“Anti-Money Laundering Law”
A web of laws innocent property buyers can be trapped by!
By Porthep Werachon

Foreigners contemplating to buy a real property in Pattaya are beset by a plethora of precepts and legislations spreading and omnipresent in all local and international transactions. The ignorance of law cannot be the excuse in court for the violation of law.

The local lawyer should not be lax to provide these foreigners with the comprehensive knowledge of law. In Pattaya where most of retired people compare themselves to children, sailors and drunken men who are protected by “God”, nobody will listen to local licensed lawyers who try to explain the basic knowledge of Thai law.

Some foreigners are arrogant to believe the bread of justice is available to serve them in this country. This kind of foreigners always enjoy the cynicism and spontaneously cast the stone of prejudice to everyone who tries to lead them to the justice in the Kingdom of Heaven. No light of wisdom can piece the veil of ignorance if they prefer to listen to unscrupulous foreign unlicensed consultants who just say “No problem Sir, Every foreigner does it like this in Pattaya. Don”t listen to that yellow monkey stupid lawyer who just wants to rock the boat “.

There are many laws besetting all property buyers in Pattaya like a web of spider. With our empirical knowledge, the Anti-Money Laundering Law is the main law that most of you overlook and ignore by the misconception that “Why do I have to worry about this law because I”m not the money launderer”. The confiscation of ill-gotten property is the main concept of this law.  Most of the professional money launderers have already the sophisticated knowledge. How about the na”ve foreigners who may be innocently trapped in the web of this law”

Layman speaking, “Money Laundering” means “the processing of criminal proceeds which can be profits or other benefits in order to disguise their illegal origin and transforming or converting the proceeds of illegal activities into legitimate capital”.

We can easily understand that the commission of “Money Laundering” is to disguise money or property generated from the nefarious criminal offence underlying the laundering activity which we call the “Predicate Offence”. The main predicate criminal offence is the illegal narcotic drug trade. Other predicate offences are different from country to country mostly are extortion, bribes, protection rackets, terrorism and smuggling of goods, etc. In Thailand, there are seven predicate criminal offences underlying the money laundering activity we are going to discuss in more details.

With the international pressure, Thailand enacted the legislation to cope with the nefarious transnational crime on narcotic drug trafficking being the common threat for our world. The “Anti-Money Laundering Act” was enacted in 1999 after the debate in the parliament that this legislation may deprive the fundamental right and liberty of people under the constitution.

The Anti-Money Laundering Act of Thailand 1999, specifies in Section 5.- that the offence of money laundering will cover whoever :-

1)     Transfers, receives or converts the form of properties related to an predicate offence to conceal or cover up the source of these ill-gotten properties

2)     Takes any actions to cover up or disguise the true nature of theses ill-gotten properties

A person found guilty of money laundering will be punishable with the imprisonment of one to ten years and fine of twenty thousand to two hundred thousand baht.

Section 3.- of the Anti-Money Laundering Act of Thailand 1999 specifies seven  predicate criminal offences  which are :-

1)     Illegal Narcotic Drug Trading and Trafficking
2)     Sexual Procurement and Operation of Prostitution
3)     Public Fraud and Fraudulent Loan
4)     Misappropriation and Fraud of Funds by Director and Managers of Banks, Financial Institution, Trusts, Credit Foncier and Stock Exchange
5)     Malfeasance and Corruption of Government Officers
6)     Extortion by Organized Crime and Criminal Association
7)      Evasion of Customs Law

The Anti-Money Laundering Act 1999 is implemented by the “Anti-Money Laundering Office” (AMLO) which is attached to the Prime Minister Office.

The AMLO will oversee and trace the suspicious money transaction both local and transnational with the commercial banks and financial institutions.

The “Suspicious Transaction” is defined in Section 3.- of  the Anti-Money Laundering Act 1999 as a transaction that is more complicated than the norm by which that transaction is usually conducted or lacks of economic possibility or the transaction which is believed for the purpose of evasion of the anti-money laundering law.

For example, John transfers ten million baht from UK to buy a small Pizza Kiosk in Pattaya. Everyday John puts 100,000 baht in a bank claiming that it comes from the profits of his daily sale.

The AMLO requires a commercial bank or financial institution dealing with a transaction to report if the transaction involves cash from two million baht or property with the value from five million baht, or if the transaction is suspicious. The Land Office is also required to report to the AMLO for the transaction involving with cash from two million baht or suspicious transaction.

If  the AMLO ascertains any suspicious transaction and finds out the reasonable cause to believe that the transaction is related to money laundering activity, the AMLO may have the order to freeze and forfeit these suspiciously ill-gotten properties and forward a report  to the public prosecutor to seek order of the court to confiscate these properties. The criminal prosecution will be also taken against the wrongdoer.

If you are an innocent property buyer, you should avoid dealing with a cash transaction or the transaction with no business plausibility. It is advisable to make payment by a cashier cheque or bank draft payable to the owner whose name appears in the title document.

The buy and sale contract should be supported by complete supporting documents. If you set up a Thai limited company to buy property, you should open the bank account under the name of your company. You should retain a licensed lawyer to deal with the bank. If you are innocent, your lawyer should be willing to justify your money transaction with the bank by issuing a letter with all supporting documentation, i.e., corporate documents, buy and sale contract and title documents. The letter from the lawyer will obviously facilitate the bank with the AMLO and you may refer this letter for the transaction once you repatriate money to your home country in the future.

We strongly advise you to avoid the suspicious transaction. The transaction should be justifiable and transparent in every stage. Please seek a professional advice from the licensed lawyer who will help you to break the veil of ignorance otherwise your assets may be under the confiscation of the AMLO who has always a suspicious mind against ignorant farang.