The situation is getting worse every day with

“Corruption” that infiltrates Thai society to the point that some people see it as normal.

“Consent to pay money to buy convenience, special privileges, reduce annoyance”

but it seems

"Corruption problem" has not been solved.

"Financial Institution" as a central organization

"Risk of being used as a place to launder money" until being reduced to be trusted in the eyes of the world

As a result, it is “more difficult to transact internationally.” This is reflected in the research.

points out the risk of corruption in financial institutions comparing the gap between Thai and international standards.

Corruption in financial institutions is divided into 2 parts: the first part...

such as money laundering, terrorism money support, drug trafficking that is difficult to detect.

Because there are complicated methods of disguising the financial system to create an image as if the money has been legitimately using financial institutions, capital markets, and other assets as a means of laundering money.

As for the level of sophistication, there is the first step... depositing money through the financial institution system as an intermediary.

But the beneficiary is the same person. Level 3 Bring money out to convert into other legitimate assets such as investing in the stock market.

or invest in business

Later, the second part of corruption in financial institutions...“The risk arises from the cooperation of financial institutions and fraudsters directly”, such as lobbying activities, bribery that cause conflicts of interest to support that person.

There are two mechanisms to prevent this matter: 1. Prevention and Suppression of Money Laundering

And support money to terrorists can do so by identifying customers to know the origin of the money.

and report the suspicious transaction to regulators.

Approach 2 Preventing bribery

and other corruption

“Should examine the recruitment of employees” to prevent conflicts of interest.

And there must be a corruption investigation process before the merger.

especially the service unit relating to government officials

There must also be a safe and easily accessible whistleblowing channel for all employees.

But if looking back on “Vulnerabilities of anti-corruption mechanisms in financial institutions” according to Global Witness (2015) collected and analyzed, it was found that

“The existing penalties are not high enough” to incentivize financial institutions to prevent wrongdoing.

and allow customers to conduct suspicious transactions

because he saw that the fine was only an operating expense

In addition, the enforcement of “the rules of conduct is very weak” because, according to the Financial Conduct Authority (FCA), financial institutions' anti-money laundering systems

There are operational weaknesses.

Although improving the development of guidelines

and better preventive measures

But the number of corruption cases did not decrease much.

Again,

Nowadays, more and more anonymous companies are emerging.

“The structure of the client company is complex” Sometimes the law is used to blind the investigator so that they cannot verify the facts.

When an offense occurs

“Senior executives of financial institutions” are not responsible for the misconduct as well.

Next is "Measures to Prevent and Suppress Money Laundering Risks in Thailand" which can be summarized into 3 parts: the first part... "customer risk" which ranges from financial transaction behavior.

political status

Income and Occupation Correspondence

shareholding structure

or being identified in a suspicious transaction report.

Section 2

considers cash amount, transaction value, frequency, speed, ease of transfer or transfer.

cross-border use of service products; and 3 “Country-Spatial Risks” consider location information of establishments.

service area

Potential High-Risk Sources of Income

In the section “Practice Gap between Thailand and International”, the research team summarizes the gap between practice in Thailand and internationally.

Passed Thailand Assessment Report on Preventive Measures

and anti-money laundering

Including countering the financing of terrorism in 2017 by the Asia-Pacific Anti-Money Laundering Group on 4 issues:

First story... Thai financial institutions still accept facilitation fees.

“Even a small amount.” In the second story...the lack of a regulation

"Financial Institution Representative" checks to know the facts of the customer.

Including no measures for trustees such as lawyers and accountants to submit information for verification.

resulting in incomplete information

The third story...Strong customer verification measures only apply to customers in high-risk countries.

And there are no countermeasures or measures to reduce the risk from high customers.

Fourth issue...reporting of suspicious transactions does not cover financial service providers other than banks.

It does not cover money transfer service providers or monetary values.

Plus, there is no requirement for financial institutions.

“must not conduct electronic transactions with customers” who are suspected of money laundering

or financing terrorism even

Emphasizing the loopholes in corruption in financial institutions, Jakkrapong Khongklum, a researcher at Fair Finance Thailand, raises a case study of 4.3 billion baht worth of value-added tax fraud from 25 counterfeit metal ore import-export companies. Farmer's identification card to set up a company

Register a taxpayer to open a horse account.

Before forging trades, issuing false purchase tax slips, applying for tax refunds

but with the revenue officers at that time

"may deliberately not check", therefore issuing cash checks through the bank and transferring money to many accounts until the bank can't verify

However, the loophole that arises is

"The bank permits" the offender to take the application for opening a corporate deposit account to sign outside the branch area.

"There was a forgery of the signature on the document requesting to open an account" and the offender had to transfer the fraudulent tax money from the account not exceeding 100,000 baht per time to several accounts, totaling more than 10 million baht per day.

In such cases, the “bank” is obligated to report suspicious transactions to the

AMLO, but did not proceed with the law

This reflects that

“The central bank” plays a key role in investigating the fraudulent distribution of tax money to other bank accounts.

if detected

or found abnormalities since requesting to open an account

Until the financial transactions of the offenders may be able to reduce the fraudulent tax money, resulting in tax fraud offenders 4.3 billion baht, able to seize back 133 million baht "the damage to the state over 3 billion baht" But there were arrests of civil servants.

And some of the offenders, the “Court of First Instance” considered the punishment in the case, but the case was in the process of appeal.

Therefore, what I would like to propose are 4 matters: 1. Increase the penalties to fine financial institutions.

Because nowadays, when fraud occurs, it is found that part of it is caused by the laxness of bank employees.

2. Require intermediaries such as attorneys, accountants and trustees to report due process information (CDD) and disclose their status to financial institutions.

Article 3. Adjustment of reporting criteria for suspicious transactions of financial institutions to cover more misconduct.

Both extend to electronic transactions and have a process to verify customer transactions below the minimum threshold.

4. Open land information and land appraisal prices across the country.

as well as disseminating the regulations on dubious land for financial institutions to inspect before granting loans.

This is a collaboration between "Fair Finance Thailand and Anti-Corruption Organization (Thailand)" that collects and analyzes vulnerabilities in financial institutions' anti-corruption mechanisms through education as a tool to enhance risk assessment, prevention, control and management of suspicious transactions in a timely manner. Better efficiency.