By James Shwe
When the Financial Action Task Force (FATF) meets in Paris this October, its members will decide whether to escalate action against Myanmar from “enhanced due diligence” to full countermeasures — the strictest financial designation FATF applies, and one currently active against Iran and North Korea (Monetary Authority of Singapore — October 2025 FATF Statement; FIAU Malta — FATF Public Statements, 24 October 2025). This is not a distant technical matter for the Northeast. It is the single most consequential decision affecting cross-border illicit finance from Myanmar into India in years, and India — now FATF Vice President for 2026–2027 in the person of Vivek Aggarwal — will help write the outcome (Press Information Bureau, Government of India).
The Northeast has both a national security stake and a regional voice worth using.
What the numbers already show
The Ministry of Home Affairs told Parliament this July that the Moreh–Tamu border in Manipur remains the major transit point for heroin and methamphetamine originating in Myanmar, moving onward to distribution hubs across the country (ANI, 29 July 2026). The scale of the crossing is now impossible to describe as marginal. According to a March 2026 Lok Sabha reply, Manipur’s drug seizures rose from 284 kilograms in 2024 to 2,556 kilograms in 2025 — a nearly ninefold increase in a single year (Outlook India). Mizoram, Assam, and Tripura reported comparable or larger seizures. The Narcotics Control Bureau’s annual report, released in June 2026 by Home Minister Amit Shah, was blunt: with the Taliban’s 2022 opium ban in Afghanistan, Myanmar has replaced Afghanistan as the world’s leading opium source, and the northeastern states of Manipur, Mizoram, and Nagaland are bearing the sharpest frontline exposure (The Hindu).
The July 2026 NCB arrest of Nengzatuan, a Chin State–based trafficker apprehended in Churachandpur and running heroin and methamphetamine through Manipur, Mizoram, Assam, and Tripura into India and Bangladesh, illustrates the pattern (The Tribune). These are not lone smugglers. They are cross-border criminal enterprises whose survival depends on financial infrastructure — hundi networks, mobile-money accounts, front companies, correspondent banking relationships — that Myanmar’s post-coup banking system now protects rather than polices.
Behind the narcotics story sits a second one. Myanmar Witness has identified more than 137 suspected scam compounds in the region, primarily along the Myanmar–Thailand border, with more than 5,300 trafficked workers still held in Karen State compounds as of mid-2026 despite last year’s multinational crackdown (Myanmar Witness scam-compounds investigation; Al Jazeera, 23 June 2026). The proceeds of these industrial-scale cyber-fraud operations — targeting victims in India, Bangladesh, and across Asia — pass through the same regional financial channels that carry drug money. Indian investigators have documented precursor chemicals flowing westward from India into Myanmar and finished narcotics returning eastward. What FATF will consider in October is precisely whether Myanmar’s banking system has become a laundry for these flows.
What FATF countermeasures would and would not do
It helps to be clear about what FATF is and is not. It is not a sanctions body. It cannot impose arms embargoes, freeze foreign reserves, or ban trade. What it can do is direct the financial institutions of its 40 member jurisdictions to apply progressively stricter scrutiny — and, at the countermeasures level, to refuse correspondent relationships, close subsidiaries, and limit business relationships with the designated country on a risk basis.
For Myanmar, this would translate into three concrete effects. First, the junta’s remaining international banking channels — already narrowed since the 2022 listing — would tighten further. Second, foreign banks would face heavy compliance liability for any Myanmar-linked transaction they cannot verify. Third, and most importantly for the Northeast, cross-border criminal finance that currently moves through Myanmar’s private mobile-payment platforms (KBZPay, Wave Money, AYA Pay, CB Pay) and correspondent banks would face far greater friction reaching international financial systems.
The scale of what is at stake is now unmistakable. Non-public data reported by Bloomberg in May 2026 show worker remittances into Myanmar reached US$5.6 billion in 2025 — up from just $670 million in 2022 — after the junta’s 2024 rules forced migrant workers to remit 25 percent of their income through official banking channels or lose passport renewals and the right to work overseas (Bloomberg, 14 May 2026; The Straits Times). Remittances now account for roughly 38 percent of Myanmar’s foreign inflows, a figure independently reflected in the World Bank’s most recent country monitor (World Bank — Myanmar Economic Monitor). This is the financial system FATF will be assessing in October: one that has become dependent on the coerced earnings of migrant workers, including many working in India.
This last point is where India’s interest is sharpest — and where the framing of the countermeasures matters most.
The risk of getting it wrong
There is a version of FATF countermeasures that would harm the Northeast rather than help it. If foreign banks respond to a countermeasures listing by closing every Myanmar-related account regardless of context — what FATF itself calls indiscriminate “de-risking” and formally opposes — legitimate remittances from Myanmar migrant workers in India to their families, cross-border humanitarian aid to Chin and Sagaing displacement camps, and payments supporting Rohingya relief in Bangladesh would all be pushed into informal channels. Those channels are precisely the hundi and cryptocurrency networks that Indian law enforcement already struggles to monitor (Fulcrum — ISEAS analysis).
The junta itself is now accelerating this outcome. On August 28, 2026, the junta-controlled Central Bank ordered Myanmar’s private banks to block overseas access to domestic mobile-payment applications through IP-based, location-based, and geo-blocking restrictions (Moemaka English). The stated purpose is anti-money-laundering compliance. The practical effect is to force diaspora remittances — including those from workers in India — either into the junta’s controlled foreign-exchange system or into unregulated informal networks. Either outcome is bad for Indian regulators.
FATF’s own recent statements anticipate this problem. They require that enhanced measures on Myanmar “must not disrupt or discourage humanitarian assistance, legitimate nonprofit activity, or remittances” (MAS — October 2025 FATF Statement). The question in October is whether member states will insist that this language has operational force.
What India can do
India’s position at FATF is stronger than at any point since it joined in 2010. Vivek Aggarwal takes up the Vice Presidency in July 2026 (Press Information Bureau; ThePrint). India sits on the Steering Group and co-chairs the working group on Risks, Trends and Methodologies. Its June 2024 Mutual Evaluation Report placed it among the highest-performing FATF members.
This standing gives India three practical opportunities in October.
First, India can push for targeted countermeasures that focus scrutiny on junta-linked banks, military conglomerates, scam-center proceeds, and beneficial owners rather than on all Myanmar-related transactions. This is a specifically Indian interest: undifferentiated de-risking would close the licit channels through which Indian regulators can see cross-border flows, while doing little to disrupt the criminal networks that already operate outside those channels.
Second, India can insist on operational humanitarian and remittance carve-outs — verified nonprofit partners, low-value survival transfer thresholds, and licensed remittance corridors — that keep the Northeast’s own cross-border communities from being caught in blanket restrictions. Manipur, Mizoram, and Nagaland have long-standing cross-border kinship, trade, and religious ties. Sustainable enforcement must accommodate them.
Third, India can bring Northeast-specific evidence to the FATF table. The Moreh–Tamu corridor data, the NCB’s Chin State casework, precursor-chemical seizures moving westward, and the scam-compound victim testimony already being collected by Indian and Thai authorities constitute one of the most complete open-source pictures of Myanmar’s illicit-finance ecosystem. India’s June 2026 bilateral drug-control meeting with Myanmar authorities also underscores that India already engages on these questions — and bilateral engagement will benefit from being paired with multilateral leverage at FATF.
The choice
The junta’s argument, echoed by some in the region, is that FATF pressure hurts ordinary Myanmar people and destabilizes neighbours. The evidence points the other way. The status quo — five years of “enhanced due diligence” without countermeasures — has coincided with a ninefold rise in Manipur drug seizures, the emergence of Myanmar as the world’s opium leader, and the industrialization of scam compounds now defrauding victims across the Indian subcontinent. It is inaction, not action, that has produced the current damage to the Northeast.
Well-designed FATF countermeasures — precisely targeted, with real humanitarian and remittance protection — would restrict the junta’s criminal economy while protecting the legitimate flows that Indian regulators need to see. Poorly designed countermeasures, or continued deferral, would leave the Northeast absorbing the costs of a regional criminal system that Myanmar’s authorities cannot or will not police.
India has both the standing and the direct interest to shape which of these outcomes emerges in October. The Northeast has every reason to want its voice in that conversation.
(James Shwe is a semi-retired professional engineer and independent policy commentator based in Los Angeles, California. He writes on Myanmar’s political and financial transitions, with a focus on international sanctions, anti-money-laundering regimes, and regional security in South and Southeast Asia. A long-time advocate for democratic transition in Myanmar, he engages regularly with policymakers, civil society, and diaspora networks across the region.)
Author’s Note: The article is offered exclusively to The Frontier Manipur and has not been submitted or published elsewhere. It is timed to the FATF October 2026 plenary in Paris, where the decision on whether to escalate Myanmar from enhanced due diligence to full countermeasures will be taken. The article is fully sourced (fifteen inline citations, listed at the end).
Sources/Reference:
FATF and India at FATF
- Monetary Authority of Singapore, “October 2025 FATF Statement.” https://www.mas.gov.sg/publications/fatf-statement/2025/october-2025-fatf-statement
- FIAU Malta, “FATF Public Statements – 24th October 2025.” https://fiaumalta.org/news/fatf-public-statements-24th-october-2025/
- Press Information Bureau, Government of India, “India to assume Vice-Presidency of the Financial Action Task Force,” 19 June 2026. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2275528®=48&lang=2
- ThePrint, “India gets global anti-money laundering body FATF’s vice presidency,” 19 June 2026. https://theprint.in/india/india-gets-global-anti-money-laundering-body-fatfs-vice-presidency/2965089/
Northeast India drug seizures and Moreh–Tamu transit
- ANI, “Cross-border drug trafficking poses significant challenge; Manipur’s Moreh–Tamu border continues as major transit point from Myanmar (MHA),” 29 July 2026. https://www.aninews.in/news/national/general-news/cross-border-drug-trafficking-pose-significant-challenge-manipurs-moreh-tamu-border-continues-major-transit-point-from-myanmar-mha20260729195058
- Outlook India, “Drugs and the Golden Triangle: Renewed Concerns for Northeast India.” https://www.outlookindia.com/national/drugs-and-the-golden-triangle-renewed-concerns-for-northeast-india
- The Hindu, “Myanmar replaces Afghanistan as key opium source; impact seen on India’s eastern border: NCB.” https://www.thehindu.com/news/national/myanmar-replaces-afghanistan-as-key-opium-source-impact-seen-on-indias-eastern-border-ncb/article71151299.ece
- The Tribune, “NCB arrests Myanmar-based drug kingpin, dismantles transnational trafficking syndicate.” https://www.tribuneindia.com/news/india/ncb-arrests-myanmar-based-drug-kingpin-dismantles-transnational-trafficking-syndicate
Scam compounds and trafficked workers
- Myanmar Witness, “Scam Compounds in Myanmar” (report). https://www.info-res.org/app/uploads/2026/05/FINAL-Scam-Centres-Report-1-.pdf
- Al Jazeera, “More than 5,300 people still held in Myanmar scam centres, rights group says,” 23 June 2026. https://www.aljazeera.com/news/2026/6/23/more-than-5300-people-still-held-in-myanmar-scam-centres-rights-group
Coerced remittances and Myanmar’s foreign-inflow dependence
- Bloomberg, “Myanmar Junta’s Forced Remittance Rules Pull in $5.6 Billion,” 14 May 2026. https://www.bloomberg.com/news/articles/2026-05-14/myanmar-junta-s-forced-remittance-rules-pull-in-5-6-billion
- The Straits Times, “Myanmar junta’s forced remittance rules pull in $5.6b.” https://www.straitstimes.com/asia/se-asia/myanmar-juntas-forced-remittance-rules-pull-in-5-6-billion
- World Bank, Myanmar Economic Monitor (recent development section, 2026). https://documents1.worldbank.org/curated/en/099061526075033335/pdf/P507203-a497789a-01dd-4d79-bb47-faaf34d61123.pdf
Central Bank geo-blocking directive and de-risking risk
- Moemaka English, “Central Bank instructs banks to prevent Myanmar banking apps from being used abroad,” 28 August 2026. https://moemaka.net/eng/2026/08/central-bank-instructs-banks-to-prevent-myanmar-banking-apps-from-being-used-abroad/
- Fulcrum (ISEAS – Yusof Ishak Institute), “Rules or Ruse? Myanmar’s Anti-Money Laundering Efforts Coerce Compliance with a Rigged Financial System,” 31 July 2026. https://fulcrum.sg/rules-or-ruse-myanmars-anti-money-laundering-efforts-coerce-compliance-with-a-rigged-financial-system/