Myanmar to be put back on money-laundering watchlist

Myanmar, the world’s third largest opium producer, is to be listed back on a global money laundering watchlist by Paris-based Financial Action Task Force (FATF), a global finance watchdog, Reuters reported, adding that an announcement is expected for February 21.

The move comes amid concerns of money-laundering by transnational drug traffickers and weak regulation of Myanmar’s financial system, the newswire cited insiders.

FATF, an intergovernmental organisation, removed Myanmar from the list of states deemed weak in combating money laundering and terrorist financing in June 2016 based on progress the country had initially made.

However, an evaluation report conducted two years later identified that many weaknesses persisted, particularly with regards to implementation, as well as due to a lack understanding of high-risk issues at banks with few of them having taken a risk-based approach.

Two sources with knowledge of the FATF’s proceedings and its investigation into Myanmar now said the watchdog found that implementation of the nation’s anti-money laundering action plan was far from complete and the country will be put back on the organisation’s grey list.

While being on the list does not carry any sanctions, it could curtail the growth of financial, investment and trade flows to and from Myanmar, the report said.

Drugs, arms, tropical wood and gemstones fuel black economy

Myanmar lies at the heart of the Golden Triangle region, the epicenter of illicit drug production and trafficking in Asia-Pacific. It also has significant problems with illegal jade mining, arms trafficking and logging, among other offences, FATF noted.

“Myanmar faces extremely high levels of proceeds-generating crimes” and was “exposed to a large number of very significant money laundering threats,” the report said, also noting that “activities of large-scale transnational crime groups” were “closely related” to ethnic armed groups which control areas of Myanmar’s territory, particularly in the north and northeast.

The report further stated that corruption remained a “very significant challenge” in Myanmar while its state-owned financial institutions and enterprises were “poorly governed and weakly regulated.”

Myanmar, the world’s third largest opium producer, is to be listed back on a global money laundering watchlist by Paris-based Financial Action Task Force (FATF), a global finance watchdog, Reuters reported, adding that an announcement is expected for February 21. The move comes amid concerns of money-laundering by transnational drug traffickers and weak regulation of Myanmar's financial system, the newswire cited insiders. FATF, an intergovernmental organisation, removed Myanmar from the list of states deemed weak in combating money laundering and terrorist financing in June 2016 based on progress the country had initially made. However, an evaluation report conducted two years...

Myanmar, the world’s third largest opium producer, is to be listed back on a global money laundering watchlist by Paris-based Financial Action Task Force (FATF), a global finance watchdog, Reuters reported, adding that an announcement is expected for February 21.

The move comes amid concerns of money-laundering by transnational drug traffickers and weak regulation of Myanmar’s financial system, the newswire cited insiders.

FATF, an intergovernmental organisation, removed Myanmar from the list of states deemed weak in combating money laundering and terrorist financing in June 2016 based on progress the country had initially made.

However, an evaluation report conducted two years later identified that many weaknesses persisted, particularly with regards to implementation, as well as due to a lack understanding of high-risk issues at banks with few of them having taken a risk-based approach.

Two sources with knowledge of the FATF’s proceedings and its investigation into Myanmar now said the watchdog found that implementation of the nation’s anti-money laundering action plan was far from complete and the country will be put back on the organisation’s grey list.

While being on the list does not carry any sanctions, it could curtail the growth of financial, investment and trade flows to and from Myanmar, the report said.

Drugs, arms, tropical wood and gemstones fuel black economy

Myanmar lies at the heart of the Golden Triangle region, the epicenter of illicit drug production and trafficking in Asia-Pacific. It also has significant problems with illegal jade mining, arms trafficking and logging, among other offences, FATF noted.

“Myanmar faces extremely high levels of proceeds-generating crimes” and was “exposed to a large number of very significant money laundering threats,” the report said, also noting that “activities of large-scale transnational crime groups” were “closely related” to ethnic armed groups which control areas of Myanmar’s territory, particularly in the north and northeast.

The report further stated that corruption remained a “very significant challenge” in Myanmar while its state-owned financial institutions and enterprises were “poorly governed and weakly regulated.”

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