OFAC Sanctions Two Burmese Military Holding Companies

OFAC designated two Burmese military holding companies, Myanma Economic Holdings Public Company Limited ("MEHL") and Myanmar Economic Corporation Limited ("MEC"), to the Specially Designated Nationals and Blocked Persons List (or "SDN List").

The designations were pursuant to Executive Order ("EO") 14014 ("Blocking Property with Respect to the Situation in Burma"), which, as previously covered, authorizes the Treasury Secretary to sanction Burma's defense sector. According to OFAC, the two companies enjoy a "privileged position" in the economy of Burma, and "dominate" certain industries, including trading, natural resources, alcohol, cigarettes and consumer goods.

Concurrent with these designations, OFAC issued General License ("GL") No. 4, which authorizes, through June 22, 2021, transactions and activities ordinarily incident to the wind down of transactions involving MEHL, MEC or any entity owned by 50 percent or more by the two companies. In FAQ 883, OFAC clarified that, while GL 4 is in effect, covered wind down transactions may be processed through the U.S. financial system and otherwise may involve U.S. persons.

With respect to the situation in Burma, OFAC also issued GLs 1, 2 and 3, which authorize certain transactions prohibited by EO 14014 that are associated with, respectively, the official business of the United States Government, the official business of certain international organizations and the activities of certain nongovernmental organizations. In FAQ 882, OFAC clarified which organizations within the United Nations' programs are covered by GL 2.