Myanmar’s Financial Intelligence Unit Falls Short on Supervision and Cooperation

YANGON, MYANMAR - A recent assessment of Myanmar’s Financial Intelligence Unit (MFIU) has revealed that it is only partially compliant with international standards for fit and proper supervision beyond banks.

Challenges Faced by MFIU

Lack of systems for operational analysis
Reliance on manual processes
Dual role as FIU and financial investigation team raises doubts about its capacity to carry out its functions freely
Insufficient capacity and IT systems to conduct operational analysis
Strategic analysis reports lacking depth, failing to identify trends and patterns of predicate offending

Cooperation with Foreign Authorities

Myanmar is not yet a member of the Egmont Group, limiting its ability to share information securely with foreign counterparts
Relies on informal channels and emails, which raises security concerns

Positive Steps Taken by MFIU

Established a secure web-based database for sharing information with domestic and international partners
Developed standard operating procedures for security and confidentiality of information received

Importance of Independence

Critical for effectiveness in identifying and disrupting money laundering and terrorist financing activities
Section 11 of the AML Law appears to place some constraints on the unit’s independence, which needs to be addressed

Conclusion

While Myanmar’s Financial Intelligence Unit has made some progress in recent years, it still faces significant challenges in terms of fit and proper supervision beyond banks. To improve its performance, the MFIU must address these challenges and ensure that it has the necessary capacity, systems, and cooperation with foreign authorities to effectively identify and disrupt money laundering and terrorist financing activities.

Recommendations

Address the lack of systems for operational analysis
Develop sufficient capacity and IT systems to conduct operational analysis
Improve strategic analysis reports to include value-added analysis
Enhance cooperation with foreign authorities by joining the Egmont Group or developing a secure information-sharing system
Ensure the independence of the MFIU by revising section 11 of the AML Law