DEPARTMENT OF THE TREASURY

OFFICE OF PUBLIC AFFAIRS

November 19, 2003 

Treasury Department Designates Burma and Two Burmese Banks to be of 

“Primary Money Laundering Concern” and Announces Proposed Countermeasures 

 Under Section 311 of the USA PATRIOT Act 

Fact Sheet 

Overview: 

The Treasury Department today announced the designation of Burma and two 

Burmese banks, Myanmar Mayflower Bank and Asia Wealth Bank, to be of “primary 

money laundering concern.” In conjunction with this designation, Treasury 

announced a notice of proposed rulemaking that would require U.S. financial 

institutions to terminate correspondent accounts involving Burmese financial 

institutions, subject to certain specified exemptions. Correspondent accounts 

involving the two specific banks that have been designated would have to be 

terminated without exception.

Background: 

Section 311 

• Title III of the USA PATRIOT Act amends the anti-money laundering provisions of the 

Bank Secrecy Act (BSA) to promote the prevention, detection, and prosecution of 

international money laundering and the financing of terrorism. 

• Section 311 authorizes the Secretary of the Treasury – in consultation with DOJ, the 

State Department, and appropriate Federal financial regulators – to designate a foreign 

jurisdiction, institution, class of transactions, or type of account to be of "primary 

money laundering concern," and to require U.S. financial institutions to take certain 

"special measures" against the primary money laundering concern. 

• These special measures could range from enhanced recordkeeping or reporting 

requirements to a requirement to terminate correspondent banking relationships with 

the designated entity and are meant to provide Treasury with a range of options to most

effectively target specific money laundering and terrorist financing concerns. 

 
Financial Action Task Force (FATF) 

• Established in 1989, the FATF is the premier international body dedicated to the fight 

against money laundering and terrorist financing. FATF sets international standards in 

the areas of money laundering and terrorist financing, and seeks to ensure global 

compliance with those standards. 

• Among the FATF’s most important and successful initiatives is the Non-Cooperative 

Countries and Territories (NCCT) process. Through the NCCT process, the FATF 

identifies and takes action against countries that fail to implement comprehensive antimoney laundering regimes. Once a country is placed on the NCCT list, FATF members 

inform their respective financial institutions of the designation. If the designated 

jurisdiction continues to fail to take appropriate remedial action after a period of time, 

FATF then calls upon its members to impose additional countermeasures. 

• FATF has called on members to impose countermeasures only three times – in the cases 

of Ukraine, Nauru, and now Burma. In each instance, the U.S. has designated the 

jurisdiction a “primary money laundering concern” under Section 311. 

For further information on the FATF, please go to www.fatf-gafi.org. 

Burma’s Anti-Money Laundering System 

In June 2001 Burma was placed on the FATF NCCT List for its lack of basic anti-money 

laundering provisions and weak oversight of its banking system. Following up on this 

designation by the FATF, in April 2002, FinCEN issued an advisory to U.S. financial institutions 

advising that enhanced scrutiny be given to all transactions involving Burma. In taking these 

actions, FATF and FinCEN cited to the following significant, structural deficiencies in the 

Burmese anti-money laundering system: 

• Burma lacked a basic set of anti-money laundering laws and regulations. 

• Money laundering was not a criminal offense for crimes other than drug trafficking in 

Burma. 

• The Burmese Central Bank had no anti-money laundering regulations for financial 

institutions. 

• Banks licensed by Burma were not legally required to obtain or maintain 

identification information about their customers. 

• Banks licensed by Burma were not required to maintain transaction records of 

customer accounts. 

• Burma did not require financial institutions to report suspicious transactions. 

• Burma had significant obstacles to international co-cooperation by judicial authorities. 

In June 2002, Burma responded to this international pressure by enacting an anti-money 

laundering law that purportedly addressed some of these deficiencies. The necessary 

regulations required for its effective implementation, however, are not in place. As a result, 

the Burmese anti-money laundering law is ineffective and unenforceable, and cannot be 

regarded as effectively remedying the identified deficiencies. 
As a result of Burma’s lack of progress, on October 3, 2003, the FATF called upon its member 

jurisdictions to impose additional countermeasures on Burma as of November 3, 2003. 

Myanmar Mayflower Bank and Asia Wealth Bank 

The U.S. has information that two Burmese banks - Myanmar Mayflower Bank and Asia Wealth 

Bank - are controlled by and used to facilitate money laundering for such groups as the United 

Wa State Army – among the most notorious drug trafficking organizations in Southeast Asia. 

The Burmese government has failed to take any regulatory or enforcement action against these 

financial institutions, despite their well-known criminal links. 

The designations of Myanmar Mayflower Bank and Asia Wealth Bank are independent from the 

designation of Burma as a jurisdiction, and represent the first time that the Treasury Department 

has used its authority under Section 311 against a foreign financial institution. 

Effect of Application of Section 311 

The designation of Burma is intended to deny Burmese financial institutions access to the U.S. 

financial system through correspondent accounts. Thus, the proposed rule would prohibit U.S. 

financial institutions from establishing or maintaining any correspondent account for, or on 

behalf of, a Burmese financial institution. This prohibition would extend to any correspondent 

account maintained by a U.S. financial institution for any foreign bank if the account is used by 

the foreign bank to provide a Burmese financial institution indirect access to the U.S. financial 

system. In such a case, the U.S. financial institution would be required to ensure that the 

account no longer is used to provide such access, including, if necessary, terminating the 

correspondent relationship. The proposed rule does provide for limited exemptions, referred to 

as general licenses, in order to allow for financial services to be provided consistent with those 

permitted by Treasury’s Office of Foreign Assets Control’s Burma sanctions program. 

A list of the general licenses can be found at 

www.treas.gov/offices/eotffc/ofac/sanctions/snactguide-burma.html

Myanmar Mayflower Bank and Asia Wealth Bank are covered by the general Burma designation 

and proposed rule. Treasury, however, has taken independent action in order to reinforce the 

importance of termination of relationships with these two institutions, and to ensure that no 

exemptions are available for them. The designation of these two institutions will remain in place 

until it is demonstrated that they have severed their links with narcotics trafficking organizations. 

Under this designation transactions would not be permitted with Myanmar Mayflower Bank and 

Asia Wealth Bank under the limited exemptions that apply to other Burmese financial 

institutions.