The Myanmar National Democratic Alliance Army is heavily tied to the drugs trade.
One of China’s biggest state-owned lenders has suspended an account used to fund an ethnic-armed group fighting Myanmar’s government forces, easing diplomatic tension between the neighbours.
The Myanmar National Democratic Alliance Army (MNDAA), which has been fighting the Tatmadaw or Burmese army this month, said the Agricultural Bank Of China (AgBank) was no longer accepting funds into an account used for “crowdfunding” the powerful rebel army.
Reuters appears to have prompted the move by questioning AgBank about the transactions, which could contravene controls intended to stop banks being used to fund terrorism or crime.
AgBank declined to comment, hiding behind client confidentiality, but said it had strict anti-money laundering and counter-terror financing procedures and “diligently obeyed relevant laws, regulations and regulatory requirements”.
The MNDAA is not designated as a terror group.
China’s Ministry on Foreign Affairs says it will respect Burmese sovereignty and independence.
“I am not aware of that,” Hua Chunying, ministry spokeswoman, said when asked if Beijing demanded that the state-owned Agricultural Bank of China suspend the account at the Myanmar’s request.
“Adhering to the principle of non-interference in the internal affairs of other countries, we respect Myanmar’s national sovereignty, independence and territorial integrity,” Hua told the media.
“We will never allow any organisation or individual to sabotage China-Myanmar relations on Chinese territory and destabilise the border. Any violation of regulations and laws will be handled in accordance with law,” she said.
The MNDAA’s leader, Peng Jiasheng, was identified as a major drugs trafficker by the US Drug Enforcement Agency, in 2009 US diplomatic cables published by Wikileaks.
The rebels attacked government troops in north-eastern Myanmar this month, displacing more than 20,000 people, who mostly fled across the Chinese border. It said it was responding to “continued military pressure” from the military.
The group’s website said it had collected more than US$500,000 over nearly two years through crowdfunding, directly into the AgBank account or through two mobile payment services.
“If I handed this case to an internal committee there is absolutely no way they would do anything other than shut the account down immediately,” said a money laundering specialist at a global bank.
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