Financial Crime World

Stricter AML/CFT Compliance Requirements for Myanmar Microfinance Businesses

The Myanmar Microfinance Business Supervisory Committee has issued Directive No. 4/2022, aimed at strengthening anti-money laundering and combating the financing of terrorism (AML/CFT) compliance in the country’s microfinance institutions.

Key Obligations for Licensed Microfinance Institutions

  • Formulate policies and procedures to implement AML/CFT processes required by the government
  • Identify and evaluate AML/CFT-related risks
  • Recognize member information, including personal and financial data
  • Monitor operations regularly
  • Report suspicious activities promptly
  • Maintain accurate records of all transactions and activities
  • Develop policies and procedures for existing members and service distribution channels

Specific Requirements for Microfinance Institutions

  • Be aware of specific money laundering methods and factors relating to the financing of terrorism
  • Assign specific duties and powers to employees to prevent financial services and products from being used for money laundering or terrorism financing
  • Classify member risks as high, medium, or low based on personal information and financial behavior
  • Evaluate AML/CFT risks for non-citizen members and clients based on factors such as country of residence, corruption perception index, and financial information

High-Risk Companies and Structures

  • Unregistered companies without disclosed beneficial owners
  • Corporations connected to trusts or special mechanisms
  • Businesses providing financial services
  • Real estate agencies
  • Gemstones and valuable goods traders
  • Others

Management and Employee Requirements

  • Establish and maintain effective compliance practices
  • Include AML/CFT procedures in daily operating procedures
  • Monitor the effectiveness of policies and procedures regularly
  • Provide training on AML/CFT to relevant employees

Conclusion

The Myanmar Microfinance Business Supervisory Committee emphasizes the importance of effective AML/CFT compliance in preventing money laundering and terrorism financing. The directive aims to ensure that microfinance institutions adopt robust risk management practices to prevent such illegal activities and maintain a secure financial environment for the country’s microfinance sector.