Sanctions against military companies welcome but US must now stop Chevron from funding regime, say activists

The US and the UK announced sanctions against businesses owned by the Myanmar military on Thursday, almost two months after Senior General Min Aung Hlaing seized power in a coup and plunged the country into chaos. 

The US announced the measures against the military’s two major conglomerates, Myanma Economic Holdings Limited (MEHL) and the Myanmar Economic Corporation (MEC). The UK only announced sanctions against MEHL.  

The two companies account for a large majority of the Tatmadaw’s business empire, which covers mining, beer, timber, banking, construction, insurance and cigarettes, among other industries. 

Andrea M Gacki, Director of the US Treasury Department’s Office of Foreign Assets Control, said the sanctions targeted “the Burmese military’s control of significant segments of the Burmese economy, which is a vital financial lifeline for the military junta.”

UK Foreign Secretary Dominic Raab said: “Today’s sanctions target the military’s financial interests to help drain the sources of finance for their campaigns of repression against civilians.”

Activists welcomed the move but said governments must now act to ensure foreign oil companies with natural gas interests in Myanmar, such as Chevron, are not allowed to fund the regime. 

“The US should also impose sanctions to prevent Chevron paying gas revenues to the military,” said Anna Roberts, Executive Director at Burma Campaign UK.

The oil giant, along with France’s Total, South Korea’s Posco, and Malaysia’s Petronas, have come under increasing pressure to ensure that around $1bn in yearly revenues from natural gas projects in Myanmar do not end up in the hands of the coup regime. 

Payments from Total are likely to be the regime’s biggest source of tax revenue, activists at Justice For Myanmar said last month. 

Since the February 1 coup, a movement to boycott products made by military companies has gained momentum across Myanmar. Bars and shops have stopped selling Myanmar Beer; traders have destroyed batches of Red Ruby cigarettes, and people have been urged to throw away their Mytel SIM cards. 

Paul Donowitz, Myanmar Campaign Leader at the pressure group Global Witness, said the new sanctions were “an important step in cutting off key sources of funding to the military regime.” 

“MEHL and MEC provide vast amounts of revenues to the military, helping to enable its illegitimate power grab and fund its abuses against the people of Myanmar,” he said. 

The European Union must now follow suit with its own sanctions against the companies, and the UK should follow the US in sanctioning MEC, he added.  

Burma Campaign UK said in a statement that it was “essential” the British government “moves swiftly” to sanction MEC as well. 

“We welcome this long overdue action by the British government,” said Roberts. “We hope they will move swiftly to expand these sanctions to all military companies in order to stop British companies doing any form of business with the military, including providing financial and insurance services.”

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