Financial Crime World

Myanmar’s AML/CFT Reform Efforts Remain Incomplete

Yangon, Myanmar - Despite some progress, Myanmar’s efforts to combat money laundering and terrorist financing (AML/CFT) have significant deficiencies, according to a recent report by the international financial watchdog.

Incomplete Risk-Based Approach to Supervision

The report notes that while Myanmar has implemented some measures to address AML/CFT risks, it still lacks a comprehensive risk-based approach to supervision and monitoring of financial institutions. This includes:

  • No periodic reviews of ML/TF risk profiles for financial institutions other than banks
  • Gaps in fit and proper requirements for all financial institutions, including insurance and securities firms

Weaknesses in Financial Intelligence Unit (MFIU)

The report criticizes the MFIU’s lack of systems for operational analysis and reliance on manual processes. Additionally:

  • The unit lacks a secure database and dissemination process for sharing information with foreign counterparts
  • Strategic analysis reports produced by the MFIU lack added value and do not provide a comprehensive view of ML/TF trends and vulnerabilities

Positive Steps Taken by Myanmar’s MFIU

Despite these challenges, the MFIU has taken some positive steps:

  • Establishing a secure web-based database
  • Mandatory training for staff on handling sensitive and confidential information

Recommendations for Improvement

The report recommends that Myanmar should prioritize implementing a comprehensive risk-based approach to supervision and monitoring of financial institutions. Additionally:

  • Enhance the capacity of the MFIU to conduct operational analysis and strategic assessments
  • Develop a secure database and dissemination process for sharing information with foreign counterparts

Myanmar has been under international pressure to improve its AML/CFT regime since being identified as a high-risk jurisdiction by the Financial Action Task Force (FATF) in 2018. The country is expected to address these deficiencies to avoid further sanctions and maintain its financial stability.