Banks in at least seven countries, including Thailand, have been facilitating the Myanmar military junta’s weapons trade, says a new report released on Wednesday (26 June) by Tom Andrews, the UN Special Rapporteur on the situation of human rights in Myanmar.

The report Banking on the Death Trade: How Banks and Governments Enable the Military Junta in Myanmar identifies 16 banks in seven countries that have processed transactions linked to the junta’s military procurement and 25 other that have provided correspondent banking services to Myanmar’s state-owned banks that are controlled by the junta.

According to the report, banks in Thailand facilitated at least US$60 million in purchases of weapons and other materials in the 2022 fiscal year and at least US$120 million in the 2023 fiscal year. The report noted that throughout 2023, as Singaporean banks stopped processing these transactions, the volume of transactions through Thai banks increased and came to account for around half of the State Administration Council (SAC) Military of Defense’s total military procurement.

Five Thai banks were identified in the reports: Siam Commercial Bank (SCB), Bangkok Bank, KBank, TMB Thanachart Bank, and Krung Thai Bank. The report said that the large increase in military procurement processed by Thai banks was largely due to an increase in transactions processed by SCB, which processed less than US$5 million in transactions in the 2022 fiscal year but in the following year, the SAC approved the transfer of over US$100 million to SCB accounts.

Meanwhile, KBank saw a significant decrease in the volume of military procurement transactions it processed between the 2022 and 2023 fiscal year from over US$35 million to less than US$5 million. The report noted that all transactions processed by KBank took place in April and June 2023, before the US imposed sanctions on the Myanmar Foreign Trade Bank (MFTB) and the Myanmar Investment and Commercial Bank (MICB). KBank also told the Special Rapporteur that it had terminated its relationships with MFTB and MICB after the sanctions.

The report said that transactions processed through Thai banks in 2024 included payments for the overhaul of Mi-35p attack helicopters, MiG-29 fighter jet components, and payments relating to K-8W light attack aircraft. It noted that these types of aircraft have all been directly implicated in indiscriminate attacks on civilians.

At least 25 financial institutions also provided correspondent banking services in the form of nostro accounts to Myanmar state-owned banks like the MFTB, the MICB, and the Myanmar Economic Bank (MEB), enabling the junta to conduct transactions in several currencies. In Thailand, the report named Bangkok Bank, SCB, KBank, Krung Thai, and the Export-Import Bank of Thailand as the banks providing nostro accounts for Myanmar state-owned banks controlled by the SAC.

The Special Rapporteur contacted all of the institutions providing nostro accounts to the MFTB, MICB, and MEB. Nine institutions responded.

“By relying on financial institutions that are willing to do business with Myanmar state-owned banks under its control, the junta has ready access to the financial services it needs to carry out systematic human rights violations, including aerial attacks on civilians,” the Special Rapporteur said.

Andrews urged international banks that facilitate transactions linked to Myanmar state-owned banks to stop doing so because they are at risk of enabling military attacks on civilians and because they have a fundamental obligation not to facilitate crimes, including war crimes and crimes against humanity.

Although Andrews noted the Myanmar military’s annual procurement of weapons and military supplies through the formal banking system has been declining, he said that the junta is circumventing sanctions and other measures “by exploiting gaps in sanctions regimes, shifting financial institutions, and taking advantage of the failure of Member States to fully coordinate and enforce actions.”

“With the junta on its heels, it is critical that financial institutions take their human rights obligations seriously and not facilitate the junta’s deadly transactions. It is also critical that States step up by fully coordinating their actions, including by closing loopholes in sanctions regimes,” said Andrews. He called on sanctioning governments to target the networks supplying jet fuel to the Myanmar junta and the MEB, which has not been subjected to international sanctions and has become the “go-to bank” for the junta.

While the flow of weapons and military supplies from Singapore-registered companies to Myanmar saw a significant decrease following a report by the Special Rapporteur identifying it as the junta’s third largest weapon supplier and an investigation by the Singaporean government, Thailand went the opposite direction. The report said that up to March 2024, the junta imported nearly US$130 million in weapons and military supplies from suppliers registered in Thailand, more than double the amount in the previous year, and Thai banks had played a role in this dramatic shift.

“Singapore’s example demonstrates that a government with sufficient political will can make a significant difference toward shutting down the Myanmar death trade. Thailand has an opportunity to follow this powerful example by taking action that will deal a huge blow to the junta’s capacity to sustain its escalating attacks on civilian targets. I urge it to do so,” said Andrews.

Following the report’s release, Raoul Danniel Manuel, a Philippines MP and member of ASEAN Parliamentarians for Human Rights (APHR), said that, while APHR is glad to hear that Singapore has taken steps to halt the transfer of weapons to the Myanmar junta, it is alarmed that the junta has seemed to address this by instead importing weapons from and using banks in Thailand.

APHR called on the governments of Thailand and other ASEAN member states to learn from Singapore’s example and implement policies to restrict the sale of weapons to the junta and ensure that financial institutions in their countries terminate all relationships with Myanmar’s state-owned banks.

“ASEAN’s efforts to resolve the conflict in Myanmar cannot be taken seriously if ASEAN member states are helping to arm and fund the murderous Myanmar junta, which has already killed thousands of its own people and continues to indiscriminately attack the civilian population,” said Manuel.

The Thai Bankers Association (TBA) issued a statement on Friday (28 June) saying that the association and its members conduct business with full accountability to their customers, society, and the international community and that it follows human rights principles. The TBA and its members also adhere to the laws and regulations issued by its supervising organizations, including the Bank of Thailand and the Anti-Money Laundering Office.

The TBA notes that its members have their own compliance units specializing in local and international regulations and banking business practices. They also have databases of individuals, organizations, and countries considered “high-risk” or on a blacklist with whom they are forbidden from doing business.

The statement also said that Thai commercial banks have a clear policy of not supporting the arms trade with the Myanmar military and not allowing financial transactions for the procurement of weapons used in human rights violations.

SCB issued a statement on Friday (28 June) saying that the transactions it processed were payments by corporate customers for consumer goods and energy and are not connected to arms trade. The bank also said that it is committed to adhering to relevant anti-money laundering and related regulations.