New expanded sanctions on Myanmar military are positive step but omission of state-owned oil and gas company leaves key revenue source intact

Today, on the eve of the first anniversary of the military coup in Myanmar, the US and UK announced expanded sanctions on the military, its business allies, and their economic interests in a coordinated action. All three added military-regime appointed officials who have facilitated the regime’s assault on the rule of law in Myanmar, including the Attorney General and chairman of the Anti-Corruption Commission to the sanctions list. The US also added the Chief Justice of the Supreme Court and the military’s Directorate of Procurement while the UK included the Union Election Commission chairman.

In addition to these coordinated actions, the United States took aim at the military regime’s business allies. The US sanctioned Tay Za, a notorious military ‘crony’ who has been under UK sanctions since September and was also under US sanctions from 2008 to 2016, and his two sons. Also sanctioned was Jonathon Myo Kyaw Thaung and his company KT Services and Logistics. Global Witness welcomes these actions – Jonathon Myo Kyaw Thaung has been publicly reported as a key facilitator of arms sales to the junta while KT Services and Logistics is a company with close ties to the military – it leases the Bo Aung Kyaw port in Yangon from the sanctioned military-conglomerate MEHL – and has benefited from preferential treatment following the coup.

“The decision to add businesses like Jonathon KT and his company to the sanctions list is particularly important. Up to now, most sanctions targets have been military companies, members of the military or their family members,” said Paul Donowitz, Campaign Leader at Global Witness. “With today’s action, the US and UK have reminded Myanmar’s business community that there are consequences for facilitating the military’s arms purchases and business interests.”

Today’s sanctions follow the release of an advisory notice by multiple U.S. government departments on January 26^th warning companies invested in Myanmar of the legal and reputational risks of doing business with the military regime or in industries with heavy military involvement, including gemstones. Total, Chevron and Woodside Petroleum also all announced last week that they will be withdrawing from Myanmar in the coming months in response to the military’s human rights abuses.

These actions together are a marked escalation, in both state policy and private sector conduct, after months of disappointing silence from the international community on the key sources of revenue for the military regime. However, billion-dollar annual revenues still flow to the military through the Myanma Oil and Gas Enterprise (MOGE) via the sales of natural gas to Thailand and China, providing the military with its single largest source of crucial foreign exchange. Total and Chevron’s withdrawal may only increase the military’s share of the project proceeds, netting the military millions more unless sanctions or other restrictive measures prevent the proceeds of gas sales from accruing to MOGE.

“Today’s sanctions, along with the recent U.S. business advisory, are huge steps in the right direction,” continued Donowitz. “However, by leaving MOGE off of sanctions lists the US, UK, and EU are essentially allowing the military to continue to collect hundreds of millions of dollars to sustain its power and fund its mass atrocities. The international community must maintain pressure on the military regime and continue to find ways to support Myanmar’s pro-democracy movement.”

The European Union did not join the US and UK in bringing in further sanctions today. Reports suggest the EU is delaying a sanctions announcement over disagreements about whether to include MOGE, but there is no reason the EU should have been so unprepared given how many months activists have called for such action.

“The lack of action from the EU is disappointing,” said Donowitz. “But if the EU is serious about leading the international community in finally targeting the military regime’s largest source of revenues by sanctioning MOGE, then we would welcome that.”