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Myanmar Banking Sector Faces Strict Compliance Regulations
The government of Myanmar has recently issued a series of directives, presidential orders, and sector-specific instructions aimed at combating money laundering and terrorism financing. This move has sent a clear message to reporting organizations: implement anti-money laundering measures now or face the consequences.
Reporting Organizations Must Comply
Reporting organizations, including banks, financial institutions, insurance companies, finance companies, securities exchange companies, money changers, lawyers, accountants, company service providers, real estate agents, dealers in precious metals and stones, and casinos, must develop and implement internal policies, procedures, and controls to mitigate money laundering and terrorism financing risks.
Key Requirements
- Conduct risk assessments to identify potential vulnerabilities
- Implement measures to address identified risks using a risk-based approach
- Enhance due diligence for high-risk customers and simplify measures for low-risk ones
- Verify the identity of customers and beneficial owners through customer due diligence
- Understand business relationships and disclose beneficial ownership requirements (5% threshold applies to all companies)
Additional Measures Required
- Enhanced due diligence when dealing with foreign politically exposed persons (PEPs)
- Additional measures for high-risk transactions
Ongoing Monitoring and Reporting
- Conduct ongoing monitoring of transactions and activities
- Report suspicious activities to the Financial Intelligence Unit (FIU)
- Failure to comply can result in imprisonment and fines
Compliance Burden on Reporting Organizations
The compliance burden is significant, requiring:
- Senior management involvement
- Mandatory compliance officers
- Employee training
- Independent audits
- Extensive record keeping
Action Required
As Myanmar continues its efforts to combat money laundering and terrorism financing, reporting organizations must take immediate action to ensure they are fully compliant with the latest regulations. Non-compliance will not be tolerated by the government.