Singapore firms found arming Myanmar, how?! what analytics is missing?

Myanmar is a country that is close to my heart, I felt at home in Yangon, loved the place and the people; I left before the new junta took over. Analytics is what I do for a living. So I am a little bit ‘apalled’ (1) that firms based in Singapore, using Singapore ports have been sending weapons to Myanmar; given that the Singapore government is at the forefront of finding a solution to the Myanmar crisis. (2). Singapore has made a ‘principled position’ against the Myanmar military’s use of lethal force against unarmed civilians (3)

 

How do we know the list of firms?

The beauty of this, is that it is from the horse’s mouth. It seems the list of arms providers comes from a leak from the procurement department of the Myanmar Ministry of Defence (4). While it seems that there is some debate around which firms have been selling arms to the Myanmar military after the ‘coup’ and the following sanctions.

 

How deep does the involvement of Singapore related companies go?

First of all, these are Singapore registered companies, under the purview of corporate regulatory authority. Secondly, if they used Singapore ports, a whole range of organisations must have been overseeing their operations, from the ports authority to make sure the physical movement takes place without hitch, to customs who are in charge of the legality of the trade. Now, I am in no way suggesting that there was any complicity, nor am I suggesting all containers need to be checked. But I do think analytics could have helped.

When trade takes place, most of the time, there is trade financing and insurance. Financial institutions get involved. Most of the time someone loans money for the transaction, someone will insure the contents. Again, I am not saying that some Singapore bank or some Singapore based insurer is involved, but chances are, there was. The analytics teams of the banks and insurers must have had a look and approved the risk involved. These transactions that broke the sanctions imposed by the Singapore government were not picked by these institutions.

We must also remember that, unless the military equipment has been manufactured in Singapore, they must have been imported, stored, then exported out. Hence the involvement of these organizations listed above is doubled.

Thirdly, there are companies who actually do the moving, the storing, but the companies listed by the procurement department of the Myanmar ministry of defense could be in that business themselves. So let’s just limit to these large institutions.

 

What could these organisations/authorities have done?

Some basic checks at the government related organisations, which I actually expect to be routinely carried out, but apparently are not:

• Are these companies, by the license to operate, allowed to engage in export?
• This is a basic hygiene check.
• Do these companies regularly trade with Myanmar?
• Any company that all of a sudden starts to trade with a sanctioned country should raise a red flag or two
• How about the pattern on trade? Even if they trade with Myanmar, has the volume changed, or the frequency?
• More interestingly, I doubt they would list helicopters on the manifest, but does the manifest gel with the container volume, size weight?

These are basic hygiene models that can be implemented as the front-end systems collect the data.and feed them back to back-end analytical systems. The government is engaging in building analytical platforms and has even made it possible for services from the most common commercial cloud providers to be used by government department and government related bodies.

There is no reason for these basic checks not to be implemented. Some of these are very common in say the banking sector as they assess risk of individual customers, especially those engaged in international trade. And this brings us to the private sector.

 

What could banks/insurers involved in the trade transaction have done?

I am pretty sure that financial institutions are very aware of sanctions and are bound to flag cases where these are be circumvented. It is often the case of closing the barn door after the horses have left, but the systems are built to facilitate flagging of potentially fraudulent transactions. Tweaking them to flag sanction-busting is not rocket science.

Even better, it is not difficult to predict the business as usual flows for many corporate banking customers, I have done that myself and I am sure many others have too for various financial institutions. It is a basic tool that allows banks to know, in advance, what are the funds required, by who, and so on… Now if a company asks for financing when they are not likely to do so by the models, add to that that it is going to a country under sanction, then a second look should be required. And that should leave a trail that efforts have been made to ensure the propriety of the trade.

Hence, to me, if any Singapore bank facilitated the transactions whereby military equipment was exported from Singapore to Myanmar since sanctions have been imposed by Singapore, then these banks are guilty of, at a minimum laziness, or worse keeping an eye shut to let profits roll-in.

 

Conclusion

Did you notice something?  I did not use LLM, ChatGPT, or even AI. Everything I mentioned can be done by very basic models/algorithms. All it would have taken is someone to understand the business imperative, and someone to get it done. But then again, may be it wasn’t high on the list of imperatives. And that is the reality.

What is the cost of these infractions? May be some companies that made huge profits sanction busting will close down, directors get a slap on the manicure, but trade has taken place, financing profited from, ports used…

As in many cases, doing the analytics, implementing them is easy, understanding the need for them and the will to use them is often the stumbling block. This is probably the case in this circumstance: when there is no will, way doesn’t matter.

 

1. https://frinkiac.com/gif/S08E08/770702/772154/SSBBTSBTSE9DS0VEIEFORCBBUFBBTExFRC4
2. https://www.mfa.gov.sg/Newsroom/Press-Statements-Transcripts-and-Photos/2023/05/20230519-Comments-on-Myanmar-Report

3. https://www.channelnewsasia.com/singapore/myanmar-arms-singapore-based-entities-mfa-un-special-rapporteur-3500051

4. https://thediplomat.com/2022/08/report-claims-38-singapore-based-firms-supplying-myanmars-military/