In more detail

In 2022 and 2023, the AMLO issued guidelines on customer due diligence for banks, securities businesses, money changers, cooperatives, and asset management companies. The new Guidelines, issued in April 2024, target certain businesses classified as "reporting entities" under sections 3 and 16 of the Anti-Money Laundering Act, B.E. 2542 ("AML Act"). These Guidelines provide recommended customer due diligence practices for:

• Digital asset businesses, including digital asset exchanges; digital asset brokers; digital asset dealers; digital asset advisory services; digital asset fund managers; digital asset custodial wallet providers; and digital token portal service providers (commonly referred to as ICO portals).
• Payment service providers under the payment systems law.
• Money transfer agent businesses under the exchange control law.
• Insurance businesses, including life and non-life insurance companies.
• Designated professions under the AML Act, including the professions regarding:
  • Advising or acting as an advisor in transactions regarding investment or the movement of funds under the securities and exchange law.
  • Trading of precious stones, diamonds, gems, gold, or ornaments using these materials.
  • Trading of cars or hire-purchase of cars.
  • Real estate brokerages and agencies.
  • Trading of pre-owned goods.
  • Personal loan businesses under supervision.

The key elements of the Guidelines provide explanations and practical guidance on regulatory requirements outlined in the Ministerial Regulation on CDD and its sub-regulations. This includes the AMLO's expectations for each type of business operator. The Guidelines cover detailed requirements, including AML policy, risk assessment, customer and ultimate beneficial owner (UBO) identification and verification, transaction monitoring, enhanced customer due diligence, reliance on third parties, and transaction reporting.

Another crucial section of the Guidelines is the Annex, which offers methodologies and examples of product risk assessment tailored for each type of business operator. This is to ensure that every business can effectively apply specific risk factors and assessment methodologies to identify the risks associated with each product, as the resulting product risk assessment will be used to indicate the standard of the customer identification and verification process.

The Guidelines themselves are not considered as law; however, the AMLO's inspectors usually utilize them as a manual during business audits. As a result, we strongly recommend that business operators diligently consider the practices outlined in the Guidelines when designing or reviewing their customer due diligence processes.

For more details, please contact our team at Baker McKenzie.