US embassy cable - 02RANGOON1553

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 001553 
 
SIPDIS 
 
STATE FOR EAP, INL AND EB 
TREASURY FOR OASIA AND FINCEN 
DEA FOR OF, OFF 
NSC FOR BEERS 
MANILA ALSO FOR USED/ADB 
 
E.O. 12958: DECL: 12/03/2012 
TAGS: SNAR, EFIN, BM 
SUBJECT: INITIAL MONEY LAUNDERING INVESTIGATIONS IN BURMA 
 
REF: RANGOON 908 
 
Classified By: COM Carmen Martinez.  Reason: 1.5 (d). 
 
1. (C) Summary: Burma has begun at least two investigations 
under its new money laundering law.  It has frozen assets 
worth hundreds of thousands of dollars and applied to the 
courts for forfeiture of a variety of property connected with 
two high-profile narcotics cases.  End Summary. 
 
2. (C) Burma has moved with extraordinary speed to deal with 
problems of money laundering identified by the Financial 
Action Task Force.  On June 17, 2002, it enacted a powerful 
new law which criminalized money laundering in connection 
with virtually every kind of serious criminal activity.  A 
Central Control Board chaired by the Minister of Home Affairs 
was established in July and training for financial 
investigators was conducted in Rangoon and Mandalay in July 
and August.  Most importantly, the first investigations under 
the new law were begun within weeks of its passage.  Two 
cases, in particular, stand out.  The first involves the Gold 
Uni Investment Company; the second is directed at Tuan Sin 
Htan, one of the principals in the October 2000 Fiji drug 
bust. 
 
Gold Uni Investment Company 
 
3. (C) On July 12, police officials in Hong Kong discovered 
12.5 kilograms of heroin concealed within a shipment of raw 
jade stones from Burma.  They relayed information to Burma's 
Central Committee for Drug Abuse Control (CCDAC), which 
immediately opened up an investigation.  Numerous arrests 
followed.  On July 19, Burma's new financial investigation 
unit was also tasked with pursuing leads in regard to bank 
accounts and currency transfers.  As a result of the work of 
the financial investigation unit, CCDAC has now filed under 
the new money laundering law for forfeiture of assets worth 
approximately Burmese Kyat 166 million (i.e., USD 166,000). 
The assets include four residential buildings, one poultry 
feed factory, five automobiles and one motorcycle, and five 
raw jade stones.  In addition, CCDAC has filed for a court 
order freezing all savings and checking accounts of suspects 
in the case, and is auditing eleven other accounts to 
determine if there is any further cause for action against 
other individuals. 
 
Tuan Sin Htan 
 
4. (C) On October 28, a multinational investigation team 
seized 357 kilograms of heroin in Suva, Fiji.  Shipping 
documents pointed to a Burma-based trading company, KMT 
Trading Enterprise.  CCDAC opened an investigation and, using 
powers granted under both its 1993 Narcotics Law and the new 
money laundering law, identified the following assets for 
forfeiture: 12 buildings, one golf course, one recreation 
center, two orange groves, two vehicles, three heavy 
construction vehicles, and one plot of undeveloped land.  It 
also froze all of the checking and savings accounts of the 
company and seized cash totaling approximately Burmese Kyat 
31 million (i.e., USD 31,000). 
 
Comment 
 
5. (C) The Burmese police have not hesitated to use the 
powers granted by the money laundering law.  What is 
surprising is that, at least to date, they have been careful 
to ensure that the law is applied only in clearly criminal 
cases.  This is important, because the powers in the law are 
truly extraordinarily.  Basically, it states that the 
government has the right to seize the funds or property of 
anyone who cannot "clearly prove with valid evidence" how he 
obtained the money or property in question.  Since almost no 
one can prove the source of funds in Burma, where 
record-keeping is a lost art, this means, in effect, that all 
funds on deposit in the banking system are potentially at 
risk and any indiscriminate investigations could provoke a 
panic.  Sensitive to this, police have focused on clearly 
criminal cases, at least to date.  Nevertheless they have 
produced some striking results and could produce more as they 
become more familiar with financial investigations. 
Martinez