Hong Kong regulator warns Myanmar faces tougher FATF measures without reform progress

Hong Kong’s Securities and Futures Commission (SFC) on 14 July issued a circular reminding financial institutions that Myanmar remains subject to enhanced due diligence under the Financial Action Task Force (FATF), warning that the global watchdog could consider stronger countermeasures if the country fails to make further progress by October 2026. The circular, issued to licensed corporations, SFC-licensed virtual asset service providers and associated entities, summarised the outcomes of the FATF Plenary held from 17 to 19 June and highlighted the watchdog’s latest statements on high-risk jurisdictions. The FATF said Myanmar has made only limited progress in addressing strategic deficiencies in its anti-money laundering and counter-terrorism financing (AML/CFT) regime over recent years. The country has remained subject to enhanced due diligence since October 2022, requiring financial institutions worldwide to apply additional scrutiny to transactions and business relationships linked to Myanmar. According to the SFC, the FATF will consider imposing countermeasures if Myanmar fails to make further progress by October 2026. Countermeasures could lead to stricter restrictions on financial relationships with Myanmar, although the country is not currently subject to the same level of measures applied to North Korea and Iran. The circular reminded financial institutions and virtual asset service providers to continue applying enhanced due diligence measures proportionate to the risks arising from Myanmar. It also urged businesses to pay particular attention to transactions involving jurisdictions identified by the FATF as presenting higher money laundering and terrorist financing risks. The FATF continued to call for countermeasures against North Korea and Iran, while updating its list of jurisdictions under increased monitoring. Bosnia and Herzegovina and Iraq were added to that list, while Algeria and Namibia were removed. The global watchdog’s recommendations are not legally binding, but they are widely adopted by governments, banks and financial institutions around the world. Countries placed under enhanced due diligence often face increased compliance checks, making some cross-border financial transactions slower, more costly or subject to additional scrutiny. Myanmar has remained on the FATF’s enhanced due diligence list since October 2022 after the watchdog concluded that the country had failed to complete agreed reforms to strengthen its anti-money laundering framework. The FATF will review Myanmar’s progress again before deciding whether additional measures are warranted. The post Hong Kong regulator warns Myanmar faces tougher FATF measures without reform progress appeared first on ENG.MIZZIMA.COM.