The U.S. departments of Commerce, State, Treasury, Homeland Security, and Labor, along with the Office of the U.S. Trade Representative, are again warning U.S. companies about the continued risks of potential exposure to or involvement in operations or supply chains tied to the military regime that overthrew Burma’s elected government in February 2021.
This supplemental business advisory builds on a previous advisory issued in January 2022 by highlighting additional sectors and activities of concern, as well as the actions taken under various federal and multilateral authorities to address destabilizing conduct involving the military regime or private entities located in Burma. It is intended to inform individuals, businesses, financial institutions, and other persons, including investors, consultants, non-governmental organizations, and due diligence service providers, of the continued risks and considerations for businesses and individuals with exposure to entities responsible for undermining democratic processes, facilitating corruption, and committing human rights and labor rights abuses in Burma.
The supplemental business advisory lists (1) rare earth elements, (2) base metals and gold, (3) timber, and (4) aviation services, components, and fuel as additional sectors of concern, as well as (1) potential diversion to military end uses and end users, (2) financial and related services to state-owned banks, and (3) ongoing abuses of Burmese workers’ internationally recognized labor rights as additional activities of concern. The advisory asserts that these economic sectors generate revenue for the military, often operating under state monopolies or monopoly-like concessions, and/or are linked with corruption and human rights or labor rights abuses. Businesses and individuals are therefore advised to be wary of reputational, economic, and legal risks associated with conducting business and utilizing supply chains involving these sectors and activities because of their links to Burma’s military.
The advisory adds that conducting business in Burma may also be complicated by ongoing deficiencies in that country’s anti-money laundering and counter financing of terrorism framework and focuses specific attention on labor rights abuses and the risk of diversion of computer chips and other export-controlled products from Burma to military end users in China and Russia.
In light of these concerns, the U.S. government is advising businesses and individuals with potential exposure to, or involvement in operations or supply chains tied to, the Burmese military regime to continually review sanctions measures imposed with respect to Burma. The advisory cautions that businesses and individuals that do not conduct appropriate due diligence run the risk of engaging in conduct or transactions that may expose them to significant reputational, financial, and legal risks, including violations of U.S. sanctions and export controls.
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