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Myanmar: Economic growth may increase money laundering cases

Yangon: Observers in Myanmar said rapidly growing economy is benefitting its people but this growth, could increase the risk of money laundering in the country.

The Asian Development Bank expects Myanmar’s economy to grow 8.4 per cent this year but if money laundering activities are allowed to go unchecked, this could wreck investor confidence.

“In Mandalay, when legal action is taken against drugs and jade, prices of real estate and other areas – all the businesses – slow down,” said Khin Maung Nyo, an economist. “So in reverse … because of the migrant money, because of the migrant people, because of the income from drugs and jade, they make the real estate market boom.”

“If you take a country where they have moved away from cash – so you’re making your payments by cheque or by (credit) card or by electronic transactions – every one of those transactions leaves a trace,” said Chris Batt, regional anti-money laundering adviser for the United Nations Office on Drug and Crime (UNODC).

“That makes it easy for the financial institution to carry out an audit trail to satisfy themselves as to the origins of the money. It also makes it easy for law enforcement to investigate the origins of the cash, to make sure it’s not coming from some kind of criminal activity. In a cash-based economy, it’s not quite so good,” he added.

UNODC appreciated Myanmar’s commitment to fight money laundering when it enacted an anti-money laundering law in 2014.

But critics said the law is useless if it is not enforced.

“After enacting that money laundering law, there is no rules and regulation yet and there’s no enforcement, if I remember, there’s no case of taking any action against money laundering.

“Just the law is not enough, we need to have more rules and regulations, detailed instructions,” said Khin Maung Nyo. “Even if we have laws, rules and regulations, we need to strengthen our enforcement authority.”