US blocked Myanmar junta attempt to empty $1B New York Fed account

Washington DC (AdChoiceTV News) — Myanmar’s military rulers attempted to move about $1 billion held at the Federal Reserve Bank of New York days after seizing power on February 1, prompting US officials to put a freeze on the funds, according to three people familiar with the matter, including one US government official.

The transaction on February 4 in the name of the Central Bank of Myanmar was first blocked by Fed safeguards. US government officials then stalled on approving the transfer until an executive order issued by President Joe Biden gave them legal authority to block it indefinitely, the sources said.

A spokesman for the New York Fed declined to comment on specific account holders. The US Treasury Department also declined to comment.

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The attempt, which has not been previously reported, came after Myanmar’s military installed a new central bank governor and detained reformist officials during the coup.

It marked an apparent effort by Myanmar’s generals to limit exposure to international sanctions after they arrested elected officials, including de facto leader Aung San Suu Kyi, who had won a national election in November. The army seized power alleging fraud, claims that the electoral commission has dismissed.

A spokesman for Myanmar’s military government did not answer repeated calls seeking comment. Reuters was unable to reach officials at the central bank.

The United States, Canada, the European Union, and Britain have all issued fresh sanctions following the coup and the army’s subsequent deadly crackdown on demonstrators. The United Nations said on Thursday that at least 54 people have been killed since the coup. More than 1,700 people had been arrested, including 29 journalists.

Announcing a new executive order paving the way for sanctions on the generals and their businesses, Biden said on February 10 that the United States was taking steps to prevent the generals from “improperly having access” to $1 billion in Myanmar government funds.

US officials did not explain the statement at the time, but an executive order issued the next day specifically names the Central Bank of Myanmar as part of Myanmar’s government. The order authorizes the seizure of assets of Myanmar’s post-coup government.

Two sources told Reuters the executive order was designed to provide the New York Fed with the legal authority to hold the $1 billion of Myanmar reserves indefinitely.

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Myanmar’s reserves would be managed by part of the New York Fed known as Central Bank and International Account Services (CBIAS), where many central banks keep US dollar reserves for purposes such as settling transactions.

An attempt to empty the account was made on February 4, but was blocked automatically by processes that had been put in place at the New York Fed before the coup, two of the sources said.

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