AML/KYC in Thailand—A Guide to One of the Best Fintech Destinations in Asia

Despite the country’s economic slowdown, Thailand remains an attractive fintech destination. A 2019 report by EY predicted Thailand would become a key ASEAN fintech hub with its high level of digital penetration and young demographic.

According to Statista, the market value of the fintech sector in Thailand amounted to approximately 37.6 billion Thai baht (1 bn USD) in 2021—compared to 14.3 billion baht in 2019 (401 m USD)—and it keeps growing.

Moreover, the Thai government is seeking to duplicate the Singapore model for startups, in a move to establish a pathway for venture capital companies to reap tax-free capital gains from the sale of startup shares.

However, those seeking to open a business in Thailand need to be aware of the country’s AML/KYC regulations. Let’s dive into them.

Who’s affected?

According to the Anti-Money Laundering Act B.E. 2542 (1999), the following industries must comply with Thailand’s AML regulations:

1. Banks
2. Electronic payment service businesses
3. Credit institutions including personal loan businesses
4. Advisors in transactions relating to investment
5. Traders of precious stones, diamonds, gems, gold, or ornaments decorated with precious stones, diamonds, gems, or gold
6. Car traders or car hiring services
7. Real estate brokers or agents 
8. Traders of antiques 
9. Digital asset business operators.

It is also worth mentioning that casinos, betting and gaming activities are forbidden in the country.

Status of cryptocurrency in Thailand

The Bank of Thailand issued a circular stating that cryptocurrencies are not legal tender, meaning they can’t be used to pay for services. However, cryptocurrencies and other digital tokens are considered “digital assets” in accordance with the Royal Decree on Digital Asset Business (the ‘Royal Decree’), which took effect on May 14, 2018. Under the Royal Decree, Digital assets may be issued, traded, and exchanged through digital asset business operators.

Digital asset businesses under the Royal Decree are categorized into three types:

• Digital Asset Exchange
• Digital Asset Broker
• Digital Asset Dealer

Digital asset businesses operating in Thailand shall be approved by the Minister of Finance upon recommendation of the Thai Securities and Exchange Commission (SEC). In turn, digital asset business operators must comply with the country’s AML requirements. 

Who’s the regulator?

• The Bank of Thailand performs general supervision of the financial system
• The Securities and Exchange Commission (SEC) supervises securities businesses
• The Anti-Money Laundering Office (“AMLO”) is tasked with enforcing laws related to anti-money laundering and the prevention of financing for terrorism. It was founded in 1999 after the adoption of the Anti-Money Laundering Act, B.E. 2542.

What are the relevant regulations for fintechs?

• The Anti-Money Laundering Act B.E. 2542 (1999), revised in 2022
• The Counter-Terrorism Financing Act B.E. 2559 (2016)
• The Financial Institutions Business Act B.E. 2551 (2008)
• The Ministerial Regulation B.E. 2563 (2020) 
• The Prime Minister Office Notification
• The Emergency Decree on Digital Asset Businesses B.E. 2561 (2018)
• Notification of the Bank of Thailand No. FPG. 6/2565 Re: Regulations on commercial banks’ financial business groups undertaking digital asset related businesses and transactions

How to stay compliant

According to the Anti-Money laundering Act, affected financial institutions and professions should: 

• Issue a customer acceptance and risk management policy related to money laundering
• Undertake Customer Due Diligence periodically until the account is closed or the relationship is terminated
• Report suspicious activity to the regulator.

Suggested read: The APAC Sentinel: Effective Transaction Monitoring Tactics

Customer Due Diligence

Identification of a customer who is a natural person includes, at the minimum, the following information:

(1) Full name

(2) Date of birth

(3) Personal identification number 

(4) Address as appears on the customer’s personal identification card or house registration. (In case of a foreigner, the country of citizenship and current address in Thailand shall be provided—except for foreigners with no address in Thailand, whose current address shall be used instead)

(5) Other contact information such as a phone number or email address.

Identification of a customer which is a legal entity shall, at the minimum, include:

(1) Name of the legal entity

(2) Type and purposes of the business

(3) Address and phone number

(4) Taxpayer Identification Number (if any)

(5) Full name of every person authorized to sign on behalf of the legal entity

(6) Information of representative:

• Full name
• Date of birth
• Personal identification number
• Address as appears on the customer’s personal identification card or house registration. (In case of a foreigner, the country of citizenship and current address in Thailand shall be provided—except for foreigners with no address in Thailand, whose current address shall be used instead)
• Signature of person who was ultimately given power of attorney.

For more details, please refer to Ministerial Regulation B.E. 2563 (2020) Art. 17 and Prime Minister Office Notification, Art. 4.

Apart from customer identification and verification, companies must also conduct:

• Ongoing monitoring
• Sanctions screening 
• Adverse media checks
• Record-keeping.

Record-keeping

According to the AML Act, affected financial institutions and professions must retain information in the following way:

1. Information relating to customer identification should be retained for a period of five years from the date that the account was closed or of the termination of relationship with the customer. 
2. Information relating to financial transactions should be retained for a period of five years from the date the transaction or the recording of the facts occurred. 
3. Information relating to the customer acceptance policy and risk management related to money laundering should be kept for ten years from the date the account was closed or the relationship was terminated. (Where there is a compelling necessity, the Secretary-General of the Anti-Money Laundering Board shall have the power to instruct the reporting entity in writing to continue keeping the records for a period not exceeding five years after the lapse of ten years.)  

Rules and procedures for record-keeping shall be prescribed by the Anti-Money Laundering Board.

What are the penalties?

The penalties depend on the offenses committed and other circumstances, and may include fines or imprisonment of up to 10 years, as well as a combination of both.

FAQ

• What is considered money laundering in Thailand?

  According to the country’s main Anti-Money Laundering Act, “any person who:

  • (1) transfers, accepts a transfer of or converts the asset connected with the commission of an offense for the purpose of covering or concealing the origin of that asset or, whether before or after the commission thereof, for the purpose of assisting other persons to evade criminal liability or to be liable to lesser penalty in respect of a predicate offense; or

  • (2) acts in any manner whatsoever for the purpose of concealing or disguising the true nature, acquisition, source, location, distribution or transfer of the asset connected with the commission of an offense or the acquisition of rights therein, shall be said to commit an offense of money laundering.”

• What are the AML laws and regulations in Thailand?

  • The Anti-Money Laundering Act B.E. 2542 (1999)

  • The Counter-Terrorism Financing Act B.E. 2559 (2016)

  • The Financial Institutions Business Act B.E. 2551 (2008)

  • The Emergency Decree on Digital Asset Businesses B.E. 2561 (2018)

• Is Thailand a high-risk country for money laundering?

  Despite some deficiencies, FATF doesn’t consider Thailand a high-risk country for money laundering.

• What is the penalty for money laundering in Thailand?

  The penalty for money laundering in Thailand depends on the exact offenses and may include a fine, imprisonment of up to 10 years, or a combination of both.