The United States, European Union, and other governments should urgently counter illicit activities by foreign banks that are assisting the Myanmar military in evading sanctions imposed after its 2021 coup, Human Rights Watch said today. A United Nations report released on June 26, 2024, reveals that since 2022 the military junta has switched the banks it uses to receive foreign revenue and make payments for weapons and other military needs, after the US, EU, and other governments imposed sanctions on military-controlled entities and banks.

The report, by the UN special rapporteur on Myanmar, Tom Andrews, focuses on the military’s use of banks in third countries to engage in sanctioned transactions. The special rapporteur found that from 2022 to the present, most of the junta’s foreign revenue that previously was sent to foreign accounts at the sanctioned Myanmar Foreign Trade Bank has instead been sent to accounts at the non-sanctioned but also junta-controlled Myanmar Economic Bank. The report also shows that after authorities in Singapore began restricting the military’s use of banks to make arms purchases in 2022-2023, the junta dramatically ramped up the use of its other accounts at banks in Thailand, mostly at Siam Commercial Bank.

“Sanctions on Myanmar’s military have reduced its capacity to receive revenue and purchase arms, but funds are still getting to the junta and vigilant enforcement is essential,” said John Sifton, Asia advocacy director at Human Rights Watch. “Authorities in Thailand, Singapore, and other countries need to put banks on notice that they should not provide services that facilitate further junta atrocities.”

The UN report provides figures showing that the largest source of the junta’s outside income still comes from Thailand: at least US$660 million in payments for natural gas sent to Thailand by pipeline. The payments, made to the military-controlled Myanmar Oil and Gas Enterprise (MOGE), come from Thailand’s government-owned energy company PTT. The US and EU have sanctioned MOGE, and banks in numerous other jurisdictions have enforced some US and EU sanctions, including in Singapore and China, since many of these banks operate internationally and have close ties with the US and EU financial systems.

PTT and all Thai banks named in the UN report should stop payments to MOGE and divert future payments to escrow accounts, Human Rights Watch said. Governments should call on Thailand to instruct Thai companies to end transactions involving MOGE.

The UN report shows that sanctions are impeding the junta’s capacity to make military purchases. The military’s use of the international banking system to procure weapons and military supplies declined by 33 percent between March 2022 and March 2023, from $377 million to $253 million. The use of military procurement agents and banks in Singapore, Malaysia, and Russia all declined markedly from 2022 to 2024.

During the same period, however, the use of Thai banks and Thailand-registered military suppliers doubled, from approximately $60 million to almost $130 million. Most of these payments, over $100 million, were handled by Siam Commercial Bank.

For years, the Myanmar military has engaged in war crimes and other atrocities in the context of armed conflict with ethnic armed groups and grave human rights violations against the civilian population. It carried out atrocities and ethnic cleansing of Rohingya Muslims in Rakhine State, including crimes against humanity and acts of genocide in 2017. Since the 2021 coup, the military has been engaged in a broad crackdown on civilians who oppose its rule and committed numerous war crimes in fighting with armed opposition groups. Despite the abuses over many years, however, international efforts in response have been meager, Human Rights Watch said.

Amid economic and infrastructure collapse in Myanmar, the number of people requiring humanitarian assistance has grown to 18.6 million. The UN estimates that 10,000 children under age 5 died in 2023 due to lack of treatment for malnutrition. Over 2.7 million people have been internally displaced or have become refugees. But the junta has ramped up its deadly blocking of humanitarian aid as a form of collective punishment of the population. These blockages sustain the military’s longstanding “four cuts” strategy, designed to maintain control of an area by isolating and terrorizing civilians.

Cutting funds to Myanmar’s military and impeding its capacity to make military purchases is essential to limiting abuses, Human Rights Watch said. The US, EU, and other concerned governments should quickly sanction the Myanmar Economic Bank, which is now handling most junta banking transactions on the international level, as well as the Myanmar Agricultural Development Bank and the Myanmar Investment and Commercial Bank. The US, Canada, and Australia have already sanctioned some of these banks, while the EU and UK have not sanctioned any of them.

All governments should also sanction the networks that provide aviation fuel to the Myanmar military, including insurance and trading companies, owners of storage facilities and transport vessels, and Myanmar-based agents and buyers. Governments should also establish cooperative agreements on sanctions and coordinate their implementation and enforcement.

“All of Myanmar’s state-owned and military-controlled financial institutions and companies should be sanctioned,” Sifton said. “Depriving the junta of revenue and banking services impairs the military’s capacities to brutalize the people of Myanmar.”

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