Guest contributor
James H. Shwe
Ask 10 people in Myanmar what “sanctions” means and you may get 10 different answers.
For some, the word recalls the early 2000s, when garment factories closed and young women lost their jobs.
For others, it means a list of generals who can no longer shop in Singapore.
The military’s spokesmen add to the confusion by blaming sanctions for every shortage, from fuel to medicine.
Before we argue about whether sanctions work, we should be clear about what they are today, what they have achieved and who bears their cost.
Today’s sanctions are mostly targeted. They name specific people, companies and sectors connected to the military, and they bar foreign banks and businesses from dealing with them.
They are not a trade embargo on Myanmar. No Western government bans the purchase of Myanmar rice, beans or garments.
The European Union stopped short of withdrawing Myanmar’s preferential trade access after the coup, out of concern for garment workers, most of them young women.
The targets are the sources of the military’s money and weapons. The first is its two business empires, Myanma Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC).
The U.N. Fact-Finding Mission identified 106 businesses owned by the two companies and 27 close affiliates, in sectors from beer and jade mining to telecoms, and found that their revenue supports military operations marked by grave abuses.
Canada listed both as early as 2007, and the U.S, U.K. and the E.U. followed in 2021. Next come the state banks the military used to pay for arms and other supplies from abroad.
In June 2023, the U.S. sanctioned Myanma Foreign Trade Bank and Myanma Investment and Commercial Bank, which Canada and Australia also sanctioned.
Then there is gas revenue: the E.U. listed the state oil and gas company, MOGE, in 2022, and the United States barred American financial services to it from December 2023.
Since then, several governments have also sanctioned the companies, ships and insurers that supply jet fuel to the air force.
Arms embargoes and the blacklist of the Financial Action Task Force (FATF), the international body that sets standards against money laundering, complete the picture.
Sanctions are not aimed at farmers, workers or families. American rules automatically allow aid groups to carry out humanitarian, health, food, education and peacebuilding work and U.S. law exempts food and farm goods.
The E.U. exempts funds needed for humanitarian aid, and the U.K. has issued a general licence for humanitarian work. This design came from hard experience.
In 2003, the U.S. banned all imports from Myanmar. More than 100 garment factories closed and 50,000 to 60,000 people lost their jobs, most of them young women, while the generals kept earning from gas sold to Thailand.
Broad bans hurt the public and spare the powerful. Today’s measures try to do the opposite.
Do they work? The strongest argument against them is simple. Five years after the coup, Min Aung Hlaing is still in power, now with the title of president.
Airstrikes have not stopped, and political prisoners remain in jail. That much is true.
Sanctions have not changed the generals’ minds, and on their own they probably never will.
But that is the wrong test. Their realistic job is to limit what the military can do: to make weapons, fuel and dollars harder and more expensive to get, and to deny the regime the legitimacy it craves.
Judged that way, the evidence is clearer. After the 2023 bank sanctions, the value of arms and related supplies the military bought through the formal banking system fell by a third, from $377 million to $253 million USD, in the year that followed.
When Singapore tightened enforcement, the flow of weapons materials from Singapore-registered companies fell by nearly 90 per cent.
The E.U.’s listing of MOGE cut off at least $500 million USD, according to a joint statement by 240 organizations.
The military adapted, and the way it adapted shows where the gaps are.
Business linked to the military at Thailand’s Siam Commercial Bank rose from about $5 million to more than $100 million USD in one year.
Money also moved to Myanma Economic Bank (MEB), which only Canada sanctions; the value of its transactions grew from less than $80 million to $495 million USD.
Jet fuel came from Iran: about 175,000 tons arrived on sanctioned tankers between October 2024 and December 2025, some of it labeled as diesel.
And Thailand’s payments for pipeline gas, at least $660 million USD, kept flowing because Thailand is outside every Western measure.
Each workaround costs the military money in middlemen’s fees, higher prices, delays and risk. Deaths from air strikes still rose by more than half, from 641 in 2024 to 982 in 2025.
That shows the gaps, not the futility of the tool: the fuel is coming from known places, on known ships, through known paperwork tricks.
The regime’s own behavior is further evidence. If it truly did not care about sanctions, it would not spend millions trying to escape them.
A month after the coup, it signed a $2 million USD contract with the lobbyist Ari Ben-Menashe, whose brief included seeking the “removal or modification” of sanctions.
He later put the work on hold because, he said, sanctions stopped him from being paid. In 2025 the regime hired DCI Group for $3 million USD to work on “rebuilding relations” with Washington.
Who pays, then? Ordinary families do feel some effects, and those of us who support sanctions should say so plainly.
When the state banks were sanctioned in 2023, the kyat fell and import prices rose.
The FATF blacklist leads cautious foreign banks to refuse or delay transfers they could lawfully process, and aid organizations report delayed, frozen and returned payments. The regime turns this into a weapon.
It uses anti-money-laundering rules as a pretext to push people into its own banking system, and since 2023 it has revoked 194 money-changer licenses and pressured families who rely on hundi, the informal transfer network that in many areas is the only way to receive money.
But most of the economic pain comes from elsewhere. The regime finances its deficits by printing money, keeps an official exchange rate of 2,100 kyat to the dollar while migrant workers’ remittances are converted at close to 4,000, and forces exporters to convert part of their earnings at the low official rate.
The war has cut roads and trade routes. The 2026 fuel crisis came from the closure of the Strait of Hormuz, and the collapse in aid came mainly from the 2025 cuts in U.S. foreign aid, neither of which is a sanction.
Even the new U.S. Embassy strategy for Myanmar blames the “state-planned economy” and the lack of hard currency, not sanctions, for blocked import licenses.
In the liberated areas, the balance is mostly positive. Air attacks are the leading cause of civilian deaths: of 1,241 civilian deaths verified in the most recent U.N. reporting period, 845 were caused by aircraft, drones and other air attacks.
Every barrier to jet fuel, aircraft parts and dollars for weapons is, in principle, a barrier to bombing.
The one Western-backed measure that clearly hurts these communities is the FATF blacklist, because it makes hundi riskier and gives the regime cover to crack down on it.
So when someone says “sanctions are starving the people,” the right response is not to deny all harm. It is to ask which measure is causing it, through which channel, and what the fix is.
A blocked remittance calls for clear guidance from governments to banks that family and aid transfers are lawful and expected. On October 30, FATF itself said these flows must be “neither disrupted nor discouraged” and that it would watch for “undue scrutiny” of them; that commitment should be enforced, especially when FATF considers countermeasures in February 2027.
A rice exporter’s problem with the exchange rate has to be fixed in Naypyidaw, not Washington. And the gaps should be closed: list Myanma Economic Bank, work with Thailand to hold gas money in a protected account so the gas keeps flowing but the money stays out of the military’s hands, and act together against the tankers, insurers and brokers that carry jet fuel.
Sanctions have not changed the generals. They have made the war harder and more expensive to wage, and the regime’s spending to escape them shows that it feels the cost.
Lifting them would fix none of the problems families face. What families need is for the side effects to be repaired and the gaps that let money and fuel through to be closed.
James H. Shwe is a Myanmar American advocate for democracy in Myanmar and an independent policy analyst based in California.
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