boasting a new democratically elected government that enjoys
enormous popular support, Myanmar looks unlikely to shed the US
sanctions that have restricted the country for decades,
according to experts familiar with the sanctions program.
by Steve Gilmore, MyanmarTimes, Myanmar, March 2
Various individuals and organisations – international and
domestic – have
for the US to lift sanctions against Myanmar, following the
National League for Democracy’s victory in last November’s
elections and an apparently
smooth transition to a new administration underway.
Five major business associations sent
a joint letter to the US administration earlier this
month, which said that the benchmark of free and fair
elections had been met, and that it was “incumbent upon the
United States to continue to advance the normalisation
Myanmar is sanctioned under the International Emergency
Economic Powers Act (IEEPA), which provides a legal
framework for the US Treasury to blacklist certain
individuals or companies. The joint letter asked that the
IEEPA is allowed to lapse when it falls due for renewal in
But one US lawyer familiar with the sanctions program holds
out little hope that 2016 will see an end to the sanctions
program, pointing to recent comments from several US
administration officials as signalling maintenance of the
Scot Marciel, the new
US ambassador to Myanmar, said at his confirmation
hearing in November 2015 that the US would need to engage
with the new government to encourage progress on a range of
issues, including ending
ethnic fighting and human
trafficking, increasing respect for human rights, and
promoting broad-based economic development.
He was also quoted in his response to the Senate’s questions
as saying he would not recommend any dramatic change to the
The outlook is also complicated by timing. The NLD will take
power shortly before the annual Thingyan water festival,
which heralds almost two weeks of national holiday.
“Then you’re almost into the heart of the US campaign
season, and so Congress for all intents and purposes will be
home for summer and campaigning into autumn,” said Peter
Kucik, a sanctions expert at Inle Advisory Group and former
senior sanctions adviser at the US Treasury’s Office of
Foreign Assets Control (OFAC).
“That’s not to say that the US administration will stop
operating, but you lose Congress so that the legislature
isn’t able to focus on the issue. That will be the period
when the new NLD government is up and running,” he added.
The US administration was once concerned that Myanmar’s
democratic elections would not be allowed to take place. Now
that the elections are over, the administration will want to
see that the NLD is allowed
to govern without interference, said Mr Kucik.
“Until members of Congress and the US administration see
that the NLD administration is up and running and able to
govern, there will be fear in the back of some people’s
minds,” he said.
The NLD formally takes power in April and the IEEPA is due
for renewal shortly afterward, in May, leaving little time
for the administration to become comfortable.
A spokesperson for the US embassy in Yangon said it did not
“anticipate any dramatic change in the near term” to the US
administration’s sanctions policy. The US will wait to see
how the political transition proceeds, and is looking for
“progress on a wide range of issues affecting Myanmar’s
political transition”, the spokesperson said.
President Barack Obama has the power to lift the trade and
financial sanctions enforced by OFAC. But even if he was
willing to do this, it would require political capital that
he may not be willing to spend, said Eric Rose, lead
director at Herzfeld Rubin Mayer & Rose Law Firm in Yangon.
A US presidential election scheduled for November of this
year, and the recent death of Supreme Court Judge Antonin
Scalia, requiring Mr Obama to nominate a replacement, means
the US president has more pressing problems, he said.
“I don’t think that in his last year, with all the problems
he is having, he is willing to invest political capital into
what is arguably one of his greatest foreign policy
There are politicians in both the Republic and Democratic
parties eager to see sanctions relaxed and others that have
argued for additional sanctions to be imposed.
Californian Congressman Ed Royce, in a House Foreign Affairs
Subcommittee Hearing last October, said he was concerned
that “only one individual had been added to the Specially
Designated Nationals [SDN] list for violations of human
rights since violence erupted in 2012”, and that he hopes to
add other names. At least 140,000 Rohingya and other Muslims
in Myanmar have been
by violence in the previous five years, he said.
Deputy Secretary of State Antony Blinken in a visit to Nay
Pyi Taw on January 18 also raised
concerns about discrimination and violence against
ethnic and religious minorities, including the Rohingya
population, who are officially called Bengalis in Myanmar.
However, even if sanctions are not lifted in their entirety,
progress towards easing the program can still be made. This
was demonstrated last year, a month after Myanmar’s
elections, when the US treasury department issued a
six-month general licence, allowing
trade to pass freely through Yangon’s blacklisted Asia
World Port Terminal and other key infrastructure hubs with
an SDN connection.
A spokesperson for OFAC could not comment on whether the
six-month general licence was likely to be renewed, but
sanctions lawyers are confident that it will be extended
either for a set period of time or indefinitely before it
expires in June.
“I would be floored if there wasn’t an extension,” Mr Kucik
Progress is also possible on the SDN list – one of the
biggest barriers to US trade with Myanmar. However, the
general licence does not solve the difficulty US firms have
in determining exactly who they are dealing with, said Kaveh
Miremadi, an OFAC economic sanctions attorney at Price
Benowitz in Washington.
SDNs have become adept at operating through shell companies,
and the due diligence required to evaluate potential
business partners is onerous, he said, adding that the
average US company lacks the resources to fully vet who they
are dealing with. For example, even soft drink giant Coca-Cola
failed to uncover that a director at its local partner
had links to jade mining.
Myanmar’s SDN list contains 38 individuals and 77 entities,
but removing either an individual or an entity from the list
has proved difficult.
Last year, U Win Aung became the first
and only person to be removed from the SDN list. His two
companies, Dagon International and Dagon Timber, were also
removed. Mr Kucik estimated there were some 10 other
individuals actively engaged in trying to remove themselves
from the SDN list.
“But I don’t think the US is doing enough to effectuate its
existing policies,” he said. “People are left two years into
the process and they don’t know whether it will take another
Clearer statements and better information on the de-listing
process would encourage SDNs to engage. Efforts to shorten
the process would also help, Mr Kucik said.
There remains a ban on investment with the military, and an import
ban on rubies and jadeite. Most of the other economic
sanctions have been removed. A better functioning de-listing
process would allow the US to use the SDN list as a tool to
chip away at the remaining sanctions.
“Then if the SDN list goes, the material sanctions are
gone,” Mr Kucik said.
99B Myay Nu Street, LAMAI Condo, Suite 6D, Sanchaung Twp., Yangon 11111, Myanmar - Phone: +95 1 230-5935©2015 Herzfeld Rubin Meyer & Rose Law Firm Limited. - Legal Info