Anti-money laundering efforts used by junta to control economy, research group says

A Singapore-based research group has stated in a study released yesterday (June 29) that the Myanmar military junta is using international standards for combating money laundering to suppress political rivals and force economic activities into the state banking system. The study, written by Jared Bissinger, an economist and Myanmar expert at the ISEAS–Yusof Ishak Institute, states that the junta is targeting democracy activists, suspending bank accounts of non-profit organizations, and attempting to dismantle informal remittance systems that millions of people rely on, under the pretext of complying with international standards. The report notes that after the Financial Action Task Force (FATF), a global financial watchdog, included Myanmar in its list of "jurisdictions of concern" in 2022, the junta used this warning for its own economic and political survival. While the report states that the junta has met some FATF requirements and reduced its deficiencies from eight to four, it analyzes that such procedural progress merely conceals the junta's predatory economic strategy. According to the report, the junta is attempting to channel foreign currency into state-owned banks using strict financial regulations. It is said that the junta has set various unfavorable exchange rates within these banking systems. For example, the official exchange rate for one US dollar is set at 2,100 kyats, while for overseas workers, a rate of 3,975 kyats is offered. Export businesses are also forced to convert 15 percent of their income at the less favorable official rate, through which the junta is securing foreign currency sources at a low cost, the report states. The junta is also heavily cracking down on informal remittance systems known as "Hundi," which people use to avoid these losses. It is known that the junta revoked 194 foreign exchange licenses between January 2023 and August 2024, and also formed a special task force to search for and arrest remittance brokers. According to Bissinger's report, even a previous military government in 2008 acknowledged that Hundi systems were fulfilling official requirements in Myanmar, where banking infrastructure was insufficient. However, the junta is now severely cracking down on Hundi systems. The report also states that there is no evidence of increased Hundi use in illegal activities such as drug trafficking or online scam operations, and therefore, there is no sufficient justification for such a crackdown. Furthermore, the report states that the junta has used anti-terrorism financing laws to prosecute opponents. It includes that Ko Jimmy, also known as Ko Kyaw Min Yu, a democracy activist who was sentenced to death in 2022, was convicted on charges of exchanging US dollars for "terrorist activities." The junta has also designated prominent ethnic armed organizations such as the Arakan Army (AA) and the Karen National Union (KNU), including the National Unity Government (NUG), as terrorist groups. These designations have allowed them to apply strict regulations such as financial reporting and asset seizure against those perceived to be associated with them. The report states that non-profit organizations are also under the junta's financial scrutiny. A data collection survey conducted by the junta in 2025 has further heightened concerns about covert surveillance. The freezing of bank accounts of the International Labour Organization (ILO) shortly after the military coup in 2021 also strengthened these concerns. The report's conclusion urges the FATF to urgently change its approach towards Myanmar. The report states that the FATF should recognize that the junta is using these regulations to dismantle informal remittance networks, which are vital for the livelihoods of the people, rather than just looking at the junta's technical compliance. The report also warns that in war-torn regions where the banking system is not functioning, Hundi systems continue to be the only way for people to receive life-saving remittances. The full report can be read at this link: https://www.iseas.edu.sg/articles-commentaries/iseas-perspective/2026-47-rules-or-ruse-myanmars-anti-money-laundering-efforts-coerce-compliance-with-a-rigged-financial-system-by-jared-bissinger/