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ISSUE: 2026 No. 47 ISSN 2335-6677 22 Global New Light of Myanmar, “CBM cracks down on digital currency, forex, and Hundi fraud,” August 3, 2024, https://www.gnlm.com.mm/cbm-cracks-down-on-digital-currency-forex-and-hundifraud/ 23 Asia/Pacific Group on Money Laundering, “5th Follow-up Report: Mutual Evaluation of Myanmar,” October 2023 https://apgml.org/about-us/members/members/myanmar 24 The Global New Light of Myanmar, “Govt cracks down on currency speculation, illegal foreign exchange,” June 4, 2024, https://www.gnlm.com.mm/govt-cracks-down-on-currency-speculationillegal-foreign-exchange/ 25 Global New Light of Myanmar, “CBM intensifies crackdown on illegal Hundi businesses,” January 14, 2024, https://www.gnlm.com.mm/cbm-intensifies-crackdown-on-illegal-hundi-businesses/ 26 Asia/Pacific Group on Money Laundering, “5th Follow-up Report: Mutual Evaluation of Myanmar,” October 2023 https://apgml.org/about-us/members/members/myanmar 27 Rhys Thompson, “’Underground Banking’ and Myanmar’s Changing Hundi System,” Journal of Money Laundering Control,” Vol. 22, No. 2, 2019, pp. 339-349. 28 Asia/Pacific Group on Money Laundering, “APG Mutual Evaluation Report on Myanmar Against the FATF 40 Recommendations (2003) and 9 Special Recommendations,” July 10, 2008, https://apgml.org/sites/default/files/documents//Myanmar_MER_2008.pdf 29 Myanmar Digital News, “Real Estate Agents Need Registration Certificate to Run Business,” December 8, 2022, https://www.mdn.gov.mm/en/real-estate-agents-need-registration-certificates-runbusinesses 30 FinCEN, “FinCEN Alert on Prevalent Virtual Currency Investment Scam Commonly Known as ‘Pig Butchering’,” FinCEN 2023 Alert 005, September 8, 2023, https://www.fincen.gov/system/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf 31 Financial Crimes Enforcement Network, “FinCEN Finds Cambodia-Based Huione Group to be of Primary Money Laundering Concern, Proposes a Rule to Combat Cyber Scams and Heists,” May 1, 2025, https://www.fincen.gov/news/news-releases/fincen-finds-cambodia-based-huione-group-be-primarymoney-laundering-concern 32 Rhys Thompson, “’Underground Banking’ and Myanmar’s Changing Hundi System,” Journal of Money Laundering Control,” Vol. 22, No. 2, 2019, pp. 339-349. 33 Rhys Thompson, “’Underground Banking’ and Myanmar’s Changing Hundi System,” Journal of Money Laundering Control,” Vol. 22, No. 2, 2019, pp. 339-349. 34 Asia/Pacific Group on Money Laundering, “Anti-money laundering and counter-terrorist financing measures: Myanmar Mutual Evaluation Report,” September 2018, https://apgml.org/sites/default/files/documents//Myanmar_MER_2018_-_published_version.pdf 35 International Labour Organization, “Update on the Situation in Myanmar and on Additional Measures to Promote the Restoration of Workers’ Rights,” Governing Body, 342nd Session, June 1, 2021, https://policycommons.net/artifacts/2435625/update-on-the-situation-in-myanmar-and-onadditional-measures-to-promote-the-restoration-of-workers-rights/3457216/ 36 DW, “Myanmar junta designates shadow government as ‘terrorists’,” Sept. 5, 2021, https://www.dw.com/en/myanmar-junta-designates-shadow-government-as-terrorist-group/a57473057 37 Al Jazeera, “Myanmar regime labels key ethnic armed groups ‘terrorist’ organizations,” Sept. 4 ,2024, https://www.aljazeera.com/news/2024/9/4/myanmar-regime-labels-key-ethnic-armed-groupsterrorist-organisations 38 Myo Pyae, “Myanmar Junta Declares Karen National Union ‘Terrorist Organization’,” Irrawaddy, August 29, 2025, https://www.irrawaddy.com/news/ethnic-issues/myanmar-junta-declares-karennational-union-terrorist-organization.html?utm_source=chatgpt.com 39 Myanmar Now, “Democracy veteran Ko Jimmy and former NLD MP Phyo Zayar Thaw sentenced to death,” January 21, 2022, https://myanmar-now.org/en/news/democracy-veteran-ko-jimmy-andformer-nld-mp-phyo-zayar-thaw-sentenced-to-death/?tztc=1 40 Global New Light of Myanmar, “Kyaw Min Yu (a) Jimmy convicted of leading terrorist activities in Yangon Region,” June 9, 2022, www.gnlm.com.mm/kyaw-min-yu-a-jimmy-convicted-of-leadingterrorist-activities-in-yangon-region/ 10

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Rules or Ruse? Myanmar’s Anti-Money Laundering Efforts Coerce Compliance with a Rigged Financial System

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English

Topic

Digital Surveillance
Military Coup

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ISEAS Yusof Ishak Institute

Date Published: Jun 29, 2026

Abstract: Since being labelled a “Jurisdiction of Concern” by the Financial Action Task Force (FATF) in 2022, Myanmar’s military government has undertaken efforts to improve its technical compliance with the FATF’s recommendations on anti-money laundering and countering the financing of terrorism (AML/CFT). The focus on technical compliance has not adequately addressed the interaction of AML/CFT recommendations with economic policy changes – namely, the regime’s multiple exchange rate system, which is a key driver of informal financial flows. This points to a fundamental challenge – Myanmar’s regime is supposed to regulate informal financial flows that are incentivised by its own self-serving economic policies. The target of the regime’s crackdowns on informal financial flows includes money agents, known as hundis. Though connections between hundis and illicit activities such as drug production and scam centres exist, hundis’ primary business is facilitating informal trade and migrant worker remittances. Previous military regimes have acknowledged the largely legitimate nature of the hundi system. Myanmar’s military regime uses AML/CFT compliance less to address actual money laundering, and more as a tool to compel individuals and businesses to use the state-controlled financial system. This increases the regime’s access to and control over foreign currency and is a novel method of using global rules on financial crime as a cover for authoritarian economic controls to capture foreign exchange. The regime also uses AML/CFT compliance to target politically connected persons, conflict opponents and non-profit organisations. This tactic, when combined with the lack of an independent judiciary, raises questions about the effectiveness and potential abuse of AML/CFT compliance. FATF should acknowledge that a traditional AML approach is not an appropriate or useful response to financial transactions facilitated by hundis for humanitarian or legitimate economic reasons in present-day Myanmar, and should adjust the application of recommendations accordingly.

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Rules or Ruse? Myanmar’s Anti-Money Laundering Efforts Coerce Compliance with a Rigged Financial System

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