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AML Cases in Thailand

Rights, Process & Defenses

JIRAWAT & ASSOCIATES LAW OFFICE provides advisory and litigation services for matters concerning Thailand’s Anti-Money Laundering (AML) framework. Understanding the complex processes and significant challenges that individuals and corporations face when under investigation by authorities such as the Anti-Money Laundering Office (AMLO) or the Department of Special Investigation (DSI) is critical. This guide offers legally grounded information to help you understand your rights and effectively prepare a defense.

1. AML Cases in Thailand: Rights, Process & Defenses

Anti-Money Laundering cases in Thailand are governed by the Anti-Money Laundering Act B.E. 2542 (1999) (the “AMLA”). This is the primary legislation establishing both civil and criminal measures to disrupt the financial pipelines of criminal enterprises.

Money Laundering under Section 5 of the AMLA is defined as any act to conceal or disguise the origin of “assets connected with the commission of an offense” or to assist an offender of a “predicate offense” to evade legal liability.

  • Predicate Offense: This is the underlying crime that generates illicit proceeds. Section 3 of the AMLA specifies over 28 categories of predicate offenses , including narcotics, public fraud, corruption, illegal gambling, and offenses under the Securities and Exchange Act.

Nature of Predicate Offences under the Anti-Money Laundering Act B.E. 2542 (1999)

Section 3 of the said Act defines the term “predicate offence” as follows:

    1. An offence relating to narcotics under the law on the prevention and suppression of narcotics, or under the law on measures for the suppression of offenders in narcotics-related offences.
    2. An offence relating to human trafficking under the law on the prevention and suppression of human trafficking, or offences under the Penal Code concerning sexual offences, specifically those involving procuring, luring, taking away, or receiving a man or woman for the purpose of sexual gratification of another person; or offences of taking away a child or minor for profit, for indecency, or with fraudulent intent; buying, selling, or receiving a child or minor so taken away; or offences under the law on the prevention and suppression of prostitution, specifically those relating to procuring, luring, or inducing a person to engage in prostitution, or those relating to the ownership, supervision, or management of a prostitution business or establishment, or the control of prostitutes therein.
  • An offence of public fraud under the Penal Code, or an offence under the law on the fraudulent public borrowing of money.
    1. An offence of embezzlement, fraud, or dishonest acts against property, or any fraudulent act under the law on financial institution businesses, or the law on securities and exchange, committed by a director, manager, or any person responsible for or having an interest in the operation of such financial institution.
    2. An offence against official duties, or an offence against the administration of justice under the Penal Code; an offence under the law on offences of officials in state organizations or agencies; or any offence concerning official malfeasance or corruption under other laws.
    3. An offence of extortion or blackmail committed by claiming the influence of a secret society or a criminal association under the Penal Code.
    4. An offence of smuggling under the law on customs.
    5. An offence of terrorism under the Penal Code.
    6. An offence relating to gambling under the law on gambling, limited to offences involving organizing or operating gambling without authorization, with the total amount involved in the commission of the offence being not less than five million baht, or organizing gambling through electronic means (online gambling).
    7. An offence of membership in a secret society under the Penal Code, or participation in an organized criminal group as defined by law.
    8. An offence of receiving stolen property under the Penal Code, limited to aiding in the distribution, purchase, pawning, or receiving in any manner of property derived from a crime, in the course of trade.
    9. An offence relating to the counterfeiting or alteration of currency, stamps, duty stamps, or bills under the Penal Code, committed in the course of trade.
    10. An offence relating to trade under the Penal Code, limited to counterfeiting or infringement of intellectual property rights in goods, or offences under the law on the protection of intellectual property rights, committed in the course of trade.
    11. An offence relating to the counterfeiting of title documents, electronic cards, or passports under the Penal Code, committed in the course of business or for commercial purposes.
    12. An offence relating to natural resources or the environment, by unlawfully using, possessing, or exploiting natural resources, or through illegal means of deriving benefits therefrom, committed in the course of trade.
  • An offence against life or body causing grievous bodily harm under the Penal Code, committed for the purpose of obtaining property or benefits.
  • An offence of unlawful detention or confinement under the Penal Code, committed for the purpose of demanding or receiving benefits, or negotiating to obtain any benefit.
  • An offence of theft, extortion, blackmail, robbery, gang-robbery, fraud, or embezzlement under the Penal Code, committed in the course of business.
  1. An offence of piracy under the law on the prevention and suppression of acts of piracy.
  2. An offence of unfair securities trading under the law on securities and exchange, or an offence of unfair trading under the law on futures contracts, or an offence of unfair conduct affecting the price of agricultural futures or involving the use of inside information under the law on agricultural futures trading.
  3. An offence under the law on firearms, ammunition, explosives, fireworks, and imitation firearms, limited to the trading of firearms, ammunition, or explosives; and an offence under the law on the control of armaments, limited to the trading of armaments for use in terrorism, combat, or warfare.
  • Asset Connected with the Commission of an Offense: This is a broad term covering money or property directly obtained from a predicate offense, assets derived from the sale or transfer of such property, and any “fruits” (profits or benefits) generated, regardless of how many times they have been converted or who currently holds them.

A clear grasp of these definitions is the first step in building a defense strategy, as actions by AMLO and DSI will focus on establishing a link between your assets and one of these predicate offenses.

2. AMLO Asset Seizure: Immediate Steps for Respondents

Receiving a notice of an asset seizure or freeze from AMLO is an urgent situation requiring a careful and immediate response. Such orders are issued by AMLO’s Transactions Committee or its Secretary-General, who have the authority to temporarily freeze assets for up to 90 days if there is probable cause to believe the assets are connected to an offense .

Immediate steps to take:

  1. Remain Calm and Comply: Do not attempt to move, transfer, or alter the state of the frozen assets. Doing so could constitute a separate criminal offense.
  2. Engage Specialized Legal Counsel Immediately: The process for challenging a freeze order is subject to strict statutory timelines. Delay can result in a forfeiture of your rights.
  3. Analyze the Seizure Notice: Carefully review the order to understand which authority issued it, the specific assets affected, and the initial grounds cited for the action.
  4. Preserve All Documentation: Immediately implement a “legal hold” on all financial records, contracts, communications, and other documents related to the frozen assets.

Many businesses can become unwittingly involved in money laundering schemes through seemingly normal commercial activities that criminals exploit. Common vulnerabilities include:

  • Third-Party Payments: Accepting payments from or making payments to entities not party to the underlying contract can be a major red flag for concealing the true source of funds.
  • Use of Nominees: Using Thai nationals as nominee shareholders or directors to circumvent the Foreign Business Act can itself be a predicate offense, triggering AML scrutiny.
  • Overly Complex Corporate Structures: Utilizing multiple layers of shell companies without a clear commercial rationale may raise suspicions of an intent to obscure the ultimate beneficial owner (UBO).
  • High-Value Cash Transactions: Businesses in cash-intensive sectors are at high risk and are subject to mandatory transaction reporting requirements under the AMLA.

3. AML Risks & Responses for Businesses

4. Proving Source of Funds in AML Matters

The core of any AML defense is to demonstrate, with clear and convincing evidence, that the frozen assets were acquired through legitimate means. Essential documents to collect and organize include:

  • Proof of Income:
    • For Individuals: Employment contracts, salary slips, personal income tax returns (PND 90/91), and social security contribution records.
    • For Corporations: Audited financial statements, corporate income tax returns (PND 50), VAT returns (PP 30), client invoices, purchase orders, and commercial contracts.
  • Investment Records: Brokerage statements, share certificates, and records of dividend payments.
  • Transactional Evidence:
    • Sale and purchase agreements for real estate or other high-value assets.
    • Loan agreements from reputable financial institutions.
    • SWIFT confirmations for international wire transfers.
    • Bank statements showing a clear and consistent financial history.

How to Prepare: Evidence should be organized chronologically to build a clear “narrative” of the funds, from their legitimate origin to the acquisition of the asset in question. A well-reasoned summary explaining this journey, supported by authenticated documents, is far more effective than an unorganized submission of records.

5. Civil vs. Criminal Tracks in AML

Thailand’s AML regime features a dual-track enforcement system, where civil and criminal proceedings can run in parallel. Understanding the differences is crucial, as they present distinct and simultaneous risks

Aspect

Civil Forfeiture

Criminal Prosecution

Primary Target

The property itself


The individual offender


Objective


To petition the court to order that the property be forfeited to the State


To punish the offender by imprisonment and/or fine


Responsible Authority


The Anti-Money Laundering Office (AMLO) submits the matter to the public prosecutor to file a petition with the Civil Court


The Department of Special Investigation (DSI) or the police submit the case file to the public prosecutor to indict before the Criminal Court


Burden of Proof


The public prosecutor must prove, by a preponderance of evidence, that the property is connected to an unlawful act


The public prosecutor must prove beyond a reasonable doubt that the defendant committed the offence


Outcome

The court orders the forfeiture of the property


The court convicts the defendant and imposes imprisonment of 1–10 years, or a fine of THB 20,000–200,000, or both


Requirement of Conviction

Not required — the property may be forfeited even if the owner has not been prosecuted or has been acquitted in the criminal case


Required — there must be a final judgment convicting the defendant


This distinction highlights a critical risk: you can win your criminal case (be found not guilty) but still lose your assets in the parallel civil proceedings, where the burden of proof is significantly lower.

6. Investigation Process by Special Agencies (DSI & AMLO)

Two primary agencies lead AML investigations in Thailand:

  • Anti-Money Laundering Office (AMLO): Functions as Thailand’s Financial Intelligence Unit (FIU), analyzing suspicious transaction reports from financial institutions. Its primary enforcement power is civil, focusing on asset freezes and initiating civil forfeiture cases.
  • Department of Special Investigation (DSI): An agency under the Ministry of Justice that investigates complex “special cases,” including the criminal offense of money laundering. It gathers evidence to prosecute individuals.

General Case Workflow

  1. Trigger: A financial institution files a Suspicious Transaction Report (STR) with AMLO, or a criminal complaint regarding a predicate offense is filed with DSI/Police.
  2. Analysis & Initial Action: AMLO analyzes the financial data. If suspicion is warranted, the Transactions Committee issues a temporary asset freeze order (up to 90 days).
  3. Initial Challenge: The respondent has the right to challenge the order by submitting evidence to AMLO.
  4. Parallel Investigations:
    • Civil Track: AMLO continues to investigate the asset’s connection to the offense. If the evidence is strong, it refers the case to the OAG to file a civil forfeiture petition in court.
    • Criminal Track: DSI/Police investigate the individuals involved for the crime of money laundering. If the evidence is sufficient, the case is referred to the OAG for criminal prosecution.
  5. Court Proceedings: The civil and criminal cases proceed in their respective courts and may have different outcomes.

7. Defense Strategy for Complex Financial Cases

An effective defense in a complex AML case must be proactive and meticulous:

  • Early Case Assessment: Conduct a swift internal investigation to understand the facts, identify vulnerabilities, and map out the financial trail before responding to authorities.
  • Evidence Preservation and Analysis: Formally preserve all relevant documents. The defense team must analyze the same financial data AMLO is reviewing to anticipate and counter their arguments.
  • Building the Financial Narrative: Construct a detailed, evidence-backed timeline that tells the legitimate story of the assets.
  • Expert Engagement: In complex cases, engaging forensic accountants is crucial. Their expert reports can independently verify the licit origin of funds and can be submitted as powerful evidence.

8. AML Compliance for Private Entities

The most effective defense is prevention. Businesses should implement a robust AML Compliance Program to mitigate risks proactively. Key components include:

  • Risk Assessment: Identify and understand the specific money laundering risks your business faces.
  • Written Policies and Procedures: Establish a formal, board-approved AML policy.
  • Know Your Customer (KYC) & Customer Due Diligence (CDD): Implement procedures to verify the identity of customers and their ultimate beneficial owners.
  • Enhanced Due Diligence (ECDD): Apply heightened scrutiny to high-risk clients, such as Politically Exposed Persons (PEPs).
  • Transaction Monitoring and Reporting: Have systems in place to detect unusual activity and a clear process for filing STRs with AMLO when required.
  • Record-Keeping: Maintain all KYC/CDD and transaction records for at least 5-10 years as required by law.

9. Rights to Challenge AML Seizures

An individual or entity whose assets have been frozen has a legal right to challenge the order.

  • Avenues for Challenge:
    1. Administrative Challenge to AMLO: The first and most critical step is to submit a petition with supporting evidence to AMLO’s Transactions Committee under Section 48 of the AMLA, arguing that the assets are legitimate and requesting the order be revoked.
    2. Contesting in Civil Court: If AMLO denies the petition and the OAG proceeds with a forfeiture case, the defense must be presented in the Civil Court .

Do’s and Don’ts Checklist

  • DO:
    • Engage legal counsel immediately.
    • Preserve all financial records.
    • Comply strictly with the terms of the freeze order.
  • DON’T:
    • Attempt to move or hide assets.
    • Destroy or alter potential evidence.
    • Speak with investigators without your lawyer present.
    • Ignore official notices or deadlines.

10. Digital Asset Tracing in AML

Cryptocurrencies and other digital assets have introduced new complexities to AML enforcement.

  • Legal Status: In Thailand, cryptocurrency is regulated as a “digital asset” under the Digital Asset Business Decree. Trading is only permitted through locally licensed exchanges supervised by the Securities and Exchange Commission (SEC) .
  • Obligations of Exchanges: Licensed exchanges are reporting entities under the AMLA. They must conduct KYC/CDD on customers and report suspicious transactions to AMLO, just like traditional banks .
  • Blockchain Tracing: While often perceived as anonymous, most cryptocurrency transactions are recorded on a permanent, public ledger. Authorities use sophisticated blockchain analysis tools to trace the flow of illicit funds through wallets and exchanges. This same technology can also be used defensively to prove a legitimate transaction history.

11. Penalties & Sentencing Overview

For a criminal conviction of money laundering, the AMLA specifies clear penalties.

  • Penalties for Individuals: Under Section 60 of the AMLA, an individual found guilty of money laundering faces imprisonment from one (1) to ten (10) years or a fine from THB 20,000 to THB 200,000, or both.
  • Related Offenses:
    • Attempt (Section 8): Punished as if the crime was completed .
    • Conspiracy (Section 9): Punished with half of the prescribed penalty .

Beyond the statutory penalties, the most severe consequences are often the permanent loss of assets through civil forfeiture, devastating reputational damage, and the financial strain of a multi-year, dual-track legal battle.

FAQ (Frequently Asked Questions)

Do not forward or use the funds. Contact your bank immediately to report the transaction. If you suspect it is related to illicit activity, consult a lawyer to avoid risks associated with being a "mule account."

AMLO can issue an initial temporary freeze order for a period not exceeding 90 days. During this time, they will gather evidence to determine whether to refer the case to the OAG for a permanent forfeiture petition to the court.

Not necessarily. The civil forfeiture proceeding is separate and has a lower standard of proof. The court in the civil case could still find that the assets are connected to an offense and order them forfeited to the state, even after a criminal acquittal.

No, but designated businesses (e.g., financial institutions, real estate agents, precious metals dealers) must report cash or property transactions exceeding certain thresholds, as well as any transaction deemed suspicious, regardless of the amount.

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