Thailand Law Journal 2011 Fall Issue 2 Volume 14

III. Analysis

1. Conformity with the Conventional Obligations regarding the predicate offences definition.

The threshold issue is whether the list of nine categories of predicate offences under the Thai Anti-Money Laundering Act meets the convention's obligation, in summary, the existing predicate offences cover only part of the offences regarding corruption as required by the Palermo Convention.

Article 8 of the Palermo Convention requires the criminalization of bribery and corruption related to domestic and foreign officials by providing:|

1. Each States Party shall adopt such legislative and other measures as may be necessary to establish as criminal offences, when committed intentionally;

(a) The promise, offering or giving to a public official, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties;

(b) The solicitation or acceptance by a public official, directly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties.

2. Each State party shall consider adopting such legislative and other measures as may be necessary to establish as criminal offences conduct referred to in paragraph 1 of this article involving a foreign public official; or international civil servant. Likewise, each State Party shall consider establishing as criminal offences other forms of corruption.
….¹¹⁶

The categories of predicate offences in Section 3 (5) of Thai Anti-Money| Laundering Act include the offences regarding malfeasance in office or judicial office. Section 144 and Section 201 of the Thai Penal Code under the categories of predicate offences in Section 3(5) pertain to the corruption conducted by the official and judicial official:

whoever, being an official, member of State Legislative Assembly, member of the Changvad Assembly or member of Municipal Assembly, wrongfully demands, accepts or agrees to accept for himself or the other person a property or any other benefit for exercising or not exercising any of his functions, whether such exercise or non-exercise of his functions is wrongful or not...¹¹⁷

whoever, being a judicial in a judicial post, a Public Prosecutor, an c facial conducting cases or an inquiry official, wrongfully demands, accept or agrees to accept a property or any other benefit for himself or the other person in order to exercise or not to exercise any of his functions, whether such exercise or non-exercise is wrongful to his duty or not...¹¹⁸

The above two sections clearly criminalize corruption conducted only by domestic officials. The rest of the statutes in the categories of Predicate Offences in Section 3 (5) do not criminalize bribery of domestic and foreign officials and corruption conducted by foreign officials. Regarding the rest of the offences required under the Palermo Convention, the nine categories of predicate offences under the Act do not include all serious crimes or offences regarding participation in an organized crime and offences regarding obstruction of justice.

Thus, the nine categories of predicate offences cover some corruption offenses, but it has not fully conformed to the convention's obligation.

Table

The next issue is whether Thailand should broaden its predicate offences in order to conform to the obligations of the Convention. For following reasons, Thailand should broaden its predicate offences.

First, the existing predicate offences do not cover the offences regarding transnational organized crime. For example, the predicate offences do not include the arm smuggling offence as categorized as the transnational organized crime. Therefore, the law enforcement officer cannot prosecute the money launder of such crime. This results in a legal loophole because Thailand is unable to efficiently and effectively combat money laundering conducted by transnational organized crime rings currently active in the country.

2. Recommendation for Conformity with the Convention Obligations regarding the definition of predicate offences

As a state party to the Palermo Convention, Thailand must conform its domestic laws to the Convention's requirements. Therefore, Thailand must broaden its predicate offences to satisfy the conventional obligation.

Thailand should set out the list of offences associated with organized criminal group as the predicate offences. The amendment of section 3 of the Anti-Money Laundering Act could include the text: "Offences relating to the transnational organized
crimes under the Act on Prevention and Suppression of the Transnational Organized Crime".¹¹⁹

Including all serious crime, offences regarding the obstruction of justice, offences regarding the participation in an organized crime, and offences regarding corruption as predicate offences will make the scope of the Thai Anti Money Laundering Act excessively broad. The definition of all serious crime under Article 2 of the Palermo
Convention is "conduct constituting an offence punishable by a maximum deprivation of liberty of at least four years or a more serious penalty".¹²⁰ Thailand has hundreds of statues criminalizing conduct punishable by at least four years of imprisonment In addition, most of them involve an individual without the profit motive by acting within the country.

By following up the recommendation, it can be consistent with the convention's text: "[i]n the case of State Parties whose legislation sets out a list of specific predicate offences, they shall, at a minimum, include in such list a comprehensive specific predicate offences associated with organized criminal groups".¹²¹ This is because the nature of defining the predicate offences under Thai Anti-Money Laundering Act is to set out the list of the predicate offences.¹²²

With regard to the benefit from the recommendation, Thailand will likely gain the following:

1. Conventional Requirement Prospective. It can enable Thailand to conform to the Palermo Convention regarding the predicate offences definition.

2. Legal Enforcement Prospective. It can close the legal loophole and provide law enforcement officials with instruments to combat money laundering conducted by transnational organized criminals.

3. Economic Prospective. It is estimated that transnational organized crimes active in Thailand net proceeds in an amount of 100,000 millions Baht per year (approximately two billions U.S. dollars) from illegal activities.¹²³ If the law enables enforcement officials to suppress and prevent money laundering by transnational organized crimes efficiently, their significant amounts of dirty money will be pushed into Thailand's economic system and will help the economic system of the country to become healthier.¹²⁴

4. National Image Prospective. Amending the law will likely provide Thailand with a better image in the international community. Including offences regarding transnational organized crime as predicate offences will illustrate Thailand's sincerity in combating money laundering by transnational organized crime groups.¹²⁵
           
However, Thailand should make the following preparation in addition to implementing the above legal measure.

1. Resources. Some of the required elements for efficient law enforcement are resources and manpower for the relevant enforcement bodies. The broader scope of the law affects the authorities' resources and manpower, particularly the AMLO. Therefore, Thailand should consider providing them with additional resources and manpower.

2. Private Sector Awareness. One of the factors necessary to combat money laundering efficiently is collaboration with the private sector, especially financial institutions. To broaden the scope of the legal application will result in the more burdens to them. Thailand should promote governmental support of financial institution to gain their support.

IV. Conclusion

Clearly, transnational organized crime is a problem of the international community. The United Nations has therefore created the Palermo Convention to deal with transnational organized crime. The Palermo Convention requires its state parties to conform to, among other things, the obligation regarding defining predicate offences in money laundering crimes.

As a state party to the Palermo Convention, Thailand is required to conform to the above obligation. However, Thailand has not yet fully conformed to this obligation because the predicate offences under the Thai Anti-Money Laundering Act include only some part of corruption offences required by the Palermo Convention.

To comply with the obligation, Thailand should amend its Anti-Money
Laundering Act to include the list of offences associated with organized criminal groups by including the text: "Offences relating to the transnational organized crimes under the Act on Prevention and Suppression of the Transnational Organized Crime."

With this amendment, the Anti-Money Laundering Act will not become excessively broad. In addition, it will enable Thailand to directly attack money laundering conducted by transnational organized criminals. This is because the draft PSTOC Act will criminalize the offences that are transnational in nature and involve an organized criminal group. Finally, it will be consistent with the convention's text:

"[i]n the case of State Parties whose legislation sets out a list of specific predicate offences, they shall, at a minimum, include in such list a comprehensive specific predicate offences associated with organized criminal groups." because the nature of defining the predicate offences under the Anti-Money Laundering Act is to set out the list of the predicate offences.