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Treasury Department Designates Burma and Two Burmese Banks to be of “Primary Money Laundering Concern” and Announces Proposed Countermeasures

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Secretary of the Treasury John W. Snow today announced the designation of Burma and two Burmese banks to be of “primary money laundering concern” under Section 311 of the USA PATRIOT Act. 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, Myanmar Mayflower Bank and Asia Wealth Bank, would have to be terminated without exception.

“President Bush and the Department of the Treasury are committed to cracking down on money laundering wherever it occurs. By employing the tough new tools of the PATRIOT Act against Burma, we send a strong message around the world that the United States will safeguard our own financial system from under-regulated banking systems and financial institutions that facilitate criminal activity,” said Secretary Snow.

The designation of Burma is the result of its failure to remedy serious deficiencies in its anti-money laundering system, and is consistent with the Financial Action Task Force’s (FATF) call on November 3, 2003, for its members to take anti-money laundering countermeasures against Burma.

The designation of Myanmar Mayflower Bank and Asia Wealth Bank represents the first designation by the Secretary of specific foreign financial institutions found to be of “primary money laundering concern.” These two institutions have been linked to narcotics trafficking organizations in Southeast Asia.

Treasury will continue to work with Burma to implement a comprehensive and effective anti-money laundering system in that country. Until Burma implements an anti money laundering regime that meets international standards, Treasury will continue to take steps necessary to ensure that criminal proceeds emanating from Burma do not reach the U.S. financial system.

Section 311 of the USA PATRIOT Act gives the Secretary of the Treasury the authority to designate a foreign jurisdiction, foreign financial institution, type of account or a type of transaction to be of primary money laundering concern. Once designated, the Secretary can require U.S. financial institutions to take appropriate special measures against the concern. The Treasury Department has employed Section 311 twice before against Ukraine and Nauru.

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