Financial Action Task force on Money Laundering

Annual Review of Non-Cooperative Countries or Territories

July 2004

[Extracts on Myanmar]

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Counter-measures

Due to Myanmar's failure to introduce comprehensive mutual legal assistance legislation prior to 3 November 2003, counter-measures have been in effect since that date. Although legislation was adopted in April 2004, it contains serious deficiencies that will need to be addressed; the FATF will consider removing counter-measures when Myanmar has established a framework for effective international judicial co-operation. The FATF welcomes Myanmar's recent enactment of implementing rules and regulations for its AML law.

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3. In sum, the list of NCCTs is comprised of the following jurisdictions: Cook Islands, Indonesia, Myanmar, Nauru, Nigeria, and Philippines. The FATF calls on its members to update their advisories requesting that their financial institutions give special attention to businesses and transactions with persons, including companies and financial institutions, in those countries or territories identified in the report as being non-cooperative.

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D. JURISDICTIONS CURRENTLY SUBJECT TO COUNTER-MEASURES

Myanmar*

Situation in June 2001

46. In June 2001, Myanmar met criteria 1, 2, 3, 4, 5, 6, 10, 11, 19, 20, 21, 22, 23, 24 and 25. It lacked a basic set of anti-money laundering provisions. It had not yet criminalised money laundering for crimes other than drug trafficking. There were no anti-money laundering provisions for financial institutions, and there was an absence of a legal requirement to maintain records and to report suspicious or unusual transactions. There were also significant obstacles to international co-operation by judicial authorities.

Progress made since June 2001

47. On 17 June 2002, Myanmar enacted The Control of Money Laundering Law (CMLL) (The State Peace and Development Council Law No. 6/2002). The law criminalises money laundering for certain predicate offences and allows for the establishment of a monetary threshold relating to predicate offences. The law created a framework for suspicious transaction reporting, customer identification, and record keeping; however, comprehensive implementing rules and regulations were needed to specify and improve this framework. Remaining significant deficiencies in the law included the lack of measures to engage in effective international co-operation, particularly mutual legal assistance.

48. Due to Myanmar's failure to introduce comprehensive mutual legal assistance legislation prior to 3 November 2003, counter-measures have been in effect since that time. Although legislation was adopted on 28 April 2004, it contains serious deficiencies that will need to be addressed. The FATF will consider removing counter-measures when Myanmar has established a framework for effective international judicial co-operation. Myanmar made progress by issuing implementing rules for the CMLL in December 2003 and 3 orders in January 2004 that specify reporting requirements for financial institutions and property record offices and assign certain staff to an FIU. Myanmar authorities reported having already received 862 reports on large transactions but no STRs; therefore, Myanmar still needs to build an effective STR regime. Myanmar should also include the fraud offence to the predicate offences for money laundering.

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75. The reviews carried out in 2000 and 2001 by the FATF were extremely productive. Most jurisdictions participated actively and constructively in the reviews. The reviews of jurisdictions against the 25 criteria have revealed - and stimulated - many ongoing efforts by governments to improve their systems. As of June 2004, most jurisdictions had enacted significant reforms and are well on their way towards comprehensive anti-money laundering regimes. 76. Nevertheless, serious systematic problems remain in several jurisdictions. Following the progress made by the jurisdictions deemed to be non-cooperative in June 2000, June 2001, and September 2001, the list of NCCTs now comprises the following jurisdictions:

Cook Islands Indonesia Myanmar Nauru Nigeria Philippines

77. These jurisdictions are strongly urged to adopt the necessary measures to improve their rules and practices as expeditiously as possible in order to remedy the remaining deficiencies identified in the reviews. Pending adoption and implementation of appropriate legislative and other measures, and in accordance with Recommendation 21, the FATF recommends that financial institutions should give special attention to business relations and transactions with persons, including companies and financial institutions, from the "non-cooperative countries and territories" mentioned in paragraph 76 and in so doing take into account issues raised in the relevant summaries in Section III of this report and any progress made by these jurisdictions since being listed as NCCTs.

78. Should those countries or territories identified as non-cooperative maintain their detrimental rules and practices despite having been encouraged to make certain reforms, FATF members would need to consider the adoption of counter-measures against such jurisdictions. With respect to those NCCTs whose progress addressing deficiencies has stalled, the FATF will consider the adoption of additional counter-measures as well.

79. The FATF and its members will continue the dialogue with these jurisdictions. FATF members are also prepared to provide technical assistance, where appropriate, to help jurisdictions in the design and implementation of their anti-money laundering systems.

80. All countries and territories that are part of the global financial system are urged to change any rules or practices which impede the fight against money laundering. To this end, the FATF will continue its work to improve its members' and non-members' implementation of the FATF Forty Recommendations. It will also encourage and support the regional anti-money laundering bodies in their ongoing efforts. In this context, the FATF also calls on all the jurisdictions mentioned in this report to adopt legislation and improve their rules or practices as expeditiously as possible, in order to remedy the deficiencies identified in the reviews.

81. The FATF intends to remain fully engaged with all the jurisdictions identified in paragraph 76. The FATF will continue to place on the agenda of each plenary meeting the issue of non-cooperative countries and territories, to monitor any progress which may materialise, and to revise its findings, including the removal of jurisdictions' names from the list of NCCTs, as warranted.