New EU sanctions against Myanmar junta miss target

Press release

On 21 June 2021, the Council of the EU’s decided to add eight individuals and three economic entities to the list of individuals and entities under sanctions for human rights violations and undermining democracy and the rule of law in Myanmar. The listed entities are state-owned or military-controlled businesses active in the gemstones and forestry sectors. While these new sanctions are a step in the right direction, additional measures are needed to put an end to the widespread human rights violations that continue to be recorded in Myanmar.

"The EU must urgently step-up its action and ensure financial flows from the oil and gas sector, the largest revenue source for the military, are hit by economic sanctions".

Debbie Stothard, coordinator of ALTSEAN-Burma

This is the third wave of EU sanctions in response to the February 2021 military coup. After having listed many individual members of the State Administration Council (the junta’s ruling body) last February, the EU also designated military business conglomerates MEHL and MEC in March. Today’s measure adds Myanmar Gems Enterprise, Myanmar Timber Enterprise and Forest Products Joint Venture Corporation Limited to the list, all businesses operating in gemstones and forestry – two sectors that provide for a relatively small part of the military’s foreign currency revenues. Eight additional individuals have also been added, as well as the War Veterans Organisation.

FIDH welcomes these important, albeit largely symbolic listings. While they signal that the EU is ready to continue its mobilisation on Myanmar, the current sanctions fail to target the military’s largest foreign currency stocks, namely central bank reserves and other foreign bank accounts, nor the largest source of revenue, which derives from the exploitation of Myanmar’s natural gas reserves by oil giants Total (France based), Chevron (US), Posco (Korea), PTT (Thailand), China National Petroleum Company (China) or Petronas (Malaysia). The offshore upstream and midstream (e.g., pipelines) gas sector generates roughly USD 1 billion per year for the Myanmar state, representing approximately one-third of all foreign currency entering state coffers in any given year.

Since the coup, the military have continued to collect foreign currency inflows, which have contributed to keeping the junta in power and to finance the commission of widespread human rights violations across the country. Foreign currency is important to the military. While the military has already starved public services and the private sector of foreign exchange, it has prioritised spending of foreign currency inflows to pay for military equipment (e.g., tanks, guns) and supplies (e.g., fuel), as well as to service military-owned companies. Thus, further reductions in its access to foreign currency are likely to predominantly impact the military rather than civilians.

It is now essential for the EU to adopt stronger measures in order to effectively prevent foreign currency inflows from reaching the Myanmar military and police. FIDH urges the EU to work in coordination with like-minded jurisdictions to explore all options available, including the possibility to prohibit all financial transactions whose ultimate beneficiary is the Tatmadaw (Myanmar military).

Three days after the United Nations General Assembly adopted a resolution calling for a global arms embargo, it is crucial for the international community to further step up its engagement through the adoption of concrete and powerful measures. Prompt and resolute action is necessary to send a strong message that the international community will not stand by as the junta continues to commit serious human rights violations against the population.

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