IV. ARMS, MILITARY EQUIPMENT, AND RELATED ACTIVITY
The 2018 APG Myanmar (Burma) Mutual Evaluation found that arms trafficking and the illegal arms trade were major issues in Burma, indicating the involvement of military-affiliated militias, ethnic armed organizations, transnational organized crime groups, and corrupt officials. This has only worsened with the military coup.
In response, the UN General Assembly adopted a resolution on June 18, 2021, calling for a stop to the flow of arms to Burma, while also urging the military to restore the democratically elected government. The United States supported this resolution and encourages U.S. businesses and individuals to implement the screening measures necessary to ensure they do not facilitate trade or transactions related to the arms and defense sectors of Burma. The United States also has the authority to implement financial sanctions targeting foreign individuals and entities operating in the defense sector of Burma through E.O. 14014 and will not hesitate to use this authority.
Countries with entities that have previously sold or transferred arms and other military equipment, including dual-use goods, to Burma and have not subsequently enacted arms embargos include China, India, Israel, Japan, Democratic People’s Republic of Korea, the Philippines, Russia, Serbia, Singapore, South Africa, and Ukraine. These countries had previously sold or offered services related to ammunition ranging from small arms use to torpedoes and missiles, cameras and radios with military use, military grade vehicles including aircraft and automobiles, navigation and position system services for the military, and unmanned aerial vehicles with potential military uses.
In response to the February 2021 military coup, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a notice announcing a more restrictive review policy for certain license applications as well as several amendments imposing restrictions under the Export Administration Regulations (EAR), 15 C.F.R. Parts 730-774, on the export and reexport of items (commodities, software, and technology) subject to the EAR that are destined for Burma and/or certain entities located in Burma. Pursuant to the EAR, BIS regulates the export and reexport of U.S.-origin dual-use, purely commercial, and certain less-sensitive military items. In addition to U.S.-origin items, certain foreign-produced items are also subject to the EAR, if they meet a certain “de minimis” level of U.S.-origin content by value that is “controlled” to the destination in question (in the case of Burma, greater than 25 percent). On February 18, 2021, BIS issued a Federal Register notice announcing that it would review license applications for items destined for Burma’s Ministry of Defense, Ministry of Home Affairs, armed forces, and security forces under a presumption of denial. BIS also suspended the availability of four license exceptions for
items destined for Burma.
On March 8, 2021, BIS implemented new restrictions on Burma under the EAR, moving the country to a more restrictive country group (Country Group D:1), and subjecting it to “military end use” and “military end user” controls. On the same day, BIS added to the Entity List (Supp. No. 4 to Part 744 of the EAR)15 four entities—a military services entity and a security services entity responsible for the coup, and two commercial entities that are owned and operated by the military services entity. In a July 6, 2021, rule, BIS added to the Entity List four commercial enterprises providing the military with material support or revenue. Additionally, on April 9, 2021, BIS added Burma to the list of destinations subject to military intelligence end-use and end-user restrictions and identified the Office of Chief of Military Security Affairs (OCMSA) and the Directorate of Signal on an illustrative list of military-intelligence end-users. Exports of all items subject to the EAR require a license to military-intelligence end users in Burma.
All regulatory amendment (and one notice) issued by the Department of Commerce in response to the military coup may be found at Promoting Human Rights and Democracy (doc.gov).
BIS may act against any person (individual or entity) in connection with a violation of the EAR. As set forth in the Export Control Reform Act of 2018, 50 U.S.C. §§ 4801-4852, criminal penalties may include up to 20 years of imprisonment and up to $1 million in fines per violation, or both. Administrative monetary penalties may currently reach up to approximately $309,000 per violation or twice the value of the underlying transaction, whichever is greater. In general, the administrative monetary penalty maximum is adjusted for inflation annually. In order to disclose a potential violation of export controls administered by BIS under the EAR, please send an electronic transmission to BIS_VSD_INTAKE@bis.doc.gov and the BIS Confidential Lead/Tip Form or tip line (1-800-424-2980) as appropriate. To submit a request to BIS for a license, please refer to the BIS licensing website.
Actors engaged in business activities or transactions in or involving Burma should consider conducting heightened due diligence and ensure compliance with all applicable U.S. laws and regulations.