The European Union will on Monday ban all European companies from investing in Burmese firms controlled by or linked to the military dictatorship in Rangoon, senior Dutch diplomats said yesterday.
In a package of sanctions planned by the EU against the regime in Burma, foreign ministers, meeting in Luxembourg, will also vote against extending any loans to the country from international financial institutions such as the World Bank and IMF.
Speaking as leaders from 38 countries descended on Hanoi for the Asia-Europe Meeting (ASEM) summit, Thom de Bruijn, the Dutch EU ambassador, said the failure of the Rangoon authorities to respond to EU demands for reforms on democratic and human rights, including freeing opposition leader Aung San Suu Kyi from house arrest, meant there was no choice but to impose sanctions.
In August the Burma Campaign UK published a "dirty list" of 95 companies directly or indirectly helping to finance the regime, including Rolls-Royce, the aero-engine maker, operating through a Singaporean subsidiary, and Lloyd's of London.
Others, including British American Tobacco, accountants Pricewaterhouse Coopers and advertising group WPP, have ended their involvement in the past year, the campaign said.
Amid misgivings about how the sanctions will be policed, ministers will prohibit EU-registered companies from making financing such as loans or equities available to Burmese state-owned firms, including banks and manufacturers. One aim is to enable Burma's neighbours, such as Thailand, to exert more pressure on Rangoon.
The EU is concerned that the sanctions hit the military authorities and their "cronies" in state-run firms rather than the Burmese people but there is scepticism this can be achieved. "It is not our intention to take sanctions that would hurt the population," Mr de Bruijn said.
But ministers, who will expand a visa ban list to include all Burmese military officers above the rank of brigadier-general, will increase aid for health and education after consultations with local democratic groups, including the National League for Democracy headed by Ms Suu Kyi.
According to British campaigners, imports from Burma have more than tripled since Tony Blair came to power in 1997 and reached £62.2m last year.
