Thursday, March 3, 2016

US groups call for sanctions to be lifted

Myanmar Times   Monday, 29 February 2016

Five major business associations have written to the US administration, asking that it does not renew its authority to maintain sanctions on Myanmar for another year when the program expires in May.

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 country has been subject to this program since 1997 for its “large-scale repression of the democratic opposition”, according to the US Treasury’s Office of Foreign Assets Control (OFAC).

Earlier this month five groups wrote to Secretary of State John Kerry, Secretary of the Treasury Jack Lew and Commerce Secretary Penny Pritzker, asking that they allow the IEEPA to lapse when it falls due for renewal in just over two months.

If the US allowed the IEEPA to lapse, assuming no further action, all executive sanctions programs would immediately expire, including all Myanmar names on the Specially Designated Nationals (SDN) list, as well as the import ban on jadeite and rubies.

The letter was signed by AmCham Myanmar Chapter, the National Foreign Trade Council, the US-ASEAN Business Council, the United States Chamber of Commerce and the United States Council for International Business.

It notes that the US business community has strongly supported efforts by US President Barack Obama’s administration and Congress to engage Myanmar’s government and advance reforms.

“The concrete measures the US has taken to normalise the relationship - including lifting the import ban, easing bans on investment and financial services, opening a USAID office, extending the Overseas Private Investment Corporation and Export-Import Bank support, and other measures - have brought real and tangible benefits to the people of Myanmar,” it said.

Improved relations with the US have been “instrumental” to the progress made by Myanmar in reforming key institutions and improving transparency, it said. The letter also highlights Myanmar’s November 2015 elections, which it deems “largely free and fair, with few reported irregularities”.

The elections were widely seen as an important benchmark for determining the future of the US-Myanmar relationship. “That benchmark has been met and it is now incumbent upon the United States to continue to advance the normalisation process,” the letter said.

“There needs to be a clear pathway and an efficient process to remove individuals and entities from the Specially Designated Nationals list or to license US companies to engage in business with them.” If necessary, other sanctions programs should be calibrated to target only individuals and entities of concern, it added.

Last year, U Win Aung and his two companies, Dagon International and Dagon Timber, became the first to be taken off the SDN list, prompting speculation that other blacklisted individuals and companies would also be removed. However since then, no other business or individual has been removed from the list.

In December, OFAC issued a general licence allowing trade to pass freely through Yangon’s blacklisted Asia World Port Terminal and other key infrastructure hubs with an SDN connection, in a move aimed at easing trade bottlenecks.

Nevertheless, remaining US sanctions are holding back investment into Myanmar, and place US companies who want to invest in the country or support engagement at a unique disadvantage, the letter said.

“The time has come to examine the utility of the remaining sanctions and to map out a vision for the future of the relationship,” it said. “The upcoming expiration of sanctions authority under the IEEPA provides just such an opportunity.”

Last May, Mr Obama renewed the IEEPA program for another year, citing concerns over conflict and human rights abuses, particularly in ethnic areas, as well as the continued role of the military in the country’s political and economic activities.

If the US administration does not renew the IEEPA program, as a practical matter there would be potential complications from certain other restrictive measures, said one sanctions expert who preferred to remain anonymous due to the sensitivity of the subject.

“For example, because IEEPA licensing authority would expire along with the IEEPA prohibitions, the special measures against Burma imposed under Section 311 of the USA Patriot Act of 2001 would go back into effect with respect to correspondent accounts at Burmese financial institutions, while currently there is licensing interaction between the respective regulatory provisions,” they said.

“And there could be other such interrelation of authorities that has not yet been fully investigated.”

The administration has consistently said it foresees no major sanctions changes in the near future, and incoming US ambassador to Myanmar Scot Marciel told the Senate Foreign Relations Committee that he “would not anticipate, nor recommend any dramatic change”, as reported by Reuters last December.