By Sakura Murakami and Simon Lewis
TOKYO/WASHINGTON (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, part of a major Japanese holding company that has offices globally.
Parent company Yokogawa Bridge Holdings Corp 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)
