Japan firm got U.S. sanctions exemption to pay Myanmar military company - Japanese official

Yokogawa Bridge Holdings

27/01/2023 17:08

By Sakura Murakami and Simon Lewis
       TOKYO/WASHINGTON, Jan 27 (Reuters) - A Japanese
construction firm was granted an exemption by the U.S.
government to make payments to a Myanmar military-owned company
despite sanctions aimed at cutting off the Myanmar junta that
seized power in a coup from sources of revenue, a Japanese
official said on Friday.
    The payments relate to work on a Japanese government-funded
bridge in Myanmar's commercial hub of Yangon that was approved
before the Feb. 1, 2021, coup that plunged the Southeast Asian
country into deadly chaos.
    The U.S. Treasury Department said it could not confirm
whether it granted a license for Japanese company Yokogawa
Bridge Corporation to pay the Myanmar Economic Corporation
(MEC), which would be the first publicized exemption to
sanctions issued against junta-linked businesses since the
putsch.
    A Japanese foreign ministry official, who requested
anonymity to speak about discussions with a private company,
said the construction firm Yokogawa Bridge Corporation had
discussed the project with U.S. authorities.
    "They were able to continue the project because the U.S.
authorities agreed to make an exception for the sanction in this
case," the official told Reuters, declining to comment on why
the exception was granted.
    The Myanmar military, accused of widespread human rights
abuses in its bloody crackdown on opponents to the coup, has
been hit by new Western sanctions, including against MEC, which
the U.S. Treasury Department designated in March 2021. 
    Human Rights Watch (HRW) said it analyzed financial
transactions that show Yokogawa Bridge Corporation paid MEC
about $1.3 million from July to November 2022. The campaign
group said the payments were transferred through Japan's Mizuho
Bank Ltd  MZFGAE.UL , part of a major Japanese holding company
that has offices globally.
    Parent company Yokogawa Bridge Holdings Corp  5911.T 
declined to comment, saying the company does not comment on
individual contracts. Mizuho Bank Ltd also declined to comment.
    The payments "effectively helped fund junta atrocities,"
Teppei Kasai, Asia program officer at HRW, said in a report
published on Monday, calling on the Japanese government to
ensure it is no longer providing non-humanitarian development
assistance to the junta.
    Since the coup, Tokyo has halted new aid to Myanmar and
called on the military to stop the violence but its response has
been more restrained than the strict sanctions imposed by the
United States, European Union and others.
    Japan's late former Prime Minister Shinzo Abe announced
plans to provide a 31 billion yen ($239 million) development
loan for the 3 kilometer (1.86 mile) bridge in 2016. 
    A U.S Treasury spokesperson said they could not confirm or
deny the existence of any sanctions license or application,
which are granted on a case-by-case basis and determined by U.S.
foreign policy and national security concerns.
    "We are deeply concerned about the deterioration of human
rights in Burma and are in close contact with Japan regarding
the situation there," said the spokesperson. 
 (Reporting by Sakura Murakami in Tokyo and Simon Lewis in
Washington; Editing by Daniel Wallis)
 ((simon.lewis@thomsonreuters.com; +1 (202) 680-0055;))