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FATF Statement re AML Strategic Deficiencies:
Date: 16 February 2012
Despite Myanmar’s high-level political commitment to work with the
FATF and APG to address its strategic AML/CFT deficiencies,
Myanmar has not made sufficient progress in implementing its
action plan, and certain strategic AML/CFT deficiencies remain.
Myanmar should work on addressing these deficiencies, including
by: (1) adequately criminalising terrorist financing (Special
Recommendation II); (2) establishing and implementing adequate
procedures to identify and freeze terrorist assets (Special
Recommendation III); (3) further strengthening the extradition
framework in relation to terrorist financing (Recommendation 35
and Special Recommendation I); (4) ensuring a fully operational
and effectively functioning Financial Intelligence Unit
(Recommendation 26); (5) enhancing financial transparency
(Recommendation 4); and (6) strengthening customer due
diligence measures (Recommendation 5). The FATF encourages
Myanmar to address its remaining deficiencies and continue the
process of implementing its action plan.
____________________________________________________
Sanctions:
May 14, 2012 - EU Council Regulation (EU) No 409/2012 of 14
May 2012 suspending certain restrictive measures laid down in
Regulation (EC) No 194/2008 renewing and strengthening the
restrictive measures in respect of Burma/Myanmar
Read Regulation
On April 17, 2012, the Office of Foreign Assets Control issued
General License No. 14-C pursuant to the Burmese Sanctions
Regulations, 31 CFR Part 537, authorizing certain financial
transactions in support of humanitarian, religious, and other not-
for-profit activities in Burma.
Read More
On 19 December 2011 the EU Council implemented Regulation
No 1345/2011 renewing and strengthening the restrictive
measures in respect of Burma/Myanmar implemented in
Regulation (EC) No 194/2008
Read Regulation
The European Union adopted Council Regulation (EC) No
1081/2000 on 22 May 2000. The Regulation provided, among
other matters, for a freeze on the assets of certain persons
related to important governmental functions in Burma/Myanmar,
and their families. Council Common Position 96/635/CFSP had
previously adopted the position that listed persons should be
subject to a visa ban.
The European Union has since extended the scope of the visa
ban and assets freeze to target more persons linked to economic
or political activities of the State Peace and Development Council.
Council Regulation (EC) No 1853/2004 of 25 October 2004
strengthened the measures by introducing a ban on the financing
of certain Burmese state-owned enterprises. Council Regulation
(EC) No 194/2008, inter alia, broadened the scope of the
investment ban to apply to enterprises in certain extractive
industries.
For further information: http://www.hm-treasury.gov.
uk/fin_sanctions_burma.htm
For further info re US Sanctions: http://www.treasury.
gov/resource-center/sanctions/Programs/pages/burma.aspx
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Burma is not a regional or offshore financial center. Its economy is
underdeveloped and largely isolated from the international
financial system. However, Burma’s prolific drug production and
lack of transparency make it attractive for domestic money
laundering. While its underdeveloped economy is not adequate
as a destination to harbor funds, the low risk of enforcement and
prosecution makes it appealing to the criminal underground. In
addition to drug trafficking, trafficking in persons and public
corruption are major sources of illicit proceeds. Money launderers
also exploit the illegal trade in wildlife, gems, and timber; and
trade-based money laundering is of increasing concern.
Burma is second only to Afghanistan in opium production and is
increasingly a source of methamphetamine and amphetamine
type substances. Its long, porous borders are poorly patrolled. In
some remote regions where smuggling is active, ongoing ethnic
tensions, and in some cases armed conflict, impede government
territorial control. In other areas, political arrangements between
traffickers and Burma’s government allow organized crime groups
to function with minimal risk of interdiction. The Government of
Burma (GOB) considers drug enforcement secondary to security
and is willing to allow narcotics trafficking in border areas in
exchange for cooperation from ethnic armed groups.
The government dominates the economy. State-owned
enterprises and military holding companies control a substantial
portion of Burma’s resources. A move toward privatization in 2010
transferred significant assets to private parties. This was followed
in 2011 by sales of government buildings and plots of land, mostly
in Rangoon; however, most new owners appear to be business
associates of the former ruling generals or politicians in the
current civilian government and some are allegedly connected to
drug trafficking.
Corruption is endemic in both business and government.
Transparency International’s 2010 Corruption Perception Index
ranks Burma 176 out of 178 countries. This extensive corruption,
overall lack of governmental transparency, and an extremely weak
financial regulatory system have stymied the GOB’s recent,
preliminary gestures toward financial reform. In the past several
years, the GOB enacted several reforms intended to reduce
vulnerability to drug money laundering in the banking sector.
However, connections to powerful patrons still outweigh rule of
law, and Burma continues to face significant risk of drug money
being funneled into commercial ventures.
Since 1997, the United States has imposed economic sanctions
on Burma due to large-scale repression of the country’s
democratic opposition. Executive Order 13047 (1997) prohibits U.
S. persons from making or facilitating new investments in Burma.
Subsequent measures expand the scope of economic sanctions.
In 2003, the Burmese Freedom and Democracy Act and Executive
Order 13310 added a ban on importing Burmese products and
exporting financial services to Burma and blocked the assets of
the former military government (SPDC) and three designated
Burmese foreign trade financial institutions. A 2007 Executive
Order (E.O. 13348) freezes the assets of additional designated
individuals responsible for human rights abuses and public
corruption. In July 2008, Congress enacted legislation that
expands the categories of individuals and entities subject to asset
freezes and travel restrictions and of Burmese products subject to
import bans.
In 2003, the United States also designated Burma as a jurisdiction
of primary money laundering concern and imposed
countermeasures, pursuant to Section 311 of the USAPATRIOT
Act, because of its extremely weak anti-money laundering
/counter-terrorist financing (AML/CFT) regime.
In its October 2011 Public Statement, the Financial Action Task
Force (FATF) notes concern that Burma continues to have
significant strategic AML/CFT deficiencies and has not reported
any progress in addressing these deficiencies in accordance with
its action plan. In response to FATF Public Statements concerning
Burma, the United States continues to issue advisories to financial
institutions, alerting them of the risk posed by Burma’s AML/CFT
deficiencies and of the need to conduct enhanced due diligence
with respect to financial transactions involving Burma.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: no
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: NO
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 214 from January to
October 2011
Number of CTRs received and time frame: 137,910 from January
to October 2011
STR covered entities: Banks (including bank-operated money
changing counters), customs officials, state-owned insurance
company and small loans enterprise, securities exchange,
accountants, the legal and real estate sectors, and dealers of
precious metals and stones
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Not available
Convictions: Not available
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES
Burma is a member of the Asia/Pacific Group on Money
Laundering (APG), a FATF-style regional body. Its most recent
mutual evaluation can be found here: http://www.apgml.
org/documents/docs/17/Myanmar%202008.pdf
Enforcement and implementation issues and comments:
Burma’s financial sector is extremely underdeveloped and most
currency is held outside the formal banking system. The informal
economy generates few reliable records, and the GOB makes no
meaningful efforts to ascertain the amount or source of income or
value transfers. Regulation of financial institutions is likewise
extremely weak. While some Burmese financial institutions may
engage in currency transactions related to international narcotics
trafficking that include significant amounts of U.S. currency, the
absence of publicly available GOB information precludes
confirmation of such conduct. Burmese law does not contain any
customer due diligence (CDD) requirements, although the Central
Bank (CB) issues guidelines for banks to follow and some entities
implement CDD procedures under other, non-AML related legal
provisions.
Burma does not specifically criminalize terrorist financing or
designate it as a predicate offense for money laundering, nor is
terrorist financing an extraditable offense.
Corruption is pervasive in every level of Burma’s government.
Senior military officials are essentially above the law and free to
engage in a range of activities designed to enrich themselves and
maintain their hold on power. Government workers do not receive
a living wage and routinely seek bribes as additional
“compensation.” Any efforts to address the rampant corruption
are impeded by the military’s control over all civilian authority,
including the police. The GOB should end all policies that facilitate
corrupt practices and money laundering, including strengthening
regulatory oversight of the formal financial sector and
implementing a transparent transaction reporting regime. The FIU
should become a fully funded independent agency that functions
without interference, and the GOB should supply adequate
resources to administrative and judicial authorities for their
enforcement of government regulations. The GOB should also
move the CB from under the operational control of the Ministry of
Finance and make it an operationally independent entity.
The GOB should become a party to the UN Convention against
Corruption.
____________________________________________________
US State Dept Narcotics Report 2012(introduction):
Burma continues to be a major source of opium and also
produces and exports heroin, in large quantities, second only to
Afghanistan. Since 1996, Burma has also become a regional
source for amphetamine type stimulants (ATS). Production of
these narcotics is often co-located and occurs primarily along
Burma’s eastern borders in areas controlled by ethnic armed
groups beyond Government of Burma (GOB) immediate
jurisdiction. The 2011 Joint Burma-UN Office of Drugs and Crime
(UNODC) illicit crop survey reported that for the fifth year in a row,
opium poppy cultivation increased. The total area under opium
poppy cultivation was estimated at 43,600 hectares, an increase
of 14% compared to 2010 (38,100 hectares). Opium production is
now at its highest level since 2004. In addition, UNODC estimated
that during 2011 the potential production of opium increased by
5% to 610 metric tons. Methamphetamine production in Burma is
also a major concern with estimates of production and trafficking
increasing, though there is no reliable method to determine the
levels of methamphetamine production. The last U.S. government
joint opium yield survey occurred in 2004, though the GOB
agreed in December 2011 to restart this survey shortly before the
Secretary of State’s visit to Burma.
Officers from the Central Committee for Drug Abuse Control
(CCDAC) remained ready to enforce Burma’s narcotics laws,
though lack of training, resources and obstacles such as
coordination with the Burmese Army (BA) and ethnic Border
Guard Forces (BGFs) prevented many significant anti-trafficking
actions. The GOB underfunds its police force, including the
CCDAC. The GOB considers drug enforcement secondary to
security and is willing to allow narcotics trafficking in border areas
in exchange for cooperation from ethnic armed groups. The GOB
policy of folding ethnic armed groups into quasi GOB-controlled
BGFs complicates anti-narcotics efforts as BGFs are often
complicit, if not active protectors, of illicit drug production and
trafficking. Loosely-controlled remote territories and GOB
bureaucracy forces CCDAC officers to work with the BA and BGF;
in this process actionable intelligence is often leaked by the BA or
BGF to the targeted traffickers.
Further, conflicts with ethnic armed groups such as the United Wa
State Army (UWSA), Shan State Army (SSA), and the Kachin
Independence Army (KIA) have put vast swaths of territory
beyond GOB control. Despite recent reforms by the GOB and its
calls for a negotiated settlement to conflicts along Burma’s
borders, GOB negotiators fail to reach meaningful solutions and
ceasefires are constantly broken and renegotiated. Ceasefires
when reached, such as the August 2011 renewed ceasefire with
the UWSA perpetuate the status quo of large tracts of land of this
notorious trafficking group remaining beyond GOB control.
Burma was once again judged by the U.S. government in 2011 as
one of three countries to have “failed demonstrably” to meet its
international counternarcotics obligations.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Burma is a source country for men, women, and children who are
subjected to forced labor and for women and children subjected
to sex trafficking in other countries. Burmese children are forced
to labor as hawkers and beggars in Thailand. Many Burmese
men, women, and children who migrate for work in Thailand,
Malaysia, China, Bangladesh, India, and South Korea are
subjected to conditions of forced labor or sex trafficking in these
countries. Poor economic conditions within Burma have led to
increased legal and illegal migration of Burmese men, women,
and children throughout East Asia and to destinations as far as
the Middle East, where they are subject to forced labor and sex
trafficking. For example, men are subjected to forced labor in the
fishing and construction industries abroad. Some Bangladeshi
trafficking victims transit Burma en route to Malaysia, while
Chinese victims transit Burma en route to Thailand. The
government has yet to address the systemic political and
economic factors that cause many Burmese to seek employment
through both legal and illegal means in neighboring countries,
where some become victims of trafficking.
Trafficking within Burma continues to be a significant problem, as
the military engages in the unlawful conscription of child soldiers
and continues to be the main perpetrator of forced labor inside
the country. Burmese civilian and military authorities’ use of
forced or compulsory labor remains a widespread and serious
problem, particularly targeting members of ethnic minority groups.
Complainants to the ILO during the year indicated a trend of
forced farming accompanied by threats of fines, loss of farmers’
land, and imprisonment for those refusing to comply. Beneficiaries
of these actions are the Burmese military, defense-owned
commercial interests, and large private corporations; these
arrangements are facilitated by local government authorities, who
maintain that such activities are carried out in line with the law. A
study published during the year found an acute problem in Chin
State where 92 percent of over 600 households surveyed
reported at least one episode of a household member subjected
to forced labor, including being forced to porter military supplies,
sweep for landmines, or build roads, with the Burmese military
imposing two-thirds of these forced labor demands. Because
authorities refuse to recognize members of certain ethnic minority
groups (including the Rohingyas) as citizens and provide them
with identification documentation, they are more vulnerable to
trafficking. Military and civilian officials have for years
systematically used men, women, and children for forced labor for
the development of infrastructure and state-run agricultural and
commercial ventures, as well as forced portering for the military.
Government authorities use various forms of coercion, including
threats of financial and physical harm, to compel households to
provide forced labor. Those living in areas with the highest military
presence, including remote border areas populated by ethnic
groups, are most at risk for forced labor. The regime’s treatment
of ethnic minorities makes them particularly vulnerable to
trafficking.
Military and civilian officials subject men, women, and children to
forced labor, and men and boys as young as 11 years old are
forcibly recruited to serve in the Burma army as well as the armed
wings of ethnic minority groups through intimidation, coercion,
threats, and violence. Some observers estimate that thousands of
children are forced to serve in Burma’s national army as
desertions of men in the army continue. Children of the urban
poor are at particular risk of conscription. UN reports indicate that
the army has targeted orphans and children on the streets and in
railway stations, and young novice monks from monasteries for
recruitment. Children are threatened with jail if they do not agree
to join the army, and are sometimes physically abused.
Subsequent to cyclone Giri in October 2010, there were verified
reports of underage recruitment in cyclone-affected areas by the
Burmese armed forces. Children are also subjected to forced
labor by private individuals and groups, in tea shops, home
industries, agricultural plantations, and as beggars. Exploiters
subject girls to sex trafficking, particularly in urban areas.
Anecdotal evidence suggests that a small number of foreign
pedophiles – normally long-term residents in Burma – occasionally
exploit Burmese children in the country.
The Government of Burma does not fully comply with the minimum
standards for the elimination of trafficking and is not making
significant efforts to do so. Authorities continued efforts to
address the cross-border sex trafficking of women and girls, but
the forced labor of civilians perpetrated by regime officials and the
conscription of child soldiers by military officials remained serious
problems. The Burmese regime’s gross economic
mismanagement and human rights abuses, coupled with the
Burma military’s continued widespread use of forced and child
labor as well as recruitment of child soldiers, remain the driving
factors behind Burma’s significant trafficking problem, both within
the country and abroad. The climate of impunity and repression
and the regime’s lack of accountability in forced labor and the
recruitment of child soldiers represent the top casual factors for
Burma’s significant trafficking problem. Although the government
of Burma took some steps to address cross-border sex trafficking,
it has not demonstrated serious and sustained efforts to clamp
down on military and local authorities who are themselves deriving
economic benefit from forced labor practices. On key human
trafficking issues, most notably the complicity of public officials
and the use of forced labor, the Government of Burma is not
making significant efforts to comply with the minimum standards
for the elimination of trafficking, warranting a ranking of Tier 3.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
The Government of Burma defined almost all anti-regime activities
as “acts of terrorism,” making little distinction between peaceful
political dissent and violent attacks by insurgents or criminals. The
government characterized dissident groups as aligned with
terrorist organizations and has used this as justification to
scrutinize and disrupt dissident activities. In December 2009,
bombs exploded in Rangoon and other parts of Burma. The
government attributed the bombings to subversives or insurgents
intent on disturbing the stability of the state. Authorities have not
made public any evidence of a genuine investigation nor have
they identified the specific perpetrator(s). Requests by the U.S.
Embassy to view either specific bomb scenes or remaining
fragments of explosive devices were consistently denied.
In October, a Government of Burma liaison informed U.S. officials
that its Special Branch police had arrested three members of an
anti-Burma group that was planning to set off explosives in
Rangoon, including targeting the U.S. Embassy. The Burmese
liaison advised that the arrested persons were not members of a
terrorist organization as defined by the U.S. government. This
was a departure from past practice, in which, as noted, the
Government of Burma defined all groups allegedly engaged in
bombings as terrorists.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Date: 16 February 2012
Despite Myanmar’s high-level political commitment to work with the
FATF and APG to address its strategic AML/CFT deficiencies,
Myanmar has not made sufficient progress in implementing its
action plan, and certain strategic AML/CFT deficiencies remain.
Myanmar should work on addressing these deficiencies, including
by: (1) adequately criminalising terrorist financing (Special
Recommendation II); (2) establishing and implementing adequate
procedures to identify and freeze terrorist assets (Special
Recommendation III); (3) further strengthening the extradition
framework in relation to terrorist financing (Recommendation 35
and Special Recommendation I); (4) ensuring a fully operational
and effectively functioning Financial Intelligence Unit
(Recommendation 26); (5) enhancing financial transparency
(Recommendation 4); and (6) strengthening customer due
diligence measures (Recommendation 5). The FATF encourages
Myanmar to address its remaining deficiencies and continue the
process of implementing its action plan.
____________________________________________________
Sanctions:
May 14, 2012 - EU Council Regulation (EU) No 409/2012 of 14
May 2012 suspending certain restrictive measures laid down in
Regulation (EC) No 194/2008 renewing and strengthening the
restrictive measures in respect of Burma/Myanmar
Read Regulation
On April 17, 2012, the Office of Foreign Assets Control issued
General License No. 14-C pursuant to the Burmese Sanctions
Regulations, 31 CFR Part 537, authorizing certain financial
transactions in support of humanitarian, religious, and other not-
for-profit activities in Burma.
Read More
On 19 December 2011 the EU Council implemented Regulation
No 1345/2011 renewing and strengthening the restrictive
measures in respect of Burma/Myanmar implemented in
Regulation (EC) No 194/2008
Read Regulation
The European Union adopted Council Regulation (EC) No
1081/2000 on 22 May 2000. The Regulation provided, among
other matters, for a freeze on the assets of certain persons
related to important governmental functions in Burma/Myanmar,
and their families. Council Common Position 96/635/CFSP had
previously adopted the position that listed persons should be
subject to a visa ban.
The European Union has since extended the scope of the visa
ban and assets freeze to target more persons linked to economic
or political activities of the State Peace and Development Council.
Council Regulation (EC) No 1853/2004 of 25 October 2004
strengthened the measures by introducing a ban on the financing
of certain Burmese state-owned enterprises. Council Regulation
(EC) No 194/2008, inter alia, broadened the scope of the
investment ban to apply to enterprises in certain extractive
industries.
For further information: http://www.hm-treasury.gov.
uk/fin_sanctions_burma.htm
For further info re US Sanctions: http://www.treasury.
gov/resource-center/sanctions/Programs/pages/burma.aspx
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Burma is not a regional or offshore financial center. Its economy is
underdeveloped and largely isolated from the international
financial system. However, Burma’s prolific drug production and
lack of transparency make it attractive for domestic money
laundering. While its underdeveloped economy is not adequate
as a destination to harbor funds, the low risk of enforcement and
prosecution makes it appealing to the criminal underground. In
addition to drug trafficking, trafficking in persons and public
corruption are major sources of illicit proceeds. Money launderers
also exploit the illegal trade in wildlife, gems, and timber; and
trade-based money laundering is of increasing concern.
Burma is second only to Afghanistan in opium production and is
increasingly a source of methamphetamine and amphetamine
type substances. Its long, porous borders are poorly patrolled. In
some remote regions where smuggling is active, ongoing ethnic
tensions, and in some cases armed conflict, impede government
territorial control. In other areas, political arrangements between
traffickers and Burma’s government allow organized crime groups
to function with minimal risk of interdiction. The Government of
Burma (GOB) considers drug enforcement secondary to security
and is willing to allow narcotics trafficking in border areas in
exchange for cooperation from ethnic armed groups.
The government dominates the economy. State-owned
enterprises and military holding companies control a substantial
portion of Burma’s resources. A move toward privatization in 2010
transferred significant assets to private parties. This was followed
in 2011 by sales of government buildings and plots of land, mostly
in Rangoon; however, most new owners appear to be business
associates of the former ruling generals or politicians in the
current civilian government and some are allegedly connected to
drug trafficking.
Corruption is endemic in both business and government.
Transparency International’s 2010 Corruption Perception Index
ranks Burma 176 out of 178 countries. This extensive corruption,
overall lack of governmental transparency, and an extremely weak
financial regulatory system have stymied the GOB’s recent,
preliminary gestures toward financial reform. In the past several
years, the GOB enacted several reforms intended to reduce
vulnerability to drug money laundering in the banking sector.
However, connections to powerful patrons still outweigh rule of
law, and Burma continues to face significant risk of drug money
being funneled into commercial ventures.
Since 1997, the United States has imposed economic sanctions
on Burma due to large-scale repression of the country’s
democratic opposition. Executive Order 13047 (1997) prohibits U.
S. persons from making or facilitating new investments in Burma.
Subsequent measures expand the scope of economic sanctions.
In 2003, the Burmese Freedom and Democracy Act and Executive
Order 13310 added a ban on importing Burmese products and
exporting financial services to Burma and blocked the assets of
the former military government (SPDC) and three designated
Burmese foreign trade financial institutions. A 2007 Executive
Order (E.O. 13348) freezes the assets of additional designated
individuals responsible for human rights abuses and public
corruption. In July 2008, Congress enacted legislation that
expands the categories of individuals and entities subject to asset
freezes and travel restrictions and of Burmese products subject to
import bans.
In 2003, the United States also designated Burma as a jurisdiction
of primary money laundering concern and imposed
countermeasures, pursuant to Section 311 of the USAPATRIOT
Act, because of its extremely weak anti-money laundering
/counter-terrorist financing (AML/CFT) regime.
In its October 2011 Public Statement, the Financial Action Task
Force (FATF) notes concern that Burma continues to have
significant strategic AML/CFT deficiencies and has not reported
any progress in addressing these deficiencies in accordance with
its action plan. In response to FATF Public Statements concerning
Burma, the United States continues to issue advisories to financial
institutions, alerting them of the risk posed by Burma’s AML/CFT
deficiencies and of the need to conduct enhanced due diligence
with respect to financial transactions involving Burma.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: no
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: NO
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 214 from January to
October 2011
Number of CTRs received and time frame: 137,910 from January
to October 2011
STR covered entities: Banks (including bank-operated money
changing counters), customs officials, state-owned insurance
company and small loans enterprise, securities exchange,
accountants, the legal and real estate sectors, and dealers of
precious metals and stones
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Not available
Convictions: Not available
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES
Burma is a member of the Asia/Pacific Group on Money
Laundering (APG), a FATF-style regional body. Its most recent
mutual evaluation can be found here: http://www.apgml.
org/documents/docs/17/Myanmar%202008.pdf
Enforcement and implementation issues and comments:
Burma’s financial sector is extremely underdeveloped and most
currency is held outside the formal banking system. The informal
economy generates few reliable records, and the GOB makes no
meaningful efforts to ascertain the amount or source of income or
value transfers. Regulation of financial institutions is likewise
extremely weak. While some Burmese financial institutions may
engage in currency transactions related to international narcotics
trafficking that include significant amounts of U.S. currency, the
absence of publicly available GOB information precludes
confirmation of such conduct. Burmese law does not contain any
customer due diligence (CDD) requirements, although the Central
Bank (CB) issues guidelines for banks to follow and some entities
implement CDD procedures under other, non-AML related legal
provisions.
Burma does not specifically criminalize terrorist financing or
designate it as a predicate offense for money laundering, nor is
terrorist financing an extraditable offense.
Corruption is pervasive in every level of Burma’s government.
Senior military officials are essentially above the law and free to
engage in a range of activities designed to enrich themselves and
maintain their hold on power. Government workers do not receive
a living wage and routinely seek bribes as additional
“compensation.” Any efforts to address the rampant corruption
are impeded by the military’s control over all civilian authority,
including the police. The GOB should end all policies that facilitate
corrupt practices and money laundering, including strengthening
regulatory oversight of the formal financial sector and
implementing a transparent transaction reporting regime. The FIU
should become a fully funded independent agency that functions
without interference, and the GOB should supply adequate
resources to administrative and judicial authorities for their
enforcement of government regulations. The GOB should also
move the CB from under the operational control of the Ministry of
Finance and make it an operationally independent entity.
The GOB should become a party to the UN Convention against
Corruption.
____________________________________________________
US State Dept Narcotics Report 2012(introduction):
Burma continues to be a major source of opium and also
produces and exports heroin, in large quantities, second only to
Afghanistan. Since 1996, Burma has also become a regional
source for amphetamine type stimulants (ATS). Production of
these narcotics is often co-located and occurs primarily along
Burma’s eastern borders in areas controlled by ethnic armed
groups beyond Government of Burma (GOB) immediate
jurisdiction. The 2011 Joint Burma-UN Office of Drugs and Crime
(UNODC) illicit crop survey reported that for the fifth year in a row,
opium poppy cultivation increased. The total area under opium
poppy cultivation was estimated at 43,600 hectares, an increase
of 14% compared to 2010 (38,100 hectares). Opium production is
now at its highest level since 2004. In addition, UNODC estimated
that during 2011 the potential production of opium increased by
5% to 610 metric tons. Methamphetamine production in Burma is
also a major concern with estimates of production and trafficking
increasing, though there is no reliable method to determine the
levels of methamphetamine production. The last U.S. government
joint opium yield survey occurred in 2004, though the GOB
agreed in December 2011 to restart this survey shortly before the
Secretary of State’s visit to Burma.
Officers from the Central Committee for Drug Abuse Control
(CCDAC) remained ready to enforce Burma’s narcotics laws,
though lack of training, resources and obstacles such as
coordination with the Burmese Army (BA) and ethnic Border
Guard Forces (BGFs) prevented many significant anti-trafficking
actions. The GOB underfunds its police force, including the
CCDAC. The GOB considers drug enforcement secondary to
security and is willing to allow narcotics trafficking in border areas
in exchange for cooperation from ethnic armed groups. The GOB
policy of folding ethnic armed groups into quasi GOB-controlled
BGFs complicates anti-narcotics efforts as BGFs are often
complicit, if not active protectors, of illicit drug production and
trafficking. Loosely-controlled remote territories and GOB
bureaucracy forces CCDAC officers to work with the BA and BGF;
in this process actionable intelligence is often leaked by the BA or
BGF to the targeted traffickers.
Further, conflicts with ethnic armed groups such as the United Wa
State Army (UWSA), Shan State Army (SSA), and the Kachin
Independence Army (KIA) have put vast swaths of territory
beyond GOB control. Despite recent reforms by the GOB and its
calls for a negotiated settlement to conflicts along Burma’s
borders, GOB negotiators fail to reach meaningful solutions and
ceasefires are constantly broken and renegotiated. Ceasefires
when reached, such as the August 2011 renewed ceasefire with
the UWSA perpetuate the status quo of large tracts of land of this
notorious trafficking group remaining beyond GOB control.
Burma was once again judged by the U.S. government in 2011 as
one of three countries to have “failed demonstrably” to meet its
international counternarcotics obligations.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Burma is a source country for men, women, and children who are
subjected to forced labor and for women and children subjected
to sex trafficking in other countries. Burmese children are forced
to labor as hawkers and beggars in Thailand. Many Burmese
men, women, and children who migrate for work in Thailand,
Malaysia, China, Bangladesh, India, and South Korea are
subjected to conditions of forced labor or sex trafficking in these
countries. Poor economic conditions within Burma have led to
increased legal and illegal migration of Burmese men, women,
and children throughout East Asia and to destinations as far as
the Middle East, where they are subject to forced labor and sex
trafficking. For example, men are subjected to forced labor in the
fishing and construction industries abroad. Some Bangladeshi
trafficking victims transit Burma en route to Malaysia, while
Chinese victims transit Burma en route to Thailand. The
government has yet to address the systemic political and
economic factors that cause many Burmese to seek employment
through both legal and illegal means in neighboring countries,
where some become victims of trafficking.
Trafficking within Burma continues to be a significant problem, as
the military engages in the unlawful conscription of child soldiers
and continues to be the main perpetrator of forced labor inside
the country. Burmese civilian and military authorities’ use of
forced or compulsory labor remains a widespread and serious
problem, particularly targeting members of ethnic minority groups.
Complainants to the ILO during the year indicated a trend of
forced farming accompanied by threats of fines, loss of farmers’
land, and imprisonment for those refusing to comply. Beneficiaries
of these actions are the Burmese military, defense-owned
commercial interests, and large private corporations; these
arrangements are facilitated by local government authorities, who
maintain that such activities are carried out in line with the law. A
study published during the year found an acute problem in Chin
State where 92 percent of over 600 households surveyed
reported at least one episode of a household member subjected
to forced labor, including being forced to porter military supplies,
sweep for landmines, or build roads, with the Burmese military
imposing two-thirds of these forced labor demands. Because
authorities refuse to recognize members of certain ethnic minority
groups (including the Rohingyas) as citizens and provide them
with identification documentation, they are more vulnerable to
trafficking. Military and civilian officials have for years
systematically used men, women, and children for forced labor for
the development of infrastructure and state-run agricultural and
commercial ventures, as well as forced portering for the military.
Government authorities use various forms of coercion, including
threats of financial and physical harm, to compel households to
provide forced labor. Those living in areas with the highest military
presence, including remote border areas populated by ethnic
groups, are most at risk for forced labor. The regime’s treatment
of ethnic minorities makes them particularly vulnerable to
trafficking.
Military and civilian officials subject men, women, and children to
forced labor, and men and boys as young as 11 years old are
forcibly recruited to serve in the Burma army as well as the armed
wings of ethnic minority groups through intimidation, coercion,
threats, and violence. Some observers estimate that thousands of
children are forced to serve in Burma’s national army as
desertions of men in the army continue. Children of the urban
poor are at particular risk of conscription. UN reports indicate that
the army has targeted orphans and children on the streets and in
railway stations, and young novice monks from monasteries for
recruitment. Children are threatened with jail if they do not agree
to join the army, and are sometimes physically abused.
Subsequent to cyclone Giri in October 2010, there were verified
reports of underage recruitment in cyclone-affected areas by the
Burmese armed forces. Children are also subjected to forced
labor by private individuals and groups, in tea shops, home
industries, agricultural plantations, and as beggars. Exploiters
subject girls to sex trafficking, particularly in urban areas.
Anecdotal evidence suggests that a small number of foreign
pedophiles – normally long-term residents in Burma – occasionally
exploit Burmese children in the country.
The Government of Burma does not fully comply with the minimum
standards for the elimination of trafficking and is not making
significant efforts to do so. Authorities continued efforts to
address the cross-border sex trafficking of women and girls, but
the forced labor of civilians perpetrated by regime officials and the
conscription of child soldiers by military officials remained serious
problems. The Burmese regime’s gross economic
mismanagement and human rights abuses, coupled with the
Burma military’s continued widespread use of forced and child
labor as well as recruitment of child soldiers, remain the driving
factors behind Burma’s significant trafficking problem, both within
the country and abroad. The climate of impunity and repression
and the regime’s lack of accountability in forced labor and the
recruitment of child soldiers represent the top casual factors for
Burma’s significant trafficking problem. Although the government
of Burma took some steps to address cross-border sex trafficking,
it has not demonstrated serious and sustained efforts to clamp
down on military and local authorities who are themselves deriving
economic benefit from forced labor practices. On key human
trafficking issues, most notably the complicity of public officials
and the use of forced labor, the Government of Burma is not
making significant efforts to comply with the minimum standards
for the elimination of trafficking, warranting a ranking of Tier 3.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
The Government of Burma defined almost all anti-regime activities
as “acts of terrorism,” making little distinction between peaceful
political dissent and violent attacks by insurgents or criminals. The
government characterized dissident groups as aligned with
terrorist organizations and has used this as justification to
scrutinize and disrupt dissident activities. In December 2009,
bombs exploded in Rangoon and other parts of Burma. The
government attributed the bombings to subversives or insurgents
intent on disturbing the stability of the state. Authorities have not
made public any evidence of a genuine investigation nor have
they identified the specific perpetrator(s). Requests by the U.S.
Embassy to view either specific bomb scenes or remaining
fragments of explosive devices were consistently denied.
In October, a Government of Burma liaison informed U.S. officials
that its Special Branch police had arrested three members of an
anti-Burma group that was planning to set off explosives in
Rangoon, including targeting the U.S. Embassy. The Burmese
liaison advised that the arrested persons were not members of a
terrorist organization as defined by the U.S. government. This
was a departure from past practice, in which, as noted, the
Government of Burma defined all groups allegedly engaged in
bombings as terrorists.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| MYANMAR (BURMA) |
| KnowYourCountry |
|
|
Extracted from IMF Report: Myanmar - 2011 Article IV
Consultation
Financial Sector Policies: Facilitating Development
The financial sector is small and repressed with administrative controls
on financial intermediation. 5 Key obstacles are the deposit-to-capital
ratio,6 onerous collateral requirements, administratively set interest
rates, and segmented banking activities. These controls and the
exchange restrictions led to a reportedly large unregulated shadow
financial system. The regulatory treatment of state banks and private
banks is uneven, bank governance is poor, and banking supervision
does not follow the Basel Core Principles. There is no unified national
electronic payments and settlement system, although plans are under
way to develop the financial infrastructure.
Recently, the authorities eased some restrictions on the financial sector.
Since March 2011, more than 40 new bank branches were allowed and
the list of acceptable collateral was further expanded. These steps
improved access to credit and led to acceleration in private sector credit
growth, albeit from a very low base.
Staffs’ views
Expediting financial sector modernization is essential to facilitate
development and prepare the sector for the ASEAN Economic
Community. While gradual liberalization of loan interest rates, as with
deposit rates, should begin in tandem with reforms to the monetary
policy framework, broader efforts are needed to improve financial
intermediation. These include phasing out the deposit-to-capital ratio
while strengthening capital requirements, further expanding the list of
acceptable collateral, and easing administrative requirements on
expanding branch networks. Joint ventures with foreign financial
institutions would expedite the transfer of technology before the
ASEAN financial integration in 2015.
Financial liberalization should be complemented with a stronger
regulatory and supervisory framework. While there is a broad need to
upgrade regulation and supervision, concurrent with financial
liberalization the priority should be given to moving to internationally
accepted definitions for loan classification and provisioning,
strengthening conflict-of-interest requirements, and introducing a net
open foreign currency position limit. Efforts to strengthen the AML/CFT
regime should be guided by the action plan agreed with the
Financial Action Task Force.
Read Full Report
AML News / Updates
On April 17, 2012, the Office of Foreign Assets Control issued General
License No. 14-C pursuant to the Burmese Sanctions Regulations, 31
CFR Part 537, authorizing certain financial transactions in support of
humanitarian, religious, and other not-for-profit activities in Burma.
Read More
On 19 December 2011 the EU Council implemented Regulation No
1345/2011 renewing and strengthening the restrictive measures in
respect of Burma/Myanmar implemented in Regulation (EC) No 194/2008
Read More
On 19 December 2011 the EU Council implemented Regulation No
1345/2011 renewing and strengthening the restrictive measures in
respect of Burma/Myanmar implemented in Regulation (EC) No 194/2008
Read Regulation
Consultation
Financial Sector Policies: Facilitating Development
The financial sector is small and repressed with administrative controls
on financial intermediation. 5 Key obstacles are the deposit-to-capital
ratio,6 onerous collateral requirements, administratively set interest
rates, and segmented banking activities. These controls and the
exchange restrictions led to a reportedly large unregulated shadow
financial system. The regulatory treatment of state banks and private
banks is uneven, bank governance is poor, and banking supervision
does not follow the Basel Core Principles. There is no unified national
electronic payments and settlement system, although plans are under
way to develop the financial infrastructure.
Recently, the authorities eased some restrictions on the financial sector.
Since March 2011, more than 40 new bank branches were allowed and
the list of acceptable collateral was further expanded. These steps
improved access to credit and led to acceleration in private sector credit
growth, albeit from a very low base.
Staffs’ views
Expediting financial sector modernization is essential to facilitate
development and prepare the sector for the ASEAN Economic
Community. While gradual liberalization of loan interest rates, as with
deposit rates, should begin in tandem with reforms to the monetary
policy framework, broader efforts are needed to improve financial
intermediation. These include phasing out the deposit-to-capital ratio
while strengthening capital requirements, further expanding the list of
acceptable collateral, and easing administrative requirements on
expanding branch networks. Joint ventures with foreign financial
institutions would expedite the transfer of technology before the
ASEAN financial integration in 2015.
Financial liberalization should be complemented with a stronger
regulatory and supervisory framework. While there is a broad need to
upgrade regulation and supervision, concurrent with financial
liberalization the priority should be given to moving to internationally
accepted definitions for loan classification and provisioning,
strengthening conflict-of-interest requirements, and introducing a net
open foreign currency position limit. Efforts to strengthen the AML/CFT
regime should be guided by the action plan agreed with the
Financial Action Task Force.
Read Full Report
AML News / Updates
On April 17, 2012, the Office of Foreign Assets Control issued General
License No. 14-C pursuant to the Burmese Sanctions Regulations, 31
CFR Part 537, authorizing certain financial transactions in support of
humanitarian, religious, and other not-for-profit activities in Burma.
Read More
On 19 December 2011 the EU Council implemented Regulation No
1345/2011 renewing and strengthening the restrictive measures in
respect of Burma/Myanmar implemented in Regulation (EC) No 194/2008
Read More
On 19 December 2011 the EU Council implemented Regulation No
1345/2011 renewing and strengthening the restrictive measures in
respect of Burma/Myanmar implemented in Regulation (EC) No 194/2008
Read Regulation
| Last Updated: 16 May 2012 |
