Thailand has emerged because the main supply of banking companies to Myanmar’s army junta, and a key monetary conduit for the procurements of arms and different army gear, as Western sanctions have restricted the junta’s entry to the worldwide monetary system, a United Nations-sponsored investigation has discovered.

The report, which was authored by Tom Andrews, the U.N. particular rapporteur on the scenario of human rights in Myanmar, tracks how the army junta has been capable of proceed procuring arms by shifting suppliers of economic companies and army {hardware} in response to the sanctions imposed by various international governments.

The report claims that the army junta, recognized formally because the State Administration Council (SAC), “continues to have interaction with a broad worldwide banking community to maintain itself and its weapons provides.” This has helped maintain the SAC’s ferocious marketing campaign to crush these resisting its rule.

“Over the previous yr, 16 banks positioned in seven nations processed transactions associated to SAC army procurement; 25 banks have supplied correspondent banking companies to Myanmar’s state-owned banks because the coup,” states the report.

However Andrews notes a “vital shift in each the quantity and supply of weapons, dual-use applied sciences, manufacturing gear, and uncooked supplies that the SAC has been capable of safe from overseas.” Total, there was a pointy decline in formal monetary transactions related with weapons procurements, due primarily to the imposition of Western sanctions on necessary state-owned banks.

The SAC’s procurement of weapons and associated gear by means of the formal banking system declined by a 3rd to $253 million in 2023, from $377 million within the earlier fiscal yr. Arms transfers from China declined from $140 million in 2022 to $80 million over the identical interval.

Probably the most marked shift, famous the report, is Thailand’s emergence because the SAC’s “main supply of army provides bought by means of the worldwide banking system.” Thai banks have taken up the slack following crackdowns in Singapore, a nation that had for a few years beforehand served as an offshore commerce hub and monetary sanctuary for the Myanmar army and its galaxy of allied businesspeople.

A report printed by Andrews final yr documented that Singapore-based entities had turn into the army junta’s third-largest supply of weapons supplies, after Russia and China, regardless of the federal government’s opposition to the switch of weapons to Myanmar. In 2022, the advocacy group Justice for Myanmar additionally recognized 38 Singapore-based corporations that had been concerned in supplying the army with weapons, each earlier than and after the 2021 coup.

Following a subsequent investigation by the Singaporean authorities, “the stream of weapons and associated supplies to Myanmar from Singapore-registered corporations dropped by almost 90%,” from $110 million to simply $10 million, Andrews wrote within the report. The overall funds processed by Singaporean banks fell from $260 million to round $40 million.

The numbers in Thailand moved in the other way, with transfers of weapons and associated supplies from corporations registered in Thailand doubling from over $60 million in 2022 to just about $130 million final yr. These included the acquisition of spare components for Mi-17 and Mi-35 helicopters and Okay-8W mild assault plane, which had been beforehand sourced through Singapore-based entities. All of those had been used to conduct airstrikes on civilian targets.

Thai banks have performed a vital function on this shift. Siam Industrial Financial institution, for instance, facilitated simply over $5 million in transactions associated to the Myanmar army within the fiscal yr ending March 2023, however the determine leapt to greater than $100 million the next yr.

Whereas the report demonstrates the junta’s potential to regulate to every flip of the monetary screw, it additionally means that the marketing campaign of Western sanctions is starting to have an impact. Andrews notes that following the imposition final yr of U.S. sanctions on two state-owned banks, the Myanma International Commerce Financial institution (MFTB) and the Myanma Funding and Industrial Financial institution, the junta responded by shifting nearly all of its banking features to Myanma Financial Financial institution (MEB), an unsanctioned state-owned financial institution.

MEB has since processed tens of thousands and thousands of funds for “army procurement, receipt of worldwide taxes and charges, and repatriation of international revenues from state-owned enterprises.” Nonetheless, whereas Australia and Canada have additionally imposed sanctions on the primary two banks, no international authorities has focused MEB. Because the report acknowledged, “it’s important that the worldwide neighborhood shut down MEB’s worldwide banking entry by means of coordinated sanctions.”

He added that the sudden drop-off in financial exercise in Singapore reveals that even unilateral actions by nationwide authorities might have a decisive impact.

“If the federal government of Thailand had been to answer this data as the federal government of Singapore did one yr in the past, the SAC’s potential to assault the individuals of Myanmar could be considerably impaired,” the report states.

Banks themselves can even do extra to scrutinize any transactions with Myanmar-based entities. Within the report, Andrews notes that Kasikornbank, Thailand’s second largest, confirmed that it ended banking relations with MFTB after the latter was sanctioned by the U.S. authorities final yr. Navy procurement transactions by means of Kasikornbank subsequently fell from $35 million in 2022 to $5 million in 2023, the report acknowledged.