United States Suspends Certain Sanctions Against Myanmar
International Trade & Customs Update
Date: May 24, 2012
The United States announced late last week it will suspend certain sanctions in place against Myanmar (Burma). Secretary of State Hillary Clinton has said that a general license will be issued to allow U.S. companies and individuals to make new investments in and provide financial services to the country. The announcement also makes clear that the sanctions could be reimposed if Myanmar's government undermines nascent democratic efforts or violates human rights.
Current U.S. sanctions against Myanmar, administered by the U.S. Department of Treasury Office of Foreign Assets Control (OFAC), prohibit U.S. persons, wherever located, from making new investments in or providing financial services to the country. The term "new investment" is defined to include contracts for or economic stakes in the development of resources in Myanmar. The sanctions also broadly prohibit conducting any financial services with or in Myanmar - thereby effectively precluding banks, insurance companies and brokerages from doing any business in the country. These prohibitions will be suspended upon publication of the general license in the Federal Register.
Certain sanctions will remain in place. For example, U.S. companies will still be prohibited from doing business with Myanmar entities on OFAC's Specially Designated Nationals list. Additionally, the current ban on imports of products from Myanmar will not be suspended at this time. Whether the United States will eventually lift these sanctions as well, and to what extent, remains to be seen.
Because the United States is only suspending - rather than rescinding - the above-noted sanctions, the possibility remains that they could be reimposed if the progress in Myanmar stops or reverses. Given this potentially moving-target aspect, companies contemplating business in Myanmar should consider consulting with counsel before proceeding.