The Coup in Myanmar — U.S. Announces Initial Response with Targeted Sanctions and Export Controls

In response to the recent military coup in Myanmar (also known as Burma) against the democratically-elected government, on February 11, 2021 the Biden Administration issued an Executive Order on Blocking Property with Respect to the Situation in Burma (E.O.), which launched a new targeted sanctions regime.  That same day, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated former and current officials of Burma’s military or security forces and affiliated entities in the jade and gems sector as Specially Designated Nationals (SDNs).  In addition, the Commerce Department’s Bureau of Industry and Security (BIS) announced a series of steps to tighten export controls on certain ministries, armed forces, and security services, and to limit availability of license exceptions.  It has been indicated that these are initial steps, and that further sanctions and export control may follow.

New Targeted Sanctions and Designations

The E.O. authorizes the Treasury Secretary, in consultation with the State Department, to impose sanctions on persons that threaten the democratic processes, civil liberties, and human rights of the Burmese people.  Specifically, the Treasury Department is authorized to impose sanctions on the following:

1. Persons that operate in the defense sector or any other sector of the Burmese economy;
2. Persons that undermine Burma’s democratic processes or institutions, peace, security, stability or limits citizen’s access to freedom of expression or assembly, human rights, or access to print, online or broadcast media;
3. Leaders, officials, or members of Burma’s a) military or security forces or any successor entity; b) post-February 2, 2021 Government; c) entities that threaten any of the democratic processes, civil liberties or human rights mentioned above; and (d) entities that are blocked pursuant to this E.O.;
4. The Government of Burma’s political subdivisions, agencies, or instrumentalities (including the Central Bank of Burma and other state enterprises);
5. Spouses or adult children of any person whose property interests in property are blocked under the E.O.; and
6. Persons determined to have materially assisted, sponsored, or provided financial, material, or technological support to persons whose property interests in property are blocked under the E.O.; or to be owned or controlled, or purported to act for or on behalf of the military or security forces of Burma, or a person blocked under the E.O.

OFAC has designated as SDNs ten former and current leaders or officials of Burma’s military and newly-established State Administrative Council.  In addition, it designated three companies in the gem and jade sector that were found to be owned or controlled by, or have acted or purported to act for the military or security forces of Burma:

1. Myanmar Ruby Enterprise;
2. Myanmar Imperial Jade Co., LTD.; and
3. Cancri (Gems and Jewellery) Co., LTD.

The gem and jade sector had been a target of the prior U.S. sanctions regime for Burma.

Initial Export Control Restrictions

Separately, BIS announced a new licensing policy for exports and reexports to certain Burmese government departments and agencies, effective immediately, and new export controls on sensitive items to Burma’s Ministry of Defense, Ministry of Home Affairs, armed forces, and security services.

Following Burma’s 2015 democratic elections, the U.S. had largely lifted export control restrictions on items exported or reexported to Burma, although a military embargo remained. Burma has been included in Country Group B under the Export Administration Regulations (EAR), making available certain license exceptions.  As a result of the coup, BIS announced that it will suspend certain license exceptions — e.g., License Exception GBS (Shipments to Country Group B countries) and TSR (Technology and Software under Restriction) — which previously were available to these Burmese government departments and agencies.

BIS has stated that it is contemplating the following three additional export control restrictions.

• Adding Burma-related entities to the EAR’s Military End Use and End User (MEU) List;
• Adding Burma-related entities to the Military Intelligence End Use and End User (MIEU) List; and
• Downgrading Burma’s Country Group status in the EAR.

Regardless of whether additional export controls are put in place, the U.S. Government will maintain its current export control restrictions on Burma related to arms and chemical and biological weapons restrictions.

New Restrictions Remain Possible

Although most commerce with Myanmar currently remains permitted for U.S. and non-U.S. persons, there remains significant potential for future sanctions under the E.O. and stricter controls under the EAR.

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