Biden Administration Imposes Sanctions on Burma Following Military Coup

Jones Day

As part of the U.S. government response, the Department of the Treasury imposes sanctions on certain Burmese persons, and the Department of Commerce heightens export restrictions relating to Burma.

In response to the military coup in Burma (Myanmar), President Biden issued Executive Order 14041, "Blocking Property with Respect to the Situation in Burma," authorizing sanctions against, among others, foreign persons determined to be a leader or official of the military or security forces of Burma, or a leader or official of the Government of Burma on or after February 2, 2021.

The executive order, issued February 11, also authorizes the Secretary of the Treasury to sanction any foreign person who operates in the defense sector or, potentially, other as-yet-determined sectors of the Burmese economy, or who is complicit in, or has engaged in, or has attempted to engage in conduct proscribed by the executive order. The executive order constitutes the most significant change in sanctions policy toward Burma since October 2016, when then-President Obama signed an executive order terminating the Burma sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") in recognition of Burma's democratic reforms.

In conjunction with the executive order, OFAC has added to the Specially Designated Nationals and Blocked Persons ("SDN") List a total of 15 persons to date under the Burma sanctions—six individuals directly involved in the coup, four newly appointed government officials, two military officials, and three entities owned or controlled by the military. In addition, the Commerce Department announced export restrictions on sensitive items to certain Burmese governmental entities, providing that transactions requiring a license for export, reexport, or transfer to Burma will now be subject to a presumption of denial in the license application process where the item's end user is Burma's Ministries of Defense or Home Affairs, armed forces, and security services. In addition, the Commerce Department has suspended the use of certain license exceptions for exports, reexports, and transfers to Burma.

As a result of the new designations and export control restrictions, persons engaging business in or with Burma should review their ongoing activities and undertake reasonable compliance due diligence when engaging in new transactions, including screening partners against the SDN List and determining ownership and control of the entities with which they do business to ensure that such entities are not considered blocked or otherwise subject to restrictions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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