Global financial watchdog adds Thailand to its 'grey list'

• Published: 17/02/2012 at 06:21 PM
• Online news: Security

Thailand has been named a "high risk" jurisdiction by the global Financial Action Task Force (FATF) for its failure to take sufficient steps to guard against money laundering and the financing of terrorism.

The FATF is a worldwide body for setting standards against anti-money laundering and combating the financing of terrorism.

The decision by the FATF to put Thailand on its "grey list" could mean higher costs and delays in international trade and financial transactions, as international banks may require greater scrutiny on transactions with Thai parties.

The FATF said in a statement released on Thursday in Paris that "Thailand has not made sufficient progress in implementing  measures”.

The group urged Thailand to pass laws criminalising financing of  terrorism and establish "adequate procedures'' to identify and freeze terrorist assets.

The FATF said two countries, Iran and North Korea, are considered "blacklisted", with all FATF members urged to apply "counter-measures to protect the international financial system" from "on-going and substantial money laundering and terrorist financing risks emanating from the jurisdictions".

Fifteen countries, including Thailand, are on a "grey list", where members are warned about risks which could arise from transactions with those jurisdictions. The other countries are Cuba, Bolivia, Ethiopia, Ghana, Indonesia, Kenya, Myanmar, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania and Turkey.

Money-laundering and related financial crimes account for between two and five per cent of the world's gross domestic product, according to the international watchdog.

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong expressed concern about the potential effects on the Thai economy of the FATF decision.

Mr Kittiratt said that he is aware of the issue and is rather concerned about its potential impact. He would  follow it up with the Anti-Money Laundering Office (Amlo) to determine the exact causes behind the greylisting.

Amlo officials have travelled to Paris to attend the FATF meeting and they would provide further details, he said.

"Initially, I understand that changes need to be made to two laws related to money laundering so that they meet international standards," Mr Kittiratt said.

Deputy Prime Minister Yutthasak Sasiprapa insisted that Thailand is not a money-laundering country.

"I know which country is laundering money and it's definitely not Thailand, but Thailand could be a gateway because people can enter the country easily.

"On one hand, we invite tourists to enter our country but on the other hand we have stringent inspections," Gen Yutthasak said.