Myanmar’s Central Bank Issues Directive on Customer Due Diligence to Combat Money Laundering and Terrorism Financing

The Central Bank of Myanmar has issued a directive on customer due diligence to banks licensed and supervised by the institution, aimed at strengthening its efforts in combating money laundering and financing of terrorism.

Background

As part of its exercise of powers granted under Section 69(c) of the Anti-Money Laundering Law and Section 40 of the Central Bank of Myanmar Law, the directive aims to ensure that financial institutions conduct thorough background checks on their customers, including business owners, beneficial owners, and ultimate beneficiaries.

Objectives

The objectives of the directive are:

• To identify and mitigate potential risks associated with money laundering and terrorism financing
• To prevent illegal activities from being financed through the country’s financial system

Requirements

Under the directive, banks are required to:

• Obtain and verify identification information about their customers
• Establish the nature of their business relationships and transactions
• Conduct ongoing monitoring of customer activities to detect and report suspicious transactions to the relevant authorities

Impact

The Central Bank of Myanmar’s efforts to combat money laundering and terrorism financing are in line with international standards and best practices. The move is expected to enhance transparency and integrity in Myanmar’s financial sector, while also protecting the country from the risks associated with illicit financial activities.

By implementing this directive, Myanmar’s financial institutions will be better equipped to prevent illegal activities from being financed through their systems, ultimately contributing to a safer and more stable financial environment for the country.