YANGON, MYANMAR

A recent report assessing Myanmar’s compliance risk management framework has revealed significant gaps in the country’s ability to combat financial crime and terrorism financing.

The report highlights 40 key areas where Myanmar falls short of regional standards. The assessment was conducted using a risk-based approach, which evaluates the likelihood and potential impact of various risks on the country’s compliance framework.

National Cooperation and Coordination Lacking

One of the most critical areas of concern is national cooperation and coordination (R.2). Myanmar’s institutions lack effective communication and information sharing mechanisms, making it challenging to identify and disrupt financial crime networks.

Key Challenges:

Inadequate information sharing between institutions
Lack of a unified approach to combating financial crime
Limited resources for intelligence gathering and analysis

Money Laundering Offences Not Effective

The country also falls short in establishing an effective money laundering offence (R.3), with laws and regulations that are inadequate or unclear. This lack of clarity hinders the ability to prosecute individuals involved in money laundering activities.

Key Challenges:

Inadequate laws and regulations
Limited resources for investigations and prosecutions
Lack of international cooperation

Financial Institution Secrecy Laws Raise Concerns

Myanmar’s financial institution secrecy laws (R.9) have been criticized for being overly broad, allowing institutions to shield themselves from accountability and hindering investigations into suspicious transactions.

Key Challenges:

Overly broad secrecy laws
Limited transparency and accountability
Inadequate risk-based approach to monitoring suspicious transactions

Correspondent Banking Relationships Under Scrutiny

The country’s correspondent banking relationships (R.13) are also subject to scrutiny, with concerns raised about the lack of due diligence and monitoring by Myanmar banks when engaging in international transactions.

Key Challenges:

Lack of due diligence and risk assessment
Inadequate monitoring and reporting
Limited resources for compliance and oversight

Report Highlights 40 Key Areas for Improvement

The report highlights 40 key areas where Myanmar needs to improve its compliance risk management framework, including:

National cooperation and coordination (R.2)
Money laundering offence (R.3)
Financial institution secrecy laws (R.9)
Correspondent banking relationships (R.13)
Customer due diligence
Record keeping
Politically exposed persons
Targeted financial sanctions related to terrorism and terrorist financing

International Community Calls for Reform

The international community is calling on the Myanmar government to address these gaps and implement reforms to strengthen its compliance risk management framework.

“Compliance risk management is a critical component of any effective anti-money laundering and combating financing of terrorism (AML/CFT) regime,” said a spokesperson from the international community. “Myanmar must take concrete steps to address these weaknesses and ensure that its financial system is resilient to financial crime.”

What’s Next?

The Myanmar government has been given a roadmap for reform, with clear recommendations for improvement in each of the 40 areas identified by the report.

While progress will be slow, the international community remains committed to supporting Myanmar’s efforts to strengthen its compliance risk management framework and bring it into line with regional standards.