The United States has imposed new sanctions on Myanmar's defense ministry and two state-owned banks that it says facilitate transactions between the military government and foreign markets, including weapons and military equipment from Russia.
The US Treasury Department said in a statement that the Myanmar military relied on foreign sources, including sanctioned Russian entities, to purchase and import weapons, equipment and raw materials for weapons production.
Washington has accused the Department of Defense of importing at least $1 billion worth of goods and equipment since 2021.
The new restrictions, announced by the US Treasury Department’s Office of Foreign Assets Control on June 21, include blocking all US-related transactions with Myanmar’s Ministry of Defense, Myanmar Foreign Trade Bank (MFTB) and Myanmar Investment and Commercial Bank (MICB).
A February report by the US human rights group EarthRights International said the two banks were the Myanmar government's "foreign currency vaults" and were currently under government control.
According to EarthRights, Myanmar's military government relies on foreign currency to purchase jet fuel, parts for small arms production, and other supplies that cannot be purchased with Myanmar's kyat.
Myanmar Army (Tatmadaw) tanks parade during Armed Forces Day in Naypyitaw, Myanmar on March 27, 2021. Photo: Asia Times
“As a result, sanctions against MFTB and MICB could contribute significantly to cutting off the military regime’s access to foreign currency, especially if combined with strong enforcement,” the organization said.
Myanmar military government spokesman Zaw Min Tun said on June 20 that they were not worried about any new sanctions, as Myanmar had gone through sanctions before.
Mr. Zaw also said that the US is pushing Myanmar towards an economic and political crisis, and the new sanctions will not harm the country's economy because international banking services are also provided by local private banks and foreign bank branches.
“The US is doing this just to create economic and political difficulties. These will cause unnecessary delays as we move towards a multi-party democratic system,” Zaw said.
The US previously imposed sanctions on the two banks in 2003, but lifted them in 2016.
The sanctions announced on June 21 are the latest in a series of actions against the generals who overthrew the civilian government led by Aung San Suu Kyi in 2021.
The military government led by Min Aung Hlaing has struggled to stabilize an economy that shrank 18% last year and is now facing soaring inflation, a weakening currency and dwindling foreign reserves.
The Bangkok Business News quoted Thai sources as saying that the sanctions would affect the finances of Thailand and other countries in the region because of their connections with local banks .
Nguyen Tuyet (According to Reuters, Bloomberg)
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