Yesterday, the U.S. Department of the Treasury’s Office of Foreign Assets Control issued General License 20 to the Burmese Sanctions Regulations (31 CFR Part 537). This General License (GL) will expire on June 7, 2016, unless it is withdrawn or extended. The GL facilitates trade with Burma by authorizing certain transactions ordinarily incident to exports of goods, technology, or non-financial services to or from Burma involving designated persons and the entities they own.
This GL allows U.S. businesses to export authorized goods and technology to and from Burma through infrastructure such as ports, toll roads, and airports, and pay associated fees that would otherwise be prohibited under the Burmese sanctions. U.S. financial institutions are also authorized to unblock transactions that occurred on or after April 1, 2015, if those transactions would have been authorized under GL 20.
All other prohibitions of the Burmese Sanctions Regulations remain unaffected, and the GL does not authorize exports to, from, or on behalf of blocked individuals or entities.
The GL was issued after U.S. trade with Burma nearly came to a halt following the refusal of several financial institutions to engage in trade finance involving a Rangoon port associated with Asia World Co. Ltd. OFAC designated Asia World in 2010, noting that it “has provided critical support to the Burmese regime and has received numerous lucrative government concessions, including the construction of ports, highways and government facilities.” Although it is not explicit in either the OFAC or the State Department press releases announcing the GL, it appears that prior to the issuance of GL 20, the Rangoon port may have been blocked as a matter of law pursuant to OFAC’s 50 Percent Rule. It is also probable that banks lacked the risk appetite to engage in Burmese trade because of the involvement of additional entities associated with Tun Myint Naing (Steven Law), a key financial figure for the Burmese junta.
For an OFAC chart depicting the Steven Law Financial Network, click here.