Industry News

New Sanctions Issued Following Military Takeover in Burma

Mar. 1, 2021
By: Michael N. Coopersmith

On February 10, 2021, President Biden issued Executive Order 14014, declaring a national state of emergency in relation to the ongoing situation in Burma, following a February 1, 2021 military takeover of the county. The Order is aimed primarily at blocking property associated with the Burmese military and with individuals and entities deemed to have participated in or to have aided the takeover. Following the issuance of this Order, both the Treasury Department and the Department of Commerce have taken steps to sanction and constrain targeted individuals and entities.

The Biden administration has described the takeover as a coup after the National League for Democracy party seemed to have won the November 2020 Burmese general election by a comfortable margin. Citing widespread election irregularities, the Myanmar military rejected the results, declaring a yearlong state of emergency and seizing control of the country. The country is now under the control of General Min Aung Hlaing. The international community has largely joined the U.S. in condemning the coup, with Australia, the EU, UK, and UN among those who have officially condemned the takeover. China has since blocked a UN Security Council statement condemning the coup, instead urging all sides to "resolve differences."

The Order provides for the authority to sanction any foreign person determined by the Secretary of the Treasury, in consultation with the Secretary of State, who engages or has engaged in any of several specific categories of activities. Entities and individuals who operate in the defense sector of the Burmese economy, who engaged in or supported the coup, who is or has been a leader in the Burmese military, who is or has been a leader of the Burmese government on or after February 2, 2021, and/or anyone who is a spouse or child of a sanctioned individual are implicated by the Order. As a result of the Order, U.S. persons are now prohibited from transacting with individuals and entities sanctioned under the Order, unless otherwise authorized by OFAC.

The response from the U.S. has been coordinated yet targeted, with the Office of Foreign Asset Control (“OFAC”) responding shortly after the issuance of the Order by adding three entities and ten Burmese individuals to the OFAC Specially Designated Nationals List, including acting president Hlaing, the minister of defense, and the commander-in-chief of the Burmese military forces. On February 22, 2021 OFAC sanctioned two additional individuals deemed to be connected to the military apparatus responsible for the coup.

On February 11, 2021 the U.S. Department of Commerce announced amendments to the Export Administration Regulations designed to limit the Burmese military’s access to sensitive technology as well. The BIS has now imposed additional licensing restrictions on exports to the Burmese military and nonmilitary entities associated with the coup. As a result of these changes, there will now be a presumption of denial attached to any BIS export or reexport license request when goods are destined for the Burmese government. Additionally, the BIS has now revoked certain previously issued licenses and suspended several commonly utilized license exceptions previously available to Burma, including Shipments to Country Group B countries (GBS) and Technology and Software Under Restriction (TSR).

If you have any questions relating to Executive Order 14014, U.S. Burma sanctions, or U.S. export controls in general contact a trade attorney at Barnes, Richardson & Colburn LLP.