UN Expert: Thai Banks Are Major Financial Backers of Burma’s Military

June 27, 2024 by No Comments

According to a report released on Wednesday by Tom Andrews, the United Nations special rapporteur on the situation of human rights in Burma, Thai banks have become the primary providers of international financial services for Burma’s military government. This enables the junta to purchase goods and equipment for its increasingly violent war against pro-democracy resistance forces and armed ethnic minority groups.

The report highlights how the military junta has been able to continue acquiring arms by shifting to new suppliers of financial services and military hardware. This comes after previous sources were blocked by sanctions imposed by the United States, the European Union, and other countries.

The report accuses companies in Thailand, Burma’s eastern neighbor, of filling the void left by the withdrawal of Singaporean firms’ business with the military junta.

It states that the junta, formally known as the State Administration Council, “continues to engage with a broad international banking network to sustain itself and its weapons supplies.”

“Over the past year, 16 banks located in seven countries processed transactions related to SAC military procurement; 25 banks have provided correspondent banking services to Burma’s state-owned banks since the coup,” says the report, titled “Banking on the Death Trade: How Banks and Governments Enable the military Junta in Myanmar,” presented to the U.N. Human Rights Council.

Burma’s military junta seized power in February 2021 after the army ousted the democratically elected government of Aung San Suu Kyi. Following the use of deadly force by security forces to suppress nonviolent protests, armed resistance emerged, plunging the country into civil war. The military has been accused of widespread human rights violations, including the bombing of civilians.

“The good news is that the junta is increasingly isolated,” Andrews said in a statement. “The Myanmar military’s annual procurement of weapons and military supplies through the formal banking system declined by a third from the year ending March 2023 to the year that followed — from $377 million to $253 million.”

“The bad news is that the junta is circumventing sanctions and other measures by exploiting gaps in sanctions regimes, shifting financial institutions, and taking advantage of the failure of (U.N.) Member States to fully coordinate and enforce actions.”

A previous report from Andrews documented that Singapore-based entities had become the military junta’s third-largest source of weapons materials, despite a clear national policy opposing the transfer of weapons to Burma.

Following the presentation of that report and its findings investigated by the Singaporean government, “the flow of weapons and related materials to Burma from Singapore-registered companies dropped by nearly 90%,” the new report says.

It states that while Singapore-based banks facilitated over 70% of the military junta’s purchases that passed through the formal banking system in the 2022 financial year, “that percentage had dropped to under 20% by FY2023.”

Exports from Thailand-registered entities “more than doubled — from just over $60 million to nearly $130 million” from FY2022 to FY2023, the report adds.

“Many SAC purchases previously made from Singapore-based entities, including parts for Mi-17 and Mi-35 helicopters used to conduct airstrikes on civilian targets, are now being sourced from Thailand,” it says.

It specifically identifies Thai banks as playing a crucial role in facilitating international business for Burma’s military, citing the example of Siam Commercial Bank. It states that the bank conducted just over $5 million in transactions related to Burma’s military procurement in FY2022, increasing to more than $100 million in FY2023. The bank declined to provide an immediate comment on the report.

Andrews’ report details the toll of the fighting so far in Burma: more than 5,000 civilians killed since the takeover, 3 million people displaced, and more than 20,000 political prisoners.

“By relying on financial institutions that are willing to do business with Myanmar state-owned banks under its control, the junta has ready access to the financial services it needs to carry out systematic human rights violations, including aerial attacks on civilians,” Andrews said.

“International banks that facilitate transactions that include Myanmar state-owned banks are at high risk of enabling military attacks on Myanmar civilians. I urge them to stop doing so. Banks have a fundamental obligation to not facilitate crimes -– and this includes war crimes and crimes against humanity.”