Myanmar: Japanese NGOs alert investors in Y Complex development risk violating US sanctions, demanding responsible disengagement
"Japanese investors in Y Complex development risk violating US sanctions" 20 December 2021
Several Japanese companies that are investors in Y Complex, a mixed-use real estate development on land controlled by Myanmar’s military, risk breaching US sanctions imposed against military entities for their role in human rights abuses.
On December 10, 2021, the US, UK and Canada imposed sanctions on the Office of the Quartermaster General of the Myanmar army, in response to the unlawful February 1, 2021, attempted coup. The Office of the Quartermaster General (QMG) is a key entity that oversees the Myanmar military’s business interests.
According to the UK sanctions list, the QMG “plays a crucial role in procuring equipment for the Myanmar Armed Forces, including ammunition, bombs and jet fuel. This directly enables serious human rights violations, and the repression of the civilian population including peaceful protestors and ethnic minorities”
Japanese companies, including Daiwa House Industry subsidiary Fujita Corporation, Tokyo Tatemono and the Japanese government, private sponsored infrastructure fund Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN), pay over US$1.8 million in rent in US dollars to the QMG annually, which could violate US sanctions if they are found to be materially assisting a sanctioned entity.
The policy-based financial institution Japan Bank for International Cooperation (JBIC) and the banks Sumitomo Mitsui Banking Corporation and Mizuho Bank are co-financing the project through a US$144 million loan.
The project has been suspended following the military’s attempted coup, and the sanctions risk may apply if payments in US dollars resume.
The Government of Japan must end its complicity in human rights abuses in Myanmar by halting its business with the military junta and its conglomerates, including in the Y Complex project. Y Complex investors and creditors should also avoid the risk of breaching sanctions, and fulfil their human rights responsibilities under the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, by responsibly disengaging from their business with the QMG.