AML/CFT in Myanmar: a review of recent developments

Author:Rhys Thompson
Position:Independent Researcher, Yangon, Myanmar
Pages:358-369
SUMMARY

Purpose The purpose of this paper is to examine anti-money laundering and countering the financing of terrorism (AML/CFT) developments in Myanmar in light of its recent political and economic transition from military rule to a civilian, democratic government. This paper will discuss the changes in Myanmar’s AML/CFT frameworks, as well as international blacklisting and sanctions that have... (see full summary)

 
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AML/CFT in Myanmar: a review
of recent developments
Rhys Thompson
Independent Researcher, Yangon, Myanmar
Abstract
Purpose The purpose of this paperis to examine anti-money laundering and countering the nancingof
terrorism (AML/CFT) developmentsin Myanmar in light of its recent political and economic transition from
military rule to a civilian, democraticgovernment. This paper will discuss the changes in MyanmarsAML/
CFT frameworks, as well as internationalblacklisting and sanctions that have targeted Myanmar since the
late 1990s. It also highlightsissues that are likely to challenge Myanmars abilityto ensure compliance with
internationalbest practices, especially as the local nancial sector expandsand foreign investment increases.
Design/methodology/approach This paper drawson available literature and open source reporting.
Findings This review is a timely update of Myanmarsprogress with its AML/CFT frameworks at a time
that it is trying to encourage foreign investment and engagement and international businesses. But while
Myanmarsopeningis seen by many as an opportunity, it still presents signicant AML/CFT risks for
investors because of a considerablelack of technical expertise, as well as nancial and human resources to
ensure complianceand enforcement occur.
Originality/value Myanmar is a very under-researchedarea and has had minimal focus on its AML/
CFT frameworks or the risks present in the economy. This paper will be a useful source for researchers,
academics, policymakers, lawyers and private sector actors seeking to engage or invest in Myanmars
economy.
Keywords Money laundering, FATF, Myanmar, Anti-money laundering, Burma
Paper type General review
In 2010, Myanmar held its rst general elections since 1960[1]. After taking ofce in 2011,
the new administration embarked on an ambitious political and economic reform, opening
new sectors to foreign investment and introducing a new foreign investment law. This
attracted many international companies and foreign investment, creating a perception that
Myanmar was nally open for business. But despitepositive reforms, and the opposition
National League for Democracys (NLD) subsequent landslide election win in 2015,
Myanmar remains a high AML risk.
Myanmar does not have a strong track record with anti-money laundering and
countering the nancing of terrorism(AML/CFT) frameworks and is still a major source of
narcotic production and trafcking, traditionally involving heroin but increasingly
involving amphetamine-type stimulants (ATS) [United Nations Ofce of Drugs and Crime
(UNODC), 2015]. Myanmar has an underdeveloped economy, a nascent nancial sector and
widespread use of unregulated remittance systems, known locally as hundi. In 2014,
Myanmar introduced a new AML/CTF framework in an attempt to improve its nancial
systems and comply with the Financial Action Task Forces (FATF) AML/CFT
Recommendations[2],but this is yet to be formally evaluated.
Since Myanmars political transition began in 2011, Myanmar-specic scholarship has
increased signicantly(Selth, 2015). But there remains little focus on MyanmarsAML/CFT-
related issues, despite the increased foreign investment and the legal and regulatory
changes that have occurred. This paper contributes to this area by providing an update on
JMLC
21,3
358
Journalof Money Laundering
Control
Vol.21 No. 3, 2018
pp. 358-369
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-08-2017-0036
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm

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