International banks including HSBC and Standard Chartered are helping to fund the expansion of military communications networks in Myanmar via loans to a Tatmadaw-linked Vietnamese arms company, activists have said. 

Justice For Myanmar (JFM) named the banks, along with several other multinational firms, in a 161-page report on Sunday detailing a “web of cronyism and corruption” surrounding the telecoms firm Mytel, which is part-owned by a subsidiary of the Hanoi-based Viettel. 

Viettel is Vietnam’s largest telecoms operator. It is owned by the country’s Ministry of Defence and in recent years began a transformation into a high-tech arms manufacturer. 

“Mytel and Viettel aid and abet the Myanmar military’s continuing war crimes and crimes against humanity. The military indiscriminately kills, rapes, tortures, destroys homes and forces ethnic and religious minorities to flee,” said Yadanar Maung, a Justice For Myanmar spokesperson.  

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“These crimes are enabled by off-budget revenue from Mytel and the military’s other businesses, as well as their access to technology and training from Mytel, Viettel and allied companies,” she added. 

Mytel has roughly 10m users and is the second biggest mobile phone network operator in the country. 

JFM called on the people of Myanmar to boycott Mytel. “If you have a Mytel SIM card, destroy it. If you’re thinking of buying a Mytel SIM card, don’t do it,” the group said. It said civil society groups should support the boycott and refuse to participate in events sponsored by the company.

It also called on the UN Security Council to impose targeted sanctions and a comprehensive arms embargo against the military. 

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Between 2016 and 2020, HSBC loaned $40m to Viettel Global JSC, a Viettel subsidiary, and Standard Chartered loaned more than $20m, Justice For Myanmar said. The loans are “benefiting the Myanmar military and further enabling its criminal conduct,” the group said. 

The loans are benefiting the Myanmar military and further enabling its criminal conduct

Other banks providing loans include the Mitsubishi UFJ Financial Group and Malaysia’s Maybank.

“These funds may be used for the procurement and transfer for arms and dual-use goods to Myanmar,” JFM added.  

The report, based partly on files accidentally published online by a subsidiary of Viettel, outlines how Viettel is helping to build communications towers on military bases in conflict areas. 

“By building towers in military facilities, Viettel and Mytel are providing the Myanmar military with full access to technology from international suppliers, and there is a risk that the military can use this technology for military purposes,” JFM said. 

CommScope, a US company, is supplying Mytel with antennas, and “it is highly likely that these are being used in Myanmar military facilities and supporting its signals capabilities,” the report said. 

Risk to privacy 

The report noted that China’s Huawei and ZTE were major suppliers of transmission equipment to Mytel, which it said posed a potential threat to privacy for users of the network in Myanmar. 

“It is notable that Viettel has shunned Huawei within its domestic network, due to cybersecurity concerns, but it is using Huawei and ZTE technology extensively in Myanmar,” the report said. 

“Mytel provides cover for the military to access an extensive international network of suppliers. Mytel is also very profitable, generating revenue that could be used as a secret military slush fund,” it added. 

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The report also claimed that Viettel is mining users’ personal data for analysis in Vietnam and that the Myanmar military has “access to this data and could use it for military purposes.”

Viettel’s cybersecurity arm “is engaged in network surveillance, machine learning and data mining, including for Vietnam’s Ministry of National Defence” and is active in the company’s foreign markets, including Myanmar, the report said. 

There was a risk that Myanmar’s military and other security forces could use Viettel Cyber Security for “surveillance and internal repression,” it added. 

The report also said that although Mytel was created as a public-private partnership, the military - which acts as the “government shareholder” via the defence ministry - is able to “misappropriate” its profits via an opaque network of companies.

“The military is misappropriating public funds and assets through Mytel, which feeds a secretive off-budget slush fund,” it said. This, it added, “is more evidence that the reforms of the last decade were never intended to bring democracy and improve the lives of the people of Myanmar,” but rather were orchestrated to enrich the military elite.  

A PR firm representing Mytel did not immediately respond to a request for comment. 

A spokesperson for HSBC said the company complies with sanctions and local laws and supports the “observance of international human rights principles as they apply to business.”

Dr Zaw Oo, a former advisor to Thein Sein on telecommunication reform, said that the reason the government had not yet seen profits from Mytel may be because the Ministry of Defence is reinvesting them back into their operations. 

He did not know what kind of financial agreement there was between the military and the government concerning Mytel, he said.