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GLOBAL SANCTIONS AND EXPORT CONTROLS BLOG

US Government Issues Supplemental Business Advisory for Myanmar

FEBRUARY 20, 2024 By ALISON J. STAFFORD POWELL, EUNKYUNG KIM SHIN AND ALEXANDRA KUMAR 5 MINS READ

On January 26, 2024, the US Departments of State, Treasury, Commerce, Homeland Security, and Labor, and the Office of the US Trade Representative published a Supplemental Business Advisory (“Supplemental Advisory&rdquo intended to highlight additional high-risk sectors and activities and update guidance for individuals, businesses, financial institutions, and other persons (e.g., investors, consultants, non-governmental organizations, due diligence service providers) regarding continued risks of doing business in Myanmar/Burma. The Supplementary Advisory incorporates significant sanctions developments against Myanmar since the previous advisory on similar topics was issued in 2022.

Our blog post on the 2022 advisory is available here.

Additional Sectors and Activities of Concern

The Supplemental Advisory primarily identifies additional sectors and activities of concern in Myanmar identified as generating revenue for the military (often via state monopolies or monopoly-like concessions) and as being linked with corruption and human rights or labor rights abuses. The sectors of concern include: (i) rare earth elements; (ii) base metals and gold; (iii) timber; and (iv) aviation services, components, and fuel. The activities of concern include: (i) potential diversion to military end uses and end users; (ii) financial and related services to state-owned banks; and (iii) abuses of workers’ labor rights. Below, we summarize the risks and mitigation recommendations provided by the Supplementary Advisory.

Sectors/Activities of Concern Risks Identified by the Supplemental Advisory Risk Mitigation Recommendations Provided by the Supplemental Advisory

Rare earth elements Extraction and export of rare earth elements, including heavy rare earths, to neighbouring countries; mislabeling rare earth elements from Myanmar as originating from mines in other nearby countries Businesses procuring rare earth elements and products from the Myanmar region should conduct enhanced due diligence to reduce the risks that such products (potentially marketed as Chinese-origin) originated in Myanmar. Businesses should request documentation of products’ origin.