Myanmar

1. Does Myanmar have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

The primary pieces of anti-money laundering (“AML”) legislation are the Anti-Money Laundering Law 2014 (“AML Law”) and the Anti-Money Laundering Rules 2015 (“AML Rules”), which set out the legal framework for the management, monitoring, and inspection of anti-money laundering and counter-terrorism financing (“AML/CTF”) efforts in Myanmar. Engaging in money laundering and/or terrorist financing is a criminal offence under the AML Law.

2. To whom does the legislation apply?

The AML Law applies to any person who commits any offences under the AML Law in Myanmar, or on board a vessel, an aircraft, or any motor vehicles which are registered under Myanmar law, or any Myanmar citizen or any person residing permanently in Myanmar who commits the said offence outside Myanmar.

3. What does the legislation prohibit?

The AML Law prohibits money laundering and terrorism financing activities.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Section 3 (n) of the AML Law defines money laundering as any of the following:

• conversion or transfer of money and property, knowing or having reason to know that such money and property are the proceeds of crime, for the purpose of disguising or concealing the illicit origin of the money or property or of abetting, before or after commission of the offence, any person who is involved in the commission of the predicate offence to evade the legal consequences of his or her actions under the Anti-Money Laundering Law;
• concealment or disguising of the true nature, source, location and disposition, movement or ownership of or rights with respect to money and property, knowing or having reason to know that such money and property are the proceeds of crime;
• acquisition, possession or use of money and property, knowing or having reason to know, at the time of receipt, that such money and property are the proceeds of crime;
• participation in, association with, aiding, abetting, facilitating, managing, counselling and being a member of an organized group and commission of an offence by any other means, by action or omission, to commit, attempts to commit or conspiracy to commit any offenses mentioned above.

There is no requirement under the AML Law that the underlying criminal activity (or “predicate offence” per the language used in the legislation) to be proven to establish a money laundering offence.

5. What level of intent or knowledge is required to establish a violation?

The AML Law does not explicitly state what level of intent or knowledge is required to establish a violation. However, the wording “knows or having reason to know that the money and properties are the proceeds of crime or suspects that money laundering or any offences is committed” suggests that a mere suspicion that the laundered assets were derived from a predicate offence is enough to establish a violation. However, we are not aware of what level of intent or knowledge is required in practice to assess or predict the decisions of Myanmar courts.

6. What are the potential penalties for infringing the legislation?

The potential penalties for infringing the legislation are provided in Sections 43 to 50 of the AML Law and the penalties range from terms of imprisonment from three to ten years, fines or both. If the offender is a company or an organization, it may be subject to fines ranging from MMK 100 million to 500 million based on the types of specified offences.

7. Does the legislation have extra-territorial reach?

Yes, the AML Law extends its application to individuals, legal entities, and organizations (both domestic and foreign) that conduct business operations outside the territory of Myanmar that are involved in money laundering and terrorism financing.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Under the AML Law, financial institutions and designated non-financial businesses and professions (such as casinos, real estate agencies, lawyers, accountants, company service providers, precious metals and/or precious stone dealers) are deemed as the “reporting organizations” and they are subject to several reporting obligations and compliance requirements. Sections 18 to 35 of the AML Law provides the preventive measures and reporting obligations for the reporting organizations.

Under the AML Law, reporting organizations must: (i) establish anti-money laundering and counter-terrorism financing programs; (ii) implement internal risk assessment measures and know-your-customer (“KYC”) measures; (iii) conduct customer due diligence checks; (iv) gather information on customers; (v) record data; and (vi) report suspicious transactions to the Financial Intelligence Unit (“FIU”).

9. What are the potential penalties for failing to comply with these obligations?

One or more of the following supervisory or counter measures may be imposed on reporting organizations or directors, boards of directors, executive directors or administrators of the reporting organizations who fail to comply with the AML’s obligations:

• written warnings;
• restricted by specific instructions;
• submission of reports in accordance with the stipulations in respect of taking action against identified violations; and
• actions to be taken along with other appropriate measures.

In addition, failure to comply with these reporting obligations can attract penalties of up to MMK 300 million (approximately USD 167,320) and terms of imprisonment for up to 7 years.

10. Who are the relevant enforcement authorities in Myanmar and what are their contact details?

The relevant enforcement authority in Myanmar is the FIU:

address: Kyun Shwe Myaing St, 1000 Acres (near Ingyin Market), Danatheiddi Quarter, Zabuthiri Township, Nay Pyi Taw

T: +95 673 421 761, +95 673 421 756

F: +95 673 421 761

mfiu.str1@gmail.com

str2.mfiu@gmail.com

mfiu.str3@gmail.com

mfiu.str4@gmail.com

Noted: Currently the above contact phone/fax and emails are temporarily blocked by the FIU.