Legal Issues Regarding Money Laundering Through Front Companies: A Case Study of Construction Contracting Business

Abstract

This research consists purposes were 1. to concepts, theories and principles regarding money laundering by disguised companies in the construction contracting business 2. to legal measures concerning money laundering by disguised companies in the construction contracting business under both international and Thai law 3. to analysis of legal problems related to money laundering by disguised companies in the construction contracting business and 4. to approaches to resolving legal issues related to money laundering by disguised companies in the construction contracting business. This is qualitative research using a documentary research method, examining relevant money laundering laws and comparing them with those of Thailand and other countries. The data collected from the relevant documentary sources were subsequently analyzed using content analysis. The findings indicate that 1) The Anti-Money Laundering Act B.E. 2542 (1999), the Criminal Code, the Civil and Commercial Code and other related laws establish regulations for controlling money laundering and the use of corporate structures, but do not specifically address the use of disguised companies or the verification of the true controlling authority of such companies. 2) International legal approaches, such as those of the United States, the United Kingdom and Singapore, emphasize the circumstances of the assets and the ability to reasonably explain their origin, thereby reducing the burden of proof on the state and to improve the effectiveness of law enforcement against money laundering through disguised companies. 3) when there is a lack of regulations defining the liability of shareholders and directors in cases of collusion, disclosure of the true controlling power and mechanisms to support the proof of financial trail in money laundering cases through disguised companies, which opens the door for the legal entity structure to be used as a tool to conceal and move assets in the construction contracting business and 4) amendments to related laws, the essence of which is (1) defining the liability of shareholders and the true controllers of the business and (2) proving the source of assets in money laundering cases through legal entities.