The Legal Framework: Anti-Money Laundering Act
Thailand's Anti-Money Laundering Act B.E. 2542 (1999), as amended, establishes the legal framework for combating money laundering and terrorist financing. The Anti-Money Laundering Office (AMLO) is the primary enforcement agency, while the Bank of Thailand (BOT) supervises bank compliance.
Under this framework, Thai banks are required to:
- Conduct Know Your Customer (KYC) verification when opening accounts
- Monitor transactions for suspicious activity
- Report certain transactions to AMLO
- Freeze accounts when suspicious activity is detected, pending investigation
Anti-Money Laundering Act - Key Provisions
Section 14: Financial institutions must report transactions that are suspicious or exceed prescribed thresholds to AMLO.
Section 35: The AMLO Secretary-General may order the temporary seizure or freezing of assets where there are reasonable grounds to believe they are connected to a predicate offense.
AMLO Reporting Thresholds
Thai banks are required to report certain transactions to AMLO regardless of whether they appear suspicious. Understanding these thresholds helps explain why certain activities may trigger scrutiny.
| Transaction Type | Reporting Threshold | Notes |
|---|---|---|
| Cash transactions | 2,000,000 THB or more | Single transaction or related transactions |
| Property transactions | 5,000,000 THB or more | Real estate purchases/sales |
| International transfers | Varies; typically 50,000 USD+ | Bank of Thailand reporting |
| Suspicious transactions | Any amount | No threshold for suspicious activity |
Note that these thresholds trigger mandatory reporting - they do not automatically result in account freezes. However, the reporting itself may lead to questions if the activity does not match your account profile.
Why Foreigner Accounts Get Frozen
Foreigners face additional scrutiny because their transaction patterns may be less predictable than local account holders. Banks may not understand the legitimate reasons behind certain activities. Common triggers include:
Common Freeze Triggers for Foreigners
-
1
Large international transfers without prior notice
Receiving a large sum (especially from multiple sources) without having informed the bank can trigger alerts. This is common when receiving property sale proceeds, inheritance, or investment returns. -
2
Activity inconsistent with stated account purpose
If you opened the account for "living expenses" but receive business payments, this mismatch raises flags. Many digital nomads face this issue. -
3
Frequent cash deposits near reporting thresholds
Multiple cash deposits just under 2 million THB (called "structuring") is a major red flag, even if the funds are legitimate. -
4
Transfers to/from high-risk countries
Transactions involving countries on FATF gray/black lists or with known money laundering concerns receive extra scrutiny. -
5
KYC information becomes outdated
If your visa status changes, address changes, or you fail to respond to bank requests for updated information, your account may be restricted. -
6
Receiving payments from unknown third parties
If others deposit money into your account (common in informal business arrangements), this can trigger suspicion of operating an unlicensed money service. -
7
Dormant account suddenly becomes active
An account with no activity for months that suddenly receives or sends large amounts is a classic suspicious activity pattern.
Types of Account Restrictions
Not all "freezes" are the same. Understanding the type of restriction helps determine the resolution approach.
Bank-Initiated Hold (Most Common)
The bank's internal compliance department has flagged your account for review. This is a precautionary measure while they investigate. You typically cannot make transactions, but the bank can release the hold once satisfied with documentation.
AMLO-Ordered Freeze
AMLO has formally ordered the bank to freeze your account as part of an investigation. This is more serious and requires AMLO approval to release. These cases often involve suspected connection to predicate offenses (fraud, drug trafficking, etc.).
Court-Ordered Seizure
A court has issued an order seizing funds, typically as part of criminal proceedings or civil litigation. This requires court action to release and may involve legal representation.
How to Resolve Account Freezes
Step-by-Step Resolution Process
- Contact the bank immediately Visit your branch in person with your passport. Ask specifically: (1) Why is the account restricted? (2) What documentation do you need? (3) What is the timeline for review? Get answers in writing if possible.
- Gather documentation Prepare documents that explain the flagged transactions: bank statements from sending banks, contracts or invoices, employment verification, tax returns, source of funds letters, or any other relevant documentation.
- Prepare a written explanation Draft a clear, factual explanation of the transactions in question. Include dates, amounts, purposes, and relationships to other parties. Keep it professional and straightforward.
- Submit everything to the bank Provide all documentation to the compliance department. Ask for a receipt or acknowledgment. Inquire about the review timeline and get a contact number for follow-up.
- Follow up regularly Check in weekly (politely) on the status. Document all communications. If the bank requests additional information, provide it promptly.
- Escalate if needed If the bank is unresponsive or the freeze continues without explanation, consider: contacting the Bank of Thailand consumer protection hotline, seeking legal counsel, or contacting your embassy (for informational purposes, not intervention).
When to Seek Legal Help
If your account freeze involves any of the following, consult a Thai lawyer immediately: police contact or questioning, mention of specific criminal allegations, AMLO formal investigation notice, court orders, or if the bank refuses to discuss the matter with you. Early legal involvement can help protect your rights.
Prevention Strategies
The best approach to account freezes is avoiding them in the first place. These practices help maintain a clean account profile:
Best Practices to Avoid Account Issues
- Inform your bank before large transfers: A simple call or branch visit before receiving a large international transfer can prevent automatic holds.
- Keep KYC information current: Update your address, phone number, and visa status promptly. Respond to bank requests for information immediately.
- Match account usage to stated purpose: If you need to receive business income, open a business account. Do not mix personal and business funds.
- Avoid cash transactions when possible: Use bank transfers for large amounts. If you must use cash, keep receipts and documentation of the source.
- Maintain consistent activity: Avoid long periods of dormancy followed by sudden large transactions. Keep the account reasonably active.
- Document everything: Keep records of why money is entering and leaving your account. This makes responding to inquiries much easier.
- Use reputable transfer services: Transfers from established banks and services like Wise are viewed more favorably than cryptocurrency exchanges or unknown platforms.
Special Considerations for Digital Nomads and Remote Workers
The growth of remote work has created new challenges for Thai banking compliance. If you work remotely and receive income from abroad, consider these points:
The Gray Zone Problem
Thai banks are often uncertain how to classify remote workers. You may be on a tourist visa (no work permitted) but receiving "income" from abroad. The bank may question whether this is actually work income (problematic) or investment/savings transfers (acceptable).
Recommendations
- If possible, use the DTV (Destination Thailand Visa) which explicitly allows remote work
- Keep foreign income in foreign accounts and transfer only what you need for expenses
- Describe transfers as "savings" or "family support" rather than "salary" or "income"
- Consider maintaining your primary banking relationship outside Thailand