The United States imposed sanctions on Myanma Oil and Gas Enterprise (Moge) on Tuesday, the first time it has directly targeted the entity that is Myanmar’s ruling junta’s main source of foreign revenue.
The action, first reported by Reuters, prohibits certain financial services by Americans to the state oil and gas enterprise starting on 15 December, the treasury department said in a statement. Financial services include loans, accounts, insurance, investments and other services, according to treasury guidance.
The move represents the US’s first direct action against the state-owned enterprise. Washington has previously targeted its leadership.
The oil and gas industry is the biggest source of foreign-currency revenue to Myanmar’s murderous junta, bringing in $1.72bn in the six months to 31 March 2022 alone, according to the junta’s figures. Junta-controlled Moge acts as the primary gatekeeper to the country’s oil and gas assets.
Since the coup in February 2021 more than 4,162 people have been killed by the junta and pro-military groups and 25,363 have been arrested, according to Assistance Association for Political Prisoners. The United Nations special rapporteur on Myanmar has said the regime is “committing war crimes and crimes against humanity daily”.
Some of the world’s biggest oil and gas service companies have continued to make millions of dollars from operations that have helped prop up the military regime, according to a joint investigation of documents obtained by Distributed Denial of Secrets and analysed by the Guardian, the Myanmar activist group Justice for Myanmar and the investigative journalism organisation Finance Uncovered.
While the new sanctions will complicate business dealings with Moge, Washington held back from adding the enterprise to the specially designated nationals list, which would effectively kick it out of the US banking system, ban its trade with Americans and freeze its US assets.
“The US financial services directive against Moge is a welcome step to disrupt the significant flow of funds to the junta from the oil and gas sector,” said Yadanar Maung, a Justice for Myanmar spokesperson.
“The US should continue to target the junta’s sources of revenue and arms, including through full sanctions on Moge that would also target the US corporations that have been supporting the maintenance and expansion of the very gas fields that finance atrocities.”
Senator Jeff Merkley, who has led efforts to impose stricter sanctions on the junta, said: “Imposing targeted sanctions on the Myanma Oil and Gas Enterprise is a step in the right direction. However, to more effectively blunt the Burmese military junta’s ability to purchase the weapons it is using to brutalize its own people, we must fully cut off revenues from Moge to the junta.”
Washington also slapped sanctions on three entities and five people who the US treasury department said were connected to Myanmar’s military, according to the statement, in action coordinated with the United Kingdom and Canada.
“Today’s designations close avenues for sanctions evasion and strengthen our efforts to impose costs and promote accountability for the regime’s atrocities. We continue to encourage all countries to take tangible measures to halt the flow of arms, aviation fuel and revenue to the military regime,” the US secretary of state, Antony Blinken, said in a separate statement.
Myanmar’s embassy in Washington did not immediately respond to a request for comment. Reuters was unable to reach Moge for comment.
Myanmar has been in crisis since a 2021 military coup and a deadly crackdown that gave rise to a nationwide resistance movement that won the backing of several ethnic minority armies.
Rights groups and United Nations experts have accused the military of committing atrocities against civilians in its efforts to crush the resistance. The junta says it is fighting “terrorists” and has ignored international calls to cease hostilities.
“Today’s action … maintains our collective pressure on Burma’s military and denies the regime access to arms and supplies necessary to commit its violent acts,” the treasury’s undersecretary for terrorism and financial intelligence, Brian Nelson, said in the statement, using the south-east Asian nation’s former name.
“We remain committed to degrading the regime’s evasion tactics and continuing to hold the regime accountable for its violence.”
The UN human rights expert for Myanmar in September called on the United States to further tighten sanctions on the country’s military rulers to include the state oil and gas enterprise.
Human rights advocates have repeatedly called for sanctions on Moge, but Washington had so far held back.
Washington in June issued sanctions against the state-owned Myanmar Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB), which allowed the junta to use foreign currency to buy jet fuel, parts for small arms production and other supplies.
Myanmar military officials have played down the impact of sanctions.
Reuters contributed reporting
