The European Union (EU) imposed sanctions on Monday against a lucrative state-owned oil and gas company that has provided major funding to Myanmar’s military, which seized power from an elected civilian government in a coup more than a year ago.
The action makes the EU the first international entity to introduce such a measure against the junta.
It was part of the bloc’s latest punitive measures against companies—both state-owned and private—as well as 22 officials within the coup regime, bringing the total number of designated persons to 65 and corporate entities to 10. The EU has also frozen the European assets of and imposed travel bans on the named individuals.
“The European Union is deeply concerned by the continuing escalation of violence in Myanmar and the evolution towards a protracted conflict with regional implications. Since the military coup, the situation has continuously and gravely deteriorated,” an EU statement issued on Monday said.
It also said that the newly designated entities and junta officials—among whom are military generals—are responsible for or contribute to the junta’s undermining of both democracy and rule of law in Myanmar.
The four sanctioned companies were the state-owned Myanma Oil and Gas Enterprise (MOGE) and the No. 1 Mining Enterprise (ME1), and two private conglomerates: the Htoo Group of Companies and International Group of Entrepreneurs (IGE). Both the Htoo Group and IGE provide support to or work with the junta’s businesses, the EU stated.
In September, the UK government also imposed sanctions against the Htoo Group and its owner, Myanmar tycoon Tay Za, for providing arms and financial support to the military.
IGE—one of Myanmar’s largest conglomerates, with involvement in the oil and gas, energy, hotel and banking industries—is owned by two sons of the late Aung Thaung, a retired army colonel with close ties to leaders of Myanmar’s former ruling junta. He was targeted by US sanctions in 2014. Another of his sons, Moe Aung, is the junta’s current navy chief.
The MOGE owns stakes in all oil and gas projects in Myanmar through joint partnerships with foreign energy giants, including France’s Total and the US’s Chevron. Last month, the two companies, which partially own the Yadana offshore gas project, said they were withdrawing from the country over concerns surrounding escalating violence in the country under the coup regime.
Nearly one week later, Australia’s Woodside Energy also announced its withdrawal from all of its offshore projects, including the A-6 block in the Rakhine Basin. Petronas and Mitsubishi Corporation also announced their withdrawal from the Yetagun gas project in the country last week.
Since the Myanmar military took control of MOGE after last year’s coup, it has been earning considerable revenue through the company’s oil and gas projects, the EU said.
The sanctions on MOGE came after intense campaigning by human rights activists who have urged foreign governments, notably the US and EU member states, to adopt such measures in order to cut off the sector’s funding to the military. Myanmar was projected to earn 2.305t kyat (around US$1.5b) from oil and gas during the current fiscal year, according to an official forecast made prior to the coup which saw oil and gas accounting for more than 10 percent of total government revenue.
Campaign group Justice For Myanmar (JFM) welcomed the EU’s sanctions on MOGE, which it described as “the junta’s biggest single source of revenue, responsible for financing its terror campaign,” and marked the move as a “historic win for grassroots activism throughout Myanmar and around the world.”
“Sanctions on MOGE are essential to deny the junta the funds it needs to finance its increasing and intensifying violent attacks against civilians, which amount to war crimes and crimes against humanity,” JFM spokesperson Yadanar Maung said.
She urged other international governments to follow suit and introduce their own sanctions on MOGE, as well as other military-controlled businesses and their associates.
“EU sanctions against IGE should send a strong message to POSCO International and Lotte Hotels & Resorts, which continue to partner with IGE in the Lotte Hotel project, on land leased from the Office of the Quartermaster General,” she said in a statement, referring to Korean companies with continued ties to Myanmar’s military and the newly sanctioned private company IGE.
Burma Campaign UK said the EU’s move is “particularly significant,” as previous sanctions imposed by the US and EU on Myanmar have excluded the oil and gas industry.
Anna Roberts, the campaign group’s executive director, said in a statement following the announcement that the EU must now ensure European companies are not helping “to fund and arm the Burmese military.”
“The European Union must also sanction aviation fuel. Airstrikes by Burmese military jets and helicopters have forced hundreds of thousands of people from their homes and created a humanitarian crisis,” she said.
In an interview with news outlet Bloomberg, junta spokesperson Zaw Min Tun downplayed the EU measures, predicting that the move would not have a substantial impact.
“When it comes to sanctions there are companies that strictly follow them, but there are also companies that neglect them,” he is quoted as saying. “But there is one thing, we are likely to face some difficulties in bank transactions, so we have to address some bank issues, more or less.”
