MYANMAR MICROFINANCE INSTITUTIONS URGED TO STRENGTHEN AML/CFT COMPLIANCE
In a bid to combat money laundering and terrorist financing, the Myanmar Microfinance Industry has been advised to implement an effective Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) system.
Directive Requirements
According to Directive No. 4/2022, microfinance institutions (MFIs) must:
- Identify risk factors based on their operations and classify them as high, medium or low risk
- High-risk factors include members who are Politically Exposed Persons (PEPs), those with a history of criminal activity, and individuals from countries with a high rate of terrorist activity
- Verify the identity of members and customers using a reliable source
- Conduct ongoing due diligence on existing accounts
- Monitor transactions above reported financial amounts
- Report suspicious transactions to the Financial Intelligence Unit (FIU)
Regular Communication
The directive emphasizes the importance of regular communication between:
- Compliance Officers and Senior Management Teams
- Law enforcement agencies
Consequences for Non-Compliance
MFIs that fail to comply with the provisions of Directive No. 4/2022 will be prosecuted under the Microfinance Law, Anti-Money Laundering Provisions Law, and the Anti-Terrorism Law.
Key Takeaways
- Implement an effective AML/CFT system
- Identify risk factors based on operations and classify them as high, medium or low risk
- Verify member identity using a reliable source
- Conduct ongoing due diligence on existing accounts
- Monitor transactions above reported financial amounts
- Report suspicious transactions to the FIU
- Communicate regularly with Compliance Officers and Senior Management Teams, as well as with law enforcement agencies
Conclusion
DFDL Myanmar advises MFIs to seek legal advice on implementing an effective AML/CFT system. In a statement, [Name], Director at DFDL Myanmar, emphasized the importance of AML/CFT compliance in the microfinance industry: “It is crucial that MFIs implement effective systems to prevent money laundering and terrorist financing.”
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