On Wednesday the White House announced the authorization of US investment and the export of financial services to Myanmar, significantly relaxing US economic sanctions that have been in place for over 15 years. The New Executive Blocking Property of Persons Threatening the Peace, Security, or Stability of Burmalays out the conditions and exceptions of the action.
The US State Department followed the White House announcement with a press release stating that the goal of the Order is to support “democratic reform and reconciliation efforts while aiding in the development of an economic and business environment that provides benefits to all Burma’s people.” The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) simultaneously issued General Licenses 16 & 17, granting permission for US companies to conduct “responsible business” in Myanmar.
The release of the Executive Order and General Licenses comes two months after the joint public statement by President Obama and US Secretary of State Hilary Clinton announced the intention of the United States to lift economic sanctions on Myanmar in the wake of significant political reform in the country. In signing the Order, the United States is now in a position to encourage continued democratic reform in the country, exert pressure on the government to combat human rights issues and political corruption, and to specifically sanction individuals who pose safety threats in the country.
Provisions & Conditions
General License No. 16 (GL 16) specifically authorizes the export of financial services to Myanmar, while General License No. 17 (GL 17) allows US investment, superseding the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 which restricted any such activity.
According to a statement by the OFAC the biggest disclaimer to the Licenses is that the government is “not authorizing new investment with the Burmese Ministry of Defense, state or non-state armed groups (which includes the military), or entities owned by the foregoing.” In addition, the US government has maintained a ban on dealing with individuals listed on the Specially Designated Nationals (SDNs) list or any entity that has 50% or more ownership by SDNS. Individuals on this list are considered by the United States government to be those that “threaten the peace, security, or stability or Burma, including those who undermine or obstruct the political reform process or peace process with ethnic minorities, those who are responsibly for or complicit in the commission of human rights abuses in Burma, and those who conduct arms trade with North Korea.”
The Reporting Requirements on Responsible Investment in Burma, which is currently pending approval by the White House’s Office of Management and Budget, will require all US citizens or businesses conducting business in Myanmar with a value over US$500,000 to file reports with the US government. These reports must include an overview of the individual’s or entity’s activity in Myanmar, as well as a summary of the environmental, human rights, and anti-corruption policies and procedures as they pertain to supply chain and operations of the companies that they own or invest in.
The purpose of the report is to encourage transparent practices in Myanmar. The overall theme of yesterday’s announcement seems to be that the lifting of sanctions is a “reward” for the reforms the Myanmar government is enacting. By focusing US investment and economic activity in specific sectors and banning interaction with certain individuals, the US is trying to send a strong message that reinforces democratic processes and undermines individuals and entities that threaten future prosperity. US Secretary of State Hilary Rodham Clinton has been making a great effort to highlight the US’s interest in investment in the Southeast Asia region as a whole. Taking steps to stabilize Myanmar is a great example of the effort toward that goal, and could be a promising sign for the future of the country and of the region.
Full Text: Release of Executive Order Blocking Property of Persons Threatening the Peace, Security, or Stability of Burma; Release of Burma General Licenses [US Department of the Treasury, 11 July 2012]
Press Release: Statement by the President on the Easing of Sanctions of Burma [White House, 11 July 2012]