Financial Crime World

Banking Sector Compliance Issues Plague Myanmar, Report Reveals

A recent report on Myanmar’s follow-up to anti-money laundering and combating the financing of terrorism (AML/CFT) efforts has highlighted significant compliance issues in the country’s banking sector.

Challenges Implementing FATF Recommendations

According to the report, Myanmar faces challenges in implementing key recommendations from the Financial Action Task Force (FATF), a global organization that sets standards for AML/CFT. The report’s findings are reflected in ratings that indicate the extent of Myanmar’s compliance with FATF recommendations.

Non-Compliance and Partial Compliance

In several areas, Myanmar was found to be non-compliant or only partially compliant. For example:

  • Confiscation and freezing of assets related to terrorism and terrorist financing has not been fully implemented.
  • Effective targeted financial sanctions related to proliferation have not been put in place.
  • Money laundering offense is a concern, as well as customer due diligence and record keeping requirements for financial institutions.

Transparency and Beneficial Ownership Issues

The report highlights concerns over:

  • Lack of transparency and beneficial ownership of legal persons and arrangements.
  • Inadequate regulation and supervision of financial institutions.

Progress Made in Some Areas

On a positive note, Myanmar has made progress in some areas, including:

  • National cooperation and coordination between different authorities.
  • Establishment of a financial intelligence unit to gather and analyze financial information.

Call for Action

However, the report’s findings underscore the need for Myanmar to address its compliance issues and implement further reforms to prevent the misuse of its financial system. The country’s banking sector is seen as a key area for improvement, with many institutions lacking robust AML/CFT controls and procedures.

The report’s authors have called on Myanmar to take immediate action to address these concerns and bring its AML/CFT regime into line with international standards. Failure to do so could result in further scrutiny from the FATF and other global authorities, as well as potential sanctions and reputational damage for the country’s financial institutions.