Thailand is now the Myanmar junta’s favored banking destination as military attacks ramp up, UN expert says

By Helen Regan, Kocha Olarn and Michael Mitsanas, CNN

Hong Kong/Bangkok (CNN) — International banks are playing a significant role in the Myanmar military junta’s ability to carry out its systematic and deadly assault on its people, a new United Nations-backed report has found.

Thai banks have now become the main source through which the Myanmar military is buying weapons and military supplies – including parts for helicopter gunships – used to support its three-year civil war that has devastated the country and killed more than 5,000 civilians, Tom Andrews, the UN Special Rapporteur for Human Rights in Myanmar, said in a new report Wednesday.

Since seizing power in a coup in February 2021, the military has been fighting a deepening war against ethnic armed groups and people’s resistance forces across Myanmar. In recent months it has faced significant losses of territory and troops.

As it contends with widespread public opposition and an economic crisis that has sparked soaring levels of poverty, the junta has increased airstrikes and attacks against civilians and civilian infrastructure, displacing more than 3 million people.

Andrews said the junta has increased its deadly aerial attacks against civilian targets by “fivefold” in the past six months, fueling the humanitarian crisis as it seeks to “scare” civilians into ceasing resistance to the military.

“They’re able to do that by procuring weapons from abroad, and that’s made possible by the services they receive from these banks,” Andrews told CNN.

The military’s brutal campaign of violence has prompted Western nations to impose wide-ranging sanctions on military leaders, family and cronies, state-owned companies, banks, and jet fuel suppliers.

The report, “Banking on the Death Trade: How Banks and Governments Enable the Military Junta in Myanmar,” found that 16 banks in seven countries have processed transactions linked to the military’s procurement in the past year.

Weapons, dual-use technologies, manufacturing equipment, and raw materials secured by the junta from abroad reached $253 million between April 2023 and March 2024, the report said.

“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 wrote in the report.

However, the volume of weapons and military supplies purchased by the junta through foreign banks has decreased by a third from 2023, with exports from Singapore dropping dramatically, according to the report.

“The good news is that the junta is increasingly isolated,” the report said. “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 Member States to fully coordinate and enforce actions.”

International banks, Andrews said, need to know there is a “high likelihood” that transactions involving Myanmar’s state-owned entities could be used to buy the weapons or weapons-grade materials fueling the junta’s war-chest.

“If you want to be sure that isn’t happening, then don’t conduct business with Myanmar’s state-owned banks,” he said.

The Thai connection

Singapore-based entities were Myanmar’s third largest source of weapons and military materials. But following a government investigation, the flow of weapons materials to Myanmar from Singapore-registered companies dropped by nearly 90% compared to the previous year.

In 2022, Singapore-based banks facilitated more than 70% of the junta’s purchases passing through the banking system. By 2023, that had dropped to under 20%, the report found.

Looking for other financial institutions, the junta found neighboring Thailand.

Between 2022 and 2023, exports of weapons and related materials from Thai-based entities more than doubled, from $60 million to nearly $130 million last year.

“Many SAC (junta) 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,” the report said.

Siam Commercial Bank is among the Thai banks that have played a “crucial role” in the shift, the report found. In 2022, the bank facilitated just over $5 million in transactions relating to the military; by 2023 that figure ballooned to more than $100 million, according to the report.

In a statement, SCB said it provides “international transaction services” between Thailand and Myanmar “with the primary objective of supporting Thai and international businesses in paying for consumer products and services to Myanmar.”

SCB’s statement said the bank complies with all relevant anti-money laundering laws, and an internal investigation determined its transactions with Myanmar are not connected to the arms trade.

“SCB reaffirms its commitment to adhering to relevant anti-money laundering and related regulations,” the statement added.

A spokesperson for Thailand’s Ministry of Foreign Affairs told CNN, “we have seen the report and are looking into it.”

“Many countries have been named and certainly these are countries where the majority of financial transactions in the region would pass through,” the spokesperson said in a statement.

“Our banking and financial institutions follow banking protocols as any major financial hub. So we will have to first establish the facts before considering any further steps.”

Andrews told CNN he welcomed the Thai government’s decision to “look into the facts.”

“I am hopeful that (the investigation) is going to lead to positive changes in Thailand, much as it did in Singapore,” he said.

In his report, Andrews said it was “critical” that “financial institutions take their human rights obligations seriously and not facilitate the junta’s deadly transactions.”

In addition, sanctioning the networks supplying jet fuel to the junta and the military’s “go-to bank” Myanma Economic Bank, “could play a decisive role in helping to turn the tide in Myanmar and saving untold numbers of lives,” the report said.

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This story has been updated with additional information.