Myanmar at risk of money laundering as economy grows: Observers

YANGON: Myanmar’s rapidly growing economy will benefit its people but this growth, according to observers, could increase the risk of money laundering in the country.

The Asian Development Bank expects Myanmar’s economy to grow 8.4 per cent this year but if money laundering activities are allowed to go unchecked, this could erode investor confidence.

The real estate sector is projected to continue to do well in a developing country like Myanmar, but the industry is also often used to enable some to transform illegal takings into legitimate money. It would be difficult to find statistics and data on money laundering in Myanmar but its existence can be easily concluded.

“In Mandalay, when legal action is taken against drugs and jade, prices of real estate and other areas – all the businesses – slow down,” said Khin Maung Nyo, an economist. “So in reverse … because of the migrant money, because of the migrant people, because of the income from drugs and jade, they make the real estate market boom.”

In Myanmar, many pay for big-ticket items with cash, a practice that makes the money trail hard to follow.

“If you take a country where they have moved away from cash – so you’re making your payments by cheque or by (credit) card or by electronic transactions – every one of those transactions leaves a trace,” said Chris Batt, regional anti-money laundering adviser for the United Nations Office on Drug and Crime (UNODC).

“That makes it easy for the financial institution to carry out an audit trail to satisfy themselves as to the origins of the money. It also makes it easy for law enforcement to investigate the origins of the cash, to make sure it’s not coming from some kind of criminal activity. In a cash-based economy, it’s not quite so good,” he added.

UNODC lauded Myanmar’s commitment to fight money laundering when it enacted an anti-money laundering law in 2014.

But critics said the law is useless if it is not enforced.

“After enacting that money laundering law, there is no rules and regulation yet and there’s no enforcement, if I remember, there’s no case of taking any action against money laundering.

“Just the law is not enough, we need to have more rules and regulations, detailed instructions,” said Khin Maung Nyo. “Even if we have laws, rules and regulations, we need to strengthen our enforcement authority.”

The UNODC agrees, saying that Myanmar’s reputation is at stake if money laundering is allowed to go unchecked. It would erode the confidence of overseas investors if they start to think the country’s economy is based not on genuine, honest business but on the flow of criminal proceeds.

Observers highlight that if the ASEAN region becomes one single economic community, the free flow of people and cash may lead to increased money laundering activities, making the money trail even more difficult to trace.

– CNA/ec

Source: Channel NewsAsia

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Puma Energy", “MOGE”, “yangon new town”,"MECTEL", "hydropower", etc.