Singapore’s United Overseas Bank (UOB) — which is known as the offshore bank of choice for Myanmar generals — has told Myanmar banks that it will cut off ties with them by September 1, Nikkei Asia reported on Wednesday.
According to the report, the financial giant said in a confidential note sent to Myanmar banks last week that it will restrict all incoming and outgoing payments to and from Myanmar account holders, allowing funds to be moved only between accounts held with the bank.
It will also impose tough new curbs on Visa and Mastercard transactions by Myanmar individuals and banks, restricting their dealings to accounts within UOB.
In addition, UOB said it would close Myanmar banks’ “nostro” accounts at its Hong Kong branch — foreign currency accounts banks hold at overseas counterparts to facilitate trade, the report said.
Last month, the bank also told Myanmar Airways International (MAI) that it would shut down all of the airline’s accounts by mid-August, following US sanctions in June on two Myanmar state-owned banks that conduct international transactions.
The latest clampdown was also seen as a response to US pressure on Singapore to curb offshore banking and financial services for Myanmar’s military regime, as the actions followed a series of visits to Singapore by US State Department Counselor Derek Chollet and senior sanctions coordination officials, who met with the Monetary Authority of Singapore and key Singaporean banks in April.
Singapore is the largest source of foreign investment in Myanmar as well as the preferred haven for Myanmar’s military rulers and their cronies. They make frequent visits to the city state for medical reasons, recreation or to squirrel away money in bank accounts held by proxies.
Many Singaporean companies have commercial ties with Myanmar’s junta and its conglomerates.
Following the coup, the city state saw its financial leverage over the regime rise.
UN Rapporteur Tom Andrews also revealed that the number of Singapore-based entities known to have supplied the Myanmar junta’s military has risen to 138 with the addition of 91 entities.
