By Tamiyuki Kihara and Poppy McPherson
TOKYO/BANGKOK, Oct 30 (Reuters) – Japan is pushing a global financial crimes watchdog to remove Myanmar from its blacklist to make it easier to do business there, the latest sign that some major countries are looking to bring the pariah state’s military-backed government in from the cold.
Japan wants the Financial Action Task Force to drop requirements that its members apply enhanced screening to financial transactions with Myanmar to avoid money laundering and terrorist financing, said a senior Japanese government official and another person familiar with the matter.
Removing Myanmar from the list would ease checks on business with a country whose military seized power in a 2021 coup and which remains under scrutiny over scam centres and illicit finance.
The only other countries currently on FATF’s blacklist are Iran and North Korea. The 40-member body will conclude its third and last plenary meeting of the year in Paris on Friday.
It was not immediately clear whether a change is imminent, though the second source, speaking on condition of anonymity, said at least one other major Asian country was pushing for Myanmar’s removal.
A spokesperson for the FATF Secretariat said meetings were ongoing, discussions were confidential, and any changes to the blacklist would be announced after their conclusion on Friday. A spokesperson for Myanmar’s military-backed government did not respond to a request for comment.
Myanmar was added to the blacklist in 2022 as the country plunged into turmoil and widespread civil war after the coup.
The chaos has fuelled illicit drug production, trafficking and the growth of industrial-scale scam centres in the Golden Triangle, some of them run by militia aligned to the military-backed government.
Myanmar’s government has said it is participating in a multinational effort to curb scam centres. It has also said it has been making efforts to seize narcotics and that drug production and trafficking is carried out by armed groups.
On Monday, Reuters reported Myanmar imported sanctioned jet fuel from Iran, used for deadly bombing campaigns, in shipments disguised with sham paperwork. Myanmar government officials did not return requests for comment.
DIPLOMATIC ENGAGEMENT
The push to remove Myanmar from the blacklist is the latest effort by some nations including Japan to re-engage with Myanmar after a period of international isolation that followed the ousting of leader Aung San Suu Kyi in February 2021.
The coup leader-turned-president Min Aung Hlaing remains under US sanctions for human rights abuses, including for his role in the coup and the crushing of a popular uprising that followed.
The United States last month held direct talks with Myanmar’s military-backed government in Naypyidaw, the highest-level contact since the coup. Those talks, which focused on shutting down scam centres but could pave the way for negotiations on access to Myanmar’s abundant rare earth deposits, were quickly followed by more secretive talks in Tokyo earlier this month.
Japan, whose companies have maintained a large corporate presence in Myanmar even as other firms fled following the coup, believes that getting Myanmar off FATF’s blacklist will make it easier for countries to do business there and help its economy recover, the Japanese government official said.
Myanmar was added to FATF’s blacklist, formally known as the High-Risk Jurisdictions Subject to a Call for Action list, in October 2022 after missing a deadline to address deficiencies.
The global watchdog said at the time that its members must apply enhanced due diligence to business relations and transactions with Myanmar, while ensuring that funds for humanitarian purposes, legitimate non-profit activity and remittances were not disrupted.
In a June assessment, FATF said Myanmar had demonstrated some progress but urgently needed to address deficiencies including ensuring money laundering was investigated and prosecuted, while illicit finance from cyberfraud remained a concern.
(Reporting by Tamiyuki Kihara in Tokyo and Poppy McPherson in Bangkok; Writing by John Geddie; Editing by Raju Gopalakrishnan)
