Thai banks face new mandates to curb financing of juntas
Bank of Thailand and AMLO have ordered banks to enforce stricter regulations to prevent Myanmar’s junta from using Thai financial services to procure arms
The Anti-Money Laundering Office and Bank of Thailand have jointly called on Thai banks to strictly enforce international financial regulations that prevent juntas, such as Myanmar’s, from using financial services for arms procurement.
The AMLO and BOT issued a directive to all financial institutions in Thailand to rigorously adhere to the Anti-Money Laundering and Counter-Terrorism and Proliferation of Weapons of Mass Destruction Financing (AML/CTPF) regulations. These measures are designed to combat money laundering, terrorist financing and the financing of weapons proliferation.
The joint policy, which took effect on December 27, mandates Thai banks to conduct thorough checks on clients in line with risk proportionality and implement management measures accordingly.
The policy follows a 2024 UN report that highlights the risk of Thai banks being used to facilitate arms purchases by the Myanmar junta. While the report did not directly accuse Thai banks of violating AML/CTPF regulations, it raised concerns over their ability to effectively prevent such transactions.
The joint policy requires Thai banks to treat nations in the Financial Action Task Force (FATF) high-risk nations as having a high potential of violating AML/CTPF regulations as well.
As a result, the BOT and AMLO require Thai banks to carefully check transactions to and from these nations, including Myanmar, to see if they violate the AML/CTPF policy.
The joint statement was issued after a UN report in 2024 highlighted the risk of Thai banks being used to facilitate arms purchases by the Myanmar junta. While the report did not explicitly accuse Thai banks of violating AML/CTPF, it raised concerns about their capacity to investigate and prevent such transactions.
In response, the Thai government and financial institutions have reaffirmed their commitment to upholding AML/CTPF regulations and stressed the importance of international cooperation in addressing these risks.
To mitigate these concerns, Thai banks are required to verify their clients using the Ultimate Beneficial Owner (UBO) method, sourcing information from third-party data rather than relying solely on documents provided by the clients themselves.
The BOT and AMLO have also ordered enhanced customer due diligence, including cross-checking with independent sources and requiring banks to implement mechanisms for detecting suspicious transactions.
Banks are also required to scrutinise transactions involving dual-use items (DUI), which can be repurposed for weapons manufacturing. The BOT and AMLO have instructed the Thai Bankers’ Association and the Government Financial Institutions Association to develop new industry standards and create DUI-checking tools for commercial banks to use by the end of January 2025.
