As expected, the
US suspended its Burma sanctions yesterday.
The move took place as US Secretary of State Hillary Clinton attended
the ASEAN Regional Forum meeting in Cambodia, and a few days after the new US
Ambassador to Myanmar Derek Mitchell arrived in the country. A delegation of business executives from the
US-ASEAN Business Council arrives this Saturday (another delegation from various
American Chambers of Commerce in Asia will go in mid-August; I am participating
in that mission).
First, the
US Treasury Department issued a new general license authorizing the exportation of U.S. financial services to Myanmar, subject
to certain limitations. The
license excludes, in connection with the provision of security services, the
exportation of financial services to the Myanmar Ministry of Defense, state or
non-state armed groups (which includes the military), or entities owned by the
foregoing (hence the US business missions will continue to drive from Yangon to
Naypyidaw instead of flying on military-owned Air Bagan). The general
license also does not authorize the exportation of financial services to any
person blocked under the Burma sanctions program. Transfers of funds
to or from an account of a financial institution that is blocked under the
Burma sanctions program are authorized, however, provided that the account is
not on the books of a U.S. financial institution.
Second,
the US State Department has waived the ban on new U.S. investment in Burma.
Hence the
US Treasury Department issued a new general license authorizing new investment
in Myanmar, subject to certain limitations and requirements. The
general license does not authorize new investment in projects with the Myanmar
Ministry of Defense, state or non-state armed groups (which includes the
military), or entities owned by the foregoing, or any person blocked under the
Burma sanctions program. Furthermore, any
U.S. person (both individuals and entities) engaging in new investment in
Myanmar whose aggregate new investment exceeds $500,000 must provide to the
State Department the information set forth in the State Department’s “Reporting
Requirements on Responsible Investment in Burma,” available at www.HumanRights.gov/BurmaResponsibleInvestment. The reports must be filed on an annual basis
and will be made publicly available. In
addition, investments made with the Myanma Oil and Gas Enterprise (MOGE) must
be notified with the State Department within 60 days of the new investment.
Third, President Obama
signed a new Executive
Order providing new
authority to impose blocking sanctions on persons determined by the Secretary
of the Treasury, in consultation with or at the recommendation of the
Secretary of State: to have engaged in acts that directly or indirectly
threaten the peace, security, or stability of Myanmar, such as actions that
have the purpose or effect of undermining or obstructing the political reform
process or the peace process with ethnic minorities in Myanmar; to be
responsible for or complicit in, or responsible for ordering, controlling, or
otherwise directing, or to have participated in, the commission of human rights
abuses in Myanmar; to have, directly or indirectly, imported, exported, reexported,
sold or supplied arms or related materiel from North Korea or the Government of
North Korea to Myanmar or the Government of Myanmar; to be a senior official of
an entity that has engaged in the foregoing acts; to have materially assisted
any of the foregoing acts, or a person whose property and interests in property
are blocked pursuant to the order; or to be owned or controlled by, or to have
acted for or on behalf of, such a person.
The
foregoing represents a guarded show of support for the Myanmar government’s
reform efforts, but also allow the Obama administration to re-impose sanctions
should those efforts be jeopardized, and to impose those sanctions on a
targeted basis. Furthermore, although the reporting requirements are unique to the US Burma sanctions (the US does not require this in other jurisdictions, and the other Western countries did not require this), it perhaps will provide American companies with a unique opportunity to distinguish themselves from their competitors. The ban on importing
goods from Myanmar is not affected, but that can be addressed another day. For
now, it is enough to say that the United States has finally allowed its business
community to start re-engaging with Myanmar.
