Financial Crime World

Myanmar’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Framework: Areas of Concern and Recommendations

The Asia/Pacific Group on Money Laundering (APG) report for Myanmar in 2018 highlights several areas of concern regarding the country’s AML/CFT framework and its implementation. This article summarizes key findings and recommendations from the report.

Key Areas of Concern

Lack of Risk-Based Approach

  • The National Risk Assessment (NRA) has not been used to adjust policies and priorities or adopt a risk-based approach.
  • This oversight hinders the effectiveness of AML/CFT measures, as they are not tailored to specific risks.

Weak Cooperation between Law Enforcement Agencies

  • While operational and policy-level cooperation mechanisms exist, there are weaknesses in prioritizing Money Laundering (ML).
  • Enhancing ML prioritization is crucial for effective investigation and prosecution of ML offenses.

Insufficient Staffing and Resources

  • The Myanmar Financial Intelligence Unit (MFIU) suffers from a shortage of staffing and relies on manual processes.
  • This limitation impairs the unit’s ability to effectively analyze and disseminate financial intelligence.

Low-Quality Suspicious Transaction Reports (STRs)

  • STRs are only filed by banks, and the quality is low.
  • Improving STR quality is essential for effective detection and investigation of ML offenses.

Limited Use of Financial Intelligence

  • MFIU disseminations are not regularly used to initiate predicate offense investigations.
  • Enhancing the use of financial intelligence can improve the effectiveness of AML/CFT measures.

Prioritization of Asset-Tracing Investigations

  • ML investigations and asset-tracing investigations begin after a conviction for the predicate has been obtained.
  • This approach is inefficient, as it does not focus on following the money trail.

Lack of Awareness among Prosecutors and Law Enforcement Agencies

  • Prosecutors and LEAs lack an awareness of the ML offense, and investigations do not focus on following the money trail.
  • Improving awareness of the ML offense is crucial for effective investigation and prosecution of ML offenses.

Inadequate Asset Restraint and Confiscation Powers

  • Myanmar does not prioritize asset restraint and confiscation and lacks powers to confiscate property of corresponding value.
  • Enhancing asset restraint and confiscation powers can improve the effectiveness of AML/CFT measures.

Key Recommendations

Implement a Risk-Based Approach

  • Use the NRA to adjust policies and priorities and adopt a risk-based approach.

Enhance Cooperation between Law Enforcement Agencies

  • Strengthen ML prioritization and parallel investigations with predicate offense investigations.

Increase Staffing and Resources for MFIU

  • Address the shortage of staffing and improve resources for MFIU.

Improve STR Quality

  • Enhance the quality of STRs filed by banks.

Increase Use of Financial Intelligence

  • Regularly use MFIU disseminations to initiate predicate offense investigations.

Prioritize ML Investigations

  • Conduct ML investigations in parallel with predicate offense investigations.

Enhance Awareness among Prosecutors and Law Enforcement Agencies

  • Improve awareness of the ML offense and focus on following the money trail.

Strengthen Asset Restraint and Confiscation Powers

  • Prioritize asset restraint and confiscation and enhance powers to confiscate property of corresponding value.