Pimpan Charoenkwan, assistant governor for Financial Markets at the BoT, said the central bank has tightened rules governing the verification of documents for foreign currency sale transactions by residents, both individuals and legal entities, reports the Bangkok Post.
The tightened oversight aims to ensure that sources of foreign currency brought into the country are consistent with those declared and reduce the risk of undesirable or potentially illicit transactions.
At present, transactions involving the sale of US dollars for baht by residents with a value exceeding US$200,000 (B6.3 million) per transaction account for only about 15% of the total number of inbound transactions by residents.
However, these transactions represent as much as 85% of the total transaction value.
The existing thresholds for inbound transactions that do not require document checks could be exploited for undesirable activities or financial misconduct, and if conducted in large volumes, may affect exchange rate movements, she said.
Under the revised rules, the enhanced scrutiny will cover the following cases: sale of foreign currency for baht and transfers into Foreign Currency Deposit (FCD) accounts; foreign currency proceeds from gold sales; and sale of foreign currency banknotes.
For transactions valued at US$200,000 or more, or the equivalent, commercial banks are required to verify supporting documents for each transaction to ensure that the source of foreign currency matches the customer’s declaration.
An exception applies to routine transactions of well-known business customers for whom banks have conducted ongoing Know Your Business (KYB) and Customer Due Diligence (CDD) processes.
However, banks must request transaction-specific supporting documents for all transactions of US$200,000 or more, or the equivalent, without exception, when the foreign currency originates from the following sources: proceeds from the sale of real estate to foreigners; income from the sale of digital assets; other foreign capital inflows that are not intra-group or branch investments, portfolio investments, loans or lending, or derivatives-related gains; and foreign currency from other sources that are not related to payments for goods, services, income, transfers and donations, investments, banknotes, or deposits.
As for foreign currency proceeds from gold sales, when commercial banks sell or receive foreign currency derived from such sales, they must verify documentation for the overseas sale of gold.