Financial Crime World

Myanmar’s Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Framework: Areas for Improvement

Executive Summary

The Asia-Pacific Group on Money Laundering (APG) has assessed the AML/CTF framework in Myanmar, highlighting several areas where improvement is necessary to effectively prevent and combat money laundering and terrorist financing.

Key Challenges

Predicate Crimes and Money Laundering

  • There is a lack of analysis on how proceeds of crime are laundered within Myanmar.
  • Investigations do not focus on following the money trail, making it difficult to track and recover illicit funds.

Financial Intelligence Unit (FIU)

  • The FIU has access to transaction information but struggles with staffing shortages and relies heavily on manual processes.
  • Disseminations from the FIU are not regularly used for predicate offense investigations.

Money Laundering Investigations

  • These are not prioritized, and asset-tracing investigations begin after a conviction for the predicate has been obtained.
  • This approach makes it challenging to effectively combat money laundering and recover illicit assets.

Terrorist Financing

  • TF cases are not sufficiently prioritized, and there is no clear legal basis to implement TFS in relation to proliferation of WMD by certain countries.
  • This lack of clarity hinders the effective prevention and investigation of terrorist financing activities.

Preventive Measures

  • There is a lack of specific guidance on high-risk issues for FIs (Financial Institutions).
  • DNFBPs (Designated Non-Financial Businesses and Professions) have not implemented AML/CFT controls, leaving them vulnerable to money laundering risks.

Supervision

  • CBM supervision of banks has increased in skills and experience but does not comprehensively check beneficial ownership.
  • This oversight can lead to undetected money laundering activities.

Conclusion

The APG report highlights significant areas where Myanmar’s AML/CTF framework needs improvement. By addressing these challenges, Myanmar can enhance its ability to prevent and combat money laundering and terrorist financing, ultimately contributing to a safer financial system for all.