Financial Exclusion and Targeting of NGOs in Myanmar: A Recipe for Disaster
A growing crisis is unfolding in Myanmar, where the country’s non-governmental organizations (NGOs) are facing unprecedented challenges due to bureaucratic and administrative impediments imposed by the government.
KYC Procedures and De-Risking of NGOs
The Myanmar authorities’ strict application of Know Your Customer (KYC) procedures has led to de-risking of NGOs, resulting in delayed, stopped, frozen or recalled transactions. Many NGOs are now shut out of the formal banking system, making it difficult for them to operate and deliver aid to those in need.
Consequences of De-Risking
- Delayed, stopped, frozen or recalled transactions
- Difficulty in operating and delivering aid to those in need
- Increased financial exclusion and hardship for vulnerable communities
Arbitrary Financial Regulations and Heightened Risks
Furthermore, the authorities have imposed arbitrary financial regulations on NGOs, exposing individual staff members and local partner organizations to heightened safety and security risks, including physical violence, arrests, and detentions.
Consequences of Arbitrary Financial Regulations
- Physical violence
- Arrests and detentions
- Exposure of staff and local partners to safety and security risks
- Undermining of trust and credibility with local communities
Intensification of Bureaucratic Red Tape
The intensification of bureaucratic red tape has also led to an increasing number of information requests, including private and confidential staff and beneficiary data, in violation of global data protection standards.
Consequences of Intensified Bureaucratic Red Tape
- Increased information requests
- Violation of global data protection standards
- Exposure of sensitive information
- Undermining of trust with local communities and international partners
Access Restrictions to Conflict-Affected Areas
In addition, NGOs are facing physical access restrictions to communities in need in conflict-affected areas, with attempts to interfere in the implementation of humanitarian activities reported.
Consequences of Access Restrictions
- Denial of aid to vulnerable populations
- Increased hardship and suffering for those in need
- Undermining of trust and credibility with local communities
Urgent Need for Action
The situation is particularly dire for 14.4 million people in need in Myanmar who rely on international aid to survive. The blacklisting of Myanmar by the Financial Action Task Force (FATF) would exacerbate the crisis, denying these vulnerable individuals access to basic services such as food, shelter, health, and education.
Call to Action
- Reconsideration of listing Myanmar as a “high-risk jurisdiction”
- Refrain from compelling states like Myanmar to adopt legislative measures that may jeopardize or curtail legitimate NGO operations
- Review of due diligence requirements and issuance of additional guidance as appropriate
- Public statement emphasizing the need for preserving and protecting legitimate NGO activities
Conclusion
The financial exclusion of NGOs in Myanmar is a recipe for disaster, threatening the very survival of those who rely on international aid. We urge FATF Member States to take immediate action to address this crisis and prevent further harm to vulnerable communities.