THAILAND

Thailand stands to lose not only international trade opportunities, but also foreign direct investment from other Asean countries, particularly Singapore and Malaysia, after being named as a "high risk" country by the Financial Action Task Force (FATF), said Aat Pisanwanich, director of the Centre for International Trade Studies.

The "high risk" categorisation puts Thailand in a second-tier group; the first tier of "non-cooperative" countries includes North Korea and Burma.

Aat said the government could not deny that inclusion in the "high-risk" group would cause problems for Thailand, as many foreign investors are members of the Paris-based FATF, an international body set up to combat money laundering and financing of terrorism.

Aat said the classification demonstrated Thailand's failure to adhere to international standards on anti-money laundering rules and combating terrorist financing. The government should urgently pass laws rectifying the situation and clarify that it does not support such activities, he said.

"More than 40 per cent of Thailand's trade relies on 36 member states of the FATF. The government must clarify that it will act against money laundering to show transparency and restore investors' confidence," Aat said.

Meanwhile, former Bank of Thailand governor Tarisa Watanagase urged the government to quickly issue relevant laws on money laundering, to avoid associated risks to banks and business enterprises.

"Without compliance, operating costs will rise. This is a point of concern for commercial banks, particularly foreign ones. [Foreign bank] regulators do not support doing business in [high-risk] countries. They are required to impose higher fees to compensate for the risks. If this issue is not fixed quickly, more problems could follow," Tarisa said.