Reed Smith Client Alerts

In the wake of the military coup that overthrew the democratically elected Burmese government last month, both the United States and the United Kingdom have moved quickly to impose targeted sanctions on Burmese entities and individuals. The EU has similarly deplored the coup and sanctions are anticipated imminently. With the United States imposing further sanctions last week and the situation continuing to deteriorate in Burma, the sanctions situation remains fluid. While, to date, the sanctions have targeted the individuals (and associated companies) deemed responsible for the coup, rather than Burma’s overall economy, companies doing business in, or having supply chains involving, Burma should monitor the situation carefully to ensure that they are not at risk of engaging with the designated persons and companies.

Authors: Leigh T. Hansson Eli Rymland-Kelly Claire E. Don Alexander Brandt Ozra O. Ajizadeh

Background

After decades of military control, protests, and military crackdowns, Aung San Suu Kyi and the National League for Democracy (NLD) paved the way for Burma to move toward democratic control. Following a landslide win by the NLD in recent general elections, the Burmese military initiated a coup and overthrew the country’s democratically elected government. In wrestling back control of the country, the Burmese military, led by Min Aung Hlaing, has engaged in violence against unarmed civilians; detained civilian leaders, politicians, human rights defenders, and journalists; and imposed a nationwide Internet shutdown, blocking access to social media sites.

U.S. response

On February 11, 2021, President Biden signed Executive Order (E.O.) 14014, “Blocking Property with Respect to the Situation in Burma,” declaring a national emergency “with respect to the unusual and extraordinary threat to the national security and foreign policy of the [United States] posed by the situation in Burma,” and authorizing sanctions against foreign persons who played a crucial role in the assault on Burma’s transition to democracy. Rather than targeting the broader Burmese economy by restricting exports to or investments in Burma, section 1 of the E.O. authorized the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC ) to add to the Specially Designated Nationals (SDN) List individuals and entities that it deemed connected to the “military apparatus responsible for the coup.”