On April 17, 2012, the US Department of the Treasury, Office of Foreign Assets Control (OFAC) issued a new General License No. 14-C to the Burmese Sanctions Regulations (BSR) authorizing US persons to export financial services in support of humanitarian, religious, and other not-for-profit activities in Burma. General License No. 14-C replaces and supersedes the earlier General License No. 14-B in its entirety.
As discussed in our previous advisory, the new General License follows Secretary of State Hillary Clinton’s April 4th announcement that the Obama Administration would undertake a “targeted easing” of sanctions on Burma to further encourage economic modernization and political reform. As part of this effort, Secretary Clinton announced that the US would begin “enabling private organizations in the United States to pursue a broad range of nonprofit programs such as democracy building, health, and education.”
New General License No. 14-C allows US entities to pursue a broad range of non-profit projects in Burma by authorizing the exportation and reexportation of financial services in support of the following activities not otherwise authorized under the BSR:
- Projects to meet basic human needs, such as disaster relief, health and hygiene and assistance to victims of conflict or internally displaced persons
- Democracy building and good governance projects, for example rule of law, government accountability, public policy advice and civil society development projects
- Educational activities, such as literacy programs, vocational and technical schooling, foreign language instruction and educational reform
- Sporting activities, including the promotion of exercise and health and the construction and maintenance of sports facilities
- Non-commercial development projects “directly benefiting the Burmese people”, such as maternal health, animal husbandry, environmental programming, sustainable agriculture, preventing infectious disease and constructing and maintaining schools, libraries, medical clinics, hospitals and other non-commercial infrastructure projects
- Religious activities, for example religious education and training, establishment of congregations and the improvement of houses of worship, schools and orphanages
General License 14-C removes the limitation in the previous general license prohibiting the export of financial services in support of humanitarian or religious activities from being provided directly or indirectly to the Burmese Government. The exportation or reexportation of financial services to or for the benefit of any person blocked under Executive Order 13448 (Oct. 18, 2007) or Executive Order 13464 (Apr. 30, 2008) remains prohibited.
While General License 14-C eases restrictions on the export of financial services, it does not affect the BSR’s continued prohibition of “new investment” in Burma at 31 C.F.R. 537.204. Among other things, this provision bans US persons from entering into or supervising contracts or participating in royalties or profits relating to the economic development of “resources” in Burma.
Although the definition of “new investment” associated with the prohibition excludes not-for-profit educational, health or other humanitarian programs or activities, 31 C.F.R. Section 537.302, there may be certain projects, such as microloan programs or sustainable agriculture enterprises, for which the export of financial services is now authorized, which yet still may raise concerns under the continued ban on “new investment.” Accordingly, caution is warranted in cases where financial services may involve non-commercial development projects potentially implicating “new investment” concerns. Secretary Clinton’s announcement, however, included new investment as an area for further relaxation. Accordingly, there may soon be new opportunities for these activities as well.
Despite the new General License, a significant range of activities in Burma remains prohibited for US persons in addition to new investment. The BSR, among other things, ban imports of Burmese-origin products and services and block the property of senior Government officials and other persons and entities deemed to have engaged in public corruption, perpetrated human rights violations, or impeded the democracy movement in Burma, as well as entities owned or controlled by blocked entities. The Burmese sanctions also prohibit the facilitation by US persons of foreign persons’ transactions or investment in Burma, if such activities would be prohibited for US persons. Accordingly, US persons interested in engaging in the country should exercise caution before undertaking any particular transactions.