billion-Dollar Cyberscam Industry

Source: The Phuket News, by Dr Paul Crosio