11-7-2024 (BANGKOK) Major Thai banks found themselves on the defensive Thursday, refuting accusations that they facilitated weapons purchases by the Myanmar junta, arguing that they lacked the capacity to investigate all transactions that might be used for such purposes.
Representatives from the lenders appeared before a House committee to address a United Nations report that implicated five Thai banks in transferring weapons and related materials worth an estimated $20 million to Myanmar during the 2023 fiscal year, a significant drop from the previous year’s $60 million figure.
The report, authored by UN Special Rapporteur on Human Rights in Myanmar Tom Andrews, highlighted the role of Thai entities in supplying Myanmar’s Ministry of Defense with a range of goods, including spare parts for helicopters and aircraft, dual-use items like radio communications and IT equipment, medical supplies, construction materials, tools, lubricants, and oil.
The revelations have drawn criticism, as such transactions undermine global efforts to isolate Myanmar’s ruling junta, which faces mounting challenges from an armed resistance movement and a faltering economy since seizing power in the 2021 coup.
During the House committee hearing on national security, representatives from the five banks named in the report – Krungthai, Siam Commercial Bank, Bangkok Bank, TMB Thanachart Bank, and Kasikornbank – maintained that they strictly adhered to existing regulations but acknowledged the difficulties in investigating indirect transactions that could potentially be used for weapons procurement.
Pongsit Chaichutpornsuk, a senior executive vice president at Krungthai Bank, speaking on behalf of the Thai Bankers’ Association, emphasized the banks’ compliance with regulations but admitted their limitations in probing transactions that could indirectly facilitate purchases like fuel.
“This is beyond what we need to know, the banks do not have this kind of investigators,” Pongsit told the committee, adding that all commercial banks would comply if the government and regulators clearly identify entities with which they cannot conduct business.
The Bank of Thailand (BoT) and the Anti-Money Laundering Office (Amlo) have pledged to investigate all transactions potentially linked to Myanmar’s weapons procurement efforts. “If there are loopholes, we and Amlo will introduce additional measures,” BoT Assistant Governor Chayawadee Chai-anant assured the committee.
Move Forward MP Rangsiman Rome, who chairs the House committee, instructed the bankers’ association, the central bank, and Amlo to report back within 30 days with recommendations for further action.
Referring to the UN report’s indication of a drop in military exports from Singapore to Myanmar between 2022 and 2024, Rangsiman directed the foreign ministry to seek details from the Southeast Asian financial hub on its approach to address the issue.
“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.”
