ANZ has announced it will pull out of Myanmar, deal a blow to the country’s military junta and potentially increase pressure on other foreign banks to desert the regime.
Core items:
- The bank is due to end its operations in Myanmar early next year
- Activists announced last month that it had facilitated payments to a military-controlled bank in Myanmar
- ANZ said it had faced “increasing operational complexity” in the country in recent months
In a brief statement released on Tuesday afternoon, the major Australian bank said it would cease operations in Myanmar by early next year “subject to approval by local regulators”.
The move was welcomed by activists targeting ANZ earlier this month after leaked records showed the bank had facilitated at least a handful of payments held by foreign companies at a military-controlled bank in Myanmar.
ANZ said it had faced “increasing operational complexities” in Myanmar in recent months and was “working with its institutional clients to transition to alternative banking arrangements”.
“The decision follows a careful review of local operating conditions,” said ANZ International Managing Director Simon Ireland.
“We thank the team for working tirelessly to support our customers during this time.
“Our international network and supporting our clients’ trade and capital flows in the region is a critical part of our strategy and will remain so over the long term.”
ANZ does not have a large presence in Myanmar, with a small team of around two dozen employees on the ground in the country.
Still, it is one of the first major foreign financial institutions to leave Myanmar, and the decision means no significant Western banks will remain in the country until early next year.
Multinationals that bank with ANZ and have operations in the country must now find an alternative as the junta grapples with US-led sanctions.
Civil society groups also hope the announcement will help increase pressure on other banks – including institutions based in Singapore and Japan – to announce they will also be withdrawing from the country.
A host of other multinationals – including Telenor and energy giant Woodside – have already announced they will leave Myanmar in the wake of the military coup that toppled Aung San Suu Kyi’s government in February last year.
Myanmar has also increasingly turned to Russian banks for financing as it becomes increasingly isolated from Western financial institutions.
ANZ facilitated deposits into a military-owned bank
The announcement comes after it was revealed that ANZ has allowed international companies to fund accounts they have at Innwa Bank – owned by a military conglomerate, the Myanmar Economic Corporation (MEC).
The United States, United Kingdom and European Union have all imposed sanctions on the MEC as part of a broader attempt to financially isolate the military junta, but Australia has yet to do the same.
The transactions totaled around US$5,000 and were paid on behalf of a Malaysian telecoms infrastructure provider edotco and a Hong Kong-based insurer AIA.
The bank said at the time the transactions were made in Myanmar’s local currency, not US dollars, and it would be “misleading and deceptive” to claim that it violated sanctions.
But activists said the handling of Innwa Bank – which plays a crucial role in giving the junta easier access to the international financial system and funding military-controlled companies – is still morally inexcusable.
Justice For Myanmar spokesman Yadanar Maung said the group “warmly welcomed” ANZ’s decision and urged the company to “leave the country responsibly”.
“This must include mitigating and resolving the impact on their staff and ensuring they repatriate all funds so they don’t leave a windfall to the terrorist military junta,” she said.
“ANZ is the first international bank to leave Myanmar and its planned exit is yet another sign of the devastation the junta is wreaking on Myanmar’s economy through its attempted coup, war on terror and the proliferation of illegal business activities under the control of the military or for the benefit of the junta military inflicts. and his staff.”
Ms Maung also said ANZ’s record to date underscored the need for Australia to hit the junta with fresh sanctions.
“Since the illegal military attempted coup, ANZ has traded with the US, UK and EU-sanctioned Innwa Bank and facilitated customer payments to the military junta, made possible by the Australian government’s refusal to sanction the junta and its operations,” she said.
“The Australian government’s appalling inaction in response to the crisis in Myanmar undermines its democratic values and international commitments.”
Human Rights Watch Asia director Elaine Pearson said ANZ’s announcement was “welcome,” but it “underscores why targeted sanctions by the Australian government are more than just a ‘virtue’.”
“The lack of targeted sanctions by the Australian government has reportedly allowed Australian companies to continue doing business with junta-controlled companies that have been sanctioned by other governments,” she said.
“Sean Turnell is out now, so the Australian government should stop dragging its feet and act on behalf of the people of Myanmar.
“The Myanmar junta will not end its brutality unless there is a strong coordinated effort to put financial pressure on junta-controlled entities.”
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