UOB to close Myanmar Airways International bank accounts by Aug 15
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Any remaining balances will be remitted when the five bank accounts that MAI holds with UOB are closed.
ST PHOTO: KUA CHEE SIONG
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SINGAPORE - UOB will close all five Myanmar Airways International (MAI) accounts by Aug 15, despite appeals by the airline to keep them open.
In a letter signed by MAI chief executive Saravanan Ramasamy and sent to business partners, the bank proposed a timeline “to allow a smooth transition and minimise disruption”.
The letter, seen by The Straits Times, also included correspondence from UOB dated June 26. It said that by July 1, no cash or cheque deposits will be allowed into MAI accounts with UOB.
The airline will also have to stop using the bank to make payments to others by July 21, and neither will anyone be able to make payments or transfer funds to the bank, except those from the International Air Transport Association.
After the Aug 15 deadline, any balance in the five MAI accounts will be remitted, said UOB in its correspondence with the carrier.
It has asked MAI for a list of upcoming transactions and supporting documents to indicate the type of goods being transported through MAI’s cargos, citing examples such as cargo manifests and security declarations.
In the meantime, UOB said it will step up its monitoring of MAI accounts, adding that there will be delays in the processing of payments and collections, although no reasons were given for the closure of the accounts in the document.
MAI said it was making alternative arrangements, including opening accounts with DBS, among other banks.
In response to queries, a DBS spokesman said the bank is unable to provide specific details of account holders but that any business that wishes to open an account will have to undergo a raft of standard checks.
The spokesman added: “These include understanding the nature and purpose of banking relations... and screening for sanctions or other negative information.
“Accounts are not opened unless these checks are satisfactory to the bank.”
The move by UOB comes two months after the release of a United Nations report that detailed how the Myanmar military imported at least US$1 billion (S$1.34 billion) in arms and raw materials
Compiled by UN Special Rapporteur Tom Andrews, the 56-page report said Singapore banks have been “used extensively by arms dealers”. Three of them – DBS, UOB and OCBC – are among the banks suspected of holding “substantial reserves” belonging to Myanmar, the report said.
It added that Singapore should “provide clear guidance to banks in their jurisdictions on the need for enhanced due diligence on all transactions involving Myanmar”.
After the report’s publication on May 17, a Monetary Authority of Singapore (MAS) spokesman said in response to media queries that banks have been exercising greater due diligence on all transactions that involve Myanmar entities and individuals that present higher risk.
The regulator added that the banks are alert to the risk of shell companies and concealed networks of related entities being used to obscure links to the Myanmar military, and have deployed measures such as data analytics to detect any ties.
Responding to queries from ST, the MAS spokesman reiterated its earlier statement and said that banks are “closely scrutinising transactions of the remaining entities and will take further actions as necessary.”
Foreign Minister Vivian Balakrishnan said in a written parliamentary reply on July 3 that Singapore has not imposed a general trade ban on Myanmar, but remains committed to preventing the sale of items that could have military applications.
He added that 47 entities were initially flagged, followed by 91 others. Of those flagged, nine are no longer registered with the Accounting and Corporate Regulatory Authority and thus unable to carry on business or operate as legal entities here.
He said most of the initial 47 no longer have business facilities with Singapore banks either.
The Irrawaddy news outlet, which is published by Myanmar journalists exiled in Thailand, carried a report on the cancellation of MAI’s UOB accounts on Monday. The report said MAI has ties to the ruling junta.
MAI is part of the 24 Hour Group of Companies, which is run by U Aung Aung Zaw, according to information found on the 24 Hour website. The Irrawaddy report identified him as a collaborator of the regime.
It also said MAI and the Myanmar Air Force share aircraft, while the junta’s senior leadership uses the airline for international travel.
When contacted, UOB said it was unable to comment on any client relationships.
ST has contacted MAI for more information.
