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Bangladesh bank freezes accounts belonging to U.S.-sanctioned Myanmar banks
Two Burmese banks had accounts with Sonali Bank totaling U.S. $1.1 million in deposits.
- By Reyad Hossain for BenarNews
2023-08-16
Bangladesh’s Sonali Bank has frozen accounts of two Myanmar state-owned banks due to U.S. sanctions against them, its chief executive officer said Wednesday.
Confirmation of the action came after the United States Embassy in Dhaka sent a letter to the government requesting that Bangladesh comply with such sanctions, which was then forwarded to the Bangladeshi state-owned bank, according to documents seen by BenarNews.
But Md. Afzal Karim, Sonali Bank’s chief executive officer and managing director, said action had already been taken against the accounts of Myanma Foreign Trade Bank and Myanma Investment and Commercial Bank. He did not say exactly when.
“We have already frozen the accounts of the two banks due to the OFAC sanction,” Karim told BenarNews on Wednesday, referring to the Office of Foreign Assets Control, an agency under the U.S. Treasury Department that enforces sanctions.
Karim said the two Myanmar banks had total deposits of US$1.1 million in Sonali Bank.
“This money cannot be transacted [on],” he said.
“For more than a month, the accounts of the two banks [in Sonali Bank] are not being used for any transactions.”
Karim said that after Sonali Bank had frozen the accounts, the Myanmar junta had requested Bangladesh to make the accounts available for transaction.
“We were requested by Myanmar to open the account. However, it will not be possible to open until the sanction is lifted,” Karim said.
He said he was relieved that Sonali Bank did not have a large amount of funds in accounts in the two sanctioned Myanmar banks.
“We don’t have much money there. One bank has 17,000 euros, another has [200,000] dollars,” he said. “They have more money with us.”
In June, Washington announced its sanctions against three entities, including the two banks controlled by the Burmese military, which overthrew an elected government in February 2021.
The U.S. Treasury said the two banks “facilitate much of the foreign currency exchange within Burma and enable transactions between the military regime and foreign markets, including for the purchase and import of arms and related materiel.”
Since the military coup, the Burmese junta has cracked down on mass protests, killed nearly 4,000 people and arrested thousands more, according to human rights groups. The United Nations said more than 1.8 million people had been forced to flee their homes in Myanmar because of violence since the coup.
The United States, in a letter to the Bangladesh foreign ministry dated Aug. 3, reminded it of the sanctions on the two Myanmar banks and urged Dhaka to “take appropriate action.” The ministry then sent a letter to Sonali Bank, the Ministry of Finance and the Central Bank of Bangladesh informing them about the U.S. embassy letter.
“On June 21, we imposed sanctions on three entities in response to atrocities and other abuses that the regime committed against the people of Burma,” according to an excerpt from the embassy’s letter.
“These designations reinforced our objectives of denying the regime access to foreign currency and further preventing the regime from purchasing arms that could be used to commit atrocities and other abuses.”
BenarNews contacted the U.S. embassy in Dhaka for details but did not immediately hear back.
Bangladesh-Myanmar trade is small. The South Asian country mainly exports potatoes, biscuits and plastic products to Myanmar, and imports items such as wood, frozen fish, ginger and onions.
In fiscal year 2022, Bangladesh imported goods worth around $128.5 million from Myanmar, its next-door neighbor, and exported items worth $3.9 million to Myanmar.
The U.S. sanction on the two Myanmar banks that have accounts in Sonali Bank should not be a financial burden on Bangladesh, said Syed Mahbubur Rahman, managing director of Mutual Trust Bank.
“Since Bangladesh does not have a large amount of business with Myanmar, there will not be a significant bottleneck due to this reason,” he told BenarNews. “There is no reason to worry about it.”
