On October 31, 2023, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") imposed additional sanctions related to Myanmar. In particular, OFAC issued Directive 1 pursuant to Executive Order ("E.O.") 14014, which imposes extensive sanctions restrictions on Myanma Oil and Gas Enterprise ("MOGE"). In addition, OFAC designated additional individuals and entities in Myanmar on its Specially Designated Nationals and Blocked Persons ("SDN") list.
We previously discussed U.S. sanctions restrictions related to Myanmar on January 28, 2022 and June 1, 2021.
New Restrictions Applicable to MOGE
OFAC issued Directive 1 (E.O. 14014), which prohibits "the provision, exportation, or reexportation, directly or indirectly, of financial services to or for the benefit of MOGE or its property or interests in property" on or after December 15, 2023. Directive 1 (E.O. 14014) also prohibits "any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions contained in" or "any conspiracy formed to violate any of the prohibitions in" Directive 1 (E.O. 14014).
Other than as described above, all other activities with MOGE or involving MOGE's property or interests in property are permitted, provided that such activities are not otherwise prohibited by law.
OFAC also issued two related frequently asked questions ("FAQs"):
- FAQ 1138 clarifies that the term "financial services" includes "loans, transfers, accounts, insurance, investments, securities, guarantees, foreign exchange, letters of credit, and commodity futures or options."
- FAQ 1139 clarifies that Directive 1 (E.O. 14014) restrictions also apply to any entity owned 50% or more by MOGE.
This means that, if there was a U.S. nexus, the provision of financial services to MOGE and/or any entity owned 50% or more by MOGE would be prohibited by Directive 1 (E.O. 14014) on or after December 15, 2023. For example, MOGE could not receive any financial services from a U.S. bank or other U.S. person (defined as any U.S. citizen, permanent U.S. resident, person in the U.S. or entity organized under U.S. law). In addition, no U.S. person could issue loans to MOGE. Furthermore, it is unlikely that MOGE could convert funds to USD. This is because USD transfers are typically cleared through a U.S. correspondent bank.
Designation of Additional Individuals and Entities in Myanmar as SDNs
OFAC designated five individuals and three entities with connections to Myanmar as SDNs, including Sky Royal Hero Company Limited, Suntac International Trading Company Limited, and Suntac Technologies Company Limited.
As a result of this action, all property and interests in property of these individuals and entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by these SDNs are also blocked. All transactions by U.S. persons or within (including transactions transiting) the United States that involve any property or interests in property of these SDNs are prohibited unless authorized by a general or specific license issued by OFAC or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of these SDNs and the receipt of any contribution or provision of funds, goods, or services from any such person.
The full list of additional designations is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
