By George W. Thompson
The Office of Foreign Assets Control (OFAC) has announced additional revisions to the Burmese Sanctions Regulations, just the latest step in a liberalizing process that began a few years ago.
The Burmese sanctions were adopted following a series of Executive Orders in the late 1990s. They are intended to financially isolate persons deemed responsible for repressive and anti-democratic governance in that country, primarily applying to members of the government and certain government-connected private parties, business enterprises they own or in which they have a direct or indirect ownership interest of at least 50%, and certain state-owned business enterprises. The regulations also prohibit provision of financial services to, and investment in, designated enterprises.
Initially, the regulations significantly restricted U.S. persons’ financial and trade activities with Burma. For example, they prohibited “exportation or reexportation of financial services to Burma,” a restriction largely superseded by a general license issued in 2012. Another general license back then permitted investment by U.S. persons in Burma. Both general licenses maintained prohibitions on conducting such activities with designated government officials and entities.
Restrictions on Burma Shaved Again
OFAC’s most recent revisions continue the slow rollback of the sanctions regime. One new general license now covers transactions for U.S. persons residing in Burma, with “payment of living expenses and acquisition of goods or services for personal use” specifically mentioned. In my reading, this authorization covers not only those residents, but other U.S. persons involved in such payments. As a practical matter, it permits transactions with Burmese financial institutions and other entities that are otherwise restricted, and complements the previous license relating to U.S. persons’ travel expenses.
The second general license permits most transactions with Burmese banks Asia Green
Development Bank, Ayeyarwady Bank, Innwa Bank and Myawaddy Bank, each of which is identified on the Specially Designated Nationals list. Certain types of transactions with them remain prohibited, however, including those in which other SDNs are involved and new investment in or with any of them
Since the four listed banks are significant players in Burma’s limited banking sector, the new general license should ease the ability of U.S. persons to conduct business with Burmese companies in general. Such a concession by OFAC for transactions involving SDNs is a relatively rare occurrence, and removes a significant roadblock to conducting authorized trade between the United States and Burma.
