After the US stengthens its sanctions against Burma, SWIFT, a cooperative of banks with two US banks on its board,
admits four Burmese banks, significantly facilitating Burma's ability to trade internationally.
Two U.S. Banks SWIFT to Skirt Burma Sanctions
by Jeff Shaw
(March 8) - Burmese exile Aung Din fought for democracy in his home country, a nation of 50 million that has been ruled
for more than 15 years by a military dictatorship. As vice chair of the All Burma Federation of Student Unions, a group
declared illegal by the junta, Din helped organized democratic opposition -- until he was arrested on April 23, 1989. He
spent four years in prison doing hard labor at the hands of the regime.
To bring freedom to Burma and its people, Din and others believe, the world community must isolate the military
government diplomatically and economically. But now, an international consortium of financial institutions -- including
two prominent American banks -- has begun doing business with banks in Burma, contrary to the wishes of pro-democracy
activists and in possible defiance of a new US law.
The Belgium-based conglomerate SWIFT has offered four Burmese banks membership in its comprehensive financial network, a
move which observers say will dramatically increase Burma's ability to trade internationally.
This action may be illegal under US law, activists contend, and will certainly solidify the junta's hold on power.
Foreign trade of this nature offers the totalitarian regime an "economic lifeline," says Din, who left his homeland in
1995 and is now policy director of the US Campaign for Burma.
"We spent so much time and energy to get economic sanctions passed in the United States," said Din. "This totally
undermines our democratic forces, undermines the US sanctions, and undermines pressure from the international
community."
The four Burmese banks joining the SWIFT network will be able to transfer funds abroad quickly and efficiently with
other members. American financial giants J.P. Morgan-Chase and Citigroup are SWIFT members and representatives from the
two banks serve on SWIFT's 25-member board of directors.
Burma's military government -- which refers to itself as the State Peace and Development Council, and has re-named the
nation "Myanmar" -- is considered by international human rights groups to be among the most repressive in the world.
Among other abuses, the regime uses forced labor and has killed and imprisoned pro-democracy organizers.
After years of work, activists for Burmese democracy successfully pressured the US Congress into passing comprehensive
sanctions on the Burmese dictatorship last August. The economic isolation strategy has been working, they say: According
to the US Campaign for Burma, the bipartisan American sanctions prevent the regime from earning about $450 million per
year.
The group estimates that more than half of this income would be used to fund military buildup. By contrast, less than
two percent of the junta's income is allocated to social spending such as education and health care.
"They use all this money for weapons, but they don't care about the welfare of the people," said Din. "Until the
sanctions passed, generals and their cronies got richer and richer, while the people got poorer and poorer."
SWIFT is an industry-owned cooperative group that provides the technology for financial messaging services. The four
Burmese banks joining the SWIFT network will be able to transfer funds abroad quickly and efficiently with other
members. American financial giants J.P. Morgan-Chase and Citigroup are SWIFT members and representatives from the two
banks serve on SWIFT's 25-member board of directors.
Admission of the four banks was approved in November, 2003, just months after the US sanctions took effect in August. A
bank needs two-thirds of SWIFT's directors to join, but the vote breakdown is confidential. Neither Citigroup nor
J.P.Morgan-Chase returned calls seeking comment about how their representatives voted.
Since the SWIFT organization serves over 7,500 financial institutions in 200 countries, this promises to dramatically
increase prospects for foreign financial transactions -- and, say human rights activists, to help Burma expeditiously
transfer the country's undesirable kyat currency into euros, an easier currency to trade in.
Reached by telephone, a SWIFT spokesperson in Belgium said that no Burmese or European Union laws prohibit this type of
arrangement.
"SWIFT respects the laws of the countries in which it operates, and there are no applicable laws that prevent SWIFT from
doing business with these institutions," he said.
That's just another reason, says Jeremy Woodrum of the US Campaign for Burma, that the sanctions campaign "must become
more international." While the United States has tough laws against doing business with Burma in place, the EU as yet
does not.
"We hope the EU will follow suit by passing similar [sanctions] measures," adds Din, "but so far, the EU has failed."
European organizers have also expressed outrage at SWIFT's action. Mark Farmaner of Burma Campaign UK told the Observer
newspaper that his group is "shocked that such an important financial institution is doing secret deals with one of the
most brutal regimes in the world," and that the campaign believes "any US directors of SWIFT are in breach of US law and
could be prosecuted."
Burma activists in America are more circumspect on the legality issue, saying only that they've asked the Treasury
Department's Office of Foreign Assets Control to investigate. Even if the letter of the law hasn't been violated,
though, both Woodrum and Din say its spirit has "definitely" been compromised.
SWIFT, according to the spokesman, is "a totally apolitical organization" that deals only with financial institutions in
countries, not the countries themselves. "SWIFT is sensitive to the position of the various groups that are expressing
concerns, but there's nothing we can do at this time," he said.
Still, activists with the US Campaign for Burma say, actions like this one threaten the economic isolation called for by
Burma's democratically-elected government. Nobel Peace Prize winner Aung San Suu Kyi's National League for Democracy,
which the military junta has steadfastly denied power despite a landslide victory in the country's last elections in
1990, consistently urges international sanctions against the junta as a means of nonviolently bringing about a change in
governance. Capital flowing into the regime's coffers merely solidifies its hold on power, say observers like Woodrum
and Din, undermining prospects for change.
"We only ask that the international community stay away from the military junta," Din said. "Then, when the military
junta recognizes that they have no friends ... they will come to the dialogue table."
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