FATF status

Myanmar is subject to a FATF call on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from the jurisdiction.

Latest FATF Statement - 25 October 2024

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

In October 2022, 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 and FATF calls on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risk arising from Myanmar. The FATF requires that as part of enhanced due diligence, financial institutions should increase the degree and nature of monitoring of the business relationship, in order to determine whether those transactions or activities appear unusual or suspicious. If no further progress is made by February 2025, the FATF will consider countermeasures.

While overall progress continues to be slow, Myanmar has made recent progress against several items in its action plan. Myanmar should continue to work on implementing its action plan to address these deficiencies, including by: (1) demonstrating enhanced use of financial intelligence in law enforcement authorities (LEAs) investigations, and increasing operational analysis and disseminations by the financial intelligence unit (FIU); (2) ensuring that ML is investigated/prosecuted in line with risks; (3) demonstrating investigation of transnational ML cases with international cooperation; (4) demonstrating an increase in the freezing/seizing and confiscation of criminal proceeds, instrumentalities, and/or property of equivalent value; (5) managing seized assets to preserve the value of seized goods until confiscation; and (6) addressing technical compliance deficiencies related to R.7 to ensure effective implementation of targeted financial sanctions related to proliferation financing.

When applying enhanced due diligence, countries should ensure that flows of funds for humanitarian assistance, legitimate NPO activity and remittances are neither disrupted nor discouraged. The FATF will also continue to monitor whether Myanmar’s AML/CFT activities apply undue scrutiny to legitimate financial flows.

Myanmar will remain on the list of countries subject to a call for action until its full action plan is completed. 

European Commission list of countries with strategic deficiencies in their AML/CFT regimes

Myanmar is on the EU Commission list of High Risk jurisdictions which have been identified as having strategic deficiencies in their anti-money laundering and countering the financing of terrorism (AML/CFT) regimes that pose significant threats to the financial system of the European Union (‘high-risk third countries’).

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Myanmar was undertaken in 2023. According to that Evaluation, Myanmar was deemed Compliant for 7 and Largely Compliant for 18 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Corruption remains a significant issue in Myanmar, exacerbated by the military regime's lack of independent law enforcement and judicial capacity. Despite some progress made before 2021, the regime has manipulated the Anti-Corruption Commission to target political opponents and suppress dissent, while high-profile corruption cases, such as the sentencing of military officials for bribery, highlight ongoing challenges. Although some companies have adopted anti-corruption measures, the pervasive nature of corruption across various sectors continues to hinder investment and trade.

Myanmar's economy has faced significant setbacks following the military coup on February 1, 2021, leading to a sharp decline in real GDP, which shrank by 9% in FY 2020-21 and an additional 12% in FY 2021-22. Although there was a modest recovery with a 4% growth in FY 2022-23, ongoing conflict and economic mismanagement have severely hampered commercial activity, compounded by foreign exchange restrictions and a deteriorating investment climate.

The investment climate in Myanmar has significantly deteriorated following the military coup on February 1, 2021, leading to a sharp decline in commercial activity and a contraction of real GDP. Foreign exchange restrictions imposed by the Central Bank of Myanmar, along with the suspension of operations by many foreign companies, have further complicated the investment landscape, creating a challenging environment for potential investors. The rule of law is increasingly compromised, with risks of property expropriation and nationalization, making it essential for investors to conduct thorough due diligence.