OFAC Issues Additional Myanmar Sanctions, but Lawmakers Say More Can Be Done

The Office of Foreign Assets Control sanctioned two more Myanmar entities, issued four new general licenses and published two new frequently asked questions to provide guidance on certain exempted transactions with Myanmar. The sanctions and guidance, issued March 25, came days after OFAC designated entities and officials associated with the country’s military-led coup last month (see 2103220036) and about three weeks after the Commerce Department increased export restrictions for shipments to Myanmar (see 2103040075).

OFAC’s latest sanctions target Myanma Economic Holdings Public Company Limited and Myanmar Economic Corporation Limited, which the agency said are holding companies that supply goods to the military. The firms “dominate certain sectors of the economy,” OFAC said, including natural resources and consumer goods.

While the U.S. sanctions are a “big step,” the administration should be doing more to penalize the Myanmar military, said Sen. Ed Markey, D-Mass. Markey suggested more multilateral sanctions and broader arms embargoes. “More must be done to deny the army its economic lifeline and to deny it the weapons of war,” he said during a March 25 Senate Foreign Relations Committee hearing.

Sen. Mitt Romney, R-Utah, said the U.S. must “lead an international effort to expand and strengthen the sanctions” against Myanmar. But Romney also said he is skeptical that sanctions alone will be enough to restore democracy in the country. “The military has been in charge of this country before. They’ve carried out genocide against the Rohingya before. And so they suffered sanctions before. They clearly expected that would happen again,” he said. Are we basically going by the same playbook and expecting a different result?”

Atul Keshap, a State Department official overseeing East Asian and Pacific affairs, said he wants to refrain from “telegraphing” future U.S. moves but stressed the current U.S. sanctions are “a little different” from past designations. “These are very carefully designed sanctions to put pressure on the commander in chief, to put pressure on his children, on his family, to make him realize that he has bitten off more than he can chew, that he is out of step with his own people,” Keshap said.

Although the U.S. sanctions are designed to cut off revenue streams to the military, Keshap said the State Department is still “studying” how effective their designations will be. He said the Myanmar military is an “extremely secretive organization” and the U.S. has faced challenges tracking their revenues. “We have sanctioned teams that are constantly at work,” Keshap said. “We're trying to get to the bottom of this.” Keshap also said the U.S. plans to continue to “galvanize the international community to exert diplomatic pressure” on Myanmar’s military. “We have signaled to the regime that their actions have consequences.”

Along with the sanctions, OFAC issued several licenses to exempt certain trade and other activities with Myanmar. General License No. 1 authorizes transactions with Myanmar that involve the U.S. government or its contractors, and General License No. 2 authorizes transactions and activities carried out by 10 international organizations, including the United Nations, the Association of Southeast Asian Nations and the International Committee of the Red Cross. General License No. 3 allows certain transactions with Myanmar involving nongovernmental organizations, including those that support humanitarian projects, democracy building, education and more. General License No. 4 authorizes the wind-down of transactions with MEHL and MEC, including any entities they own by 50% or more, through 12:01 a.m. June 22.

FAQs 882 and 883 provide more information on the licenses. FAQ 882 specifies which UN groups are authorized by GL No. 3, and FAQ 883 clarifies that companies may use GL No. 4 to process certain Myanmar-related transactions through U.S. banks.