The United States is expected to impose sanctions on two large conglomerates linked to the Myanmar military, the Biden administration’s latest retaliation against the military’s takeover last month.
Reuters, citing “two sources familiar with the matter,” said that the blacklisting Myanmar Economic Group (MEC) and Myanmar Economic Holdings Ltd (MEHL) could arrive as early as Thursday. This move will prevent the two companies and many of their subsidiaries from making any transactions with the people of the United States or have any contact with the US banking system and will freeze any assets. that they have in the United States.
The move comes almost two months after the military took power, detained State Counselor Aung San Suu Kyi and abolished the National League Party’s major victory for Democracy at her November election. last. The coup caused widespread protests and layoffs, prompting increased repression by security forces. at least 275 people.
The imposition of US sanctions on the MEC and MEHL, has booked before on the Commerce Department’s trade blacklist, is the most direct attempt to target Myanmar’s military finances. The MEC and MEHL act as funding funds for the Tatmadaw, as Myanmar’s armed forces are known, controlling a vast network of companies involved in almost every sector of the country’s economy.
Consequently, some of the measures targeting the two corporations have been foreseen since the coup. On February 10, President Joe Biden alluded to possible sanctions against MEC and MEHL when he signed an executive order allows the US government to target “business interests” of the military.
Since then, the US government has announced a number of targeted sanctions rounds against the Myanmar military, including: Acting President, other senior military officers, and two children of Myanmar’s military leader, Lieutenant General Min Aung Hlaing. (Min Aung Hlaing himself was added to the sanctions list in 2019, because of his role in ethnic cleansing of the Rohingya Muslims in western Myanmar.)
Earlier this week, US Treasury Department is added to the growing target list the head of the Myanmar police force, and the Tatmadaw’s 33 and 77 Light Infantry Division, have been deployed against mostly unarmed protesters in recent weeks.
However, beyond the three gemstone companies with military ties, the US government has so far not targeted the military’s vast network of business interests. In hopes of starving the besieged revenue government, activists and protesters since the coup have demanded targeted action against two military holding firms, located at the heart of the military. That network, which helps to profit into the military’s military arsenal.
Based on an August 2019 report by a United Nations Truth Mission, MEC and MEHL own at least 120 subsidiaries and have strong relationships with at least 27 others. These link it to a wide range of businesses including banking and insurance, tourism, jade and ruby mining, timber, construction and production of palm oil, sugar, soap, cement, beer, cigarettes, drinking water, coal and gas. The two groups also control holding lots of real estate.
MEC and MEHL have also established joint venture partnerships with many domestic and foreign businesses including Korean steel company POSCO and China’s Wanbao Mining Company, which is growing. a controversial copper mine in central Myanmar. In response to the growing pressure on the coup, Japanese beer giant Kirin its venture ends with MEHL one week after the coup.
In September, human rights organization Amnesty International published a report on MEHL, based on a leaked shareholder profile, alleged that the company’s profits – and in other words, the profits of its foreign partners – directly financed the military, including regiments and the unit charged with genocide and other crimes against humanity. In 2008, a US diplomat company description is “One of the most corrupt and powerful” organizations in the country.
With Western nations increasingly imposing sanctions on Myanmar’s military, potentially U.S. sanctions against two companies with military affiliations send the message that it is. Biden rights will take a strong line towards the army.
The exact impact is unpredictable. Blacklisting is sure to be a headache for any foreign company continuing to do business with MEC or MEHL, but will likely act as a strong deterrent only for countries and companies. it is unlikely to do business with these two corporations in the first place.
With companies from China, Russia and other Southeast Asian countries almost certain to continue dealing with military-affiliated entities, the sanctions may not deal a fatal blow. into military finances. This has prompted some activists to appeal to governments go further and aim Oil and gas projects are the main source of revenue for the Myanmar government.
Given the central role of MEC and MEHL on the Myanmar economy, even a modest slowdown in their business can have mortgage effects on the economy as a whole. However, the two-month-long crisis left the economy at bay to the brink of collapse, a fact that may make America’s decision to impose sanctions simpler than it could have been.
Whatever the exact impact of the accumulated Western sanctions, it all signals the direction Myanmar is heading: towards an all or nothing struggle between the government. and various rivals, both at home and abroad, to determine the course of the country’s future.