On 21 October 2022, the Financial Action Task Force ("FATF") added Myanmar to a group of high-risk countries, known as the "blacklist", citing its failure to make enough progress in addressing illicit financial flows. Myanmar joins North Korea and Iran, which have been on the high-risk list since 2020. However, while North Korea and Iran are subject to a FATF call to apply countermeasures, Myanmar is subject to a FATF call to apply enhanced due diligence measures.

The inclusion means that entities and individuals in Myanmar will face enhanced due diligence from global financial institutions, including increased Know Your Client ("KYC") reporting and checks. Financial institutions may also put in place their own controls, including suspension of any new account openings, undertaking enhanced KYC measures in respect of any international transfers to and from Myanmar individuals, Myanmar entities or entities owned/controlled by Myanmar persons, or closing accounts if there are suspicious transactions.

As such, companies dealing with Myanmar counterparties or persons should at the very least expect delay in any capital transfers. Myanmar persons or those dealing with Myanmar persons should also proactively review their existing arrangements and ensure that any international remittances have legitimate and proper supporting documentation, and consider restructuring their cross border business arrangements to mitigate against the effects of Myanmar's addition to FATF's blacklist.

However, FATF has noted that when applying enhanced due diligence measures, countries should ensure that flows of funds for humanitarian assistance, legitimate non-profit organization (NPO) activity and remittances are not disrupted.

For more information, please see on the following links (available at the FATF website at https://www.fatf-gafi.org/):

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