On May 17, 2016, the US Department of Treasury’s Office of Foreign Asset Control (“OFAC”) amended the current sanctions against Burma (Myanmar) to ease certain restrictions on doing business in the country. OFAC also amended the Specially Designated Nationals and Blocked Persons (“SDN”) list. OFAC designed the amendments to support trade in Burma in light of the country’s recent competitive elections and other steps to transition to a democratically-elected government. Specifically, OFAC announced that the amendments should: (1) facilitate the movements of goods within Burma; (2) allow certain transactions related to US individuals residing in Burma; and (3) allow most transactions involving designated financial institutions.
- Extended and expanded an existing general license authorizing trade-related transactions: OFAC extended indefinitely a general license for trade-related activity that was set to expire in June 2016 and expanded the license by allowing transactions involving the movement of goods within Burma (e.g., transporting a good from a warehouse to retail outlets). Specifically, the license authorizes transactions normally incident to exports to and from Burma even if an SDN may be involved in those transactions.
- Updated an existing general license authorizing certain banking services: By removing certain financial institutions from the SDN list and including others in the general license authorizing certain banking services, OFAC has now authorized most transactions with Burmese financial institutions. However, the sanctions still prohibit financial transactions with the Burmese Ministry of Defense or any state or non-state armed group, including the military.
- Added a general license authorizing transactions related to US individuals residing in Burma: In an effort to ease the burden of US individuals residing in Burma, this amendment allows those individuals to enter into incidental transactions such as paying rent and other living expenses, and buying goods and services for personal use without fear of violating the OFAC sanctions.
With respect to the SDN list, OFAC removed seven state-owned enterprises and three state-owned banks, Myanmar Economic Bank, Myanmar Foreign Trade Bank, and Myanmar Investment and Commercial Bank (while adding certain other entities associated with the prior ruling military junta).
Additional easing of the sanctions is likely. For example, US entities and individuals currently must report investments in Burma of more than US$500,000 to the State Department. A proposal under consideration reportedly would raise the threshold to US$5 million, thus easing a regulatory restriction that some companies may have seen as too burdensome when considering whether to conduct business in Burma.