Recent improvements in the political environment of Burma have allowed for some easing of sanctions, with the ultimate goal of increasing U.S. trade with Burma. Most recently, on February 22, 2013, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) released General License No. 19 authorizing U.S. companies the ability to engage in transactions involving four major Burmese financial institutions, including: Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank, and Myanma Investment and Commercial Bank. This General License is a step towards allowing companies increased opportunities for investment in Burma by making financial resources available for such investments.
The General License, which allows U.S. companies access to four major financial institutions, came shortly after the following General Licenses were released last year:
These General Licenses are aimed towards promoting interest in the Burmese market by U.S. companies and although most commercial activity is now permitted by use of the General Licenses, many caveats remain.
Although the General Licenses and easing of U.S. economic sanctions provide great opportunities for U.S. companies interested in Burma, it is imperative for companies to carefully read the limitations outlined in the General Licenses and evaluate whether their activities fall within the realm of the General License, if a specific license applies or if their activities are prohibited. If your company is interested in investing in Burma, you will need to pay close attention to the reporting requirements outlined in General License No. 17. Any U.S. company or individual investing in Burma is subject to the Department of State’s “Reporting Requirements on Responsible Investment in Burma,” which requires an annual reporting requirement for any U.S. person whose total investment in Burma exceeds $500,000.
Additionally, as with any sanctioned country, all transactions with blocked entities or individuals on OFAC’s Specifically Designated Nationals List (“SDN’) are prohibited. Those individuals, entities and financial institutions which have previously remained blocked, do not change under the issuance of the General Licenses. Other entities to check prior to engaging in transactions with individuals or companies from Burma, include:
Entitles detailed in the Jade Act (Junta’s Anti-Democratic Efforts);
Entities or transactions directly or indirectly related to the Burmese Ministry of Defense, including the Office of Procurement;
Entities related to State or non-state armed groups; and
Entities owned by the Burmese Ministry of Defense or a state or non-state armed group.