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The US Government has imposed a series of sanctions against Myanmar Economic Corporation Limited (MEC) and Myanma Economic Holdings Public Company Limited (a.k.a. Myanmar Economic Holding Limited) (MEHL), two military-affiliated conglomerates, in response to the February military coup in Burma (Myanmar). The combined restrictions are likely to have a significant impact on business activities in Burma as these conglomerates have substantial interests and joint ventures in several sectors of the Burmese economy, including trading, natural resources, tourism, alcohol, cigarettes, and consumer goods. In addition, the US Government has significantly tightened export controls for Burma.

Restrictions on MEC and MEHL

First, effective March 8, 2021, MEC and MEHL were added to the Bureau of Industry and Security’s Entity List, restricting any person from exporting, reexporting or transferring in-country all items subject to US jurisdiction under the Export Administration Regulations (EAR) to MEC and MEHL or in any transaction to which they are a party. This would include exports, reexports and transfers of items subject to the EAR to other parties where MEC/MEHL are a purchaser or intermediary. This Entity List designation has become a favored tool in recent years to disrupt supplies of US products and technologies to targeted parties, such as Huawei and others.

Second, on March 25, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated MEC and MEHL as Specially Designated Nationals (“SDNs”) pursuant to Executive Order 14014 (“EO 14014”), a sanctions authority issued by President Biden on February 10, 2021 that authorizes the imposition of sanctions on certain Burmese parties in response to the February military coup. The SDN designation of MEHL and MEC means that:

  • US Persons (i.e. entities organized under the laws of the United States, US citizens, US permanent resident aliens, and persons physically located within the United States) are prohibited from dealing directly or indirectly with these two conglomerates.
  • In addition, under OFAC’s “fifty percent rule,” the prohibition extends to dealings by US Persons with any other entities in which MEHL and/or MEC own, directly or indirectly, 50% or greater interest in the aggregate.
  • Prohibited activities include exports (regardless of whether the item is subject to the EAR), imports, the provision or receipt of services, funds transfers, investments, etc. Any property and interests in property of these SDNs that come within the United States or within the possession or control of a US Person must be blocked and reported to OFAC.
  • Non-US persons can also be directly liable for causing violations by US Persons involving these SDNs, such as by engaging in transactions with these SDNs via US financial institutions or in US dollars.
  • Non-US persons also face the “secondary sanctions” risk of designation as an SDN themselves if found to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of MEHL or MEC.

OFAC also issued four general licenses (“GLs”) authorizing transactions that would otherwise be prohibited under EO 14014, including a wind-down license for transactions involving MEC or MEHL. The four GLs are, as follows:

  • GL No. 1 authorizes transactions and activities otherwise prohibited by EO 14014 that are for the conduct of the official business of the US Government.
  • GL No. 2 authorizes transactions and activities otherwise prohibited by EO 14014 that are for the conduct of the official business of the United Nations, the International Centre for Settlement of Investment Disputes, International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies, the Association of Southeast Asian Nations, and several other organizations, including a number of development banks.
  • GL No. 3 authorizes NGOs to engage in transactions and activities otherwise prohibited by EO 14014 that are ordinarily incident and necessary to activities in support of a range of humanitarian, democracy building, educational, non-commercial development, and environmental and natural resource protection activities in Burma. The authorized transactions include the processing and transfer of funds, the payment of taxes, fees, and import duties, and the purchase or receipt of permits, licenses, or public utility services.
  • GL No. 4 authorizes transactions and activities otherwise prohibited by EO 14014 that are “ordinarily incident and necessary to the wind-down” of transactions involving MEC, MEHL, or any entity in which MEC or MEHL directly or indirectly owns a 50% or greater interest, through 12:01 AM EDT on June 22, 2021.

The following points in OFAC’s FAQs concerning the scope of the GLs are noteworthy:

  • FAQ 883 indicates that for the duration of GL No. 4, non-US persons may wind down transactions involving MEC, MEHL, or any entity in which MEC or MEHL directly or indirectly owns a 50% or greater interest, without exposure to secondary sanctions under EO 14014, provided that such wind-down activity is consistent with GL No. 4. It also provides that wind-down transactions may be processed through the US financial system or involve US Persons as long as the transactions comply with GL No. 4’s terms and conditions. Finally, the FAQ also encourages persons unable to wind down transactions prohibited by EO 14014 prior to the expiration of GL No. 4 to seek formal guidance from OFAC.
  • FAQ 882 indicates that GL No. 2’s reference to the United Nations’ “Programmes, Funds, and Other Entities and Bodies, as well as its Specialized Agencies and Related Organizations,” should be construed with referenced to the United Nations’ system chart.

Additional Export Controls for Burma

Effective March 8, 2021, BIS amended the EAR to apply significant restrictions on exports, reexports, and transfers (in-country) to Burma in general. These changes were anticipated in an earlier February 17, 2021 notice, and include the following:

  • Burma was moved from Country Group B to the more restrictive Country Group D:1 in Supplement No. 1 to Part 740 of the EAR. This change, inter alia, removes or limits the availability of certain license exceptions for Burma, including: Shipments of Limited Value (LVS) (EAR §740.3); Shipments to Group B Countries (GBS) (EAR §740.4); Technology and Software under Restriction (TSR) (EAR §740.6); Temporary Imports, Exports, Reexports and Transfers (in-country) (TMP) (EAR §740.9 (b)); Servicing and Replacement Parts and Equipment (RPL) (EAR §740.10(a)(4) and (b)(3)(ii)(C)); Aircraft, Vessels, and Spacecraft (AVS) (EAR §740.15(b) and (c)); Additional Permissive Reexports (APR) (EAR §740.16(j)); and Encryption Commodities, Technology, and Software (ENC) (EAR §740.17(b)(2)(iv)(B)). The move to Country Group D:1 also subjects Burma to the restrictions in EAR §744.17 on exports, reexports, and transfers of certain microprocessors to military end users and end uses in Country Group D:1.
  • Significantly, Burma is now subject to the “military end use” and “military end user” (“MEU”) restrictions in § 744.21 of the EAR alongside the People’s Republic of China, Russia and Venezuela. A BIS license will now be required for the export, reexport, or transfer (in-country) of certain items specified in Supplement No. 2 to Part 744 of the EAR to Burma when the exporter, reexporter, or transferor has knowledge that the item is destined for a “military end use” or “military end user” in Burma. Applications submitted to BIS for the export, reexport, or transfer (in-country) to Burma of items identified in Supplement No. 2 to Part 744 will be reviewed with a presumption of denial. (The recently-implemented military intelligence end user and end use provisions in EAR §744.22 do not yet apply to Burma.)
  • Burma has also been moved from Computer Tier 1 to the more restrictive Computer Tier 3.  As a Computer Tier 3 country, Burma is only eligible for exports and reexports of certain technology and source code under License Exception Computers (APP), compared with the range of computers, technology and source code available to Computer Tier 1 countries.
  • In addition to MEC and MEHL, the Burmese Ministry of Defense and Ministry of Home Affairs were also added to the BIS Entity List in the same March 8, 2021 action described above. Exports, reexports and transfers (in-country) of all items subject to the EAR to those entities or in which they are a party now require a license and are subject to a presumption of denial. No EAR license exceptions are available for these four entities. Unlike with the OFAC SDN designation, the BIS Entity List restrictions only apply to the named entities, although BIS expects companies to take extra due diligence steps to ensure that items are not ultimately destined for the named, listed entity, and the affiliate is a separate legal entity (as opposed to a branch or operating division.)

Please see also our prior blog post on EO 14014 and the Burma-related sanctions and export controls put in place by the Biden Administration in February 2021.


Alison Stafford Powell has considerable experience counseling US and non-US companies on cross-border outbound trade compliance in the areas of export controls, trade and financial sanctions, anti-terrorism controls, anti-corruption and anti-money laundering rules, US anti-boycott laws, and US foreign investment restrictions under the Exon-Florio Provision. With a background also in EU and UK trade restrictions, she routinely advises non-US companies on reconciling US and EU trade regulations and on the extra-territorial impact of US trade restrictions. She is a dual US/English qualified lawyer and has worked in the Firm’s London, Washington, DC and Palo Alto offices since 1996.


Terry Gilroy is a partner in the New York office of Baker McKenzie and a member of the Compliance and Investigations Practice Group. Prior to joining the Firm in 2018, Terry served as Americas Head of the Financial Crime Legal function at Barclays. Terry advises businesses and individuals on white collar and financial crime issues and has significant experience conducting investigations relating to compliance with the US Foreign Corrupt Practices Act (FCPA) and related bribery and corruption statutes, economic sanctions regulations as administered by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), and the Bank Secrecy Act and related anti-money laundering (AML) regulations and statutes. Terry spent six years on active duty in the United States Army as a Field Artillery officer.


Eunkyung Kim Shin is an associate of Baker McKenzie’s International Commercial Practice Group and the International Trade Compliance Sub-Practice Group in the Chicago office. Eunkyung advices clients on various regulatory compliance and trade issues, concentrating on the US export controls such as the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR), economic and trade sanctions, US customs and import laws, the US Foreign Corrupt Practices Act (FCPA), and foreign anti-bribery laws.


Daniel Andreeff is an associate in the Firm’s International Trade practice group in Washington, DC. Prior to joining the Firm, he interned with the Department of the Treasury’s Office of Foreign Assets Control.


Ryan Poitras is a member of the Firm's International Trade Practice Group in our Washington, DC office. He joined the Firm as a summer associate in 2018 and became a full-time associate in 2019. Ryan’s experience also includes working as an intern with the Office of the US Trade Representative.