Thailand now preferred banking destination for Myanmar junta as military attacks increase, UN expert says

Hong Kong/Bangkok
CNN
—

International banks play a significant role in the ability of Myanmar's military junta to carry out its systematic and deadly attacks on its population, according to a new United Nations-backed report.

Thai banks have now become the main source through which Myanmar's military buys weapons and military supplies – including parts for combat helicopters – used to support its three-year civil war that has devastated the country and killed more than of 5,000 civilians, Tom Andrews, the United Nations special rapporteur for human rights in Myanmar, said in a new report Wednesday.

Since seizing power in a coup in February 2021, the military has been waging an escalating war against ethnic armed groups and popular resistance forces across Myanmar. In recent months, it has had to face significant losses of territory and troops.

While facing widespread popular opposition and an economic crisis that has caused poverty levels to skyrocket, the junta has increased airstrikes and attacks on civilians and civilian infrastructure, displacing more than 3 millions of people.

Andrews said the junta has increased its deadly air attacks on civilian targets “quintupled” over the past six months, fueling the humanitarian crisis as it seeks to “scare” civilians into stopping resistance. the army.

“They are able to do this by purchasing weapons overseas, and that is made possible by the services they receive from these banks,” Andrews told CNN.

The military's brutal campaign of violence has prompted Western countries to impose sweeping sanctions on military leaders, their families and friends, state-owned companies, banks and jet fuel suppliers.

The report, titled “Banking on the Death Trade: How Banks and Governments Enable the Military Junta in Myanmar,” reveals that 16 banks in seven countries processed transactions related to military procurement over the past year.

The weapons, dual-use technologies, manufacturing equipment and raw materials obtained by the junta from abroad reached $253 million between April 2023 and March 2024, the report said.

“By relying on financial institutions willing to do business with Myanmar's state-owned banks under its control, the junta has easy access to the financial services it needs to commit systematic human rights violations, including air attacks against civilians,” Andrews wrote. in the report.

However, the volume of weapons and military supplies purchased by the junta through foreign banks fell by a third compared to 2023, with Singapore's exports falling dramatically, the report said.

“The good news is that the junta is increasingly isolated,” the report said. “The bad news is that the junta is circumventing sanctions and other measures by exploiting loopholes in sanctions regimes, changing financial institutions and taking advantage of the inability of member states to fully coordinate and enforce their actions. »

International banks, Andrews said, should be aware that there is a “high probability” that transactions involving Myanmar state-owned entities could be used to purchase weapons or military-grade materials to feed the junta's war chest.

“If you want to be sure that this doesn’t happen, then don’t do business with Myanmar’s state-owned banks,” he said.

Singapore-based entities were Myanmar’s third-largest source of arms and military hardware. But following a government investigation, the flow of arms material to Myanmar from Singapore-registered companies has fallen by nearly 90% compared to the previous year.

In 2022, Singapore-based banks facilitated more than 70% of the junta’s purchases through the banking system. By 2023, that figure had fallen to less than 20%, the report said.

In search of other financial institutions, the junta found neighboring Thailand.

Between 2022 and 2023, exports of arms and related materials from Thailand-based entities more than doubled, from $60 million to nearly $130 million last year.

“Many SAC (junta) purchases previously made from Singapore-based entities, including parts for Mi-17 and Mi-35 helicopters used to carry out airstrikes on civilian targets, now come from Thailand” , the report says.

According to the report, Siam Commercial Bank is among the Thai banks that have played a “crucial role” in this change. In 2022, the bank facilitated just over $5 million in military-related transactions; by 2023, that figure has risen to more than $100 million, according to the report.

In a statement, SCB said it provides “international transaction services” between Thailand and Myanmar “with the primary objective of helping Thai and international businesses pay for consumer products and services in Myanmar”.

SCB's statement said the bank complies with all relevant anti-money laundering laws and that an internal investigation determined that its transactions with Myanmar were not related to the arms trade.

“SCB reaffirms its commitment to adhere to relevant anti-money laundering and related regulations,” the statement added.

A Thai Foreign Ministry spokesperson told CNN: “We have seen the report and are reviewing it.”

“Many countries were cited and these are certainly countries through which the majority of financial transactions in the region would pass,” the spokesperson said in a statement.

“Our banking and financial institutions follow banking protocols like any major financial center. We will therefore have to first establish the facts before considering other measures. »

Andrews told CNN he welcomed the Thai government's decision to “check the facts.”

“I hope it (the investigation) will lead to positive changes in Thailand, as it has in Singapore,” he said.

In his report, Andrews said it was “essential” that “financial institutions take their human rights obligations seriously and do not facilitate the junta's murderous dealings.”

Moreover, sanctioning the networks that supply kerosene to the junta and the military's “reference bank,” the Myanmar Economic Bank, “could play a decisive role in helping to reverse the trend in Myanmar and save countless lives,” the report said.