Limitations of the US imposed sanctions on Myanmar's leaders
The Magnitsky sanctions imposed on Myanmar’s top military leaders by the US Treasury Department over accusations of human rights abuses do not cover military-affiliated companies, according to US experts.
The new measures, announced in December, blacklisted Senior General Min Aung Hlaing, deputy Commander-in-Chief Soe Win, Major General Than Oo and Maj-Gen Aung Aung. US authorities accused Senior General Min Aung Hlaing of overseeing “an entity that has engaged in or whose members have engaged in serious human rights abuse under his command” as Commander-in-Chief of the Tatmadaw.
Based on the 2012 Magnitsky Act, the move freezes any US assets of the four top Myanmar military officials and criminalises financial transactions with them by anyone in the US. Last July, Washington banned Senior General Min Aung Hlaing from visiting.
The US Treasury said the sanctions were in line with US efforts to support Myanmar’s democratic transition towards civilian rule.
But Erin Murphy, a former State Department official who worked on Myanmar sanctions issues, said these designations do not affect two Tatmadaw-controlled conglomerates - MEHL and Myanmar Economic Corporation - or any businesses at this point, unless it is found that the sanctioned individuals have ownership or control of a particular company.
“This is not likely to be the last round of sanctions but the US government has reiterated its support for economic development and inclusive growth,” Murphy told The Myanmar Times.
“Foreign investors should be cautious but also open to the opportunities that Myanmar has to offer and ensure they undertake comprehensive due diligence efforts, reach out to the appropriate stakeholders, and be as transparent and responsible in their corporate governance,” she added.
Eric Rose, a US lawyer whose law firm shut down its operations in Myanmar in 2018, also said the Magnitsky Act sanctions targeted the four individual generals and were not imposed on any Tatmadaw entities.
“Consequently, other than reputational issues, and the separate USA Patriot Act sanctions, US businesses and individuals can continue doing business with these military entities,” he said.
Mr Rose noted, however, that the situation could change depending on the outcome at the International Court of Justice and the results of the US presidential and senate elections in November 2020.
Telephone calls did not get through to a spokesperson for the Tatmadaw.
Although Tatmadaw businesses are not affected by the latest sanctions, pressure is building on foreign investors to stay away from possible dealings with the military’s vast corporate network following backlash from the UN report last August calling for investors to cut ties with all army-linked businesses in response to the 2017 crackdown in northern Rakhine. Myanmar rejected the report findings.
Since that report by the UN Independent International Fact-Finding Mission, several executives said they were more reluctant to work with companies associated with the Tatmadaw. UN investigators identified around 60 foreign companies involved in joint ventures or with commercial ties to the Tatmadaw, which controls large parts of the economy through holding firms and their subsidiaries.
The UN mission urged the UN Security Council and governments to immediately impose targeted sanctions against companies run by the Tatmadaw and warned that doing business with Tatmadaw companies could be complicit in international crimes.
Tags:
Magnitsky ActRakhineSenior General Min Aung HlaingTatmadawUS Treasury Department
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