On January 26, 2024, the Office of the U.S. Trade Representative (USTR) released a Supplemental Business Advisory highlighting continued risks and exposure of doing business in Burma. In January 2022, the U.S. Departments of State, the Treasury, Commerce, Homeland Security, Labor and the USTR first published a business advisory on heightened risk of doing business in Burma after the 2021 military coup (see Thompson Hine Update of February 14, 2022). This supplemental advisory builds on the previous advisory, and “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 notes the following additional sectors and activities are of concern within Burma:
Sectors of concern:
- Rare earth elements;
- Base metals and gold;
- Timber; and
- Aviation services, components, and fuel.
The Supplemental Business Advisory indicates 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.” The advisory provides brief overviews of these economic sectors and cautions U.S. businesses “to be on the lookout for direct and indirect linkages to Burma’s military regime and to sanctioned Burma individuals and entities” when sourcing materials and products from Burma. It notes that businesses and individuals “should 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.”
Activities of concern:
- Potential diversion to military end uses and end users;
- Financial and related services to state-owned banks; and
- Ongoing abuses of Burmese workers’ internationally recognized labor rights.
The Supplemental Business Advisory also reiterates concerns over various deceptive activities when conducting business in Burma. It notes that continuing diligence for potential diversion is necessary since Burma’s military operates “an extensive network of corporate affiliates that are often registered in Thailand, Singapore, India, and the UAE,” in addition to Burma. It also indicates that Burma’s state-owned banks and other enterprises can “offer access to foreign markets for revenue generation,” and can enable Burma’s Ministry of Defense and other sanctioned military entities to purchase arms and other materials from foreign sources. The advisory also serves as a reminder that since the 2021 coup, Burma’s military regime “has repeatedly denied citizens the human rights of peaceful assembly and freedom of association, exacerbating the longstanding and growing need for better labor rights protections in Burma.”
Finally, the advisory also notes continuing concern with money laundering due to “ongoing deficiencies in Burma’s anti-money laundering and counter financing of terrorism (AML/CFT) framework” and that U.S. businesses and individuals should remain vigilant in their “risk analysis, including evaluating their potential exposure to economic and legal risks that may include violations of U.S. AML laws and sanctions.”
For additional background and recent Thompson Hine updates on U.S. restrictions on Burma, please see our other Burma updates here.