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ISSUE: 2026 No. 47 ISSN 2335-6677 41 Catalyst Economics and COAR, “Banking and Financial Systems for NGOs and CSOs in Myanmar,” October 2025. 42 Catalyst Economics and COAR, “Banking and Financial Systems for NGOs and CSOs in Myanmar,” October 2025. 43 The Central Body on Anti-Money Laundering of the Republic of the Union of Myanmar, “Myanmar National Risk Assessment: Executive Summary Report on Money Laundering and Financing of Terrorism,” 2018. 44 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 45 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 46 Asia/Pacific Group on Money Laundering, “5th Follow-up Report: Mutual Evaluation of Myanmar,” October 2023 https://apgml.org/about-us/members/members/myanmar 47 Asia/Pacific Group on Money Laundering, “5th Follow-up Report: Mutual Evaluation of Myanmar,” October 2023 https://apgml.org/about-us/members/members/myanmar 48 International Commission of Jurists, “Myanmar: Five years after the coup “justice system” remains an instrument of repression,” January 31, 2026, https://www.icj.org/myanmar-five-years-after-thecoup-justice-system-remains-an-instrument-of-repression/ 49 Asia/Pacific Group on Money Laundering, “6th Follow-up Report: Mutual Evaluation of Myanmar,” February 2024 https://apgml.org/about-us/members/members/myanmar 50 Asia/Pacific Group on Money Laundering, “6th Follow-up Report: Mutual Evaluation of Myanmar,” February 2024 https://apgml.org/about-us/members/members/myanmar 51 Stephen Reimer, “Suppression Laundering: Using FATF as a Fig Leaf to Target Civil Society,” RUSI, June 13, 2024, https://www.rusi.org/explore-our-research/publications/policybriefs/suppression-laundering-using-fatf-fig-leaf-target-civil-society#footnotes 52 FATF, “High-Risk Jurisdictions subject to a Call for Action – 24 October 2025,” Oct. 24, 2025, https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-actionoctober-2025.html ISEAS Perspective is published electronically by: ISEAS - Yusof Ishak Institute 30 Heng Mui Keng Terrace Singapore 119614 Main Tel: (65) 6778 0955 Main Fax: (65) 6778 1735 Get Involved with ISEAS. Please click here: https://www.iseas.edu.sg/sup port/get-involved-with-iseas/ ISEAS - Yusof Ishak Institute accepts no responsibility for facts presented and views expressed. Responsibility rests exclusively with the individual author or authors. No part of this publication may be reproduced in any form without permission. © Copyright is held by the author or authors of each article. 11 Editorial Chairman: Ng Chee Khern Editorial Committee: Terence Chong, Cassey Lee, Norshahril Saat, and Hoang Thi Ha Managing Editor: Ooi Kee Beng Editors: William Choong, Lee Poh Onn, and Lee Sue-Ann. Comments are welcome and may be sent to the author(s).

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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

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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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