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Banks fuel Myanmar's 'death trade' as rebels advance, U.N. expert finds

The expert report identifies Thai and Chinese banks as the main providers of financial support for Myanmar's junta.

A street scene in Bagan, Myanmar
A street scene in Bagan, Myanmar (AN/Ajay Karpur/Unsplash)

International banks are a lifeline for Myanmar's military junta, facilitating US$630 million in weapons purchases over the past two years even as resistance forces gain ground in the civil war, a new U.N. report reveals.

The report from U.N. special rapporteur Tom Andrews on Wednesday shows international sanctions dented but did not derail Myanmar’s “death trade." The junta, which seized power in 2021, still bought US$253 million of military items in 2023, down 30% from last year's US$377 million, using 16 banks mainly in Thailand and China that exploit sanctions loopholes.

Despite the decrease in military purchases, which include weapons, dual-use technologies, manufacturing equipment, and raw materials, the junta's aviation fuel shipments rose 30%, enabling a fivefold increase in its airstrikes on civilian targets in the past six months, he noted.

"The junta has ready access to financial services it needs to carry out systematic human rights violations, including aerial attacks on civilians," said Andrews, who was appointed by the U.N. Human Rights Council to independently monitor and report on human rights in Myanmar.

Myanmar's civil war, now in its third year, has become the world's most violent conflict, killing at least 50,000 people, including at least 8,000 civilians, according to the Armed Conflict Location and Event Data Project.

Since the military overthrew the democratically elected government of Aung San Suu Kyi in Feb. 2021, the junta imprisoned more than 20,000 political dissidents and displaced 3 million people, U.N. figures show.

The Burmese Rohingya Organization U.K. warned on Tuesday of an "intensifying genocide" in Rakhine State, where 600,000 Rohingya face escalating persecution and deprivation of essential resources.

On the eve of the report's release, Myanmar's U.N. ambassador, Kyaw Moe Tun, representing the ousted government, pleaded for action.

"Cutting arms, weapons, jet fuels and financial assistance to the junta must be at the heart of all strategies," Tun told the United Nations on Tuesday. "Please save lives. Please bring the future back to the people of Myanmar."

The conflict's landscape has shifted dramatically in recent months. In a war that once looked unwinnable, resistance forces are gaining ground. Rebels now control much of the country's border regions, with fighting edging closer to Naypyidaw, the junta's isolated, purpose-built capital. Even near this military stronghold, the regime's grip is slipping.

Hundreds of armed groups now oppose the junta, from long-standing ethnic militias to newly formed People's Defense Forces. Many fighters are former civilians who traded protest signs for rifles following the brutal military crackdown on protesters in the coup's aftermath.

Over half the country is now out of the military junta's control.

"With the junta on its heels, it is critical that financial institutions take their human rights obligations seriously and not facilitate these deadly transactions," Andrews said. “These actions could play a decisive role in helping to turn the tide in Myanmar and saving untold numbers of lives.”

U.N. report 'Banking on the Death Trade: How Banks and Governments Enable the military Junta in Myanmar' [Footnote 9 - Includes sales for which the special rapporteur cannot identify the seller’s country of registration.]

Thailand, China and sanctions loopholes

Exports from Singapore plummeted to just US$10 million, down from US$100 million, following a government investigation prompted by Andrews' report last year, which identified the country as the third-largest supplier of weapons to Myanmar's junta, known as the State Administration Council, or SAC.

Thailand turned on the tap, however, emerging as the junta's new primary supplier. Weapons transfers from Thai-registered companies doubled to over US$120 million in 2023, with Thai banks playing a crucial role. Siam Commercial Bank alone saw its military-related transactions surge from to over US$100 million, up from US$5 million in just one year.

Thai companies replaced Singaporean firms as the junta's source for Mi-17 and Mi-35 helicopter parts, the report found. These aircraft, used for troop transport and civilian airstrikes, were involved in an April 2023 attack on Pazigyi village that killed 170 people, including 40 children.

"If Thailand, in particular, were to follow Singapore's lead, the capacity of the SAC to launch military attacks on civilians would be significantly reduced," the report found. The Thai government maintains close relations with Myanmar's military.

The report also identifies a critical weakness in the international community's approach to Myanmar: a lack of coordination in sanctions regimes. While four countries and the European Union imposed 133 new sanctions on the junta and its allies since the start of 2023, these efforts lack coordination.

Only 19% of Myanmar's sanctioned targets were hit by four or more of the main sanctioning jurisdictions — the United States, United Kingdom, E.U., Canada, and Australia. This fragmented approach left loopholes that the junta exploits to access weapons and financing.

“The junta is increasingly isolated,” Andrews said. "It is critical that states step up by fully coordinating their actions, including by closing loopholes in sanctions regimes.”

igures for the junta, or State Administration Council (SAC), from the U.N. report
Figures for the junta, or State Administration Council (SAC), from the U.N. report 'Banking on the Death Trade: How Banks and Governments Enable the military Junta in Myanmar'

Unsanctioned bank handling hundreds of millions

The crucial loophole is the Myanma Economic Bank (MEB). After U.S. sanctions hit two major state-owned banks in June 2023, the regime quickly shifted to the unsanctioned MEB.

By late 2023, MEB was processing over US$160 million in outgoing payments and receiving US$330 million in incoming funds, including substantial oil and gas revenues. MEB remains untouched by international sanctions.

"It is critical that [sanctions] target Myanma Economic Bank, which is not subject to international sanctions and has become the go-to bank for the junta," Andrews said. "International action works. The people of Myanmar deserve more."

The junta's purchases from China declined, but it approved over US$50 million to the China Construction Bank for arms last year. Experts suggest sanctions may have shifted some procurement to informal channels.

China has supplied Myanmar's junta with fighter jets, missile technology and naval gear, while Thailand provided aircraft parts, missiles and electronic warfare equipment, the U.N. report shows. Both countries sold dual-use goods, manufacturing equipment and raw materials to the military regime.

Banks that maintain relationships with MEB risk facilitating probable war crimes and crimes against humanity, Andrews warned as he called on governments to sanction all four of Myanmar's state-owned financial institutions and urged banks to freeze relationships with them.

Since 2021, the junta has defied both a U.N. General Assembly resolution urging an arms embargo and a U.N. Security Council demand to end violence and free political prisoners, including Suu Kyi.

"The cost of inaction by the Security Council is huge for the people of Myanmar, and we are bearing the brunt of such inaction," Myanmar's envoy Tun said. "The inaction has resulted in more deaths, more disabled, more displacement, more suffering, more losing hope."