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On February 1, 2021, the military of Burma (Myanmar) in an unanticipated coup d’état installed General Min Aung Hlaing as leader and detained the country’s top elected leaders, including the President and Prime Minister. In response, on February 10, 2021, President Biden issued Executive Order 14014 (the “E.O.”) authorizing the U.S. Department of Treasury’s (“Treasury”) Office of Foreign Assets Control (“OFAC”) to impose certain sanctions blocking U.S. property and interests of Burmese military officials and Burmese government officials on or after February 2, 2021, as well as secondary sanctions on non-US persons who provide material assistance to or in support of persons or entities sanctioned under the E.O.

The E.O. additionally applies to:

  • Any foreign persons deemed by the Secretary of Treasury to be operating in the defense sector “or any other sector of the Burmese economy as may be determined by the Secretary of the Treasury”
  • Any foreign persons determined to be threatening peace, undermining democracy, restricting freedom of expression or assembly, or engaging in the human rights violations such as arbitrary detention or torture in Burma.

The E.O. could also lead to broader sanctions against other political subdivisions, agencies, and instrumentalities of the Burmese Government as well as spouses or adult children of persons whose property and interests are blocked. Natural persons sanctioned pursuant to the E.O. will be denied entry to the US.

In response to the E.O., OFAC designated ten (10) total entities and natural persons by adding them to the Specially Designated Nationals and Blocked Persons List (“SDN List”). The persons and entities designated as SDNs under the E.O. include:

  • Six (6) current and former military officers involved in the coup.
  • Four (4) members of the newly created State Administrative Council.
  • Three (3) ruby, jade, and gem entities in Burma which are owned or controlled by the military—Myanmar Ruby Enterprise; Myanmar Imperial Jade Co., LTD.; and Cancri (Gems and Jewellery) Co., LTD.

As a result of OFAC’s action, all property and interests in property of 50% or greater belonging to these persons—which are in the U.S. or controlled by U.S. persons—must be blocked and reported to OFAC. Treasury officials noted that some of the Burmese military officials responsible for the coup were previously designated for sanctions—Hlaing and his deputy Soe Win were designated on December 10, 2019 pursuant to E.O. 13818 over the alleged human rights abuses which occurred under their command.

On February 11, 2021, the U.S. Department of Commerce (“Commerce”) announced that effective immediately, the Bureau of Industry and Security (“BIS”) will change its licensing policy to apply a presumption of denial for items requiring a license for export or reexport to Burma’s Ministry of Defense, Ministry of Home Affairs, armed forces, and security services.  BIS states that it will also:

  • Revoke previously issued licenses to these Burmese government agencies which have not been fully utilized.
  • Suspend certain license exceptions previously available to Burma as a result of its current Country Group placement under the Export Administration Regulations (“EAR”), including Shipments to Country Group B countries (“GBS”) and technology and software under restriction (“TSR”).
  • Consider additions to the Entity List, adding Burma to the military end user (“MEU”) and military intelligence end user (“MIEU”) lists, and amending the EAR to downgrade Burma’s Country Group status.

Companies doing business in Burma should review these new restrictions and evaluate their potential exposure under these new rules and restrictions.  Husch Blackwell continues to monitor the U.S. sanctions and export controls on Burma and will provide further updates as developments occur. Should you have any questions or concerns, please contact Cortney Morgan or Grant Leach of our Export Controls & Economic Sanctions team.