Japan is urging the global financial watchdog to remove Myanmar from its blacklist, a move that could ease financial restrictions and reopen business opportunities with the military-backed government.

According to The Japan Times, Tokyo wants the Financial Action Task Force (FATF) to lift requirements for enhanced screening of financial transactions involving Myanmar, according to a Reuters report citing Japanese government sources. At least one other major Asian country is also reportedly backing the move.

Myanmar has been on the FATF blacklist since October 2022, following the military coup in February 2021 and its failure to address deficiencies in combating money laundering and illicit finance. Iran and North Korea are the only other countries on the list.

The push comes as Myanmar faces mounting scrutiny over industrial-scale online scam operations, drug trafficking and suspected illicit financial networks operating in conflict-affected areas, including the Golden Triangle.

FATF acknowledged some progress in a June assessment but said Myanmar urgently needed to strengthen investigations and prosecutions of money laundering, while cyberfraud-related financial flows remained a concern.

Japan’s initiative signals a potential shift in regional engagement with Myanmar, where political instability, armed conflict and international sanctions continue to complicate economic ties. Any removal from the blacklist could ease financial transactions, but questions remain over whether the country has made sufficient progress in tackling illicit finance.

BOB Post