U.S. Imposes Sanctions on Myanmar’s Defence Ministry and Two State-Owned Banks

The United States has announced sanctions against Myanmar’s defence ministry and two state-owned banks, citing their role in facilitating the military regime’s procurement of arms and other materials from foreign sources, including entities in Russia currently under sanctions.

According to the U.S. Treasury Department, Myanmar’s military has been engaged in purchasing and importing arms, equipment, and materials to manufacture weapons, which are being used for what the U.S. describes as “brutal repression” following the 2021 coup. The coup saw the military overthrow the democratically elected government led by Nobel Peace Prize laureate Aung San Suu Kyi.

The sanctions target the Myanmar Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB). These banks are instrumental in enabling revenue-generating state-owned enterprises, such as Myanma Oil and Gas Enterprise, to access international markets. They play a key role in receiving and transmitting foreign currencies for the country.

Brian Nelson, the Treasury’s undersecretary for “terrorism” and financial intelligence, stated that the military regime in Myanmar is using these state-run institutions to import weapons and materials, including from sanctioned Russian entities, thereby continuing its oppressive tactics.

The U.S. and other Western nations have imposed multiple rounds of sanctions on Myanmar’s generals following the 2021 coup and the subsequent harsh crackdown on mass protests. The situation in Myanmar has since deteriorated, with the military being accused of indiscriminate air attacks and destruction of civilian villages. In response, anti-coup forces and ethnic armed groups have organized into People’s Defence Forces, engaging in ongoing conflicts with the military.

Prior to the U.S. announcement, a spokesman for Myanmar’s military regime, Zaw Min Tun, stated to state media that the country was accustomed to sanctions and would not be significantly affected by new ones targeting state-owned banks. He claimed that these sanctions would only create economic and political challenges and delay the country’s progress towards a multiparty democratic system.

The sanctions could have regional financial implications, particularly for countries like Thailand that have connections with the targeted banks. The U.S. embassy noted ongoing discussions with the Thai government and other neighboring countries to mitigate the impact of these sanctions.

Experts suggest that while the sanctions do not directly target Myanmar’s lucrative gas projects, they could impact the military regime’s ability to fund its operations against ethnic groups and rebellions. A report by EarthRights International highlighted the importance of MFTB and MICB as the country’s “foreign currency treasuries,” now under military control, and crucial for purchases that cannot be made with the Myanmar kyat. The sanctions against these banks are seen as a significant step in cutting off the junta’s access to foreign currency.

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