Thai banks admit lack of capacity to investigate Myanmar weapon payments

Krung Thai Bank PCL

11/07/2024 10:10

BANGKOK, July 11 (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 may be used for
such purchases.
    Representatives of the lenders told a parliamentary
committee, however, that they strictly followed existing
regulations.
    A U.N. expert's report last month said that companies
registered in Thailand utilised 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.
    These 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.
    Thailand's parliamentary committee on national security
called in representatives of five banks after the report by the
U.N. special rapporteur on the situation of human rights in
Myanmar, Tom Andrews, highlighted the role of Thai entities.
    Pongsit Chaichutpornsuk, Senior Executive Vice President at
Krung Thai Bank  KTB.BK , 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 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 U.N. report,
Krung Thai, SCBX  SCB.BK , Bangkok Bank  BBL.BK , TMB Thanchart
Bank  TTB.BK  and Kasikorn Bank  KBANK.BK  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 parliamentary committee's chairman, Rangsiman Rome, said
the bankers association, the BOT and AMLO had been instructed to
report back within 30 days with recommendations for further
action.
    Referring to the U.N. report that show a drop in weapon
exports from Singapore to Myanmar between 2022 and 2024,
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."

 (Reporting by Panu Wongcha-um, Chayut Setboonsarng and Artorn
Pookasook, Editing by Devjyot Ghoshal and Raju Gopalakrishnan)
 ((Panu.Wongcha-um@thomsonreuters.com; +6626488658;))