By two recent actions, President Barack Obama has heightened the possibility of expanded trade with Burma (Myanmar) and the Ivory Coast (Côte d’Ivoire). The actions, which effectively terminate U.S. sanctions against each country, should help reinforce certain positive political trends and enhance business opportunities for U.S. companies in both countries. However, some restrictions and export licensing requirements remain in place, so U.S. companies may want to consult with counsel before proceeding.
On October 7, 2016, President Obama issued an Executive Order terminating the national emergency as to Burma. The president had announced this action on September 14, citing Burma’s substantial advances to promote democracy and human rights. The effects of this action include:
- All individuals and entities blocked under the Burmese Sanctions Regulations (BSR) of the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) have been removed from the Specially Designated Nationals (SDN) list, and OFAC will rescind the BSR;
- All property and interests in property blocked under the BSR are unblocked;
- The prohibition on Burmese-origin jadeite and rubies, and any jewelry containing them, is revoked;
- OFAC’s restrictions on banking and financial transactions with Burma are revoked; and
- Reporting certain transactions with Burma under the U.S. Department of State’s Responsible Investment Reporting Requirements is no longer mandatory.
Consistent with the revocation of OFAC’s Burmese sanctions, on September 14, the president issued Proclamation 9492, designating Burma a least-developed beneficiary developing country under the Generalized System of Preferences (GSP) program. GSP is a U.S. trade program designed to promote economic growth in developing countries by providing duty-free treatment for U.S. imports of eligible products. The GSP program imposes quantitative limits, termed Competitive Need Limitations, on GSP benefits by product pursuant to each beneficiary developing country, which may be waived under certain circumstances. The program has certain effective dates that must be followed and requires periodic authorization to remain in effect.
Also on September 14, President Obama issued Executive Order 13739, terminating the “national emergency” as to the Ivory Coast. The president’s action rescinds Executive Order 13396, issued by President George W. Bush in 2006, which declared a national emergency in response to widespread human rights abuses and significant political violence in that country. Pursuant to the 2006 executive order, OFAC listed several Ivory Coast individuals and entities as SDNs.
By terminating the national emergency with respect to Ivory Coast, the sanctions put in place under Executive Order 13396 have been withdrawn, i.e., all Ivory Coast individuals and entities previously identified as SDNs have been removed from OFAC’s SDN list.
Due Diligence Still Required
Notwithstanding the effective termination of sanctions against Burma and the Ivory Coast, it is still necessary to verify that any party from those countries is not blocked for some other reason. U.S. persons generally remain prohibited from dealing with blocked persons, including SDNs. “Blocked persons” include entities owned in the aggregate, directly or indirectly, 50 percent or more by one or more such persons, regardless of whether the entity is listed on the SDN list.
Further, despite the general lifting of sanctions, exports to Burma and the Ivory Coast remain subject to several “reasons for control” on the U.S. Department of Commerce, Bureau of Industry and Security’s Commerce Control List. Therefore, even if an export is not to a blocked person, an export license may still be required.
Finally, the removal of sanctions is not retroactive, meaning any enforcement actions or proceedings pending or not finalized, or prior violations not yet subject to proceedings, are still subject to sanctions that were in place at the time of the act. Companies with past violations should consider whether now might be a propitious time for voluntary disclosure.
Therefore, it is still strongly recommended that companies doing business or trading internationally routinely check the SDN list and other denied party lists, such as the Consolidated Screening List, and also determine whether an export license is required.