In recent years, Myanmar has witnessed a significant rise in online financial fraud, a phenomenon that poses serious risks not only to the country’s financial sector but also to its broader economic stability and security. Recognizing the growing threat, Myanmar has intensified its efforts to combat money laundering activities linked to these fraudulent schemes. This move is part of a wider strategy to strengthen the country’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework, which has been under close international scrutiny.
The Financial Action Task Force (FATF), the global standard-setting body tasked with combating money laundering and terrorist financing, continues to classify Myanmar as a high-risk jurisdiction subject to a call for action due to persistent strategic deficiencies in its AML/CFT regime.
The Central Bank of Myanmar’s recent high-profile workshop, involving key stakeholders from the government, banking sector, mobile financial service providers, and payment clearing services, marks a pivotal step in Myanmar’s efforts to address these challenges. This article provides a comprehensive analysis of Myanmar’s current AML/CFT initiatives, the challenges it faces in curbing money laundering linked to online fraud, the country’s compliance with international standards, and the implications for its financial sector and international relations.
The Growing Threat of Online Financial Fraud in Myanmar
Online financial fraud has become a rapidly evolving threat in Myanmar, fueled by the expansion of digital financial services and increasing internet penetration. Fraudsters exploit vulnerabilities in digital payment systems, mobile banking, and online money transfer platforms to launder illicit proceeds, often masking the origin of illegally obtained funds. These schemes not only threaten the integrity of Myanmar’s financial system but also facilitate other criminal activities, including corruption, drug trafficking, and terrorism financing.
The Central Bank of Myanmar, as the country’s primary financial regulator, has acknowledged the urgency of addressing these risks. The recent workshop was convened to raise awareness about the nexus between online financial fraud, money laundering, and terrorism financing. As Governor Daw Than Than Swe emphasized,
“This workshop was organized to raise public awareness about the links between online financial fraud, money laundering and terrorism financing,”
underscoring the critical need for a coordinated and multi-sectoral response.
Myanmar’s AML/CFT Regulatory and Institutional Framework
Myanmar’s AML/CFT framework has evolved over the past two decades, with significant milestones including the enactment of the Anti-Money Laundering Law, the Counter Terrorism Law, and the establishment of the Financial Intelligence Unit (FIU). The Central Bank of Myanmar serves as the primary regulator overseeing AML/CFT compliance within the banking sector, while the Myanmar Banks Association (MBA) plays a crucial role in coordinating efforts among member banks.
The MBA established a dedicated AML/CFT sub-committee in 2019, which was expanded in 2021 to include fraud and risk management. This sub-committee is responsible for developing policies, conducting training, and facilitating information sharing among banks to enhance their ability to detect and prevent money laundering and related crimes. Banks are designated as AML/CFT reporting entities, required to submit suspicious transaction reports (STRs) to the FIU and cooperate with law enforcement agencies in investigations.
In addition to banks, mobile financial service providers and payment clearing services are increasingly recognized as critical actors in the AML/CFT landscape. These entities are now subject to regulatory oversight and are expected to implement robust compliance programs to mitigate the risks posed by online financial fraud.
Challenges in Combating Money Laundering Linked to Online Fraud
Despite these institutional frameworks, Myanmar faces significant challenges in effectively combating money laundering associated with online financial fraud. One major hurdle is the sophistication and rapid evolution of fraud schemes, which often outpace regulatory and technological capabilities. Fraudsters use complex layering techniques, digital currencies, and anonymous payment methods to obscure illicit funds, complicating detection and enforcement efforts.
During the Central Bank’s workshop, senior bankers highlighted operational difficulties in identifying suspicious activities, especially given the volume and velocity of online transactions. They stressed the need for enhanced technological tools and greater regulatory clarity to support timely and accurate reporting.
The workshop also focused on the potential of Artificial Intelligence (AI) and machine learning technologies to strengthen AML/CFT efforts. AI can analyze vast datasets to detect unusual patterns, automate transaction monitoring, and reduce false positives, thereby improving the efficiency of compliance operations. However, the adoption of such technologies requires significant investment, skilled personnel, and a supportive regulatory environment, which remain areas for development in Myanmar.
Myanmar’s Status Under FATF and International Obligations
Myanmar’s AML/CFT regime remains under intense international scrutiny. The FATF continues to list Myanmar as a High-Risk Jurisdiction subject to a Call for Action, reflecting ongoing strategic deficiencies in the country’s ability to combat money laundering and terrorist financing effectively. This designation has serious implications, as it prompts countries and financial institutions worldwide to apply enhanced due diligence or even countermeasures when engaging in financial transactions involving Myanmar.
The FATF’s public statements in February and June 2025 reiterated the urgency for Myanmar to address key deficiencies, including improving risk understanding, conducting risk-based inspections, and supervising informal money transfer operators (hundi). The FATF also emphasized the need for Myanmar to increase the prosecution and investigation of money laundering cases, including those with transnational elements, and to strengthen the freezing, seizure, and confiscation of criminal proceeds.
Furthermore, the FATF urged Myanmar to implement targeted financial sanctions related to proliferation financing and to ensure that enhanced due diligence measures do not disrupt legitimate humanitarian assistance, nonprofit activities, or remittance flows, which are vital for the country’s socio-economic stability.
While Myanmar has made some progress on its action plan, including legislative reforms and capacity building, the overall pace remains slow. The FATF has made clear that Myanmar will remain under close monitoring until it demonstrates full compliance with international standards.
Collaborative Efforts and Capacity Building Initiatives
Myanmar’s recent workshop exemplifies the country’s commitment to fostering collaboration among regulators, financial institutions, and service providers. By sharing real-life case studies and discussing operational challenges, stakeholders can develop practical, context-specific solutions to combat money laundering linked to online fraud.
The Myanmar Banks Association continues to play a central role in capacity building, conducting regular training sessions to enhance the knowledge and skills of bank staff on AML/CFT compliance. These programs focus on improving the identification of suspicious transactions, understanding regulatory requirements, and fostering a culture of compliance within financial institutions.
The Central Bank also ensures that banks comply with freezing and seizure orders issued under the Anti-Corruption Law, Counter Terrorism Law, and AML Law. These legal provisions empower authorities to confiscate assets linked to criminal activities, thereby disrupting illicit financial networks.
Moreover, Myanmar is exploring partnerships with international organizations and donor agencies to access technical assistance and funding to upgrade its AML/CFT infrastructure, including the deployment of advanced technologies for transaction monitoring and intelligence analysis.
The Role of Technology in Strengthening AML/CFT Measures
Technology is increasingly recognized as a critical enabler in the fight against money laundering and online financial fraud. The Central Bank’s workshop highlighted the transformative potential of AI and machine learning in enhancing transaction monitoring systems, detecting anomalies, and automating compliance workflows.
AI-driven systems can analyze large volumes of transaction data in real time, identify suspicious patterns that may indicate fraud or money laundering, and generate alerts for further investigation. This capability is particularly valuable in the context of online financial fraud, where rapid detection is essential to prevent the laundering of illicit proceeds.
However, the successful integration of AI technologies requires not only financial investment but also skilled personnel capable of managing and interpreting AI outputs. It also demands a regulatory framework that supports innovation while ensuring data privacy and security.
Myanmar’s efforts to adopt such technologies signal a forward-looking approach to AML/CFT, but the country must continue to build the necessary technical and human resource capacities to realize the full benefits.
Economic and Social Implications
Money laundering and online financial fraud have far-reaching economic and social consequences for Myanmar. They undermine the integrity and stability of the financial system, discourage foreign investment, and erode public trust in financial institutions. The illicit proceeds generated through fraud schemes often finance other criminal activities, exacerbating corruption, organized crime, and even terrorism.
By strengthening its AML/CFT regime, Myanmar aims to protect its financial sector from abuse, promote economic development, and enhance its reputation in the international community. Effective AML/CFT controls are also essential for maintaining access to global financial markets and correspondent banking relationships, which are critical for trade and investment.
Myanmar’s stepped-up fight against money laundering related to online financial fraud reflects a growing recognition of the evolving risks posed by digital financial crimes. The Central Bank of Myanmar’s leadership, the active engagement of the Myanmar Banks Association, and the country’s cooperation with international bodies like the FATF demonstrate a multi-dimensional approach to addressing these challenges.
As Governor Daw Than Than Swe emphasized,
“The central bank is working to strengthen AML/CFT regulations to prevent banks and financial institutions from being exploited as intermediaries in online fraud schemes.”
This statement encapsulates Myanmar’s commitment to safeguarding its financial system and complying with international standards.
Despite significant challenges, including the complexity of online fraud and the need for technological and institutional capacity building, Myanmar’s recent initiatives mark important progress. Continued efforts to enhance regulatory frameworks, adopt advanced technologies, and foster collaboration will be crucial for Myanmar to overcome its AML/CFT deficiencies and improve its standing in the global financial community.
For policymakers, financial institutions, and international partners, Myanmar’s experience offers valuable lessons on the dynamic nature of money laundering risks and the importance of adaptive, cooperative, and technology-driven responses in the digital age.