The Biden administration quickly responded to the situation that was unfolding in Myanmar (also known as Burma): a day after the military, known as the Tatmadaw, seized control of the state government, the Ministry of Foreign Affairs. declared coup action, which resulted in the termination of many categories of foreign aid. Other sanctions followed soon after. As a result, new economic sanctions and export controls are restricting – currently only in a targeted way – US trade with Burma.
In particular, on February 11, 2021, President Biden signed Executive Order on Blocking Property Due to the Situation in Burma, passed new sanctions and restrictions on export controls in Myanmar in response to the February 1 military coup against the country’s democratically elected civilian parliament.1 Under the authority of a new Executive Order, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) appointed as Specially Designated Citizens (SDN) 10 military officers and three entities in the first round of targeted sanctions. Two of the military leaders who were targeted by the new action have already been targeted 2019 US Sanctions under another US authority, the Global Magnitsky Act, for their alleged involvement in serious human rights violations against the Rohingya, an ethnic minority population in Myanmar.
As the military responded to the protests with violence, the Biden Administration has added more sanctions. Following February 20 clashes between protesters and the Myanmar military that killed two protesters, OFAC appointed two more military officers.
The Executive Order grants broad powers to OFAC to designate as individual SDNs and entities that directly or indirectly cause, maintain, or exacerbate the situation in Myanmar, and / or lead Myanmar’s military or current government, or operate in its defense sector. OFAC can also designate an adult relative of a designated person, an entity that is owned or controlled by a designated person, or a person providing material support to a designated person. The scope of the Executive Order gives OFAC flexibility in selecting targets for designation as the situation in Myanmar continues to improve and the Biden Administration makes additional decisions about the person or entity it believes should be sanctioned.
In accordance with the Executive Order, on February 11, OFAC appointed six Myanmar military officers who played a direct role in the coup,2 and four military officers appointed to positions in the government of Myanmar’s State Administration Council (SAC) following the coup.3 In addition, OFAC designates three entities operating in the Myanmar gem industry that are owned or controlled by the Myanmar military.4 On February 22, 2021, following continued violence against pro-democracy protesters, OFAC appointed two additional appointed members of the State Administration Council.5 On March 10, 2021, OFAC appointed two adult children to military officers6 and six entities that are owned or controlled by a designated party.7
This designation generally prohibits US persons (as well as non-US persons while engaging in transactions with US points of contact), except as permitted by OFAC, from engaging in transactions involving 14 recently sanctioned individuals and nine entities, as well as property and their property. interest in property.
New Export Controls
As a result of two new rounds of export control, large quantities of goods, software and technology subject to US Export Administration Regulations (EAR) are now subject to restrictive licensing requirements for transfer to Burma.
First, the Department of Commerce’s Bureau of Industry and Security (BIS) responded to the coup by imposing export controls. On February 18, 2021, BIS published immediate notification to limit export and re-export of most goods to the Burmese military and security services, adopting a stricter license application review policy of presumed refusal of goods requiring a license for export and re-export to Burma’s Ministry of Defense, Ministry of Home Affairs, armed forces, and security services.
Second, days after the deadliest crackdown by Myanmar’s security forces on February 28 that resulted in the deaths of 18 pro-democracy protesters, the BIS published a final ruling stating that added The Ministry of Defense, Ministry of Home Affairs, Myanmar Economic Corporation, and Myanmar Economic Holdings Limited to the Entity List, basically prohibit the export of anything under the EAR to this entity. In addition, the final rule extends the “End Use Military and End User” Rules under EAR to Burma (previously only applicable to Russia, China, and Venezuela), and moves Burma back to the category of EAR arms embargoed countries from the previous list. profitable in the more flexible category under the EAR.
The approach targeted by the Biden Administration in this case is likely to serve as a model for future use of economic coercion tools. The sanctions and export controls it has imposed have been surgical and deliberate, punishing the military junta while trying not to harm Myanmar’s citizens. The Biden administration consults with US allies about appropriate US and international responses, and President Biden does so emphasized the need for a multilateral response. Second Canada and great Britain has imposed similar specific sanctions on military officials.
If the situation in Myanmar continues to escalate, we anticipate that the Biden Administration will continue to impose further sanctions and export control measures. If you need help assessing potential US sanctions risks or taking compliance measures more generally, this author has significant experience helping clients understand and address the issue.
1. The Myanmar military claims that its actions to take control of the government in accordance with the 2008 constitution to protect democracy in Myanmar to prevent the formation of an unauthorized United Parliament, citing irregularities in the November 2020 elections. Military takeover of the democratically elected United Parliament and the detention of elected leader Aung San Suu Kyi is an unfortunate return to Myanmar’s past. Myanmar was under military rule from 1962 to 2011. Suu Kyi was detained by the military during most of the 1990s and early 2000s. The United States has previously responded to anti-democratic measures in Myanmar with sanctions; The previous sanctions regime, first imposed by President Clinton and changed over time, only officially ended in 2016 following election reforms.
2. (1) Supreme Commander Min Aung Hlaing; (2) Deputy Supreme Commander Soe Win; (3) First Vice President and retired Lieutenant General Myint Swe; (4) Lieutenant General Sein Win; (5) Lieutenant General Soe Htut; and (6) Lieutenant General Ye Aung. Both Min Aung Hlaing and Soe Win have appointed on December 10, 2019 in accordance with the Global Magnitsky Act for their actions in the Rohingya genocide.
3. (1) General Mya Tun Oo, is appointed as Minister of Defense; (2) Admiral Tin Aung San was appointed as Minister of Transportation and Communication; (3) Lieutenant General Ye Win Oo, was appointed Joint Secretary of the SAC; and (4) Lieutenant General Aung Lin Dwe, was appointed Secretary of the SAC.
4. (1) Myanmar Ruby Company; (2) Myanmar Imperial Jade Co. LTD; and (3) Cancri (Gems and Jewelery) Co., LTD.
5. (1) Lieutenant General Moe Myint Tun and (2) General Maung Maung Kyaw.
6. (1) Aung Pyae Sone and (2) Khin Thiri Thet Mon.
7. (1) A&M Mahar Company Limited; (2) Sky One Construction Company Limited; (3) Yangon Restaurant; (4) Yangon Gallery; (5) Everfit Company Limited; and (6) Seventh Sense Company Limited.
The contents of this article are intended to provide general guidance on the subject matter. Specialist advice should be sought about your particular circumstances.