On June 21, 2023, the US Department of the Treasury’s Office of Foreign Assets Control designated Burma’s Ministry of Defense and two Burmese state-owned financial institutions, Myanma Foreign Trade Bank (“MFTB”) and Myanma Investment and Commercial Bank (“MICB”), for facilitating foreign currency exchanges within Burma, and foreign transactions for the purchase and import of arms and related materiel. Since the military coup in 2021, the Ministry of Defense has imported at least $1 billion dollars’ worth of goods and materiel from sanctioned entities in Russia. According to OFAC, these transactions provide revenue to Russia and enable Burma’s military regime to obtain equipment that supports the ongoing brutality inflicted upon the Burmese people. MFTB and MICB serve as a foreign currency exchange in Burma, enabling the regime to access international markets through offshore accounts. The three designees were sanctioned pursuant to Executive Order 14014 for being political subdivisions, agencies, or instrumentalities of the Burmese Government.
As a result of these OFAC designations, all property and interests in property of these designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons. In addition, entities owned 50 percent or more by one or more blocked persons are also blocked.
OFAC also issued General License 5 pursuant to Burma Sanction Regulations, 31 CFR part 525, to authorize wind down transactions involving MFTB and MICB or any entity in which these entities own a 50 percent or greater interest. These transactions are authorized by OFAC until August 5, 2023 as long as payments to blocked persons are made into blocked accounts in accordance with the Burma Sanctions Regulations.