Disguised Foreign Controlled Companies and the Facilitation of Transnational Criminal Activities in Thailand
DOI:
https://doi.org/10.6000/1929-4409.2021.10.126Keywords:
Transnational criminal activity, nominee shareholder, Thailand, transnational crime facilitator, Foreign Business Act.Abstract
The primary objectives of the study are to examine the role of a business using Thai nationals as nominee shareholders in foreign-controlled companies in the facilitation of the transnational criminal groups’ activities in the tourist destinations, and their social and economic impacts on the country. Nominee shareholder appointment in a legal entity has commonly been recognized as one of the techniques employed by criminal groups to launder and obscure the ownership of their illegal assets. However, this study points out that this type of company also performs other functions in providing resources and a platform for criminal groups to further their goals. The study used mixed methods by gathering qualitative data through conducting in-depth interviews and focus groups with 55 participants from relevant government agencies and private sectors, and by gathering quantitative data through conducting public surveys consisting of 1,160 participants from six provinces across five different regions in Thailand. The study concluded that there is a strong need for the country to improve monitoring mechanisms through legal changes, and collaborations among public, private and civil society as the practice of nominee shareholder appointment, although perceived as a normal practice in the global field of business, such a practice can invite unintended consequences, which can be a serious cause of concern due to the links with illegal activities operated under the umbrella of transnational organized crime.
References
Antonopoulos, Georgios A. 2009. “Are the ‘others’ coming?’: Evidence on ‘alien conspiracy’ from three illegal markets in Greece”. Crime, Law and Social Change. 52 (5): 475-493. https://doi.org/10.1007/s10611-009-9204-2
Albanese, Jay S. 2011. Transnational Crime and the 21st Century. Oxford: Oxford University Press.
Arunmas, Phusadee. 2020. “Govt cracks down on foreign nominees,” Bangkok Post, November 23. Retrieved from https://www.bangkokpost.com/thailand/general/2023991/govt-cracks-down-on-foreign-nominees
Bangkok Bank. 2019. “Tourism: Still a reliable driver of growth?” Retrieved from https://www.bangkokbank.com/en/ International-Banking/-/media/dc98bd4dd875455299b0c207bf16f2ac.ashx
Bangkok Post. 2021. “Swoop on Surrogacy Network,” February 6. Retrieved from https://www.bangkokpost.com/thailand/ general/2063455/swoop-on-surrogacy-network
Bullock, Karen, Clarke, Ron V., and Laycock, Gloria. 2010. Situational Prevention of Organised Crimes. Cullompton, UK: Willan.
Bunt, Henk van de and Schoot, Cathelijne van der. 2003. Prevention of Organized Crime. A situational approach. Boom Juridische uitgevers. DOI: 10.15496/publikation-6612
Cohen, Erik. 1997. Tourism-related Crime: Towards a Sociology of Crime and Tourism. Visions in Leisure and Business 16(1): 4-14.
Department of Business and Development. 2020. The Foreign Business Act B.E. 2542. Retrieved from https://www.dbd.go.th/dbdweb_en/more_news.php?cid=329
Financial Action Task Force. 2018. Concealment of Beneficial Ownership. Paris: Egmont Group.
Keenen, P.J. 2005. “The New Deterrence: Crime and Policy in the Age of Globalization”. Iowa Law Review 91: 505-544.
Khunsong, Preeyapa. 2020. “Thai police to probe surrogacy operation’s Chinese links,” AP News, February 14. Retrieved from https://apnews.com/article/c6c962949ff6e69fa952 bac07b5bf676
Kleemans, E.R., Soudijn, M.R.J. and Weenink, A.W. 2012. “Organized crime, situational crime prevention and routine activity theory”. Trends in Organized Crime. 15: 87–92. https://doi.org/10.1007/s12117-012-9173-1
Kleemans, Edward R. 2014. “Theoretical Perspectives on Organized Crime” Pp. 32-52 in The Oxford Handbook of Organized Crime, edited by Paoli, Letizia. New York: Oxford University Press. https://doi.org/10.1093/oxfordhb/9780199730445.013.005
Kruisbergen, E. W., Kleeman, E. R. and Kouwenberg, R. F. 2015. “Profitability, Power, or Proximity? Organized Crime Offenders Investing Their Money in Legal Economy” European Journal on Criminal Policy and Research 21(2): 237-256. https://doi.org/10.1007/s10610-014-9263-5
Kun, Zhai. 2009. “The ASEAN Power.” Pp. 21-32 in The Architecture of Security in the Asia-Pacific, edited by Huisken, Ron. ANU Press. https://doi.org/10.22459/ASAP.10.2009.03
Lemiuex, A. and Felson, M. 2011. “Tourist and visitor crime.” Pp. 223– 228 in International Crime and Justice, edited by Natarajan, M. New York: Cambridge University Press. https://doi.org/10.1017/CBO9780511762116.035
Luong, Hai Thanh. 2020. “Transnational Crime and its Trends in South-East Asia: A Detailed Narrative in Vietnam”. International Journal for Crime, Justice and Social Democracy. 9(2): 88-101. https://doi.org/10.5204/ijcjsd.v9i2.1147
Lyman, Michael D. and Potter, Gary W. 2007. Organized Crime. Prentice Hall.
McLean, R. and Holligan, C. 2019. “Alien Conspiracy Theory? Exploring Ethnicity and Drug Supply in Scotland”. Deviant Behavior. 41(10): 1244-1257. https://doi.org/10.1080/01639625.2019.1607112
Medina, Ayman Falak. 2019. “Thailand Plus: New Stimulus Package for Foreign Investment.” ASEAN Briefing, September 24. Retrieved from https://www.aseanbriefing.com/news/thailand-plus-new-stimulus-package-for-foreign-investment/
Murray, K. 2013. “A Square Go: Tackling Organised Crime Where It Doesn’t Want to Be Tackled.” Journal of Money Laundering Control 16(2): 99–108. https://doi.org/10.1108/13685201311318458
Namakorn, Pornthep. 2012. “The Economic and Social Impact of Transnational Crime in Pattaya City, Thailand”. Atlantis Press. 375-377. https://doi.org/10.2991/icpm.2012.57
Norio, E. 2021. “Why are tourist resorts attractive for transnational crime? The case of the Mayan Riviera.” Tourism Critiques: Practice and Theory. https://doi.org/10.1108/TRC-10-2020-0019
Office of the National and Economic and Social Development Council. 2019. “National Strategy 2018-2037.” Retrieved from http://nscr.nesdb.go.th/wp-content/uploads/2019/10/ National-Strategy-Eng-Final-25-OCT-2019.pdf
Organization for Economic Co-operation and Development. 2001. Behind the Corporate Veil: Using Corporate Entities for Illicit Purposes. OECD Publications Service. https://www.oecd.org/ corporate/ca/43703185.pdf
Panyaarvudh, J. 2018. “Chinese investors making good in Chiang Mai.” The Nation, September 2. Retrieved from https://www.nationthailand.com/national/30353559
Paoli, L. and Beken, T.V. 2014. “Organized Crime A Contested Concept.” Pp. 13-31 in The Oxford Handbook of Organized Crime, edited by Paoli, Letizia. New York: Oxford University Press. https://doi.org/10.1093/oxfordhb/9780199730445.001.0001
Parrish, Austen L. 2012. “Domestic Responses to Transnational Crime: The Limits of National Law.” Criminal Law Forum. 23: 275-293. https://doi.org/10.1007/s10609-012-9185-1
Rungsrisawat, Somdech. 2017. “Zero-Dollar Tour: The Damages of Thai Tourism.” Retrieved from http://www.elfms.ssru.ac.th/ somdech_ru/file.php/1/1-2560/Research_2017/Zero-Dollar_Tour_the_Damages_of_Thai_Tourism.pdf
Savona, Ernesto U. and Ricardi, M. 2015. “From Illegal Markets to Legitimate Businesses: The Portfolio of Organized Crime in Europe.” Transcrime: European Commission. Retrieved from https://www.int-comp.org/media/1997/ocp-full-report.pdf
Saypan, Supasit. 2020. “Legal Problems Concerning Nominee Arrangements in Relation to Foreign Business under Thai Laws.” Thammasart Business Law Journal. 10: 80-94.
Secretariat of the House of Representatives. 2019. “Transnational Crime and the National Security of Thailand.” Retrieved from https://library2.parliament.go.th/ebook/content-issue/2562/hi2562-012.pdf
Shelley, L. 2011. “The Globalization of Crime.” Pp. 223-228 in International Crime and Justice, edited by M. Natarajan. New York: Cambridge University Press. https://doi.org/10.1017/9781108597296.037
Thailand Board of Investment. 2012. “Thailand Strengthens its Bonds with China.” Thailand Investment Review 22(5). Retrieved from https://www.boi.go.th/tir/issue/201205_22_5/cover.htm
The Foreign Business Act B.E. 2542. 1999. Government Gazette. Vol. 116, Part 123a, Page 1, dated 4th December B.E. 2542.
The Prevention and Suppression of the Participation in Transnational Criminal Organization Act B.E. 2556 (2013). Government Gazette. Vol. 130, Part 55a, Page 1, dated 26th June B.E. 2556.
The Prevention and Suppression Human Trafficking Act B.E. 2551. 2008. Government Gazette. Vol. 125, Part 29a, Page 28, dated 6th February B.E. 2551.
The Special Case Investigation Act, B.E. 2547. 2004. Government Gazette. Vol. 121, Part 8a, Page 1, dated 19th January B.E. 2547.
United Nations Office on Drugs and Crime. 2013. “Transnational Organized Crime in East Asia and the Pacific.” Retrieved from https://www.unodc.org/documents/data-and-analysis/ Studies/TOCTA_EAP_web.pdf
United Nations Office on Drugs and Crime. 2004 “United Nations Convention against Transnational Organized Crime and the Protocols Thereto.” Retrieved from https://www.unodc.org/ documents/treaties/UNTOC/Publications/TOC%20Convention/TOCebook-e.pdf
Von Lampe, Klaus. 2011. “The Application of the Framework of Situational Crime Prevention to Organized Crime.” Criminology and Criminal Justice 11(2): 145–163. https://doi.org/10.1177/1748895811398459
Warren, Roland, L. 1973. The Community in America. Chicago: Rand McNally.
Wongthong, Leuchai and Nuntapetch, Krisda. 2018. “Transnational Crime and Its Socio-Economic Effects in Pattaya Special Administrative District.” The Journal of Faculty of Applied Arts. 11(1): 71-80.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Policy for Journals/Articles with Open Access
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are permitted and encouraged to post links to their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work
Policy for Journals / Manuscript with Paid Access
Authors who publish with this journal agree to the following terms:
- Publisher retain copyright .
- Authors are permitted and encouraged to post links to their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work .
