On October 7, 2016, President Obama signed an Executive Order lifting virtually all economic sanctions previously in effect against Burma (aka, Myanmar). This executive action signals an opening of economic activity between the United States and Burma. Perhaps more importantly for Burmese business interests, it removes an impediment to banking and financial services that had slowed non-U.S. investment into Myanmar. The action contrasts with remaining unilateral U.S. embargos that continue to impact non-U.S. interests, notably the sanctions on Iran.
Burma had been subject to targeted sanctions that were directed at members of the State Peace and Development Counsel (the “SPDC”) that governed Burma until 2011. This sanctions regime, implemented by Executive Orders issued per authority of the International Emergency Economic Powers Act (“IEEPA”) and the Tom Lantos Block Burmese JADE Act, and administered by the Office of Foreign Assets Control (“OFAC”), broadly prohibited all financial transactions involving members of the SPDC and/or entities they controlled. Given their prominence in the Burmese market, SPDC and the companies they owned or controlled created material compliance challenges for investors looking at the Burmese economy. Banks, predictably conservative in these circumstances, were reluctant to process payments and engage in services otherwise required for non-Burmese investors. Continue reading