July 25, 2023

Open Letter
United States Sanctions Myanmar Junta's Ministry of Defence
Japanese Government Should Immediately and Completely Withdraw from the Y Complex
Project
Mr. HAYASHI Nobumitsu, Governor of Japan Bank for International Cooperation
Mr. TAKESADA Tatsuhiko, President & CEO of Japan Overseas Infrastructure Investment Corporation
for Transport and Urban Development
CC:
Mr. SUZUKI Shunichi, Minister of Finance
Mr. SAITO Tetsuo, Minister of Land, Infrastructure, Transport and Tourism
Justice For Myanmar
Mekong WatchFoE Japan
Human Rights Now
Human Rights Watch
Japan International Volunteer Center
On June 21, 2023, the US government announced that it was imposing financial sanctions on theMyanmar junta's Ministry of Defence as a “Specially Designated National,” noting that the Ministry
was “responsible for the command and control of the armed forces, which has conducted decades ofrepressive military rule that was violently resumed following the coup in 2021.”1 With thisdesignation, the connection between the Redevelopment of the Defense Services Museum Project(commonly known as the “Y Complex Project”), one of the projects being implemented using
Japanese public funds, and the ongoing abuses by the Myanmar military junta, has been made evenmore obvious.
Y Complex involves building and operating a large-scale real estate complex at the site of the former
military museum in Yangon, the largest city in Myanmar. The project receives public and private
funds from Japan through Japan Overseas Infrastructure Investment Corporation for Transport andUrban Development (JOIN), a government-funded infrastructure investment corporation under theMinistry of Land, Infrastructure, Transport and Tourism, and Japan Bank for International
Cooperation (JBIC) which is Japan’s public export credit agency. JOIN and JBIC invests or lends to theY Complex project in which the Myanmar military-controlled Ministry of Defence participates,2 andthey have continued their involvement even after the attempted coup by the Myanmar military onFebruary 1, 2021.
Tokyo Tatemono, Fujita Corporation (a subsidiary of Daiwa House Industry), and JOIN set up a Joint
Special Purpose Company (J-SPC) in Singapore. JBIC along with Sumitomo Mitsui Banking Corporation
1 "Treasury Sanctions Burma’s Ministry of Defense and Regime-Controlled Financial Institutions," June 21, 2023:

https://home.treasury.gov/news/press-releases/jy1555
2 JOIN's webpage on the Y Complex Project: https://www.joinfuture.co.jp/english/investments/achievement/index.php?c=investment_en_view&pk=1603170043; JBIC, "Loan for MixedUse Development Project by Japanese Company in Myanmar," December 18, 2018:https://www.jbic.go.jp/en/information/press/press-2018/1218-011714.html

1and Mizuho Bank co-financed a loan to this J-SPC, and the J-SPC in turn is co-investing in Y Complex
Company Ltd., a Myanmar corporation set up jointly by the J-SPC and Yangon Technical and Trading
Company Limited (YTT), a Myanmar military crony-owned company.
The land lease agreement is between YTT and "Colonel Aung Min Thein (Officer No. Army 17642),
Vice Quarter Master General, Office of the Quarter Master General, Commander-in-Chief (Army).”Land lease payments are to be made to "Defence Account no. MD 010424,” an account likely to beunder control of the Office of the Quartermaster General3. On December 10, 2021, the US, UK and
Canada imposed sanctions on the Office of the Quartermaster General.4 The UK government haspointed out that the Office of the Quartermaster General "plays a crucial role in procuring equipment
for the Myanmar Armed Forces, including ammunition, bombs and jet fuel.”5 More recently, the EUimposed sanctions on Kyaw Swar Lin, the Quartermaster General, on July 20, 2023, noting that he isa “person whose policies and activities undermine democracy and the rule of law in
Myanmar/Burma, and who provides support for actions that threaten the peace, security andstability of Myanmar/Burma.”6
We understand that making land lease payments in the Y Complex project is equivalent to providing
funds to the Myanmar military through the Office of the Quartermaster General, and have alluded tothis problem since before the attempted coup.7
So far, JOIN and JBIC have explained that because the Office of the Quartermaster General is within
the Ministry of Defence and therefore a part of the government of Myanmar, land lease payments
would not benefit the Myanmar military (see below).
Response by Tatsuhiko Takesada, President & CEO of JOIN at the meeting of the Committee on
Financial Affairs of the House of Representatives, April 20, 2021: "Regarding the contract for theproject site, J-SPC is not directly involved, but under the contract, the local Myanmar company
signed a land lease agreement with the Ministry of Defence which is a part of the government toobtain land use rights, and the said local [Myanmar] company subleases the land to the local projectcompany. We have confirmed the current situation, but regarding the land lease payments, weunderstand that they were appropriately managed within the government."8Statement by JBIC official in charge of the Y Complex Project at the "Ministry of Finance - NGO
Regular Dialogue," March 5, 2021: “JBIC recognizes that in this project the rent is paid to the Office of
the Quartermaster General in the Ministry of Defence. We understand that the rent payments areincluded as revenue in the general budget of the Myanmar government…. In Myanmar, based on a
3 Mekong Watch, et al., "Call for Engagement with Companies Involved in the Y Complex Project in Myanmar,” May 24,

2022: http://www.mekongwatch.org/report/burma/mbusiness/20220524Letter_Eng.pdf
4 US Department of the Treasury, "Treasury Sanctions Perpetrators of Serious Human Rights Abuse on International HumanRights Day," December 10, 2021: https://home.treasury.gov/news/press-releases/jy0526;
Foreign, Commonwealth & Development Office, "New UK sanctions target human rights violations and abuses in Myanmarand Pakistan," December 10, 2021: https://www.gov.uk/government/news/new-uk-sanctions-target-human-rightsviolations-and-abuses-in-myanmar-and-pakistan;
Global Affairs Canada, "Backgrounder: Additional Myanmar sanctions," December 10, 2021:
https://www.canada.ca/en/global-affairs/news/2021/12/backgrounder-additional-myanmar-sanctions.html
5 Foreign, Commonwealth & Development Office, "New UK sanctions target human rights violations and abuses in
Myanmar and Pakistan," December 10, 2021: https://www.gov.uk/government/news/new-uk-sanctions-target-humanrights-violations-and-abuses-in-myanmar-and-pakistan
6 Council of the EU, "Myanmar/Burma: EU imposes seventh round of sanctions against six individuals and one entity," July20, 2023: https://www.consilium.europa.eu/en/press/press-releases/2023/07/20/myanmar-burma-eu-imposes-seventhround-of-sanctions-against-six-individuals-and-one-entity/
7 Request made to JBIC on August 25, 2020: http://www.mekongwatch.org/PDF/rq_20200825.pdf
8 Record of the meeting of the Committee on Financial Affairs of the House of Representatives, April 20, 2021:
https://www.shugiin.go.jp/Internet/itdb_kaigiroku.nsf/html/kaigiroku/009520420210420012.htm

2law called the Budget Law, so-called general accounts budget is publicly disclosed, and the Ministryof Defence is included as part of that."9These statements show that both JOIN and JBIC recognized that the rent payments should not bebenefiting the military and that they were attempting to maintain an appearance that the rent
payments were not going to the military by publicly presenting their view that the ultimate
destination of the rent payments was the Ministry of Defence and not the military. The recent
imposition of sanctions by the US on the Ministry of Defence, has made these excuses even more
untenable.10
Regardless of whether the ultimate destination of the land lease payments for the Y Complex Projectis the Office of the Quartermaster General or the linked Ministry of Defence, these payments enable
the Myanmar military to continue to commit atrocity crimes across the country. According to the UN,
there are currently 1.9 million internally displaced persons (IDPs) in Myanmar. 11 The Japanese
government and Japanese companies should fulfill their responsibilities under the UN Guiding
Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises byimmediately stopping their involvement in the Y Complex Project. To do so, the Ministry of Land,Infrastructure, Transport and Tourism should withdraw the investment made by JOIN, and theMinistry of Finance should cancel the loan made by JBIC to stop the injection of public funds into theproject and publicly announce that they have made the decision to do so.
For more information, please contact:
For Justice For Myanmar, Yadanar Maung (English): media@justiceformyanmar.org
For Mekong Watch, in Tokyo, Yuka Kiguchi (Japanese/English): info@mekongwatch.org

9 Record of the 75th Ministry of Finance - NGO Regular Dialogue, March 5, 2021: http://jacses.org/wp_jp/wp-content/uploads/2021/05/mof75.pdf
10 President & CEO of JOIN, Tatsuhiko Takesada, stated at the meeting of the Committee on Financial Affairs of the House ofRepresentatives (April 20, 2021) that "there is no such fact at this point that the local project company in which JOIN invests
through the J-SPC has made any payment to the other party in the land lease contract for the land lease for the project site
etc since the coup d'etat on February 1 of this year." However, as long as the land lease contract is in effect, YTT continues
to have an obligation to make land lease payments to the Office of the Quartermaster General.
11 Myanmar Humanitarian Update No. 31, July 15, 2023: https://reliefweb.int/report/myanmar/myanmar-humanitarianupdate-no-31-15-july-2023

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