Written by U Ne Oo on 2004-10-27
Behind the coup in Burma, there is an agenda to conceal fraud, embezzlements and criminal money laundering by the military.
Written by Dr U Ne Oo http://netipr.org/~uneoo
(U Ne Oo is a Burmese political exile living in Adelaide.
He is also the secretary of Burma Action Group in South Australia)
On 22nd October 2004, the Burmese military junta announced the abolition of National Intelligence Bureau (NIB), an umbrella organizing consisting various intelligence groups in Burma [The New Light of Myanmar, 23/10/04]. The military also repeal the 1983 law which authorizes NIB to scrutinize criminal/security issues in Burma. Some commentators put it that the abolition of NIB has been somewhat related to the removal of Lt. General Khin Nyunt. However, I formed the view that the Burmese junta abolishing NIB and repealing 1983 Law regarding NIB has been a likely case of the junta taking preventative action against the international community scrutinizing military junta's business and financial records.
BACKGROUND
On 19th October 2004, the Burmese military junta ousted Burma's prime minster Lt Gen Khin Nyunt, appointed since August 2003. Once the chief of much dreaded Military Intelligence Service (MIS), General Khin Nyunt came to political prominence in 1988 military crackdown on popular uprising in Burma. Since 1988 the military junta ruled Burma by decree (martial laws), in which the function of military intelligence services (MIS) was closely kept under the control of General Khin Nyunt.
From the outset of taking power in 1988, the military was confronted by various insurgencies as well as sanction by major donor countries. In 1989, the military junta struck ceasefire deals with former Burmese Communist Party rebels, Wa and Kokang tribal groups. Operating mainly in Shan Hill tracts in Burma's North-East, these ethnic rebel groups were engaging in illicit drug trades. These ethnic rebel groups had reportedly signed ceasefire in exchange government troops turned blind eyes to illicit-drug trade. Since then, there has been significant increase in corruption within junta and marked increase in drug-money laundering in Burma. There are also consistent and repeating allegations that the military junta, as an institution, may be involved in illicit drug traffickings.
RECENT DEVELOPMENTS
Concerned by Burmese military junta's involvement in criminal money laundering, the international community had taken measures against junta in recent years. The United States Treasury Department had classified Burma's two largest private banks -- the May Flower and Asia Wealth Banks -- as primary money laundering concerns [Federal Register pp-19100, US Department of Treasury, 1993]. In November 2003 the Financial Action Task Force, an inter-governmental cooperative agency with 31 member countries, had imposed counter-measures against money laundering cases in Burma.
Due to these pressures from international community, the Burmese junta appears to be making some token gestures toward fighting criminal money laundering cases. For example, in a response to concern raised by US Treasury Department, the Burmese junta in December 2003 had appointed an eight members commission to investigate money laundering cases by May Flower and Asia Wealth banks. The junta had also instructed the commission to complete investigation within three months and then to be reported back to the government [New Era Journal (in Burmese) April 2004]. Despite the commission had completed its task on time, the Burmese government declined to accept commission's report twice in March and May 2004. Finally, the commission's report was tabled to the military government on 5th August 2004. As yet, the Burmese military government had to make public about the commission's findings [New Era Journal September 2004].
The Burmese junta also enacted an Anti-Money Laundering Law and Mutual Legal Assistance Law on 14 October 2004 [USINFO, 22/10/04]. On 19th August 2004, Burma signed joint communique by ASEAN Chiefs of Police to participate in mutual legal assistance on fighting transnational crimes. Notably, the ASEAN Chiefs of Police conference sought enhanced cooperation within ASEAN regional grouping on transnational crimes, such as Drug Trafficking, Commercial Crimes, Bank Offenses and Credit Card Fraud [ASEAN JOINT COMM, 19/8/2004].
THE FATF LIFTS COUNTERMEASURES/JUNTA ABOLISHES NIB
Due to these developments, on 22nd October 2004 the Financial Action Task Force has instructed its members to lift counter-measures imposed on Burma(Myanmar) [USINFO, 22/10/04]. By lifting the counter-measures, the FATF appears to be hoping to get certain level of cooperation from Burmese military junta in fighting money laundering. On the same day on 22nd October 2004, the Burmese junta announces the abolishing of the National Intelligence Bureau (NIB) and repeal of the 1983 NIB Laws.
The National Intelligence Bureau comprise of Military Intelligence Services (MIS), Bureau of Special Investigation (BSI), Police Special Investigation Units and Criminal Investigation Department. In terms of day-to-day operations by various intelligence apparatus, the Burmese population see little distinction between National Intelligence Bureau (NIB) and Military Intelligence Services (MIS). This is because the MIS ultimately control every aspect of intelligence operations in Burma. Structurally, however, the NIB includes certain intelligence units such as Bureau of Special Investigation (BSI), of which are structurally independent from the military.
MIS OR NIB
As for normal operating procedures, the National Intelligence Bureau (NIB), a Police/Security Organization, will take its directives from the Home Affairs Ministry in accordance with State and Civil Laws. Whereas the Military Intelligence Services (MIS) may take its commands directly from the military junta.
In the event of the international law enforcement bodies seeking cooperation on financial crimes from the Burmese side, the NIB will become the first point of contact for international law enforcement bodies. The Counter Money Laundering Laws of Burma -- which enacted in 2002 and 2003 but had never been successfully applied so far -- considerably given investigative authorities to the intelligence units within NIB which are structurally independent from the military. Burmese junta abolishing of NIB, therefore, indicates the level of anxiety by military leaders felt on the possible international scrutiny on their business and financial dealings. By abolishing NIB, the Burmese military junta had shut down the possible avenues for international cooperation against criminal money laundering.
THE 19TH OCTOBER COUP AND MONEY LAUNDERING CONCERNS
Whilst it becomes clearer now that the Burmese junta abolishing of NIB and repealing the 1983 Law regarding NIB was directed against possible scrutiny by international bodies, there are still questions about whether the military coup took place on 19th October was triggered also by fraud, embezzlements and money laundering concerns. When analyzing the time-line on recent events, it seems to support such scenario.
1. In 5th August 2004, the junta appointed commission tabled the report on the cases of May Flower and Asia Wealth Banks. Unconfirmed report said the two banks were found to be involved in money laundering cases. The Commission's report was not made public by the junta.
2. On 19th August 2004, Burma signed into joint cooperation agreement with fighting transnational crime within the frame work of ASEAN Chiefs of Police Joint Communique.
3. On 14th October 2004, Burma enacted Mutual Assistance in Criminal Matters Law, which may allow regional and international law enforcement cooperation.
4. On 19th October 2004, Gen Khin Nyunt was ousted from Prime Minister's position.
5. On 22nd October 2004, the Financial Action Task Force lifted countermeasures against Burma. On the same day, the junta repeal the 1983 Law on NIB and abolish the NIB.
JUNTA AND THE PANIC REACTION
On 25th October 2004 press conference, the junta spoke person claimed ousting of Gen Khin Nyunt has been related to corruption and bribery cases that took place at the China-Burma border [Mizzima News (Burmese), 25/10/2004]. In reality, however, all Burmese military leaders at high level are involved in the bribery and corruptions.
In dealing with the bribery and corruptions, there has been a common practice by Burma military intelligence services (MIS) excercise since the time of late dictator Gen Ne Win (1962-1988). The MIS usually kept records of any wrong-doings by top ranking army personnel in the so-call "dirty files". These records were used when the time has come to dismiss any officer from their position. Understandably, the Burmese army rank-and-file resented such a practice and held great suspicion against military intelligence services and its chief Gen Khin Nyunt.
What likely to have happened on 19th October was, as noted above, there were some build up in tension within junta against bribery and criminal money laundering. As records suggest, Gen Khin Nyunt is also ruthless in firing the military officers. This time, however, the military faction has taken the first strike against Gen Khin Nyunt.
CONCLUSIONS:
NO PROSPECT FOR COOPERATION AGAINST MONEY LAUNDERING
It becomes apparent that Burmese military leaders are sinking too deep into corruption. It follows that the junta will oppose any international scrutiny against its business and financial records. The military coup in 19th October, along with subsequent abolition of NIB point to this grim reality. Only the military leaders themselves can tell whether they will be able to pull themselves out of these corruption and bribery.
The US Department of Treasury, FATF, Asia Pacific Group on Money Laundering and Governments in ASEAN countries must take note of this situation. In the light of current situation, FATF must consider to immediately re-impose countermeasures against money laundering cases in Burma. Burma neighbors, especially Thailand, Singapore and Malaysia should increase their scrutiny against existing transactions with Burma.
PRESS-ROUNDUPS
1. ASEAN Chiefs of Police Joint Communique on 19th August 2004.
2. Financial Action Task Force lifting counter measures against Burma (USINFO) on 22nd October 2004.
