On 11 July, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) substantially relaxed U.S. economic sanctions against Burma. OFAC’s action implemented policies announced by the Obama Administration earlier this year.
The central elements of OFAC’s action suspend two of the foremost components of U.S. sanctions regarding Burma:
the general ban on new investment in Burma.
As detailed below, however, there are limitations on these elements. In addition, the U.S. government did not suspend "blocking measures" that place many Burmese persons on the U.S. list of "specially designated nationals." Blocking measures broadly forbid U.S. companies and individuals to engage in transactions in which a specially designated national has a direct or indirect interest. In fact, OFAC’s action added a Burma-related blocking measure via a new executive order and added Burmese persons to the specially designated nationals list. (Entities that are 50%-or-more owned by specially designated nationals are also considered to be blocked.)
Key elements of OFAC’s action include the following:
In general, the U.S. is a follower in the general international movement towards liberalized Burma sanctions. The EU had already relaxed its sanctions regarding Burma earlier this year. And the U.S. was starting with a sanctions regime that was more far-reaching than the Burma sanctions of most jurisdictions.
Nevertheless, we anticipate that the U.S. action will be broadly perceived as placing a stamp of legitimacy on Burma sanctions liberalization and will lead to sanctions liberalization among other jurisdictions.