Dynamics and deficiencies of anti‐money laundering efforts in Myanmar
| Date | 01 January 2003 |
| Pages | 80-84 |
| DOI | https://doi.org/10.1108/13685200310809446 |
| Published date | 01 January 2003 |
| Author | Brian P. Joyce |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control Ð Vol. 6 No. 1
Dynamics and De®ciencies of Anti-Money
Laundering Eorts in Myanmar
Brian P. Joyce
INTRODUCTION
The anti-money laundering regime in the country of
Myanmar (Burma) suers from numerous ¯aws and
ineciencies. The lack of internationally accepted
money laundering provisions, weak law enforcement
capacity, an under-regulated banking system and
proliferation of drug tracking activity combine to
form a haven for easy incorporation of illicit proceeds
into the mainstream Myanmar economy. Speci®-
cally, proceeds of drug tracking have become a cri-
tical component of the economic composition,
funnelling pro®ts from local, regional, and interna-
tional tracking activities into commercial enter-
prises throughout both the country and the region,
intertwining criminal proceeds with legitimate infra-
structure and economic development initiatives.
Acquiescence, in addition to facilitation, by the
Myanmar government fuels the convergence of
illegally acquired currency and the composition of
the legitimate economy, contributing to continued
abuses of the ®nancial sector, neglectful and corrup-
tive action by law enforcement ocers in dealing
with ®nancial crimes, and diminished capacity per-
taining to due diligence procedures in the banking
sector. Upon release of the Financial Action Task
Force's (FATF) Non-Cooperative Countries or Ter-
ritories (NCCT) review during June of 2001,
Myanmar was newly minted as a non-cooperative
jurisdiction in the ®ght against money laundering.
This status was renewed by the FATF in June 2002,
which complemented an advisory issued in April
2002 by the United States Financial Crimes Enforce-
ment Network (FinCEN). The FinCEN advisory
recommended enhanced scrutiny of banking rela-
tionships for those entities aliated with Myanmar's
®nancial sector and outlined a roll call of inadequacies
and vulnerabilities. This unwelcome membership and
non-cooperative label is one that Myanmar will have
great diculty shedding in the coming year.
LAWS AND REGULATIONS
Until recently, the 1993 Narcotics Drugs and Psycho-
tropic Substances Law has been identi®ed as the
primary legislative tool in Myanmar for combating
money laundering.
1
This law criminalizes the act of
money laundering, if predicated by narcotics track-
ing, in addition to permitting the seizure of assets if
they are derived from the drug trade.
2
The purchase,
sale, or transfer of propery acquired by illegal means
is criminalised under the 1986 Law for the Cogni-
zance of Possession.
3
Myanmar's central banking
regulations have been identi®ed as lacking applicable
provisions for ®nancial institutions.
4
The Control of
Money Laundering Law (CMLL) No. 6/2002 was
approved and signed on 17th June, 2002. The legisla-
tive passage revamps the paper regime of Myanmar
and institutes a front line defence against the crime
of money laundering. The CMLL was coordinated
through consideration of UN Conventions, UN
Model Law, FATF recommendations and respective
laws of ASEAN nations. The new law extends the
range of predicate crimes to cover up to ten oences,
puts forth penalties of imprisonment that may reach
ten years, mandates formation of the Central Control
Board on Money Laundering, requires banks and
®nancial institutions to implement know-your-
customer standards for account openings and trans-
actions, calls for ®nancial records to be maintained
for at least ®ve years, and outlines procedures for
the reporting of unusual or suspicious transactions.
5
While enactment of a law focusing on the proceeds
of crime is a crucial ®rst step in addressing the scourge
of money laundering, the political will of Myanmar's
government to carry out and enforce such a dictate
is suspect at best. Governmental adherence to man-
dated legislative requirements, implementing ade-
quate enforcement measures, and installing reform
mechanisms to the ®nancial sector will be challenged
as a result of the constant reliance on drug dollars to
infuse the local economy with working capital and
providing the government with needed ®nancial
resources.
BUREAUCRATIC ENFORCEMENT
STRUCTURE
At present, there is no bureaucratic structure to
combat money laundering in Myanmar.
6
On a
Page 80
Journalof Money Laundering Control
Vol.6, No. 1, 2002, pp. 80 ±84
#HenryStewart Publications
ISSN1368-5201
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