Pressure from the Global Financial System, the Junta’s Struggle.
Article | Burma Independent Voice By Kyaw Ba
On March 11, 2026, the military junta enacted the Anti-Money Laundering Law. This law replaces and repeals the old 2014 law from the U Thein Sein administration.
This law was drafted and approved in a rush to ease the tightening regulations of international financial organizations and to avoid further sanctions. It is like sailors frantically bailing water out of the hull of a sinking ship. The inclusion of an objective to cooperate with international organizations and neighboring countries signifies that the junta leaders are struggling desperately to regain their place in the international financial network.
The Financial Action Task Force (FATF) has placed Myanmar on its Blacklist (High-risk Jurisdiction) alongside North Korea and Iran. This was announced in October 2022, nearly two years after Min Aung Hlaing’s coup, due to financial system issues in Myanmar under military rule. Being blacklisted is a serious global warning that a country’s financial system is broken and untrustworthy. Consequently, international banks have cut ties, making foreign currency flows difficult and causing international remittances to become slower than usual. The cessation of operations with Myanmar by Singapore’s UOB bank is a direct consequence of this issue. This was followed by a series of problems, including dollar scarcity, exchange rate instability, and import-export issues, causing the entire economy to slow down and weaken.
In its ultimatum, the FATF has given Min Aung Hlaing the opportunity to implement reforms until June 2026. If conditions do not improve due to non-compliance with this ultimatum, further actions will be taken, making this an especially localized headache for the junta leaders, similar to facing the ICJ. If actions are taken after June, all international banks will engage in De-Risking to minimize potential losses. Myanmar businesses will even find it difficult to open Letters of Credit (L/C) at foreign banks for trade, reaching a point where payments become impossible. Should this happen, the Myanmar financial system will become a global pariah, and the Central Bank in Naypyidaw will collapse.
Due to these circumstances, Central Bank Governor Than Than Swe traveled to Mexico in February 2026 to attend the FATF Plenary under the orders of Min Aung Hlaing. While military media portrayed this as obtaining international legitimacy for the military government, in reality, Than Than Swe was merely delivering a plea for survival like a defendant in a courtroom. This clearly demonstrates the military government’s current position within the international financial system. It shows that the military clique is desperately trying to appease everyone rather than being treated like a government by the international community.
While junta leaders are trying to fit into the global community in this low-profile manner, they have formed various task forces to address the FATF Blacklist issue. Consequently, they were reclassified from a non-compliant country to a partially compliant country. However, given Myanmar’s current situation, there are still many requirements and pressures to meet the standards desired by the international community. On the other hand, the military government itself is primarily focused on seeking recognition through a facade of reform rather than wanting to make genuine and meaningful changes.
To project an image of trying to comply with international standards, the military government hastily enacted this Anti-Money Laundering Law. However, in reality, the law is only strong on paper and possesses many weaknesses in implementation. Furthermore, public criticism has emerged that authorities are shifting the burden of their duties onto bank managers, goldsmiths, lawyers, real estate agents, and taxpayers.
The Know Your Customer (KYC) system for banks and the Suspicious Transaction Reporting (STR) system are standard regulations practiced internationally. However, within the Myanmar banking system where customer trust has been destroyed from the start, these changes will only further cool the already bitter relationship between banks and their customers. Legally, banks will become stricter with customers, and the public’s trust in banks will decrease, leading them to keep their distance. As a result, they may use more convenient systems for transfers instead of official ones, and “Deposit Flight” (withdrawing bank deposits) might occur later. If this happens, liquidity within the banking system will decrease, leading to consequences such as the collapse of the entire banking system that supports the military’s administrative machinery. Currently, people’s trust in the Kyat has collapsed, leading to the use of Dollars, Baht, and Yuan, and the hoarding of gold and land. The use of external remittance services and online-based financial systems is also being observed.
Including lawyers, gold and jewelry shops, and real estate agents in the reporting system for suspicious financial transactions creates mutual suspicion and distrust between service providers and clients. Critics argue that forcing citizens working in service industries to act as informers without effectively tackling corruption within departments is impractical.
Studies show that more than half of Myanmar’s economy operates under mutual understanding outside of formal law and exists outside the official banking system. Because this Shadow Economy is so large, the new law will only affect formal economic activities and will not effectively control the most dangerous financial flows. While the military and the Central Bank are aware of this, they prioritize international satisfaction and can be assessed as lacking both the will and the capacity to solve the core problems of the financial system.
The current situation only creates more opportunities for authorities to engage in extortion and oppressive displays of power. It is more likely that the law will not affect those in power while bottom-level businesses suffer. To build a truly effective anti-money laundering system, merely issuing a law is insufficient; it requires trustworthy institutions, an independent judiciary, and the trust of the public. However, since no effort is being made toward these fundamental requirements, the military government’s actions can be called a mere facade. No progress is seen other than the increased burden on the public, rising corruption among authorities, and the military’s ability to exert tighter political control. Without a doubt, the public and businesses will face increasing crises over time.
It is a fact that junta leaders are struggling desperately to ease the pressures of the international financial system and to avoid being kicked out of it. However, even in this situation, it is observed that the junta leaders have managed to create certain conditions beneficial to them. From the FATF’s ultimatum, what the junta leaders have selected and utilized to their liking is the heading of “Countering the Financing of Terrorism.”
The AML/CFT system includes the prevention of terrorism financing. Internationally, it is true that counter-terrorism is at the forefront. However, in Myanmar’s current situation, the question remains: who will define terrorism and how? Although the international community has not explicitly declared Myanmar’s pro-democracy movement as a terrorist movement, the military government has used the word “terrorist” to successfully suppress and control revolutionary financial flows at an international level. Specifically, being able to politically influence Thailand and Singapore to block the bank accounts of Spring Revolution supporters has been a silver lining in a bad situation for the Myanmar military. While appearing to implement FATF requirements, the military has, to some extent, blocked the financial paths of the Myanmar revolution, causing effective and severe disruption to Spring support operations. Simultaneously, war refugee aid, CDM support, and other fundraising activities have been brutally suppressed under this heading. It is a case where the military, while being forced to comply with international pressure, managed to drag down and erode its enemy.
On the other hand, because revolutionary leaders failed to effectively counter, clarify, and respond to the military’s use of the term “terrorist” to suppress the Myanmar revolution at an international level, revolutionary financial flows within the global financial system have become difficult and slow. Furthermore, the lack of policies/frameworks for international financial compliance on the revolutionary side, weak understanding of AML/CFT dynamics, and weaknesses in International Financial Diplomacy are prominent strategic flaws. Consequently, regarding counter-terrorism financing, the military’s one-sided statements and views have appeared internationally as if they are legitimate and within the framework.
If the military continues to take these steps, a situation may arise where all pressure on the junta leaders drops, while revolutionary financial flows become difficult and chaotic. The revolutionary government should strive to develop a path for counter-reporting to international organizations like the FATF and Egmont Group with precise evidence of how the military, when using this new law for selective enforcement, is encouraging human rights violations and corruption. It is necessary to let the world know that the military’s law is for political coercion rather than fighting black money. This is part of the Financial Warfare between the military and revolutionary groups.
In this situation, it is necessary for the NUG to systematically build a financial system that meets international standards. Firstly, it must establish and issue policies and frameworks for international financial cooperation. Specifically, policies for anti-money laundering and the prevention of financial flows to terrorism must be drafted and defined. The next step is to have KYC systems and guidelines for monitoring financial transfers. These are the main requirements for connecting with the international financial system. It should also build systems for gathering information, transaction monitoring systems, and risk assessment systems to enhance financial intelligence gathering capabilities. This will increase the ability to systematically analyze and identify financial flows related to crime and terrorism, which is the basis of AML/CFT Compliance desired by the international community.
Thirdly, it is to continue creating alternative financial channels. Secure, private financial systems that can be utilized for the revolution, like NUG Pay and Spring Bank, need to become more effective and widespread than they are now. According to certain needs, systematically connecting and implementing such systems can reduce and overcome the limitations of the current banking system. Specifically, to address the blocking of banking paths, decentralized Blockchain technology and Crypto-based transaction systems should be utilized systematically.
The final and most important requirement is to increase engagement with the international financial network. Policy-level diplomatic relations consistent with FATF standards are key to revolutionary fund flows. Building these relations and increasing direct contact with international financial organizations and partners is the foundation for gaining international trust in the revolution. Once this stage is reached, helpers who can assist in building transparent financial management will emerge from within international financial organizations. At this level, trust from contributors will increase significantly as systems to audit revolutionary funds and the ability of the revolutionary government to track financial flows are established.
If it can be accurately demonstrated how AML/CFT standards are being followed in the various stages of revolutionary fund flows, not only can accusations of “terrorist financing” be dismantled, but the trust of international banks and financial organizations can be gradually gained. The NUG must prove that it is a government capable of practically operating an international-standard financial management system, rather than limiting itself as an opposition that only points out the military council’s mistakes. Building such trust will become the foundation for the lifeblood of the revolution—its financial paths—to flow steadily and without interference.
Finally, timing is critical. The FATF makes assessments and decisions in specific periods. June 2026 is the examination period. After that, conditions will change once again. The military is approaching this by complying with requirements one by one. What has the revolutionary leadership prepared? In the end, the side that can build and demonstrate international trust will win on the financial battlefield.
