Myanmar’s military regime may soon find it more difficult to access its financial assets in Singapore, following discussions between authorities there and US officials on how to partner effectively to wield the city state’s financial leverage over the junta.
Derek Chollet, counselor of the US Department of State, who was in Southeast Asia this week to work with regional countries to help restore democracy in Myanmar, had a meeting with the Monetary Authority of Singapore on Wednesday to discuss ways to limit the Myanmar military regime’s access to overseas financial assets. The counselor tweeted that the meeting was productive.
He said on Thursday that the city state has significant financial leverage over the regime, and this has to be a very important part of efforts to try to bring about greater pressure on the junta.
“We had very good discussions with our partners there about the way ahead and the way that we’re going to continue to work together as we seek to wield whatever leverage we can over the regime to put Burma back on the course of democracy,” he said during a telephone press briefing from Jakarta.
Singapore is the largest foreign investor in Myanmar and has become a preferred destination for Myanmar’s military rulers and their associates, who make periodic visits for medical trips, recreation or to squirrel their money away in various accounts under different names. Furthermore, some companies there have commercial ties with the Myanmar military junta and its conglomerates.
Since the coup in February, the Myanmar regime has been under international sanctions for overthrowing the country’s democratically elected government, killing more than 1,000 people and arresting thousands for opposing military rule in the country.
The US and other Western democracies have pressured the regime by singling out certain key individuals as well as entities to make it harder for them to transact business in the international community, forcing the regime to struggle with a hard currency shortage.
As a result, some Singaporean companies have become a lifeline for the junta by channeling money to it.
In February, for example, Justice For Myanmar reported that Singapore Stock Exchange (SGX)-listed Emerging Towns & Cities Singapore (ETC) made payments worth millions of dollars to the regime as the developer of the Golden City complex in Yangon. The land is owned by the military and ETC has a build-operate-transfer agreement with the Myanmar Army’s Quartermaster General’s Office.
According to ETC’s 2017 annual report, the Golden City deal with the military involves a “land use premium” payment of US$6.3 million, plus annual payments of $2.8 million, with exemptions on lease payments from 2013-16.
The total in payments to the military over the maximum 70-year term amounts to US$191.1 million.
As of Dec. 31, 2019, ETC had accrued US$32.185 million for land lease payments to the Myanmar army, the report says.
On Wednesday, Justice For Myanmar said a legal memorandum has found that international law and guidance places due diligence obligations on the SGX, and possible liability on the Monetary Authority of Singapore and the Singapore government, in relation to companies like ETC doing business with the Myanmar military.
The legal memo also raised the possibility of reputational and sanctions risks for the SGX, its regulator the Monetary Authority of Singapore, and by extension, the Singapore government, should it not prevent continued payments from ETC to the Myanmar army.
On Thursday, Chollet didn’t provide details when asked about the outcomes of his meeting with the Monetary Authority of Singapore on how to limit the junta’s access to overseas assets.
But he said, “Singapore has a very, very important role to play”, adding that they had very good discussions there on how to wield whatever leverage they could over the regime.
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