US targets Myanmar’s state oil and gas enterprise with form of sanctions

By Simon Lewis and Daphne Psaledakis

WASHINGTON (Reuters) -The U.S. on Tuesday imposed a form of sanctions on Myanma Oil and Gas Enterprise (MOGE), the U.S. Treasury Department said, but stopped short of imposing full blocking sanctions on the ruling junta’s main source of foreign revenue.

The action, first reported by Reuters, prohibits certain financial services by Americans to the state oil and gas enterprise starting on Dec. 15, the Treasury said in a statement, in the first direct action against the state-owned enterprise. Washington has previously targeted its leadership.

Financial services include loans, accounts, insurance, investments and other services, according to Treasury guidance.

Washington held back from adding the enterprise to the Specially Designated Nationals list, which would effectively kick it out of the U.S. banking system, ban its trade with Americans and freeze its American assets.

Washington also slapped sanctions on three entities and five people whom the U.S. Treasury Department said were connected to Myanmar’s military, according to the statement, in action coordinated with Britain and Canada.

“Today’s designations close avenues for sanctions evasion and strengthen our efforts to impose costs and promote accountability for the regime’s atrocities. We continue to encourage all countries to take tangible measures to halt the flow of arms, aviation fuel, and revenue to the military regime,” U.S. Secretary of State Antony Blinken said in a separate statement.

Britain added five individuals and one entity involved either in providing financial services to the regime or the supply of restricted goods including aircraft parts. Canada imposed sanctions against 39 individuals and 22 entities for supporting Myanmar’s military regime. Neither country mentioned MOGE in its announcement.

Myanmar’s embassy in Washington did not immediately respond to a request for comment. Reuters was unable to reach MOGE for comment.

Myanmar has been in crisis since a 2021 military coup and a deadly crackdown that gave rise to a nationwide resistance movement that won the backing of several ethnic minority armies.

Rights groups and United Nations experts have accused the military of committing atrocities against civilians in its efforts to crush the resistance. The junta says it is fighting “terrorists” and has ignored international calls to cease hostilities.

“Today’s action … maintains our collective pressure on Burma’s military and denies the regime access to arms and supplies necessary to commit its violent acts,” the Treasury’s Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement, using the Southeast Asian nation’s former name.

“We remain committed to degrading the regime’s evasion tactics and continuing to hold the regime accountable for its violence.”

The U.N. human rights expert for Myanmar in September called on the U.S. to further tighten sanctions on the country’s military rulers to include the state oil and gas enterprise.

Human rights advocates have repeatedly called for sanctions on MOGE, but Washington had so far held back.

“I welcome the long-overdue imposition of sanctions on the #Burma junta’s oil & gas enterprises. The junta uses the profits from these companies to commit human rights abuses against innocent Burmese people,” Senator Jim Risch, the top Republican on the Senate Foreign Relations Committee, said on social media.

U.S. oil major Chevron said in February it had agreed to sell its stake in an offshore gas joint venture that included MOGE.

Chevron is working to ensure the exit is conducted in a planned manner and in compliance to applicable laws and regulations, including trade sanctions, a spokesperson said on Wednesday.

Washington in June issued sanctions against state-owned Myanmar Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB), which allowed the junta to use foreign currency to buy jet fuel, parts for small arms production, and other supplies.

Myanmar military officials have played down the impact of sanctions.

MOGE provides hundreds of millions of dollars each year to the junta, according to the Treasury statement.

Washington also imposed sanctions on three entities it said have assisted the junta in importing arms, dual-use goods and other materials, including from Russian entities under U.S. sanctions, according to the statement.

Sky Royal Hero Company Limited, a Myanmar entity that the Treasury said contracted repair work from sanctioned Russian entities and has a relationship with a Myanmar defense procurement company already subject to U.S. measures, was among those targeted.

Five officials, including the Chief of General Staff for Myanmar’s Army, Navy and Air Force, were also targeted.

Tom Andrews, UN Special Rapporteur on the human rights situation in Myanmar, said Tuesday’s move by the U.S., Britain and Canada were important steps forward and called on UN member states to take stronger action to support the people of Myanmar.

“The announcement of a U.S. ban on financial services that benefit Myanmar Oil and Gas Enterprise (MOGE) will tighten the spigot on the junta’s single largest source of revenue,” Andrews said in a statement.

(Reporting by Simon Lewis and Daphne Psaledakis; additional reporting by Tim Gardner, Sarah Young and Ismail Shakil; Editing by Chizu Nomiyama, Rod Nickel and Marguerita Choy)