On October 31, 2023, the US, UK, and Canadian governments imposed further coordinated sanctions against Myanmar (Burma) through designations of individuals and entities associated with Myanmar’s military regime and a US prohibition on the provision of financial services to Myanma Oil and Gas Enterprise (“MOGE”). The measures aim to prevent the Burmese military from obtaining access to arms and other supplies and are part of an effort to unify sanctions measures on Myanmar across the US, EU, UK, and Canada.

US Financial Services Restrictions and Designations

The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued Directive 1 under Executive Order (“EO”) 14024 (“Directive 1”), which prohibits US persons, effective December 15, 2023, from providing, exporting, or reexporting, directly or indirectly, financial services to or for the benefit of MOGE. OFAC published two related Frequently Asked Questions (“FAQs”):

  • FAQ 1138 explains the Directive 1 prohibitions and provides OFAC’s interpretation of the term “financial services” as used in Directive 1, which includes loans, transfers, accounts, insurance, investments, securities, guarantees, foreign exchange, letters of credit, and commodity futures or options.
  • FAQ 1139 clarifies that OFAC’s 50 Percent Rule applies to Directive 1, meaning the prohibitions thereof apply to any entity that MOGE owns 50 percent or more, directly or indirectly.

In addition, OFAC designated the following three entities and five officials connected with the Burmese military and government pursuant to EO 14014:  Sky Royal Hero Company Limited; Suntac Technologies Company Limited; Suntac International Trading Company Limited; Charlie Than (Union Minister of the Ministry of Industry); Kan Zaw (Union Minister of the Ministry of Investment and Foreign Economic Relations); Swe Swe Aung (Director General of the Prosecution Department of the Ministry of Legal Affairs); Zaw Min (Director General of the Prison Department of the Ministry of Home Affairs); and Maung Maung Aye (Chief of General Staff for the Burmese Army, Navy, and Air Force).

OFAC’s press release is available here.

UK Designations

The UK sanctions include an asset freeze and travel ban against five individuals and one entity involved in either providing financial services to the regime in Myanmar or the supply of restricted goods, including aircraft parts. Those who have been sanctioned are: Myo Thitsar, Htoo Htet Tay Za, Pye Phyo Tay Za, Kyaw Min Oo, Sit Taing Aung, and International Group of Entrepreneur Services Company Limited (IGE).

These new measures add to the UK’s existing sanctions regime for Myanmar. Since the coup, 25 individuals and 29 entities have been designated under the Myanmar Sanctions Regulations 2021 and the military’s two key conglomerates, Myanmar Economic Holdings Ltd (MEHL) and Myanmar Economic Corporation (MEC), and their 111 subsidiaries have been designated under the Global Human Rights Sanctions Regulation 2020. The lists of designated persons, current as of 7 November 2023, can be found here (Myanmar Sanctions Regulations 2021) and here (Global Human Rights Sanctions Regulation 2020).

Canadian Designations

Canada announced amendments to its existing Special Economic Measures (Burma) Regulations (the “Myanmar Regulations”), listing an additional 39 individuals and 22 entities and expanding its prohibition on aviation fuel.

These amendments came into force on October 27, 2023 and bolster Canada’s existing sanctions in relation to Myanmar. The individuals and entities listed under the new amendments have been identified as performing key functions on behalf of the military regime, supplying weapons, resources and revenue, and deemed by the Government of Canada as responsible for democratic reversals in Myanmar. The Myanmar Regulations now list 95 individuals and 63 entities in total and the prohibition on aviation fuel has expanded to include a ban on the provision of shipping insurance for the transportation of aviation fuel to Myanmar.

These amendments are in further support of United Nations Security Council resolution 2669 and the efforts of the Association of Southeast Asian Nations, the UN Special Rapporteur on the situation of human rights in Myanmar, the UN General Assembly and the International Labour Organization to address the security situation in Myanmar.

Generally speaking, listing under the Schedule of the Regulations imposes a dealings prohibition, effectively an asset freeze, against the listed person. For more information on the particulars of the dealings prohibition and Canada’s previous sanctions against Myanmar, read our February 2023 blog post here. An unofficial copy of the legislative amendments to the Special Economic Measures (Burma) Regulations that came into force on October 27, 2023 is available here.

Author

Terry Gilroy is a partner in the New York office of Baker McKenzie and a member of the Investigations Compliance and Ethics Practice Group. Prior to joining the Firm in 2018, Terry served as Americas Head of the Financial Crime Legal function at Barclays. Terry advises businesses and individuals on white collar and financial crime issues and has significant experience conducting investigations relating to compliance with the US Foreign Corrupt Practices Act (FCPA) and related bribery and corruption statutes, economic sanctions regulations as administered by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), and the Bank Secrecy Act and related anti-money laundering (AML) regulations and statutes. Terry spent six years on active duty in the United States Army as a Field Artillery officer.

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Ms. Test advices clients on issues relating to licensing, regulatory interpretations, enforcement actions, internal investigations and compliance audits, as well as the design, implementation and administration of compliance programs. She also advises clients on the extra-territorial application of trade compliance-related regulations in cross-border transactions.

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Michael helps clients navigate and comply with sanctions, export controls and national security controls on foreign investment (CFIUS). He also has experience in complex litigation and international commercial arbitration and has assisted clients with internal investigations and compliance related to trade, anti-money laundering, and anti-corruption matters. Previously located in Silicon Valley, he has advised clients in numerous sectors, including technology (hardware and software), energy, banking and finance, private equity, construction, transportation, biotech and medical devices, and consumer goods and retail.

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Johanna Asplund is an associate at the Firm’s London office in the International, Commercial and Trade Practice Group. Johanna advises clients on sanctions, export controls, trade compliance, customs and anti-bribery matters. She has advised extensively on sanctions and export control licensing and enforcement, including investigations and enforcement matters before government authorities, in particular in the healthcare and life sciences sector. Johanna regularly advises on compliance risk assessments, compliance policies and procedures, and internal investigations.

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Julia Webster is a disputes and international trade lawyer. She advises companies on trade remedies, free trade agreements, blocking measures, customs compliance, anti-corruption laws, economic sanctions, AML compliance, supply chain ethics, and cross-border M&A.

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