RESOURCE MATERIAL SERIES No. 65

LEGAL APPROACH TO COMBATING ILLICIT DRUG TRAFFICKING AND
MONEY LAUNDERING IN THAILAND

Krirkkiat Budhasathit *I. THE CURRENT SITUATION OF DRUG PROBLEMS
A. Drug Related Crime
During the last decade (1992-2002), a dramatic number of drug problems have been found in
Thailand. Although the Thai Government has applied extreme measures to suppress drug trafficking, thenumber of drug cases and offenders throughout the country are still high. The drug problem of Thailand
nowadays is that the country is frequently used as a transit place to the international market while theepidemic within the country is also radical. The number of domestically produced drugs like opium,
marijuana and methamphetamine are far less than those smuggled from neighbouring countries. The
drugs that are found in most tourist cities around the country are marijuana, heroin, ecstasy, ketamine,
cocaine and methamphetamine. Traditional drugs like opium, marijuana, and kratom plants are prevalent
in many areas of the country while volatile substances are epidemic in slums and dense communities.
Number of Drug Cases and Offenders in Thailand during 1998-2003
Year

Number of Cases

Number of Offenders

1998

193,502212,519

1999

206,170

223,294

2000

222,498

238,153

2001

205,426

218,218

2002

179,866

189,998

2003 (Jan-Mar)

18,11919,252

Methamphetamine is the most serious drug problem in Thailand and its become an epidemic in every
region. The supply of methamphetamine, which comes from both inside and outside Thailand, has
expanded intensively. Big syndicates mostly control the drug producers and traffickers because only thelarge and reliable wholesale traffickers can make direct contact with the manufacturers. These syndicatedgroups deliver methamphetamine and other drugs to medium and small-scale traffickers before
distributing to retailers or users. In 2002, 95.9 million methamphetamine tablets were seized, which is thehighest figure ever recorded.
The methamphetamine is mainly produced around the Golden Triangle area and smuggled through theThai northern border as the main route. Instead of carrying the drugs through the border channels, thedrug traffickers use various methods to transport the drugs i.e. drug caravans escorted by armed forces,
sneak into the jungles nearby the northern border and store the drugs at villages along the Thai border as a
hub before distributing it to other areas. Moreover, there is evidence that during the last two years a hugeamount of drug smuggling is taking place using sea routes. The drugs originate from the producing areain the north and are transported to a bay in the central part of Myanmar before being carried in fishing* Secretary of the Criminal Court, The Criminal Court, Thailand.

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boats to the southern part of Thailand. Another main route is along the Mekong River, which is near tothe producing area, to the north and north-eastern part of Thailand. For smuggling inside the country, theland route is popularly used to smuggle methamphetamine tablets from one place to another. The
producers and smugglers are mostly hill tribes including Chinese haw and Thais and some of them arefound to have a connection with overseas foreigners.
Marijuana growing is found throughout the country but its concentration is mostly in the north-easternregion. Local production may be enough for domestic demand but the total production is not sufficient to
supply international markets. Meanwhile, smuggled marijuana from neighbouring countries to Thailand
is not only delivered to international markets but distributed in the country as well. The eastern seashore
is used as a main route to transport marijuana via Thailand to other countries. Large quantities ofmarijuana products are gathered in the sea-connected provinces before being loaded into fishing trawlers,
to be carried through the Thai gulf and reloaded onto cargo ships waiting in the open sea. For marijuanaabuse, the situation during this period is stable since this drug is quite cheap and available in all regions.
In addition, it is not a hard-core drug like heroin or methamphetamine.
The volatile substances epidemic tended to be less radical last year. Glue, thinner, and lacquer are
still the three kinds of abused volatile substances in Thailand. People who abused these substances were
the same groups; i.e., out of school youths, street kids, and some adults living in slums throughout thecountry. However, due to the heavy measures being taken against hard-core drugs, there is a possibility
that the situation of volatile substance abuse will become more severe.
The epidemic situation of club drugs like ecstasy, ketamine, and cocaine during this period seems to
be more severe than the previous period. One reason is the price of these worldwide popular drugs tends
to decrease each year. For example, the retail price of ecstasy in the early period ranged between 8001500 Baht per tablet but it recently costs between 350-600 Baht. The Thai authorities seized eight
kilograms of cocaine in 2001, which was two times higher than in 2000. Ecstasy and cocaine are mainly
smuggled by foreign drug traffickers from Europe and Latin America before distributing them to theirdrug networks in Thailand and neighbouring countries. Meanwhile, ketamine is imported from countries
in South Asia and Eastern Europe. However, most ecstasy traffickers and dealers in Thailand have been
recently known to distribute ketamine and cocaine at the same time. Ecstasy and ketamine are usuallyused together by drug abusers in entertainment places since both drugs have similar effects. Ecstasy is
usually imported into the country from two sources: from overseas countries via international airports or
seaports and from a neighbouring country in the south of Thailand. As ecstasy is increasingly spreadingin Thailand and has a high price, some drug traffickers have tried to make ecstasy tablets in Thailand. For
example, the police arrested a Canadian and his Thai wife in November 2001. They were charged withusing his kitchen as a drug lab and they had a simple stamping machine to produce small quantities of
ecstasy tablets. The raw materials, MDMA and precursors chemicals were smuggled from a European
country. The police found 3,300 ecstasy tablets and 20 bottles of ketamine in their house during the raid.
Major abusers of these club drugs were found to be youths, students, and wealthy people in big or tourist
cities i.e. Bangkok, Phuket and Pattaya.
Smuggling of precursors, chemicals and equipment used in drug manufacturing has become more
serious along the Thai-Myanmar border. The manufacturers are provided chemicals and equipment fromThai conspirators. The crucial exit is at a permanent checkpoint in Mae Sai and Tachileik District,
Chiang Rai Province. The Thai government set up the Precursor Chemical Control Committee in 1993 toformulate a national strategy on precursors control, to supervise the precursor control and implementationand to develop cohesive efforts among concerned chemical control agencies i.e. the Food and Drug
Administration, Industrial Works Department, Customs Department, Department of Internal Trade, Police
Narcotics Suppression Bureau, Office of Permanent Secretary of Ministry of Interior, Foreign Trade
Department, Pharmaceutical Organization and the Office of Narcotics Control Board (ONCB). Twentythree chemicals are controlled in accordance with the 1988 UN Convention and more than sevenprecursors and chemicals, which are not listed in the 1988 UN Convention are also put under control.
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Currently, caffeine has becomes one of the crucial substances because it is a major ingredient ofmethamphetamine tablets. Each tablet is generally composed of 60 mgs. of caffeine and 23 mgs. of
methamphetamine and 7 mgs. of other binding substances. As a result, the government has enforced theCommodities Control Act 1952 to control the possession, transformation and transportation of caffeine
throughout the countries as well as the Import and Export Act 1979 to control the import in and export ofcaffeine out of the country. Thai border authorities now severely control the smuggling of chemicals andequipment from Thailand to the producing sites along the border. According to the Commodities Control
Act 1952, the possession, transformation and transportation of caffeine without permission is subject toimprisonment for 10 years.
Drug Seizure throughout the Country During 1998-2003
Weight: Kilograms
Year

Heroin Meth-Amphetamine

Ecstasy

Opium

Dried
Volatile
Marijuana Substances

1998

577

3,012
(33.5 Million tablets)

1(5,920 tablets)

1,772

2,890

599

1999

404

4,518
(50.2 Million tablets)

5(21,794 tablets)

2,046

14,684

4,141

2000

384

7,549
(83.9 Million tablets)

18(72,182 tablets)

1,595

10,323

455

2001

474

8,459
(94.0 Million tablets)

17(67,539 tablets)

2,289

10,921

360

2002

634

8,635
(95.9 Million tablets)

37(149,587 tablets)

4,034

12,122

453

2003(Jan-Mar)

138

1,942
(21.6 Million tablets)

14(57,083 tablets)

9,721

1,111

52

Seized opium includes raw and cooked opium and opium poppy plants
B. Money Laundering Situation
After the Anti-Money Laundering Act became effective, there were evidently changes in domestic
money laundering. Over-the-counter banking transactions are carried out in amounts just under theamount set forth in the law (2 Million Baht) in order to avoid the transaction being reported. Many
offenders opt to carry cash from one place to another or keep it at home. They also convert the money togold, jewellery, real estate, shares, vehicles or other property instead of depositing it in financial
institutions. Some offenders set up high risk businesses such as jewellery shops, oil trading companies,
tour companies, foreign exchange, real estate companies and entertainment places to launder their money.
There are many money laundering transactions along the Thai-Myanmar border in the northern
region. Most of the cases are drug payments. The most popular method is cash carried across the border;
nevertheless, some traffickers open a bank account in their nominees names to receive moneytransmissions. In the southern region, cash is also frequently used for the payment of drugs and evaded
custom products. Meanwhile, gambling is the main cause of money transactions along the ThaiCambodia border.
In brief, offenders generally avoid the anti-money laundering law by transferring money via the142125TH INTERNATIONAL TRAINING COURSEPARTICIPANTS PAPERS
following channels:
1. Banking transmissions using a false I.D. or fraudulent papers to pay the import price or repay a loan
higher than the real value.
2. Underground transmission via foreign exchange, travel businesses or gold and jewellery shops.
3. Hire a person to carry cash and deposit it in foreign bank accounts. There is a loophole in theregulations that does not require cash-carry reports. The most common destination countries are
Hong Kong, Singapore and Australia.
Case Example
The police stopped and searched a pick-up truck driven by Mrs. A. They found three Million Baht
cash hidden in the trunk s side compartment. Mrs. A admitted that Mr. B hired her to deliver the money in
Chiang Mai province in the northern region.
The money and vehicle were seized, the police went to search Mrs. A s house and found a small
amount of methamphetamine. Mrs. A was indicted for possession of drugs. She was bailed on 200,000
Baht cash, but finally she pleaded guilty. The Criminal Court rendered judgment and sentenced her to six
months imprisonment and a fine of 5,000 Baht; nevertheless, the sentence was suspended for two years.
The police reported the matter to the AMLO.
The AMLO officials made a preliminary examination. They found that Mrs. A had committed a drug
offence (drug possession) and were convinced it related to the drug dealing. The matter fell under thepredicate offences under the AML Act. The officials, therefore, reported it to the Secretary General forreview and then forwarded it to the Transaction Committee.
The Committee considered that there was convincing evidence and then ordered a 90 days temporary
seizure of the 3 Million Baht police-seized cash, 200,000 Baht bail money and the truck which Mrs. A
drove. The AMLO took further steps by submitting the documents to the Prosecutor for filing thepetition. The Prosecutor; nevertheless, required additional statements to support the evidence. After the
AMLO officials finished the additional statement, the Prosecutor then filed a petition to the Civil Court
for forfeiture of Mrs. As property. The Prosecutor also filed a petition for the provisional seizure of all
three properties prior to the Civil Court issuing a forfeiture order. The Civil Court granted the provisional
seizure order and the property was retained by the Secretary General of the AMLO. The Civil Court set adate for a hearing and ordered a notice to be posted at the Court and have the matter published for two
consecutive days in a local well known newspaper. Copies of the notice were passed to the AMLO for
posting at the AMLO and the police station where the properties were seized. A copy of the notice wasalso mailed to Mr. C, the truck s owner according to the registration plate.
The Civil Court then commenced the hearing. Mr. C appointed a lawyer to file a petition to claim histrue ownership. He claimed that the truck was hire-purchased from him and not related to the drug
offence. After the hearing, the Civil Court ordered the forfeiture of two amounts of cash totalling 3.2
million Baht and returned the truck to Mr. C.

II. SPECIAL MEASURES AGAINST DRUG TRAFFICKING
A. Controlled Delivery
The Narcotics Act B.E. 2522 (1979) as amended in 2002 provides legal power to use controlled
delivery channels by competent officials. Section 15 in Para I and II provide that: No person shallproduce, import, export, dispose of or possess narcotics of category I, unless the Minister permits asnecessity for the use in government service. The application for the permission shall be in accordancewith the rules, procedure and conditions prescribed in the Ministerial Regulations.
Since this Section was just amended at the end of 2002, there are no Ministerial Regulations issued
yet. As a result, controlled delivery in Thailand is pending.

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B. Communication Interception
Access to communication interception may be granted under the Narcotics Control Act B.E.2519(1976) and the Anti-Money Laundering Act. This measure is a new part of the Narcotics Control Act
1976 as amended by the fourth revision in 2002. Section 14 four allows competent officials to intercept
the communication of a suspect by the permission of the Chief Judge of the Criminal Court. The
procedure begins when there is a reasonable ground that any information communicated via post,telegraph, phone, facsimile, computer, other communication instruments and electronic or otherinformation technology communication is used or may be used for the purpose of the commission of anarcotics offence. The officials then request the approval of the Secretary-General of the ONCB and thensubmit a request to the Chief Judge for communication interception. The Chief Judge will consider theaffect of individual rights and if he believes that there is reasonable ground that a narcotics offence has
been or will be committed and the information may be received by granting the access and there is noother method more suitable and effective, the permission will be granted. The Chief Judge may permit
the interception for a period not over 90 days each time and he may change the permission depending on
the circumstances. The information obtained must be kept and used only for the investigation and as
evidence in the prosecution case.
Since this Section has just been added to the Narcotics Control Act and the ONCB is in the process ofcoordinating with competent officials to comply with the regulations to utilize this method, there are few
requests submitted to the Chief Judge of the Criminal Court.
The Anti-Money Laundering Act also provides the communication interception power. When there isa reasonable ground that an account at a financial institution; equipment or communication device; or any
computer has been used or may be used for the commission of a money laundering offence, thecompetent official designated by the Secretary-General of the AMLO shall submit a petition to the Civil
Court to grant access to the information of such sources. The Civil Court may grant access not longer
than 90 days each time.
The provisions under the Narcotics Control Act and the AML Act are quite similar; however, there
are some differences. The power to grant access under the Narcotics Control Act vests solely with theChief Judge of the Criminal Court, while all judges of the Civil Court may use such power under the
AML Act. In addition, the Narcotics Control Act clearly mentions that information obtained by theaccess may be used in the investigation and as evidence in the trial of narcotic cases. The AML Act does
not have the same provisions.
Communication Interception under the Narcotics Control Act
Year

Amount

Method2003*

9

Wire-tapped

Source: the Criminal Court *counted at the end of July
Communication Interception under the Anti-Money Laundering Act
Year

Amount

Method2001

1

Wire-tapped

2002

7

Wire-tapped

2003*

5

Wire-tapped

Source: the Civil Court *counted at the end of July

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C. Utilization of Informants
To suppress illicit drug trafficking effectively, information is very important. The ONCB and the
AMLO generally accepts the utilization of informants. The ONCB provides rewards to informants whogive information relating to narcotics according to the Prime Ministerial Office Regulation Re: Rewards
in Narcotics Case B.E. 2537 (1994). The Regulation rules that the reward may be paid to an informant
who informs the competent official and it leads to the arrest and seizure of the narcotics. The reward is
calculated according to the weight or number of tablets seized. For example, the informant will receive
10 Baht for each gram of seized heroin or 5,000 Baht per 500 tablets of Methamphetamine (for the
portion over 500 tablets, the reward is 3 Baht each). The reward will be paid from the ONCB budget.
The informant, who gives information about property related to the commission of a narcotics
offence, will receive not over 10 % of the appraisal value of the forfeited property less the expenses forappraisal or auction sale. In this case, the reward will be paid from the Narcotics Control Fund.
The AMLO will reward the informant, who gives information in the predicate offence or money
laundering offence, or information concerning assets related to the commission of an offence. However,there must be a proceeding against any property in such case in order to qualify the informant for areward. The AMLO uses its annual budget to pay the reward.
D. Witness Protection
The Witness Protection in Criminal Case Act B.E. 2546 (2003) will be effective by the end of thisyear. This Act will provide general protection to witnesses and their relatives. The general protection is tosafeguard the witness or provide a cover name, address, picture or any personal identifying information as
the case may be. Moreover, in some particular cases i.e. offences related to drugs, anti-money laundering,anti-corruption, customs or organized crime, the witness may receive special protection by requesting itfrom the Minister of Justice. The special protection includes providing suitable shelter, an allowance,
education or a change of name or any registration records. The responsibility of witness protection willvest with the Witness Protection Office, Ministry of Justice.

III. LEGAL FRAMEWORK TO COMBAT DRUGS
A. Overview of Criminal Litigation in Thailand
The main provisions of criminal procedural law are contained in the Criminal Procedure Code
B.E. 2478 (1935). This Code generally applies to trials of criminal cases, including drugs cases, in all
Courts of Justice. However, asset forfeiture under the Anti-Money Laundering Act B.E. 2542 (1999)
will be tried in the Civil Court and subject to the Civil Procedure Code.
Usually, four types of personnel of the law are involved in criminal proceedings. They are police
officers, prosecutors, lawyers, and judges. The investigation and inquiry in order to find offenders andestablish their guilt is the responsibility of the police officers. In many drug cases, the police officers may
be teamed up with officials of the Office of the Narcotics Control Board (ONCB) or the Anti-Money
Laundering Office (AMLO). When the investigation and inquiry is finished, the file of the inquiry will be
submitted to the prosecutor for consideration and the offender will be indicted if the prosecutor concludes
that there is enough evidence to support a conviction. As regards criminal cases, the court in a district
where an accused resides or is arrested, or where an inquiry official makes an inquiry has jurisdiction
over the cases. Nevertheless, the Criminal Court, which is situated in Bangkok, has discretion either totry or adjudicate criminal cases arising outside its territorial jurisdiction brought before it or to transfer
them to the court having territorial jurisdiction. At the trial, it is the burden of the prosecutor to prove
beyond a reasonable doubt to the court that the defendant is guilty as charged. The court will conduct a
trial by hearing evidence from both sides in open court and in the presence of the defendant. It should
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also be added that the accused or defendant is entitled to full legal representation. In certain cases, it isobligatory on the part of the judge to call upon and appoint a lawyer in his/her defence.
B. Narcotics Control framework
The narcotics control laws of Thailand may be classified into three groups:
1. Laws on Designating Powers and Duties of Competent Authorities
Narcotics Control Act B.E. 2519 (1976)
This Act codified the establishment of the Narcotics Control Board (NCB), the establishment of
the Office of the Narcotics Control Board (ONCB), and the empowerment of the NCB, ONCB, andcompetent officials.
Act on Authorizing Naval Officials for the Suppression of Some Offences Committed at Sea (No. 4)
1991
This Act authorizes naval officers to inspect, search, and force a vessel suspected of having
narcotic drugs to remove cargo or things in the vessel for examination. The Act also empowers
them to seize or force the vessel or conduct any actions in order to bring the vessel to a convenient
place for inspection, inquiry, or prosecution. The naval official may seize the vessel until a final
non-prosecution order is issued or otherwise ordered by the court in case the accused is prosecuted,
and may arrest and hold in custody the accused, not exceeding seven days. After that the accusedhas to be released or sent to the inquiry official together with the file of inquiry.
Act on Measures for Suppression of Offenders in an Offence Relating to Narcotics B.E.2534 (1991)
This Act codifies the provisions of the three significant measures to tackle illicit drugtrafficking. These are 1) forfeiture of assets 2) conspiracy, and 3) expansion of jurisdiction.
These measures are effective tools to eradicate drug trafficking networks because if they do nothave vast assets, they cannot continue large-scale operations.
2. Laws on Controlling Narcotics and Drugs
Psychotropic Substances Act 1975
This Act codified the control of psychotropic substances by classifying psychotropic substances
into four categories (schedule I-IV). The Act directly resulted from the Convention of Psychotropic
Substances 1971 of which Thailand is a Party.
Narcotics Act 1979
This Act codified the control of narcotic drugs by classifying them into five categories
depending on the degree of their harmful effects in order to establish the proper punishment foroffenders committing drug offences in each category.
Emergency Decree on Controlling the Use of Volatile Substances 1990
This Emergency Decree codified the control of volatile substances by establishing offences andpunishment.
Commodities Control Act, 1952 (No.11 as amended in 2000)
This Act codified the control of certain commodities, which are essential chemicals andprecursors likely to be used in producing narcotic drugs in 76 provinces of Thailand, e.g. caffeine.

146125TH INTERNATIONAL TRAINING COURSEPARTICIPANTS PAPERS
3. Law to Rehabilitate Drug Abusers
Narcotic Addict Rehabilitation Act B.E. 2545 (2002)
In the past, Thailand had two drug addict treatment and rehabilitation systems: 1) Voluntary
System for drug addicts to voluntarily apply for treatment in various treatment centres, and 2)
Correctional System for drug addicts who were sentenced to be imprisoned or on probation.
However, they were not effective enough. The relapse rate of the addicts was very high or nearly
100%. Therefore, the Narcotic Addict Rehabilitation Act 2002 was enacted and enforces acompulsory system to improve the effectiveness and efficiency of the drug addict s rehabilitation, orto help them stop using narcotic drugs as much as possible with two major objectives: 1) drug users
or addicts are required to be treated and rehabilitated properly, and 2) if the result of therehabilitation is satisfactory, the drug addicted offenders shall be relieved from the alleged offence
and be released at liberty so that they will not have a criminal record as a drug offender and can bereintegrated into society happily. This Act codifies the establishment of the Narcotic Addict
Rehabilitation committee and their power and duties, localities for identification and rehabilitation,
alleged offences, the procedure for identification of alleged drug offenders, the requirement of theprocedure of rehabilitation and the assessment of rehabilitation results.
C. Anti-Money Laundering Framework
Thailand promulgated the Anti-Money Laundering Act B.E. 2542 (1999) (AML Act) in March 1999
and it has been effective since August 20, 1999. This Act directly resulted from the 1988 United Nations
Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, which Thailand
become a member of through the Instruments of Accession in 2002. This Act criminalizes money
laundering and related conspiracy and establishes the Anti-Money Laundering Office (AMLO) to performfunctions, among many things, as the financial intelligence unit in Thailand and pursue a civil forfeituresystem to confiscate assets involving the predicate offences.
The AML Act consists of seven chapters and 66 sections, which includes eight predicate offences asfollows:
1. Offences under the narcotics laws.
2. Offences of trafficking in or sexual exploitation of children and women.
3. Offences of cheating and fraud on the public.
4. Offences of misappropriation or cheating and fraud under the laws governing commercial banks
and financial institutions.
5. Offences of malfeasance in office or judicial office.
6. Offences of extortion or blackmail committed by criminal organizations.
7. Offences of customs evasion under the customs law.
8. Offences of terrorism (This predicate offence was added to the AML Act on 11 August 2003).
D. Money Laundering Offences
The AML Act has criminalized the money laundering actions of any persons whoever:
1. Transfers, receives a transfer or converts an asset involved in the commission of an offence for the
purpose of concealing or disguising the origin or source of an asset or for the purpose of assisting
another person (s) to avoid or receive a lesser penalty for the predicate offence; or
2. Acts in any manner whatsoever for the purpose of concealing or disguising the true nature of theacquisition, source, sale, transfer or ownership of an asset involved in the commission of an
offence (Section 5).

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The penalties are imprisonment for one to ten years or a fine of 20,000 - 200,000 Baht or both. If the
defendant is a corporation, it will face a fine of up to 200,000 - 2,000,000 Baht (Sec. 60-61). Whoever
undertakes the action of aiding and abetting either before or during the commission of an offence, ormaterially assists the offender to escape or avoid the penalty or gains a benefit from the commission of an
offence shall receive the same punishment as the principal offender (Sec. 7). Any person attempting tocommit the offence of money laundering is subject to the full scale of the penalty (Sec. 8).
The AML Act imported the conspiracy and extraterritorial jurisdiction principals from the Act on
Measures for Suppression of Offenders in an Offence Relating to Narcotics B.E.2534 (1991). In case two
or more persons conspire to commit the money laundering offence, they will each receive a half penalty.
However, if the offence is committed as a result of conspiracy, the conspirators shall receive the full
penalty (Sec. 9). Regarding extraterritorial jurisdiction, even when the money laundering occurs outside
the Kingdom of Thailand, the case may be prosecuted in Thai courts if (i) a Thai national or resident is anoffender, or (ii) an alien commits the offence with the intention of having consequence in the country, or
the Government is the injured party, or (iii) when an alien committed an offence under the other state s
law and he appears on Thai territory and is not yet extradited under the Extradition Act (Sec. 6).
Money Laundering Criminal Cases Filed in the Criminal CourtYear

New Cases Filed

Predicate Offence

2001

4

2002

-

-

2

2003
(End of July)5

Cheating (1), Narcotics (3) and Narcotics
and Customs Evasion (1)3Narcotics (3),Malfeasance in Office (1)Cases Finished

1

E. Financial Intelligence Unit
The AMLO has performed the financial intelligence functions under the AML Act. Morespecifically, the law requires that:- Banking and Financial institutions (including credit financing businesses, securities dealers,insurance companies and other legal entities in the finance business), land registration offices andinvestment consultants are required to report cash transactions of 2,000,000 Baht or more, or 5,000,000
Baht or more in a property transaction to the AMLO.
- A suspicious transaction of any size must also be reported. Transactions of this type are, forinstance, an unusually complicated transaction or with features that are unusual or seem uneconomic on
their face or seem designed to avoid reporting under the AML Act or where there is any hint it is possiblyconnected to a predicate offence.
- Financial institutions are required to have their customers identify themselves and record certain
statements of fact regarding reportable transactions. The records must be retained for five years.
F. Cooperation of the Financial Institutions
When the AML Act first came into effect, the banks and financial institutions, which are subject to thelaw, were confused with their new duties. Some bank staff advised their customers to separate
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transactions into amounts less than the specific number prescribed by the law. The reason for this was toreduce the bank s responsibility to report the transactions. As time passed, the financial institutions began
to understand the law and now cooperate quite well. The AMLO received 605,176 transaction reports
during 27 October 2000-31 December 2001, valued at 36,633 Billion Baht. The transactions areclassified into 232,013 cash transactions, 356,587 property transactions and 16,576 suspicioustransactions. The AMLO also examined an additional 181 suspicious transactions reported by otherintelligence agencies.
G. Assets Forfeiture
1. General Provisions
Under the Penal Code B.E. 2499 (1956) which generally applies to all criminal cases, any
property as provided by the law that any person makes or possesses to commit an offence shall be
forfeited (Sec. 32). In addition, the court may order forfeiture of the property, which is used orpossessed for use in the commission of an offence by a person, or the property acquired by a person
through the commission of an offence unless the owner of such property does not connive with theoffence (Sec. 33). The property forfeited under the Penal Code shall become the property of theState.
In addition, Section 30-31 of the Act on Measures for the Suppression of Offenders in an
Offence Relating to Narcotics B.E. 2534 (1991) (the MSOORN Act) and Section 116 of thePsychotropic Substances Act B.E.2518 (1975) have similar provisions and process to the Penal
Code. However, when the court orders the forfeiture, the property will devolve to the Narcotics
Control Fund or the Ministry of Public Health as the case may be.
State(Penal Code)

Asset

Inquiry
Official

Prosecutor

Court(Criminal)

Narcotics Control Fund(The MSOORN Act)

Ministry of Public Health(Psychotropic Substance Act)

2. Special Forfeiture under Narcotics Related Laws
According to the Act on Measures for the Suppression of Offenders in an Offence Relating toNarcotics B.E. 2534 (1991) (the MSOORN Act), the property connected with the commission of an
offence related to narcotics may be forfeited. The Act provides a definition of narcotics offencesthat the production, importation, exportation, disposition or possession for disposition of narcotics,
and also includes conspiracy, aiding and abetting, assisting or attempting to commit such offences.
The Property Examination Committee and the Secretary-General of the ONCB have authority toissue both the property examining order and restraining or seizure orders. In case there exists a
reasonable ground that the property is connected with the commission of an offence related tonarcotics, the Committee or the Secretary-General will order an examination. If the owner of theproperty cannot adduce evidence to prove that the examined property does not relate to the offence,or he has accepted the transfer of the property in good faith and for value, or reasonably acquired
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the property on account of good moral or public charity, the property will be seized or attached.
The Committee may issue a provisional seizure order if there is a reasonable ground that theproperty will be transferred, removed or concealed during the examination. The seized property
will be retained by the ONCB. In the case that the property is not suitable to retain, the SecretaryGeneral may order an auction sale or utilize such property for official purposes. After theprosecutor has issued a prosecution order of the main narcotic case, he may file a petition to the(criminal) court to forfeit the seized property. The petition may be filed later but before the court
passes the judgment. When the petition is filed, the Secretary-General of ONCB makes a petition
published in a local newspaper for two consecutive days. A copy of the petition will be posted at
the ONCB and police station as well. If there is evidence that shows that any person may be theowner of the property, a registered letter shall be sent to him. Such process is to ensure that aperson s rights over their own property are protected. The court shall conduct the trial and theprosecutor has the advantage that prima facie the property connected to the commission of an
offence related to narcotics, will be forfeited unless the person claiming to be the owner can prove
his/her innocent ownership (see more details in Burden of Proof). The property forfeited under the
MSOORN Act shall devolve to the Narcotics Control Fund. From 1 January 2001 to 20 March
2003, there were 2,139 cases of temporarily seized assets valued at 1,380.1 Million Baht. At
present, there is a total value of 156.6 million Baht of property finally confiscated by the court andvesting to the Fund. However, this act still has some loopholes and difficulties in enforcement, as it
only applies to criminal cases. If the court dismisses the criminal charge, the property will be freed
too.
The Narcotics Control Fund is managed by a sub-committee comprised of many government
agencies. The sub-committee has the authority to issue regulations of fund management, subject tothe approval of the Narcotics Control Board. In 2000, the sub-committee issued regulations toallow government and private agencies, which are related to the suppression and prevention of
narcotics, treatment or rehabilitation of drug abusers, to utilize the properties of the fund and to pay
a reward to the informant and competent officials. In particular, the sub-committee may grantmoney payments or support properties of the fund to the government and private agencies:
1. Supporting the suppression and prevention of narcotics and the treatment or rehabilitation of
drug abusers.
2. Supporting the education, training and seminars on the topic of the suppression andprevention of narcotics and the treatment or rehabilitation of drug abusers.
3. Supporting consultants, locally or abroad, to hire consultants or expertise on the training or
seminars in the above clause.
4. Supporting activities or services which will be useful to the suppression and prevention of
narcotics, treatment or rehabilitation of drug abusers.
5. Supporting the cooperation among relevant agencies connected with the above matters,
domestically or internationally.
Therefore, the Narcotics Control Fund, in practice, has provided a channel to government
agencies to share assets forfeited under the MSOORN Act.

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Process to Forfeit the Asset under the MSOORN Act

Connected with the commission of an offence
Relating to narcotics (sec. 19)

｝

Asset

Secretary-General Of
ONCB or The Committee-order the examination (sec. 19,22)-order seizing or attaching asset (sec. 22,23)｝-file petition (sec. 27)-Publication｝

Prosecutor

Court(Criminal)

Government and private agencies, which are
related to the suppression and prevention of
narcotics, treatment or rehabilitation of drug
abusers

Narcotics
Control
Fund

Actions Undertaken under the MSOORN Act
Type of Asset: Million Baht

Year

Examination(Case)

Seize/Attach(Million Baht)

Cash

DepositMoveable
Asset

Real
Property

1998

284

174.3

70.7

60.1

22.2

21.3

1999

257

168.1

39.7

76.2

31.8

20.4

2000

449

240.2

44.2

99.5

50.1

46.4

2001

811

479.2

106.2

134

141.3

97.7

2002

1042

567.6

118.9

156.6

175.7

116.4

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3. Forfeiture of Assets Under the AML Act
Narcotics offences are one of the eight predicate offences under the AML Act. This Act
facilitates the forfeiture of drug-related assets, which may escape the loopholes under the
MSOORN Act. It is easier to forfeit drug-related assets under this Act than under the MSOORN
Act because it is civil forfeiture and need not be carried out along with criminal proceedings.
Actually, the process is quite similar but the AMLO is responsible in this matter. When there is
probable cause that any transaction is involved or may be involved in the commission of a money
laundering offence, the Transaction Committee can provisionally restrain a suspicious transaction
for examination three working days on reasonable grounds, or ten days with convincing
evidence . When there is urgency, the AMLO Secretary-General can himself use the same powerwith the Committee. If there is a reasonable ground that there may be a transfer, distribution,
placement, layering or concealment of any asset related to the commission of a (predicate) offence
during the examination, the Transaction Committee or the Secretary-General of the AMLO canorder provisional seizure for up to 90 days. The public prosecutor through a civil forfeiture system
may then pursue forfeiture of the assets. In the case of provisional seizure and forfeiture, theburden of proof lies with the claimant to prove the assets were legally obtained. Third parties will
have one year to file a petition to claim property after the Civil Court has rendered an order.
Nevertheless, the forfeited asset under this Act will devolve to the State. The asset sharing underthe AML Act, consequently, is practically much more difficult than the MSOORN Act.
Asset Forfeiture Under the Anti-money Laundering Cases Filed with the Civil CourtYear

New Cases Filed

Cases Completed

Outstanding

2001

37

7

30

2002

56

15

71

2003*

47

15

103

* As at the end of July

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FLOWCHART OF ASSET FORFEITURE UNDER THE ANTI-MONEY
LAUNDERING ACT

Financial
Institutions

Land
Official

Investment or Capital
Advisers

Report Suspicious Transaction
Seize
RestrainAnti-Money
Laundering Office
Adequate Evidence
Transaction Committee or
Secretary-General of AMLO

3 days ＊(sec. 35)

90 days ＊(sec. 48)

10 days ＊(sec. 36)
Prosecutor

ReportAnti-Money
Laundering Board

Anti-Money
Laundering Board
Civil Court
Notice & Publish in Newspaper
Forfeit
Owner

ReturnSTATE* There is probable cause that transaction may involve a money laundering offence** There is evidence to believe that transaction may involve a money laundering offence
H. Burden of Proof
The prosecutor generally has a duty to prove the offence beyond a reasonable doubt in all criminalcases. In the asset forfeiture proceedings under the MSOORN Act and the AML Act, however, theburden of proof shifts to the person who claims ownership of the seized asset. These two laws have thesame principal. If there is evidence showing that the offender is involved or used to be involved in thecommission of an offence relating to narcotics (predicate offences or offences of money laundering), thepresumption is the asset related to an offence. The offender then has a duty to prove that he is the true
owner and the asset is not related to any (narcotics or predicate) offence; or he has received the transfer ofownership honestly and with compensation or he has acquired the asset honestly and morally, or bycharity.
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RESOURCE MATERIAL SERIES No. 65

IV. INTERNATIONAL COOPERATION
Since the narcotics epidemic is a global problem that needs a global response and international
cooperation, Thailand has acceded to be party to the three United Nations Conventions on Drugs Control:
1. Single Convention on Narcotic Drugs, 1961, as amended by the 1972 Protocol
2. Convention on Psychotropic Substances, 1971
3. United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances
1988.
As a result, some narcotics control laws of Thailand were enacted in order toharmonize with theseconventions, e.g. Psychotropic Substances Act B.E.2518 (1975) that was harmonized with theConvention on Psychotropic Substances 1971, and the AML Act 1999, that follows the 1988 UN
Convention. However, many of the measures required by the 1988 UN Convention had already been
codified in previous narcotics laws that were enacted and enforced before the establishment of the 1988
UN Convention such as communication interception was codified in the Narcotics Control Act 1976
(Section 14 fourth); or Extradition Act 1929.
A. Extradition
Extradition to a foreign state is possible under the Extradition Act B.E.2472 (1929). Those fugitives
who are accused or convicted of an extraditable crime may be surrendered on the request of a foreignstate made through diplomatic channels to the Ministry of Interior. The prosecutor will apply to the court
for an arrest warrant. The fugitive who has been arrested will be brought before the court. The court willhear evidence adduced to ascertain that the fugitive has been accused or convicted of the alleged offence
and such offence is extraditable. However, the court may refuse to surrender the fugitive if the offence is
one of a political nature or the conviction is made by political motive. So far, there are ten countries thatentered the treaty on extradition with Thailand, namely the United Kingdom, Belgium, Indonesia, thePhilippines, United States of America, China, the Republic of Korea, Laos, Bangladesh and Cambodia.
Other countries may request extradition from Thailand by reciprocal practice.
B. Mutual Legal AssistanceRealizing that the growth of transnational crime has become a severe problem, Thailand enacted the
Mutual Legal Assistance in Criminal Matters Act B.E. 2535 (1992) as an important piece of legislation tocombat international crime. The Attorney General will be responsible as the Central Authority, who will
have the authority and function to receive requests seeking assistance and carry out any acts necessary forthe success of such assistance.
The scope of mutual assistance under this Act generally are:
1. Taking testimony and statements of persons
2. Providing documents and information in the possession of Government agencies
3. Serving legal documents
4. Search and seizure of articles
5. Transferring persons in custody for testimonial purpose
6. Locating persons for the purpose of investigation, inquiry, etc.
7. Initiating criminal proceedings
8. Forfeiting of Seized properties
Thailand may provide assistance to a country that has no mutual assistance treaty but the foreigncountry must state clearly that it commits itself to assist Thailand in the same manner upon request. In
case of the forfeiture of property, the foreign court must render final judgment to forfeit such property and
it is forfeitable under Thai law.

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C. Investigative Cooperation with Neighbouring Countries
Thailand regularly exchanges drug information and intelligence with many countries, particularly
with its neighbouring countries; i.e., Myanmar, Laos, Cambodia, and Malaysia. The exchange ofintelligence and information has been carried out by agency to agency to make this cooperation run
smoothly and successfully. There are also international meetings between concerned authorities of these
intelligence agencies every year. Investigative cooperation is done both through formal and informal
channels. A channel of cooperation was strengthened in 2002, when five Border Liaison Offices were
established near border areas around the country. Two are located at the Thai-Myanmar border; one islocated at the Thai-Laos border; the other two are located at the Thai-Cambodian border. In addition,
successful intelligence exchange operations with Singapore, China, and Japan have also been carried out.
The First Narcotics Control Cooperation Meeting between Thailand and the People s Republic of China
was held in January 2002, and both sides agreed to organize this kind of meeting every year. In addition,
both countries have exchanged their drug liaison officers to work closely in exchanging drug informationfor over a year while Japan has stationed a liaison officer in Thailand.
D. Technical Support for Intelligence Operations
Several countries have supported Thailand s drug control agencies by providing training andknowledge on drug intelligence and suppression both inside and outside the country. Such countries are
the United States, Australia, United Kingdom, Japan, and UNDCP.

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