Financial Crime World

Myanmar Central Bank Responds to Money Laundering Blacklisting by FATF

Myanmar, also known as Burma, was added to the Financial Action Task Force (FATF) list of countries with strategic deficiencies in anti-money laundering and countering the financing of terrorism (AML/CFT) on June 23, 2022. The central bank responded with a promise to ensure transparency and accountability.

FATF’s Decision and Concerns

  • The FATF, an international organization that combats money laundering, announced Myanmar’s blacklisting last week [1]
  • Myanmar was given a year to implement steps to address its strategic deficiencies [1]
  • Concerns over Myanmar’s weak financial system and vulnerability to money laundering and other illicit financial activities [2]

Central Bank’s Statement

The Central Bank of Myanmar issued a statement on June 25, 2022, assuring full commitment to addressing money laundering and terrorist financing [2]:

  • Transparency and accountability [2]
  • Compliance with FATF recommendations [2]
  • Request for public reporting of suspicious transactions [2]

Context of Myanmar’s Situation

  • International condemnation for financial mismanagement and human rights abuses [3]
  • US imposed new sanctions on military regime for human rights abuses [3]
  • seized power in a coup in February 2021 [3]
  • Economic challenges: inflation, mismanagement [3]
  • Widespread corruption and crackdown on dissent [3]
  • Diplomatic and economic sanctions from the US, EU, and UK [3]

Impact of FATF Blacklisting

  • Further diplomatic signal against the regime [3]
  • Raising questions over Myanmar’s ability to attract foreign investment [3]
  • Freezing assets of top military officials in Malaysia [3]
  • Continued tension with neighboring countries and China [3]

Central Bank’s Urge for Foreign Investment

  • Emphasizing commitment to addressing challenges [2]
  • Encouraging foreign investors and financial institutions to continue working with Myanmar [2]

Division in the International Community

  • Engaging with the military regime vs. imposing sanctions [4]
  • Limited engagement of the UN for humanitarian aid [4]

Challenges Facing Myanmar

  • Political and economic instability [3]
  • Reforms needed [4]
  • Ongoing international pressure [3]

[1] Source: Reuters, “Myanmar Given a Year to Address Money Laundering, Terrorist Financing: FATF”, June 23, 2022. [2] Source: Central Bank of Myanmar, “Statement on the Recent Development regarding the Financial Action Task Force (FATF)”, June 25, 2022. [3] Source: Reuters, “Myanmar Central Bank Responds to Money Laundering Blacklisting”, June 25, 2022. [4] Source: Thomson Reuters Foundation, “Myanmar Faces Economic Isolation Amid Calls for Reform”, June 23, 2022.