Administration
Eases Financial and Investment Sanctions on Burma, July 11, 2012
President
Obama and Secretary of State Clinton announced in May that the United States
would ease certain financial and investment sanctions on Burma in response to
the historic reforms that have taken place in that country over the past year.
Today, the U.S. Government has implemented these changes to permit the first
new U.S. investment in Burma in nearly 15 years, and to broadly authorize the
exportation of financial services to Burma. The United States supports the
Burmese Government’s ongoing reform efforts, and believes that the participation
of U.S. businesses in the Burmese economy will set a model for responsible
investment and business operations as well as encourage further change, promote
economic development, and contribute to the welfare of the Burmese people.
(July
11 – implement the changes. Two
components (i) U.S. investment in Burma, and (ii) the exportation of financial
service to Burma. In response to and to
encourage the historic reform )
As
these vital economic and political reform efforts move forward, the United States
will continue to support and monitor Burma’s progress. We have and will
continue to urge the Burmese Government to continue its reform process and we
expect the Burmese Government to implement measures that increase
socio-economic development and safeguard the human rights of all its people,
including political rights and civil liberties.
The
United States remains concerned about the protection of human rights,
corruption, and the role of the military in the Burmese economy. Consequently,
the policy we are announcing today is carefully calibrated and aimed at
supporting democratic reform and reconciliation efforts while aiding in the
development of an economic and business environment that provides benefits to
all Burma’s people. A key element of this policy is that we are 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.
Moreover, the core authorities underlying our sanctions remain in place. U.S.
persons are still prohibited from dealing with blocked persons, including both
listed Specially Designated Nationals (SDNs) as well as any entities 50 percent
or more owned by an SDN. The Treasury Department’s Office of Foreign Assets
Control (OFAC) publishes a list of SDNs available here.
(remains
concerned about human rights and corruption
-
not
authorizing new investment with the Burmese Ministry of Defense, state or
non-state armed groups
-
sanction
laws are still in place, in book ; executive branch using waiver authority or
block authority so that it maintains readiness to roll back if things turn out
negatively, e.g., in terms of human rights concerns
-
U.S.
persons are still prohibited from dealing with blocked persons, including both
listed Specially Designated Nationals (SDNs)
Also
today, the President issued a new Executive Order that will allow the U.S.
Government to sanction individuals or entities that threaten the peace,
security, or stability of Burma, including those who undermine or obstruct the
political reform process or the peace process with ethnic minorities, those who
are responsible for or complicit in the commission of human rights abuses in
Burma, and those who conduct certain arms trade with North Korea. Individual or
entities engaging in such activities would be subject to Treasury action that
would cut them off from the U.S. financial system.
(Executive
Order, July 11, 2012)
-
a
new Executive Order that will allow the U.S. Government to sanction individuals
or entities that threaten the peace, security, or stability of Burma
OFAC
General License No. 16 Authorizes the Exportation of Financial Services
to Burma
- OFAC has
issued General License No. 16 (GL 16) authorizing the exportation of U.S.
financial services to Burma, subject to certain limitations. Reflecting
particular human rights risks with the provision of security services, GL
16 does not authorize, in connection with the provision of security
services, the exportation of financial services to the Burmese Ministry of
Defense, state or non-state armed groups (which includes the military), or
entities owned by the foregoing. GL 16 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.
- Because
the transactions authorized by GL 16 include activities formerly
authorized by other general licenses (such as financial transactions in
support of humanitarian, religious, and other not-for-profit activities in
Burma, and noncommercial, personal remittances to Burma), General License
No. 14-C and General License No. 15 are replaced and superseded by GL 16.
OFAC
General License No. 17 Authorizes New Investment in Burma
- The
Secretary of State, pursuant to a delegation of authority from the
President, has waived the ban on new U.S. investment in Burma set forth in
the Foreign Operations, Export Financing, and Related Programs
Appropriations Act of 1997.
- Consistent
with this waiver, OFAC has issued General License No. 17 (GL 17)
authorizing new investment in Burma, subject to certain limitations and
requirements. GL 17 does not authorize new investment pursuant to an
agreement, or pursuant to the exercise of rights under such an agreement,
that is entered into with the Burmese 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.
Reporting
Requirements on Responsible Investment in Burma
- Any U.S.
person (both individuals and entities) engaging in new investment in Burma
pursuant to GL 17 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 here.
- These
reporting requirements will undergo public notice and comment in
accordance with the Paperwork Reduction Act of 1995. The Department of
State expects to issue its 60-day Federal Register notice of proposed
information collections in the coming days.
- There are
several components to these new reporting requirements, which will apply
to investors with more than $500,000 in aggregate new investment in Burma.
Investors will be required to file reports with the State Department on an
annual basis, and will include a version that the Department will make
publicly available, consistent with relevant U.S. law. Key information
that companies will report on include information regarding policies and
procedures with respect to human rights, workers’ rights, environmental
stewardship, land acquisitions, arrangements with security service
providers, and, aggregate annual payments exceeding $10,000 to Burmese
government entities, including state-owned enterprises. The purpose of the
public report is to promote greater transparency and encourage civil
society to partner with our companies toward responsible investment. The
above reporting requirements apply to any new investment, whatever
corporate form it might take.
- In
addition, individuals or entities undertaking new investment pursuant to an
agreement, or pursuant to the exercise of rights under such an agreement,
that is entered into with the Myanma Oil and Gas Enterprise (MOGE) must
notify the State Department within 60 days of their new investment.
New
Executive Order Targeting Persons Threatening the Peace, Security, or Stability
of Burma
- In
signing this Executive Order, the President has provided the United States
Government with additional tools to respond to threats to the peace,
security, or stability of Burma, and to encourage further reform in Burma.
The order provides 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
Burma, 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 Burma; 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 Burma; 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
Burma or the Government of Burma; 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.
Designation
of the Directorate of Defense Industries
- The
Directorate of Defense Industries (DDI) carries out missile research and
development at its facilities in Burma, where North Korean experts are
active. During a trip to Pyongyang in November 2008, Burmese military
officials, including the head of the Directorate of Defense Industries,
signed a memorandum of understanding with the DPRK to provide assistance
to Burma to build medium range, liquid-fueled ballistic missiles. In the
past year, North Korean ships have continued to arrive at Burma’s ports
carrying goods destined for Burma’s defense industries.
- DDI has
been designated pursuant to Executive Order ________ of July 11, 2012
(“Blocking Property of Persons Threatening the Peace, Stability, or
Security of Burma”), which provides the authority to block the property
and interests in property of persons determined 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
Burma or the Government of Burma or to have materially assisted,
sponsored, or provided financial, material, or technological support for,
or goods or services to or in support of, such acts.
Designation
of Innwa Bank
- Innwa
Bank has been designated pursuant to Executive Order 13464 as an entity
that is owned or controlled by Myanmar Economic Corporation, a company
previously designated by OFAC pursuant to Executive Order 13464. The
Myanmar Economic Corporation is a conglomerate owned by the Ministry of
Defense that has extensive interests in a variety of Burmese economic
sectors.
Reporting
Requirements on Responsible Investment in Burma
8. transparency
-
Not
clear as to whether at the country level or the project level
-
each
separate payment type, including but not limited to royalties, tax obligations,
and fees.
-
Property
acquisition
-
Security
arrangement
In sum, the mandate is broader than Section 1504 is
