Thailand

How much do APAC’s regulators earn?

Regulators’ salaries across Asia Pacific vary enormously:some supervisors earn fortunes and others hit the pay scale at the average to low end.APAC REGULATORs - SALARIES

Some governments believe that paying politicians and civil servants high salaries should reduce the likelihood of them accepting a bribe, offered in cash or disguised as a gift. Others argue that financial regulators will be less likely to jump ship and work for a bank if they are paid competitively by the government. Some countries pay their banking regulators on the same modest scale as other government employees , pitting them against some of the highest paid people in the country – bankers.

Last April, we found out how much the head of the Hong Kong Monetary Authority brings home; Norman Chan Tak-lam was set to earn HKD$9.41m(USD1.2m), making him the highest paid central bank chief in the world.  As the HKMA is also the banking regulator, this makes Chan Tak-lam the biggest earning regulator in the world. Chan Tak-lam’s counterpart in Beijing, Shang Fulin, the head of China Banking Regulatory Commission, earns an estimated  CNY11,271 (USD1,800) per month.

The accompanying infographic details more of APAC banking regulators’ earnings.

Comparing regulators salaries with those of bankers reveals a stark difference. Since the global financial crisis took hold in 2008, we have seen a distinct change of attitude towards financial institutions. Blatant rule breaking by banks – whether money laundering, sanctions busting or tax evasion – is being punished in high-profile cases as regulators finally start to show their teeth. However, the impact on the individuals responsible have been unremarkable; a move to a less high-profile role in the bank, or early retirement as opposed to job loss or, as some have called for, criminal prosecution.

Rather than going after the bankers who allowed criminality to go unchecked at banks, or those who made good from the financial crisis, there is an element of maintaining the status quo vis a vis bankers’ salaries that is out of step with the movement to make change for the better in the financial sector.

In the post global financial crisis and post public bailout economy, can banks justify paying million dollar bonuses?

In February 2015, Ross McEwen, the head of RBS, went on record to defend bonuses for bankers in spite of government bailouts and losses:

“I need to be fair paying for our people so I can actually keep them onboard.”

Although McEwen has opted to hand back his personal GBP1m (USD1.5m) share award to the bank he will still take home an expected GBP2.7m (USD4m) in 2015. Peter Sands, the outgoing boss of Standard Chartered also waived his bonus in 2015.

Looking at Asia Pacific, four of China’s largest five banks made the Banker’s Almanac list of top ten biggest financial institutions. This includes Industrial and Commercial Bank of China, China Construction Bank Corporation, Agricultural Bank of China Limited and Bank of China. China Development Bank Corporation languished at no. 21 on the list.

“According to the half-year annual reports of the listed commercial banks, the average annual payment before deductions for the chairmen of the five biggest Chinese commercial banks was around 2 million yuan ($325,600).”Source:The Global Times 2014.

Piyush Gupta, CEO of DBS bank, Singapore’s largest, made SGD9.2m (USD 6.6m)
The CEOs of United Overseas Bank and Oversea Chinese Banking Corporation were not far behind.

Chief regulators salaries fall far short of those earned by their peers at regulated entities.
It’s unlikely they will ever be measured on the same scale. Regulators, in an ideal world, would be motivated by doing the right thing for the right reasons. That is certainly the message that some regulators are putting across. But banking is all about money, and the more you earn, the higher your status.

First published on the International Compliance Association blog in March 2015. 

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Financial exclusion keeps Asia’s poor shackled to debt

Would you ever use a loan shark to borrow money? If you have a bank account, a credit rating, an address and an identity card, the chances are you will never need to. Many people in Asia, however, have no choice and the consequences of using illegal and unscrupulous lenders are catastrophic, resulting in spiralling and impossible to pay interest payments, violence and, tragically, slavery. Providing access to fair and transparent lending schemes is slowly gaining ground in Asia. FCA-loanshark

In Northern Thailand, loan sharks prey on the stateless groups living along the Thai/Burma border. The Children of the Forest project in Sangkhlaburi, north western Thailand, works with stateless children and mothers and have seen the horrendous consequences of dealing with loan sharks.

“Many of the Burmese refugee camps are just across the border in Thailand, set in dense jungle where mosquito borne diseases such as malaria and dengue are rife. If someone in a family without papers catches dengue and requires hospitalisation they must pay the hospital in full as they cannot access the cheaper health care offered to Thai identity card holders. Without the funds to pay, people turn to the local money lender who demands swift repayment and adds high interest. When the family cannot meet the payments, which is often the case, a so-called friend of the lender will step in and offer the eldest child in the family a job in Bangkok, in exchange for clearing the debt. They may even throw in the first month’s salary as a goodwill gesture to the parents. In most cases, the ‘friend’ is a child trafficker who sends children to work in bonded labour or into sexual exploitation,”one worker told me.

This happens simply because the family had no choice but to turn to an unregistered, illegal money lender. Organisations like Children of the Forest are able to step in and rescue children if they have the right information and are there at the right time to intervene.

According to the World Bank, approximately 2.5bn people, have no access to the supervised banking sector, leaving them open to exploitation by illegal lenders. Global campaigns to promote financial inclusion – bringing fair and transparent financial services to the world’s poor – are taking off in Asia, as well as in Africa and South America. Financial inclusion is a global, G-20 endorsed campaign which aims to improve livelihoods and ultimately, to squeeze out the loan sharks who prey on the poor. The inclusion campaign is relatively new – its founding Principles were developed by the G-20 in 2010 – but it is working on improving the ability of the global poor to save, borrow and protect themselves from crime and natural disaster by developing new financial systems.

Financial inclusion means provided appropriate saving and lending services of small amounts on a large scale. It calls for innovative solutions that reach local communities without the burden of strict regulations, which exclude the poor from the banking sector. It means finding a compromise for the people who lack formal identification, have no fixed abode and may not know their date of birth.

The amounts of money earned, saved and transacted by those in need of financial inclusion are small, which makes them unattractive clients for traditional banking services. The risk/reward ratio does not make sense. So, smaller banking-lite services, such as mobile-money, micro-lending, some pre-paid debit cards and financial education projects are already working towards providing fair services to those who need them.

The Sold Project in north Thailand runs a scheme providing educational scholarships to families. The money is held in an account by the project and can only be used to pay for education, schooling, clothes, transport. The families can access their scholarship account to follow their spending.

A Sold Project worker told us:“This works really well. People are happy if the scholarship account has more money and add money to it themselves. They are encouraged to apply for other scholarships and loans and not rely on us.”

Providing some small amount of financial education and a secure savings option changes how people manage money, and in this case, changes the lives of future generations.

Back in July, Police officers in Phuket took a swing at illegal lending They arrested five enforcers of a loan shark ring, which had been charging 20 percent interest per month and intimidating people who did not pay on time. The same thing happens across the continent. Where there are people in need and little government oversight, someone will step into corner the market.

The arrests in Phuket show that Thai police are paying attention, although their reputation has not always been one of pure intentions. Often, they provide the best debt collection services. You can sell your loan to the police, minus a 20 per cent cut and allow them to recoup the monies owed, using their influence and uniform to make bad debtors cough up.

With a little more awareness, however, the campaign for financial inclusion could be hugely effective across Asia, reducing the misery brought about by poverty and creating brighter futures for Asia’s youth.

This article first appeared on AsianCorrespondent.com

Phuket loan shark enforcers arrested

PHUKET: Police in Phuket Town this afternoon (July 26) arrested five enforcers for a loan sharking ring, after reports that the ring had been charging interest of 20 per cent a month and intimidating people who did not pay on time.

The five are Sakrin Salea, 34, from Trang, Surin Siboo, 20, from Songkhla,and three men from Pattani: Abdulor Jealea, 29, Kanawut Leadee 20, and Mohamad Soming, 23.

Police seized five mobile phones, a printer, three bank books, ATM and ID cards, and B14,000 in cash.

They were charged with providing banking services without a permit and charging illegally excessive interest rates.

Source: The Phuket News

Thailand: AML laws used on small corrupt businesses

The Anti-Money Laundering police division in Phuket has flexed its muscles to seize cash from allegedly corrupt taxi and tuk-tuk firms around the island.

English: Thai students going to school by tuk ...

English: Thai students going to school by tuk tuk. Italiano: Studenti thailandesi che stanno andando a scuola con il tuk tuk. (Photo credit: Wikipedia)

The crack down on Phuket’s tuk-tuk ‘mafia’ began in earnest after the Thai army took control of the country in May when Phuket police, with the support of the Army, dismantled numerous illegal taxi stands in the province in response to the taxi drivers’ cartel-like grip over transport in Phuket. Taxi, tuk-tuk and motorbike drivers across Thailand should follow pricing guidelines issued to them by the regional authorities. Some even display them in their cabs and charge customers accordingly. Unfortunately, others see a foreigner approaching and immediately rack up the price.

Police in Phuket seized an estimated 200,000THB (6,300USD) from the bank account of a taxi and tuk-tuk cooperative in the Karon-Kata area of Phuket. Although this is small time compared to the estimated sums extorted from businesses and tourists annually across Thailand – you only have to spend a few months in country before you start hearing the same tales of protection payments and overcharging – it is a step in the right direction and should send out a warning shot to other travel and transport cartels.

Financial Crime Asia is surprised to find out that Phuket Police had its own AML department, but pleased to read that it is being used to root out corruption.

Source: Phuketwan

Thailand set to ramp up anti-graft laws

Thailand‘s anti-graft commission has proposed a raft of legal changes giving it the power to prosecute foreign officials and coordinate with foreign government’s on asset recovery.FCA - bribes

The National Anti-Corruption Commission (NACC) has submitted the proposed changes to the National Commission for Peace and Order (NCPO), the country‘s ruling body.

Amendments also include extending the statute of limitations on corruption to 30 years; several high profile offenders have fled Thailand to avoid criminal proceedings and remain in exile until the statute on the crime has run out. The legal changes will bring Thailand in line with the UN’s anti-bribery and corruption standards.

Although news may have died down in the political situation in Thailand, the country is still under Army control. In terms of anti-corruption measures, having the army in control could have positive ramifications. As mentioned here before, the NCPO has orchestrated payments of lapsed rice subsidies to millions of impoverished farmers, forged ahead with the investigation into mismanagement of the rice pledging scheme by former Prime Minister Yingluck Shinawatra and is tackling wide spread corruption in Phuket, one of Thailand’s greatest sources of tourism revenue. Read Financial Crime Asia’s report in more detail.

Now that the NACC is no longer hamstrung by political horse-trading which has dominated Thailand’s legal framework in the past, it may have a good chance of pushing through some serious and effective reforms that will go some way to clearing up corruption in the country.

Source: Bangkok Post

Thailand: AMLO publishes list of rogue bank accounts

Thailand may be in the midst of political turmoil but the Anti-Money Laundering Office is still on track. The AMLO scored a victory yesterday in publishing details of more than 200 suspicious bank accounts. The accounts appear to have been opened in connection with a large-scale fraud.

Secretary of the AMLO, Pol Col Sehanart Prayoonrat

Secretary of the AMLO, Pol Col Sehanart Prayoonrat

The scam looks like a boiler room set up using a nation-wide campaign to contact potential victims. The con-artists convinced people to cough up cash, for unknown reasons, and send it to one of the 203 bank accounts uncovered in the AMLO probe. The accounts were all set up by a group of smurfs, probably unconnected to the fraudsters.

Contact the AMLO for the list of accounts.

Source: National News Bureau of Thailand

Thailand: 17 hours under a coup

Yesterday at 4pm, the Thai Army declared a military coup, taking control of Thailand until a new government can be formed and peace restored to the country. Since the protests against the government started in December 13, the country has been in turmoil, although you wouldn’t know it from talking to most people who put on a smile and tell us foreigners that everything is fine. 

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The coup leader – a man called General Prayuth Chan-ocha – has declared himself Prime Minister until the political parties can reach a compromise and retake parliament and prepare for elections. Rumour has it that the old PM, Yingluck Shinawatra, and her husband have already left Thailand.

When the Army takes control of a country, the rule book is trashed. None of the previous laws of the land have power and the Army, or the National Peace and Order Maintaining Council (NPOMC), gets to write the rules again from scratch. Prayuth’s PM-ship is Announcement Number 10. 

“In the first 16 hours of junta rule, military authorities have issued two orders and 19 announcements. Each is read several times over radio and TV stations, which otherwise are blacked out, under total military control, and playing only traditional music used for junta takeovers.” From the Bangkok Post

Announcement No. 14 repeated a martial law attempt to muzzle the mainstream media; there is also an order not to critcise the junta. Media operators were asked to report to the NPOMC today (23.05) and ISPs have been asked to  “keep track, monitor, stop the dissemination of online info”.

The traditional music blaring from the never-turned-off televisions at the neighbours’ houses only stops when Prayuth appears, in uniform and behind a desk, backed by three of his lieutenants to read the next Announcement.

Thailand: PM hit with corruption charges and Gov banker resigns

Yesterday, impoverished rice farmers in Thailand warned the government that they will take action if they do not receive their promised rice subsidies. Without the subsidies, they have nothing to live on – they are desperate and their have been suicides among the farmers who see no hope for their future. The director of the Government Savings Bank resigned from office today, according to a message from Thai PBS, “to show responsibility for the interbank bank extension to the Bank for Agriculture and Agricultural Cooperatives.”

In the latest report, the National Anti-Corruption Council has filed charges against PM Yingluck “relating to irregularities in the government’s rice-buying scheme, and it summoned her to appear to face the charges on February 27.”

Jokes are already circulating about the PM being jailed. Today’s events are significant in Thailand’s future – and for the future of everyone who loves this country. We all hope it stays peaceful up there in the capital and that there are no more needless deaths.

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Why Thailand needs Ipaidabribe.com

Thailand is in turmoil. Anti-government whistle-blowers are still on the streets of the capital, the general elections of February 2nd FCA - YLdefacedwere peacefully disrupted. In many parts of Bangkok and in southern Thailand, where I live, the elections did not happen at all. I scoured this island for a polling station yet found nothing but a few defaced posters of PM Yingluck Shinawatra. The voting in south Thailand never happened because Post Office workers refused to release the ballot papers in time for voting.

Tourism numbers are officially down although all guest-houses on this island appear to be full. Foreign governments are issuing travel warnings to would be tourists. Few have issued a travel ban as yet, but it appears the medical tourists are steering clear, opting to put up with un-botoxed brows until the rallies stop. Even the once-loyal rice farmers have moved on Bangkok to express their anger at not receiving promised subsidies for their crops.

Anti-corruption civil sparks

The protests were sparked in November by a mass public action and social media campaign to stop the passing of an Amnesty Bill, which would have been a green light for exiled politicians – with Thaksin Shinawatra at their helm – to return to Thailand without fear of prosecution for electoral fraud. Thai people want to stop corruption in their country, as do the ex-patriot residents and business owners. Thai people have taken to the streets and to social media sites to do voice their opposition. Anti-bribery sentiment is strong among the foreign community, but uncoordinated and there are few outlets for publicising attempted bribes and blatant corruption. A Facebook group called Corruption and Business in Phuket is providing an excellent stream of news on anti-bribery efforts in the province. This week, Phuket citizens called for a public meeting on bribery and corruption, following a blockade of one of the islands busiest beaches in protest at an alleged TBH20,000 (USD609) paid to three Tourist Police Officers. The funds were allegedly returned to the briber by the officers during a “private meeting.”

Official channels

Although not well publicised, Thailand has a National Anti-Corruption Commission, staffed by more than  1,000 people dedicated to pursuing bribes made to state officials and government contracts; private bribery is beyond the commission’s remit. Led by Dr Sirilaksana Khoman, the commission is government funded but has autonomy in investigations and prosecutions. In an interview with The Big Chilli ex-pat magazine, Dr Sirilaksana outlines why she believes corruption has changed in Thailand since 1997, (the Asian economic crisis, the concentration of political power under a “charismatic” new leader and numerous allegations of large scale corruption), three “grand”corruption cases she has worked on since 2007 and the pre-emptive work NACC carries out by scrutinising the accounts of major infrastructure and technology projects as they happen.

The NACC does accept reports of bribery and corruption from the public, which must be signed by the complainant. The NACC uses a system to anonymise the letters once received, by cutting the names/signatures off and placing them in an envelope kept in a heavily guarded safe. It gave no figures on how many letters it receives annually. From the outside, this system looks less  than appealling to anyone who has just been stopped by a traffic cop and asked for a bribe to avoid getting a ticket. Accessibility and anonymity are two fundamentals of any whistle-blower scheme and, reporting on a state employee who has just tried to extort funds from you is blowing the whistle.

Ipaidabribe.com

I am a huge fan and supporter of the Janaagraha led  I Paid A Bribe initiative, set up in 2010 initially to estimate the total amount paid in bribes each year  in India. In India, as in Thailand, there are fixed bribery rates for certain services.  For example, getting your passport processed, getting the stamp on the deeds of your house, getting the electricity company to turn on the supply are all covered by a recognised and regularised extra payment directly to the civil servant. The I Paid A Bribe portal collects information on bribes paid, bribes requested by not paid and incidents of meeting an “honest officer.” Those submitting stories can remain anonymous or publicise their names.

The IPAB intitiative has grown beyong india, and now has sites operating for 11 countries in Asia, Africa and Europe, with plans for portals in North and South America. Regrettably, Thailand is not yet part of the IPAB plans for Asia but this country could really benefit from this service.

This is a shout out to IPAB and anyone in Thailand, via Corruption and Business in Phuket, Eyes of Thailand and to Dr Sirilaksana herself to support the launch of Ipaidabribe.com in Thailand.  Let’s get this started.

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Passport for Lenin: Bangkok’s counterfeiting street market is thriving

The illegal trade in counterfeit documents that can be FCA - fake ID Khao San - The Big Chilliacquired in Bangkok‘s Khao San Road area seems to be still thriving. Anyone who needs a fake passport, drivers license, university degree or a fake student identity card can roll up to one of numerous temporary outlets in the backpacker haven, have their photos taken and be on their way to discounted travel fares, fraudulent insurance claims and the tools to open numerous bank accounts.

Any name will do

The authors of the report in The Big Chilli, an ex-pat focused magazine for people like me, living in a place like this, managed to get fake ID documents in the names of Ulrike Marie Meinhof, of the Baader Meinhof Gang who was jailed for terrorist acts in 1972, and one for Vladimir Illich Lenin, who needs no introduction.

The bad news is that even if well-known names are not questioned, then other high-risk but less famous identities could be duplicated. Politically Exposed Persons (PEPs) aside, the street front counterfeit markets existence means that anyone can get their hands on fake documents and use them to open a bank account or set up a company.

The good news is that, according to Steve Vickers, a security adviser, the documents are generally not good enough to pass an electronic examination, and this limits their use. That said, the serious counterfeiters do not hang out on the streets of Bangkok selling their wares; their services are still available at a high price to those in the know.

Depending on what country you happen to be in when opening a bank account, set up a company or even get a visa, you may not even need to show identification or proof of address. Opening a bank account in Thailand is pretty straightforward, as I found out last year.  And no matter where you are in Thailand,  you are never less than 50 metres away from someone who knows someone who knows a man at immigration who can help out with any visa woes.

Source: The Big Chilli

 

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