Big banks face scrutiny over business with Myanmar lender

Major international banks, including Australia’s ANZ, have continued to do business with a bank owned by Myanmar’s military administration despite its bloody crackdown on anti-coup protests, according to an advocacy group and leaked documents.

ANZ, one of Australia’s “big four” banks, was used by Hong Kong-based insurer AIA to transfer funds to accounts operated by Innwa Bank, which is owned by military conglomerate Myanmar Economic Corporation (MEC), in August and September 2021, Justice for Myanmar said, citing leaked bank documents.

Malaysian company edotco, which leases towers to Myanmar mobile operator Mytel, also used ANZ to carry out transactions with Innwa Bank accounts in April and June 2021, according to a report released by the activist group on Wednesday.

Singapore’s UOB, one of Southeast Asia’s biggest banks, facilitated transactions between a Chinese shipping firm and MEC in June and July last year, according to the report.

The Singaporean lender was also used for transactions between Myanmar-based Lamintayar, a supplier of powdered milk, and a number of its executives, the report said.

Meanwhile, BIDV, a lender jointly owned by the State Bank of Vietnam and South Korea’s KEB Hana Bank, carried out at least 18 transactions with Telecom International Myanmar, which is part owned by MEC, according to Justice for Myanmar.

The leaked Innwa Bank documents were obtained and published online by Distributed Denial of Secrets, a self-described transparency collective that regularly releases information hacked from governments and businesses.

An ANZ spokesperson said the bank had “no commercial relationship” with Innwa Bank.

“ANZ must comply with all applicable laws in all of the jurisdictions in which it operates, including requirements of supra-national organisations, such as the United Nations and European Union,” the spokesperson told Al Jazeera.

“While we are unable to comment on specific relationships or transactions, ANZ has robust processes in place to ensure all activities undertaken are compliant with the applicable regulations. These processes are in line with The Financial Action Task Force Recommendations.”

It is understood ANZ’s transactions likely related to payroll operations that it handles for corporate clients like AIA, with the bank having no control over where its clients’ employees choose to bank.

A UOB spokesperson said the bank could not comment on individual client relationships but will implement “enhanced due diligence on client relationships and transactions involving Myanmar where applicable”.

“We are closely monitoring the situation and at the same time, ensuring compliance with local and international rules and regulations,” the spokesperson told Al Jazeera.

“When applying enhanced due diligence measures, we will ensure that flows of funds for humanitarian assistance, legitimate non-profit organisation activity and remittances are not disrupted.”

Al Jazeera contacted BIDV, AIA and KEB Hana Bank for comment.

Innwa Bank has played an important role in Myanmar’s military-owned corporations being able to maintain access to the international banking system amid United States sanctions, according to a 2019 independent fact-finding mission by the United Nations Human Rights Council

While the EU, United Kingdom and US have imposed sanctions on MEC over the 2021 military coup, leading economies such as Australia, Japan, Singapore and South Korea have not taken action against the conglomerate.

Justice for Myanmar said the international banks’ business with Innwa Bank showed “a failure of governments to take a coordinated approach to isolating military conglomerates and cutting the junta’s sources of revenue”.

“Banks must immediately ban transactions with Myanmar military banks, or risk complicity in the junta’s international crimes,” the activist group said.

Myanmar’s military administration has killed more than 2,400 civilians since overthrowing Aung San Suu Kyi’s democratically elected government in February 2021, according to activists.