UN report: MAS says S'pore banks will not facilitate arms sales to Myanmar; MFA welcomes info to aid probe

SINGAPORE — Banks in Singapore will not facilitate the sale and transfer of arms to Myanmar given the Government's ban on such transactions, the Monetary Authority of Singapore (MAS) said.

In response to TODAY’s queries on Friday (May 19), the central bank added that banks here are also stepping up their efforts to detect clandestine links to the Myanmar military.

The statement on Friday evening came after the release of a United Nations (UN) report on Wednesday alleging that Singapore-based entities played a role in the supply of arms to Myanmar’s junta.

Separately, the Ministry of Foreign Affairs (MFA) earlier on Friday issued a response saying that the Singapore Government appreciates efforts by the UN official to give information and help its investigations into whether any entities here have supplied arms to the Myanmar military.

MFA reiterated that Singapore has worked to prevent the flow of arms into Myanmar and will "not hesitate" to take action against any individual or entity that contravenes the law.

The report, by UN Special Rapporteur Tom Andrews, found that US$254 million (S$342 million) worth of supplies were shipped to the Myanmar military through Singapore-based entities. He noted that Singapore "prohibits the transfer of arms to Myanmar".

This was out of more than US$1 billion worth of arms and related material supplied to the Myanmar junta since the military seized power from a democratically elected government in a February 2021 coup.

“Singapore banks have likewise been used extensively by arms dealers operating within Singapore and outside of it, with payments for hundreds of millions of dollars of arms transfers described in this report moving through Singapore banks,” the UN report dated Wednesday stated.

The report identified entities allegedly operating here as being the third-largest source of arms and related material to the Myanmar army.

However, it also noted that the Special Rapporteur “has received no information indicating” entities owned or controlled by the Singapore Government, or the Government itself, has approved or transferred arms to the Myanmar military.

“Rather, arms dealing organisations appear to be using the jurisdictions of Thailand and Singapore, and specifically the banking and shipping sectors there, to facilitate arms transfers,” the report stated.

In its response on Friday evening, MAS said that banks are “keenly alert” to the situation in Myanmar and “have been applying enhanced due diligence” on all transactions involving Myanmar entities and individuals that present higher risk. 

“Banks in Singapore are also alert to the risk of shell companies and concealed networks of related entities being used to obscure links to the Myanmar military,” it added.

“They have stepped up efforts to detect such entities and networks. This includes deploying data analytics drawing on internal and external data and intelligence sources.”

'SINGAPORE GOVERNMENT NOT INVOLVED IN SALES OF ARMS TO MYANMAR'

MFA reiterated Singapore’s "principled position" against the Myanmar military’s use of lethal force against unarmed civilians.

“(Singapore) has worked to prevent the flow of arms into Myanmar as called for in United Nations General Assembly resolution A/RES/75/287 ‘The Situation in Myanmar’,” it added. 

Singapore voted in support of the resolution in June 2021. Among other things, it strongly condemned the use of lethal force and violence against civilians and called upon all UN member states to prevent the flow of arms into Myanmar.

In response to a parliamentary question on a similar issue, Foreign Affairs Minister Vivian Balakrishnan said in February that Singapore complies strictly with its international obligations on international arms sales and transfers.

"While UN General Assembly resolutions are not strictly legally binding, nevertheless, the Government of Singapore has decided to prohibit the transfer of arms to Myanmar," he said then.

"We also decided not to authorise the transfer of dual-use items which have been assessed to have potential military application to Myanmar."

On Friday, MFA noted how the UN report highlighted that the Singapore Government prohibits the transfer of arms to Myanmar and does not authorise the transfer of dual-use items assessed to have potential military application.

“Special Rapporteur Andrews has also noted that ‘there are no indications the Government of Singapore has approved, or is involved in, the shipment of arms and associated materials to the Myanmar military’,” MFA said.

“We appreciate the Special Rapporteur’s efforts to provide information to aid Singapore’s investigations into whether any offences were committed under Singapore law.

“Singapore will not hesitate to take action against any individual or entity which contravenes our laws.” 

MFA also said that Singapore remains committed to providing humanitarian assistance to support the people of Myanmar and will continue working with fellow Association of Southeast Asian Nations members and the UN to facilitate peace and national reconciliation in Myanmar.

138 SINGAPORE-BASED ENTITIES ALLEGEDLY SUPPLYING MYANMAR MILITARY

The UN report stated that Singapore has become “a major jurisdiction for spare parts, raw materials, and manufacturing equipment sent to the Myanmar military”.

It found “at least” 138 Singapore-based firms that have “served as intermediaries” for the Myanmar military since the coup.

Taken in total, entities operating here make up the third-largest sources of trade in arms and related materials to the Myanmar military.

Entities in Russia and China, including state-owned entities, make up the top two sources, supplying US$406 million and US$267 million of supplies respectively, the report said.

Entities in India and neighbouring Thailand constitute the fourth and fifth sources of supplies.

The report added that the Special Rapporteur has made the decision not to list the names of entities transferring arms to the Myanmar military based in Singapore, to allow time for the Government here and other UN member states to take action against these entities.

“In early March 2023, the Special Rapporteur provided his detailed findings on arms shipments from Singapore-based entities to Myanmar to the Singapore Government,” the report stated, adding that the Special Rapporteur had provided names of more than 45 entities to the Government.

The report also said that the Singapore Government “could have a significant impact on the ability of the military junta to continue its attacks on the people of Myanmar by strictly enforcing its clearly stated ban on weapons sales to the Myanmar military”.

In a section on blocking Myanmar military’s key sources of foreign currency, the report noted that to date, only the United States has frozen Myanmar reserves within its territory.

It added that “further substantial reserves are suspected to be held in at least three Singapore commercial banks": DBS, United Overseas Bank and OCBC.

On Friday, MAS said that it has alerted banks here to information provided by the UN report.

“Several of the entities mentioned in the report no longer have business relationships with the banks," the financial regulator said.

"Banks are closely scrutinising transactions of the remaining entities and will take further actions as necessary.” 

The UN report made recommendations to the Singapore Government and banks here.

It recommended that the Singapore Government:

• Shuts down the use of its jurisdiction by arms dealing networks
• Investigates the networks identified in the report as providing material support to the Myanmar military
• Supports the enforcement of international sanctions in its jurisdiction and cooperates with international investigations into the military junta's finances
• Provides clear guidance to banks in its jurisdiction on the need for enhanced due diligence on all transactions involving Myanmar

The report also called upon banking institutions, “particularly those in Singapore and Thailand” to undertake enhanced due diligence measures including:

• Obtaining more identifying information about the parties to a transaction from a more extensive range of reliable and independent sources
• Conducting more searches to more fully understand individual “customer risk assessment” (such as whether a transaction violates international sanctions)
• Ordering an intelligence report on the customer or beneficial owner to better understand if the customer or beneficial owner is involved in illegal activities
• Verifying the source of funds or wealth in the business relationship to be satisfied that they do not constitute the proceeds from crime
• Getting more information from the customer about the purpose and intended nature of the business relationship