FATF blacklists Myanmar, calls for due diligence to transactions in nation

Money laundering and terrorist financing watchdog FATF has put Myanmar on the "black list" and has called on members to apply enhanced due diligence to business relations and transactions in Myanmar

Don't want to miss the best from Business Standard?

Money laundering and terrorist financing watchdog Financial Action Task Force (FATF) has put Myanmar on the "black list" and has called on members to apply enhanced due diligence to business relations and transactions in Myanmar.

Myanmar has entered the FATF's high-risk jurisdictions list, often referred to as the 'black list'. The FATF blacklist, officially designated as High-Risk Jurisdictions subject to a Call for Action, identifies nations with weak anti-money laundering and counter-terrorist funding regulatory frameworks.

In February 2020, Myanmar committed to addressing its strategic deficiencies. Myanmar's action plan expired in September 2021.

In June 2022, the FATF strongly urged Myanmar to swiftly complete its action plan by October 2022 or the FATF would call on its members and urge all jurisdictions to apply enhanced due diligence to business relations and transactions with Myanmar.

FATF said that given the continued lack of progress and the majority of its action items still not addressed after a year beyond the action plan deadline, the FATF decided that further action was necessary in-line with its procedures. FATF called on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risk arising from Myanmar.

When applying enhanced due diligence measures, countries should ensure that flows of funds for humanitarian assistance, legitimate NPO activity and remittances are not disrupted, FATF advised.

It added that Myanmar should continue to work on implementing its action plan to address these deficiencies, including demonstrating an improved understanding of Money laundering (ML) risks in key areas, demonstrating that on-site/offsite inspections are risk-based, and hundi operators are registered and supervised.

Moreover, it urged Myanmar to demonstrate enhanced use of financial intelligence in law enforcement agency (LEA) investigations, and increase operational analysis and dissemination by the Financial Intelligence Units (FIU).

Plus, FATF also exhorted Myanmar to ensure that ML is investigated/prosecuted in line with risks; demonstrating investigation of transnational ML cases with international cooperation; demonstrating an increase in the freezing/seizing and confiscation of criminal proceeds, instrumentalities, and/or property of equivalent value; managing seized assets to preserve the value of seized goods until confiscation; and demonstrating implementation of targeted financial sanctions related to Proliferation Financing (PF).

The FATF urged Myanmar to work to fully address its deficiencies and Myanmar will remain on the list of countries subject to a call for action until its full action plan is completed.