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U.S. Takes Further Measures to Support Trade with Burma

Wednesday, May 18, 2016
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control announced May 17 regulatory and other amendments intended to support trade with Burma, facilitate the movement of goods within Burma, allow certain transactions related to U.S. individuals residing in Burma, and allow most transactions involving designated financial institutions.

General Licenses. OFAC has extended indefinitely General License 20 and incorporated it into the Burmese Sanctions Regulations. GL 20 authorizes transactions that are ordinarily incident to exports to or from Burma that are otherwise prohibited involving an individual or company that is designated or otherwise blocked by OFAC’s sanctions. To further support trade-related transactions OFAC has expanded this authorization by adding a general license permitting certain transactions incident to the movement of goods within Burma; e.g., transporting goods from a warehouse in Burma for further distribution to retail outlets in Burma.

OFAC is also updating an existing general license that authorizes most transactions involving all currently designated financial institutions in Burma. Two of the financial institutions that were included in this license are being delisted because engagement with them is no longer prohibited. Concurrently, OFAC is adding to the general license two other Burmese financial institutions that are currently designated, thereby authorizing most transactions involving all Burmese financial institutions once the amendment takes effect May 18.  

Further, OFAC is adding a general license that allows U.S. persons to conduct most transactions otherwise prohibited by the regulations that are ordinarily incident to U.S. individuals residing in Burma. This includes paying rent and other living expenses and buying goods and services for personal use. This complements the existing exemption for travel to or from Burma and will make it easier for U.S. persons to reside and work in Burma.

SDN List. OFAC has removed from the list of specially designated nationals seven state-owned enterprises and three state-owned banks that are organized under civilian line ministries or no longer exist. This leaves few remaining OFAC restrictions related to banks in Burma, and the remaining sanctions on Burmese individuals and entities are primarily intended to target those who obstruct political reform, commit human rights abuses or propagate military trade with North Korea. 

However, to incentivize further democratic reforms and maintain pressure on targeted individuals and entities and the military, certain sanctions remain in place. As such, OFAC has identified as blocked and added to the SDN List six companies that are owned 50 percent or more by two entities that remain on the SDN List.  As a result, any property or interests in property of these companies that are or come within the U.S., or that are in the possession or control of U.S. persons, should be frozen, and it is prohibited for U.S. persons to engage in transactions or to do business with these companies.

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