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MYANMAR MICROFINANCE INSTITUTIONS MUST ENSURE COMPLIANCE WITH ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING DIRECTIVE

Combating Money Laundering and Terrorism Financing in Myanmar’s Microfinance Sector

Yangon, Myanmar - The Myanmar Microfinance Authority has issued Directive No.4/2022 to combat money laundering and terrorism financing in the country’s microfinance sector. The directive outlines strict guidelines for microfinance institutions (MFIs) operating in Myanmar.

Key Provisions of the Directive

  • Identify high-risk members and take appropriate measures to mitigate risk
  • Conduct ongoing monitoring and reporting of suspicious transactions and activities
  • Cooperate fully with law enforcement agencies and other regulatory bodies
  • Implement a risk-based strategy for assessing the level of risk associated with each member
  • Verify the identity and background of all members, including those from high-risk countries or territories
  • Conduct ongoing training and education for employees on anti-money laundering and counter-terrorism financing procedures

Consequences of Non-Compliance

Failure to comply with the directive may result in prosecution under the Microfinance Law, Anti-Money Laundering provisions Law, and the Anti-Terrorism Law.

Background Checks and Risk Assessment

Under the directive, MFIs are prohibited from accepting members who have been determined to be criminals or have a history of criminal activity. Additionally, institutions must verify the identity and background of all members, including those from high-risk countries or territories. The directive also requires MFIs to implement a risk-based strategy for assessing the level of risk associated with each member, taking into account factors such as their country of residence, financial behavior, and occupation.

Ongoing Monitoring and Reporting

MFIs are required to conduct ongoing monitoring and reporting of suspicious transactions and activities, and to cooperate fully with law enforcement agencies and other regulatory bodies. This includes conducting regular reviews of members’ accounts and reporting any suspected money laundering or terrorism financing activity to the relevant authorities.

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