Financial Crime World

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Money Laundering Techniques in Myanmar Exposed

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A recent report has shed light on the extent to which Myanmar has implemented international anti-money laundering (AML) standards. The country’s Mutual Evaluation 2018, conducted by the Financial Action Task Force (FATF), reveals a mixed picture of compliance with key recommendations.

Risk and Approach Assessment Lacking

Myanmar was found to be only partially compliant (PC) in assessing and applying risk-based approaches to money laundering (R.1). This is a critical aspect of AML, as it helps identify potential risks and ensures that resources are allocated effectively.

Key Findings

  • Myanmar’s risk assessment mechanisms were deemed inadequate.
  • The country failed to apply a risk-based approach to money laundering.

National Cooperation and Coordination Inadequate

The country’s national cooperation and coordination mechanisms were also deemed largely compliant (LC), but only just. This is concerning, given the importance of interagency collaboration in combating money laundering.

Key Findings

  • Myanmar’s national cooperation and coordination mechanisms were found to be largely compliant.
  • However, there were concerns about the effectiveness of these mechanisms.

Key Offenses and Sanctions

Myanmar was found to be compliant (C) in terms of having a clear money laundering offense in place (R.3). However, its confiscation and provisional measures were largely compliant (LC), while targeted financial sanctions related to terrorism and terrorist financing were also largely compliant (LC).

Key Findings

  • Myanmar has a clear money laundering offense in place.
  • However, there are concerns about the effectiveness of its confiscation and provisional measures.

Financial Institution Secrecy Laws

The country’s financial institution secrecy laws were found to be compliant (C) with international standards.

Key Findings

  • Myanmar’s financial institution secrecy laws are in line with international standards.
  • However, there may be concerns about the effectiveness of these laws.

Customer Due Diligence Inadequate

Myanmar was only partially compliant (PC) in terms of customer due diligence, a critical aspect of AML. This is concerning, given the importance of verifying customers’ identities and assessing their risk profiles.

Key Findings

  • Myanmar’s customer due diligence mechanisms were found to be inadequate.
  • The country failed to verify customers’ identities and assess their risk profiles effectively.

Record Keeping and Politically Exposed Persons

The country’s record keeping mechanisms were found to be largely compliant (LC), while its handling of politically exposed persons was also partially compliant (PC).

Key Findings

  • Myanmar’s record keeping mechanisms are in line with international standards.
  • However, there may be concerns about the effectiveness of these mechanisms.

Correspondent Banking and Money Transfer Services

Myanmar’s correspondent banking arrangements were only partially compliant (PC), while its money or value transfer services were non-compliant (NC).

Key Findings

  • Myanmar’s correspondent banking arrangements are in line with international standards.
  • However, there may be concerns about the effectiveness of these arrangements.

New Technologies and Wire Transfers

The country’s approach to new technologies, including wire transfers, was deemed largely compliant (LC).

Key Findings

  • Myanmar’s approach to new technologies is in line with international standards.
  • However, there may be concerns about the effectiveness of this approach.

Reporting of Suspicious Transactions

Myanmar was found to be compliant (C) in terms of reporting suspicious transactions.

Key Findings

  • Myanmar has a clear system for reporting suspicious transactions.
  • However, there may be concerns about the effectiveness of this system.

Tipping-Off and Confidentiality

The country’s handling of tipping-off and confidentiality issues was only partially compliant (PC).

Key Findings

  • Myanmar’s handling of tipping-off and confidentiality issues is in line with international standards.
  • However, there may be concerns about the effectiveness of this approach.

DNFBPs: Customer Due Diligence and Other Measures

Myanmar was only partially compliant (PC) with international standards for designated non-financial businesses and professions (DNFBPs), including customer due diligence and other measures.

Key Findings

  • Myanmar’s handling of DNFBPs is in line with international standards.
  • However, there may be concerns about the effectiveness of this approach.

Transparency and Beneficial Ownership

The country’s approach to transparency and beneficial ownership of legal persons and arrangements was deemed non-compliant (NC).

Key Findings

  • Myanmar’s approach to transparency and beneficial ownership is not in line with international standards.
  • There may be concerns about the effectiveness of this approach.

Regulation and Supervision of Financial Institutions

Myanmar was only partially compliant (PC) with international standards for the regulation and supervision of financial institutions.

Key Findings

  • Myanmar’s handling of financial institution supervision is in line with international standards.
  • However, there may be concerns about the effectiveness of this approach.

Powers of Supervisors

The country’s powers of supervisors were found to be largely compliant (LC).

Key Findings

  • Myanmar’s powers of supervisors are in line with international standards.
  • There may be concerns about the effectiveness of these powers.

Responsibilities of Law Enforcement and Investigative Authorities

Myanmar’s law enforcement and investigative authorities had responsibilities that were deemed largely compliant (LC).

Key Findings

  • Myanmar’s law enforcement and investigative authorities have clear responsibilities.
  • However, there may be concerns about the effectiveness of these responsibilities.

Cash Couriers and Statistics

The country’s approach to cash couriers was only partially compliant (PC), while its statistics on AML were also partially compliant (PC).

Key Findings

  • Myanmar’s handling of cash couriers is in line with international standards.
  • However, there may be concerns about the effectiveness of this approach.

International Cooperation

Myanmar has agreed to cooperate internationally in combating money laundering.

Key Findings

  • Myanmar has signed agreements to cooperate internationally.
  • There may be concerns about the effectiveness of these agreements.

In conclusion, while Myanmar has made progress in combating money laundering, there are still many areas where improvement is necessary. The country needs to strengthen its legal framework, enhance international cooperation, and improve its financial institutions supervision. It also needs to improve its customer due diligence practices, increase transparency and beneficial ownership, and enhance its handling of cash couriers and statistics on AML. In general, Myanmar’s efforts need to be more comprehensive and effective in order to effectively combat money laundering. I hope this helps! Let me know if you have any other questions.

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