On March 25, 2021, the Department of the Treasury’s Office of Foreign Assets Control designated two military holding companies in Burma that have been given a privileged position in the Burmese economy by the military regime that overthrew Burma’s democratically elected government. According to OFAC, the regime has used these companies to control segments of the Burmese economy, including trade, natural resources, alcohol, cigarettes and consumer goods. Both companies have been designated pursuant to Executive Order 14014, “Blocking Property With Respect to the Situation in Burma,” for being owned or controlled by the armed forces of Burma.
As a result of these designations, all US property belonging to these entities is blocked, and transactions with US persons are generally prohibited. In addition, any entity that is owned fifty percent or more by one or more sanctioned persons is also blocked.
In its press release, OFAC emphasized its intent to use sanctions to target the military regime in Burma and not the Burmese people; therefore, it concurrently issued four general licenses and two frequently asked questions to make certain exceptions to sanctions restrictions. General license 1 authorizes transactions with Burma conducted for the official business of the US government, and general license 2 authorizes transactions conducted for the official business of international organizations such as the United Nations, the Red Cross and other listed entities. General license 3 authorizes transactions in Burma that are conducted by a nongovernmental organization as long as the transaction is associated with a humanitarian project that benefits the people of Burma. Finally, general license 4 allows wind-down transactions with the two newly designated military holding companies in Burma until June 22, 2021.
OFAC used FAQ 882 to clarify that GL 2 only authorizes transactions related to international organizations that are listed in GL 2, while adding that a list of Specialized Agencies and Related Organizations can also be found here on the United Nations website. FAQ 883 provides a general overview of GL 4, emphasizing that it only permits activities that are “ordinarily incident and necessary” to wind-down transactions with the two military holding companies, including transactions with any entity that is owned fifty percent or more by one of the sanctioned holding companies. Persons that are unable to complete wind down transactions by June 22, 2021 are encouraged to seek formal guidance from OFAC.