Money laundering is the process of converting money obtained through illegal or dishonest means into money that appears to be legally acquired or whose illicit origin cannot be proven. This requires the use of various methods to conceal the existence of the financial source that was unlawfully obtained, thereby disguising or transforming such money into legitimate funds. Such actions must therefore be suppressed in accordance with the Anti-Money Laundering Act B.E. 2542 (1999). H&P litigation team has prepared a summary of the most relevant aspects under Thai Law of money laundering practices:
Under Thai Law, the process of money laundering can be divided into three types:
- Placement or Conversion – This involves introducing illegally obtained money into the legal financial system, such as depositing it into a bank or using it to purchase other assets like houses or land.
- Layering or Concealment – This refers to creating multiple layers of financial transactions to obscure the origin of the money or to cut off the true trace, making the transactions complex and difficult to investigate or trace. Examples include multiple deposits and withdrawals between various banks using false names or transferring money through underground banking systems.
- Integration or Creation of Perception of Legitimacy – This involves mixing the laundered money with funds or income generated from legitimate businesses, thereby making the illegally obtained money appear as if it were earned legally.
Elements of the offense of money laundering
Section 5 of the Anti-Money Laundering Act B.E. 2542 (1999) stipulates that the offense of money laundering includes any act of transferring, receiving the transfer, or converting assets related to an offense in order to conceal or disguise the origin of those assets, or to assist another person—whether before, during, or after the commission of the offense—to avoid punishment or receive a reduced punishment for a “predicate offense,” or any act committed to conceal or disguise the true nature, origin, location, disposition, transfer, or acquisition of any rights in assets related to the offense.
Section 3 of the said Act defines “predicate offenses” to include offenses related to narcotics, sexual offenses involving prostitution, trafficking of women and children, ownership of prostitution businesses, offenses involving public fraud, offenses involving embezzlement or fraud against property under commercial banking laws, offenses related to official duties, offenses involving extortion or blackmail using the influence of criminal organizations, offenses related to smuggling or customs violations, terrorism-related offenses, gambling-related offenses, and others.
Assets obtained from such offenses—such as funds, houses, land, investments, or any returns generated from those assets—shall be seized or frozen by the state and become property of the state because of the offense of money laundering.
Protection and Remedies for Damage from Money Laundering
As mentioned above, assets obtained from money laundering will be seized and frozen to become property of the state. However, in money laundering, there must be victims of the predicate offenses that lead to money laundering, such as victims of fraud, or the assets obtained from money laundering may not belong to the offender but might be assets that the victim had mortgaged, for example. This could result in victims or those affected not receiving protection or remedies for damages caused by this offense.
Therefore, to protect and remedy those affected by money laundering, provisions have been established regarding the protection of the rights of victims of predicate offenses under the final paragraph of Section 49 of the Anti-Money Laundering Act B.E. 2542. Victims of these offenses can file a petition to request protection of their rights from the seizure or freezing of assets as a civil claim for damages due to the money laundering offense. When the Anti-Money Laundering Office issues an announcement to protect victims in each case, the victim must submit a petition along with evidence to officials for consideration of their status as a victim and the extent of their damage, so that appropriate protection and remedies can be provided.
Based on our Bangkok litigation team experience, under Thai Law in criminal cases, victims cannot join as plaintiffs with the public prosecutor in money laundering cases because it is an offense in which only the state is considered the victim. However, victims may file a lawsuit against the offender for the predicate offense in certain cases, such as fraud, child abduction, extortion, etc.
If you need to request a legal consultation of an alleged money laundering case, please contact our litigation team at [email protected]
