Infamous for its border casino towns and proliferation of scam hubs, Myanmar has remained on the Financial Action Task Force’s (FATF) “black list” of High-Risk Jurisdictions Subject to a Call for Action following the agency’s latest Plenary Meeting, held last week.
However, the FATF has continued to call for the application of enhanced due diligence on Myanmar rather than the more serious countermeasures, citing steps taken to improve its anti-money laundering and counter-terrorism financing (AML/CTF) regime.
Under the FATF’s guidelines, enhanced due diligence suggests financial institutions should apply extra scrutiny to customers, transactions and business relationships connected to the jurisdiction due to AML/CTF deficiencies. It stops short of applying countermeasures, which effectively recommends that countries and financial institutions protect themselves from transactions.
In maintaining Myanmar on the black list, the FATF noted that authorities had in 2020 committed to address strategic deficiencies. However, the agency decided in 2022 that, given the continued lack of progress and failure to address the majority of its action items even a year beyond the action plan deadline, further action was necessary. As such, the FATF called on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risk arising from Myanmar. It also stated that, if no further progress is made by October 2026, it will consider countermeasures.
In its latest update, the FATF said, “During this reporting cycle, Myanmar has taken steps to improve its AML/CFT regime by demonstrating enhanced use of financial intelligence in law enforcement authorities (LEAs) investigations; demonstrating investigation of transnational money laundering cases with international cooperation; and demonstrating an increase in the freezing/seizing and confiscation of criminal proceeds, instrumentalities, and/or property of equivalent value.”
However, it added that Myanmar should “urgently” work to further implement its FATF action plan to address its strategic deficiencies, including increasing operational analysis and disseminations by the financial intelligence unit and ensuring that money laundering is investigated/prosecuted in line with risks.
It also noted that fraud and cyber scam activities in Myanmar remain extensive and present significant illicit finance risks, despite some steps Myanmar has taken to tackle such operations, including the formation of a national committee to combat online fraud and gambling and strengthening regional and international cooperation.
“The FATF calls on Myanmar to take appropriate action to address the illicit finance risks associated with fraud and cyber scam threats and will continue to work with Myanmar in this regard,” the agency said. “In tackling these illicit finance threats, Myanmar should have due regard for the victims of trafficking by criminal groups.”
Myanmar, it added, will remain on the list of countries subject to a call for action until its full action plan is completed.
The latest developments come just a week after Chinese President Xi Jinping called on Myanmar to continue to combat criminal activities including online gambling during a meeting between the two countries in Beijing.
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