VESTED INTERESTS DOMINATE MYANMAR’S ILLICIT FINANCIAL FLOWS

Poor Coordination and Lack of Capacity Hinder Anti-Money Laundering Efforts

A recent report has shed light on the continued dominance of vested interests in Myanmar’s illicit financial flows, highlighting the country’s struggle to combat money laundering and corruption. The report reveals that Myanmar’s Anti-Money Laundering (AML) framework is poorly coordinated, with the Financial Intelligence Unit lacking capacity.

• Investigations into money laundering tend to follow successful prosecutions related to other offenses, indicating a lack of priority in addressing the issue.
• Petty corruption by border guards and law enforcement creates ideal conditions for an illicit economy, with only an estimated 0.4% of smuggled imports seized.

Economic Policies Contribute to Black Market Economy

Myanmar’s economic policies have been criticized for contributing to the emergence of a black market economy, which relies on illegal imports and exports. The country’s military is accused of being responsible for much of the illicit trade in resources, including jade and timber.

• External demand from countries such as China and Thailand drives many of Myanmar’s illicit trade outflows.
• Chinese companies are known to have formed linkages with the military’s holding companies and rebel movements.

Corruption at All Levels Enables Illicit Finances

Corruption at all levels plays a significant role in allowing unregulated financial and trade flows to and from Myanmar. The report highlights the existence of a war economy in Myanmar, where the military controls many sectors dominated by illicit finances.

• The military’s vested interest in maintaining conflicts allows them to obtain funds through illicitly smuggled resources.
• Addressing the root causes of corruption and conflict, including the military’s role in the economy and society, is essential to combating illicit financial flows.

Challenges Ahead

Despite the government’s efforts to combat illegal trade, experts warn that the issue is systemic and intimately connected to conflict dynamics in the country. The report concludes that while there are signs of political will to address illicit financial flows, the challenge remains significant due to the vested interests involved.

• Addressing Myanmar’s illicit financial flows requires a comprehensive approach that addresses corruption, conflict, and the military’s role in the economy.
• The judiciary sector in Myanmar also suffers from systemic failure, impunity, and glaring dysfunctionalities, further hindering efforts to combat corruption.