ANZ, UOB among international banks transacting with Myanmar military owned Innwa Bank
November 2, 2022
Innwa Bank records released by Distributed Denial of Secrets reveal transactions with major international banks, despite sanctions.
Innwa Bank is owned by the military conglomerate Myanmar Economic Corporation (MEC) and is a key financial institution of the Myanmar military cartel. The military and its top generals use Innwa Bank to pay salaries for military officers, to transfer funds to military units and to sustain military controlled businesses.
The UN Independent International Fact-Finding Mission on Myanmar found that Innwa Bank plays an important role in sustaining the military’s economic interests, providing military conglomerates, their subsidiaries, and owners with access to the international financial system.
On March 25, the US imposed sanctions on MEC in response to the military’s illegal coup attempt. The UK followed on April 1 and the EU sanctioned MEC on April 19. These sanctions apply to Innwa Bank as an MEC-owned company.
However, transaction records show international banks continuing business as usual, transacting with Innwa Bank in Myanmar kyat.
Australia’s ANZ was one of the first international banks to receive a licence from the Central Bank of Myanmar, winning approval in 2014, under the military’s proxy government.
Since US sanctions on Innwa Bank, the Hong Kong based insurance corporation AIA has used ANZ to transfer funds to Innwa Bank accounts. Records show transactions in August and September 2021.
The Malaysian tower company edotco also used ANZ for transactions to Innwa Bank accounts in April and June 2021. edotco leases towers to Mytel, a mobile operator partly owned by MEC.
ANZ’s transactions with Innwa Bank have taken place amid a sanctions void in Australia, with the government failing to impose any sanctions in response to the military’s coup attempt. Military conglomerates MEC and Myanma Economic Holdings Limited (MEHL) remain unsanctioned in Australia.
Justice For Myanmar wrote to ANZ regarding its transactions with Innwa Bank. A spokesperson responded, “We are monitoring the situation in Myanmar closely and our priority is ensuring the safety and wellbeing of our staff. 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.”
Justice For Myanmar also asked ANZ whether it transacts with MWD, a bank owned by MEHL. ANZ did not provide a response.
AIA and edotco did not respond to questions regarding Innwa Bank transactions.
AIA has a bancassurance partnership with Aya Bank, which is owned by the crony company Max Group. The Distributed Denial of Secrets trove of bank records include almost 2,000 transactions between Innwa Bank and Aya Bank. In 2019, the UN Independent International Fact-Finding Mission on Myanmar called for a criminal investigation into Max Group “for making a substantial and direct contribution to the commission of the crime against humanity of “other inhumane acts” and persecution”.
Singapore’s UOB also received a licence to open a branch in 2014 and maintains an active presence in Myanmar.
Since US sanctions on MEC, UOB has facilitated transactions between Cosco Shipping Lines and MEC in June and July 2021. Cosco is a Chinese shipping corporation, and the transactions suggest the company is enabling foreign trade with MEC.
UOB was also used for transactions between Lamintayar Company Limited and some of its directors. Lamintayar is an industrial powdered milk supplier for the New Zealand dairy giant, Fonterra.
Justice For Myanmar wrote to UOB regarding its transactions with Innwa Bank. A UOB spokesperson replied, “as a regulated financial institution, UOB is obligated to strictly comply with all government directives and international sanctions. We seek your understanding that we are unable to comment on individual client relationships.”
Justice For Myanmar asked Fonterra whether they directly or indirectly supply the Myanmar military, and for details on their relationship with Lamintayar. Fonterra replied, “Fonterra sells a small amount of product to customers in Myanmar. None of our customers there are sanctioned individuals or entities.” A short time later, Lamintayar’s website and Facebook page were taken offline.
Fonterra must clarify steps taken to ensure that its distributors in Myanmar do not engage in trade or other business relationships with the Myanmar military junta and sanctioned entities.
BIDV is majority owned by the State Bank of Vietnam with a 15% stake held by South Korea’s KEB Hana Bank. It received a licence to open a Myanmar branch in 2016.
The bank is a major provider of credit and financial services to Telecom International Myanmar, the parent company of Mytel. Telecom International Myanmar is mostly owned by MEC and Viettel Global Investment of Vietnam’s Ministry of National Defence.
Records show at least 18 BIDV transactions with Telecom International Myanmar following the military’s illegal coup attempt. These involve payments to MEC, MEC’s subsidiary, Star High, Innwa Bank Limited and Eco Friendly Towers Company Limited.
BIDV and KEB Hana did not response to questions from Justice For Myanmar.
The Innwa Bank records include over 200 transactions between Yoma Bank and Innwa Bank, which largely took place following the military’s coup attempt.
Yoma is a Myanmar bank controlled by FMI, a holding company listed on the Yangon Stock Exchange led by Serge Pun and backed by major international investors. Greenwood Capital, an affiliate of Singapore’s sovereign wealth fund, GIC, owns 19.7% of Yoma Bank. The Norwegian development finance institution Norfund owns 10.6%. The International Finance Corporation (IFC) of the World Bank Group owns 4.5%.
Records involving Yoma bank include transactions with MEC, individual military personnel, Best Oil Company Limited, Pinnacle Asia and Meditech.
Best Oil is a wholesale oil importer and distributor that is a member of the junta’s Steering Committee for Purchasing Fuel Oil from Russia. Pinnacle Asia is a company linked to Khin Thiri Thet Mon, the daughter of junta head Min Aung Hlaing. Yoma Bank issued a loan to Pinnacle Asia in 2020 to build towers for Mytel. Meditech is a medical equipment distributor that represents Siemens Healthineers in Myanmar and is a supplier of the Myanmar army.
Yoma Bank, GIC, IFC, Norfund and Siemens Healthineers did not respond to questions regarding Innwa Bank transactions.
Stop Innwa Bank
Since February 1, 2021, the illegitimate junta has murdered over 2,400 people and arbitrarily arrested over 15,000 more. It has summarily executed political prisoners and is conducting indiscriminate airstrikes and shelling across large parts of Myanmar. In recent weeks, the junta carried out air strikes against a concert in Hpakant, killing more than 80, and a school in Let Yet Kone village, killing at least 12 people.
The junta’s atrocity crimes are enabled by its international business network. Innwa Bank remains a major node in the Myanmar military’s web of businesses.
Despite US, UK, EU and Canadian sanctions on MEC, Innwa Bank is still transacting with international businesses, including banks from Australia and Singapore. This shows a failure of governments to take a coordinated approach to isolating military conglomerates and cutting the junta’s sources of revenue.
Jurisdictions that have not imposed sanctions on MEC and MEHL must now do so, including Australia, Singapore, Japan and South Korea, which all have banks operating in Myanmar.
Banks must immediately ban transactions with Myanmar military banks, or risk complicity in the junta’s international crimes.