ISSUE: 2026 No. 47 ISSN 2335-6677 Economic policy changes Since coming to power, Myanmar’s military authorities have changed many economic and financial sector policies, often in ways that create or exacerbate incentives to work around state-controlled systems. Sometimes, individuals and businesses have had no choice but to use informal systems to keep their livelihoods or stay in business. One example is trade restrictions. The regime now requires import licensing for all goods. In 2024, the Ministry of Commerce adopted an export-first policy requiring importers to provide proof of export earnings in order to obtain an import license. 17 However, licenses are tightly controlled, so many individuals and businesses were forced to use informal channels to obtain necessities such as pharmaceuticals or spare parts for factory machinery. Informal trade, especially between Thailand and Myanmar, increased in 2022 and 2023, as individuals and businesses circumvented the regime’s trade and foreign exchange controls. These steps resemble economic coping strategies, even though the tactics are similar to money laundering techniques. 18 Military authorities also adopted a multiple exchange rate regime, which includes statesanctioned rates ranging from the official rate (2,100 MMK/USD) to the migrant worker remittance rate (3,975 MMK/USD). 19 They require migrant workers to remit 25% of their wages through official channels, either to their family or their bank account in Myanmar. 20 They also require exporters to return export proceeds to Myanmar, and convert a share of these earnings – currently 15% – to Myanmar kyat at the official rate. These policies increase the regime’s access to and control over forex. However, they reduce export earnings, which in turn affect business incomes – sometimes making businesses unviable. In response, businesses have increased trade mispricing and mis-invoicing, often as a tool to minimise exchange-rate-related losses rather than to launder money. The regime has also increased deficit monetisation, which has increased inflation to around 2530% per annum in recent years. Despite this, interest rates from banks – which are determined by the authorities – remain far below inflation. Individuals and businesses have taken steps to insulate themselves from this by moving money from bank deposits to other stores of value, including gold, property, jewellery, and even cryptocurrency. In sum, regime policies have incentivised the use of informal money transfer systems, trade-related practices that resemble money laundering, and storing value outside the financial system. Hundis: The Big Problem? Myanmar’s efforts to crack down on hundi dealers began with training and education; later, it turned to enforcement. In early 2024, for example, the Global New Light of Myanmar (GNLM) noted that the Central Bank of Myanmar (CBM) had investigated 99 alleged hundi agents and the Myanmar Police Force had taken action against 20 of them. 21 Later that year, the GNLM noted that 194 money changer licenses had been revoked between January 2023 and August 2024. 22 In their 2024 Follow-up Report to FATF, the CBM and Myanmar’s Ministry of Home Affairs noted that they had begun collecting information on unregistered money transfer businesses, with over 50 already identified. 23 Regime-controlled media have also associated hundis with currency speculation and destabilising Myanmar’s economy. 24 They have also formed a task force to “investigate Hundi brokers.” 25 These efforts, amongst others, persuaded the FATF to rate Myanmar as “largely compliant” in its oversight of FATF Recommendation 14 on Money and Value Transfer Services. 26 5