Thai banks ‘lack capacity’ to screen Myanmar deals
text size

Thai banks ‘lack capacity’ to screen Myanmar deals

Bankers’ spokesman appears before House committee investigating funding of weapons exports

Tom Andrews, the UN special rapporteur on human rights in Myanmar, addresses a news conference after a meeting on Thursday with the House committee on national security, border affairs, national strategy and national reform, chaired by Move Forward MP Rangsiman Rome (second from right). (Photo: Reuters)
Tom Andrews, the UN special rapporteur on human rights in Myanmar, addresses a news conference after a meeting on Thursday with the House committee on national security, border affairs, national strategy and national reform, chaired by Move Forward MP Rangsiman Rome (second from right). (Photo: Reuters)

Major Thai banks defended themselves on Thursday against criticism that they facilitated weapons purchases by the Myanmar junta, saying they lacked the capacity to investigate all transactions that might be used for such purchases.

Representatives of the lenders told a House committee, however, that they strictly followed existing regulations.

A report last month by a United Nations expert said that companies registered in Thailand utilised five Thai banks to transfer weapons and related materials worth $120 million in the 2023 fiscal year to Myanmar, compared with $60 million the year before.

Material supplied to the Ministry of Defence in Myanmar by companies based in Thailand ranged from spare parts for helicopters and aircraft to dual-use goods such as radio communications and IT equipment, medical supplies, construction materials, tools, lubricants and oil. A breakdown of the value was not available.

Such transactions blunt global efforts to isolate Myanmar’s ruling junta, which is facing its biggest challenge since taking power in a 2021 coup, with an nationwide armed resistance gaining ground on multiple fronts and a wilting economy.

A junta spokesman did not respond to a call seeking comment.

The House committee on national security called in representatives of five banks after the report by the UN special rapporteur on human rights in Myanmar, Tom Andrews, highlighted the role of Thai entities.

Mr Andrews said the junta had shown an ability to get around sanctions, with 16 international banks helping, wittingly or unwittingly, to finance defence procurement transactions, some of them for weapons used on civilians.

“It almost appears as if the junta is trying to destroy a country that it cannot control,” he told the committee hearing.

Pongsit Chaichutpornsuk, senior executive vice-president at Krungthai Bank, said lenders have strictly complied with regulations but find it difficult to investigate indirect transactions, such as those potentially made to buy fuel.

“This is beyond what we need to know, the banks do not have this kind of investigators,” said Mr Pongsit, who was addressing the committee on behalf of the Thai Bankers’ Association.

All commercial banks would comply if the government and regulators makes it clear which entity they cannot do business with, he added.

The five Thai commercial banks named in the UN report — Krungthai, Siam Commercial bank, Bangkok Bank, TMB Thanachart Bank and Kasikornbank — did not respond to requests for comment from Reuters.

The Bank of Thailand (BoT) said that it is working with the Anti-Money Laundering Office (Amlo) to investigate all transactions that may be linked to Myanmar’s weapon procurement.

“If there are loopholes, we and Amlo will introduce additional measures,” BoT assistant governor Chayawadee Chai-anant told the committee.

The House committee chairman, Move Forward MP Rangsiman Rome, said the bankers’ association, the central bank and Amlo had been instructed to report back within 30 days with recommendations for further action.

Referring to the UN report that show a drop in military exports from Singapore to Myanmar between 2022 and 2024, Mr Rangsiman instructed the foreign ministry to ask the Southeast Asian financial hub for details on its approach.

“We need to use Singapore as a model to address this issue,” he said. “If our banking system has been used to facilitate arms dealing and support the Myanmar junta in killing its people, this is something the committee thinks is unacceptable.” 

Do you like the content of this article?
COMMENT (35)