On 17 May 2016, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced amendments to the Burmese Sanctions Regulations (“BSR”), 31 C.F.R. Part 537, by issuing new and amending existing general licenses intended to, support trade with Burma, facilitate the movement of goods within Burma, allow most transactions involving designated Burmese financial institutions, and allow certain transactions related to “U.S. Persons” (defined below) residing in Burma. These BSR amendments take effect today (18 May 2016) and are summarized in more detail by OFAC here.
In addition to the BSR amendments, OFAC removed ten (10) entities from and added six (6) entities to the List of Specially Designated Nationals and Blocked Persons (“SDN List”)—amendments which took effect immediately on 17 May. A summary of the SDN List amendments is available here. These BSR and SDN List developments (collectively, the “Burma Developments”) are described in further detail below.
Amendments to the BSR
General License Authorizing Trade-Related Transactions
OFAC is making two (2) regulatory amendments (available here) in connection with trade-related transactions:
- First, OFAC is extending indefinitely General License No. 20 (available here), which was initially issued for six (6) months beginning in December 2015. General License No. 20, which will be incorporated into the BSR at §537.532(a)-(c), authorizes transactions ordinarily incident to exports to or from Burma that may involve an SDN, provided the exportation is not to, from, or on behalf of an SDN. We previously reported on General License No. 20 in our blog post dated 8 December 2015, available here.
- Second, OFAC is issuing a new general license at §537.532(d) of the BSR that permits certain transactions incident to the movement of goods within Burma that may involve an SDN, provided the goods are not to, from, or on behalf of an SDN. Authorized transactions include, for example, transporting goods from a warehouse in Burma for further distribution to retail outlets in Burma.
The net effect of these provisions is to facilitate the movement of goods in, out, and around Burma without concern for SDN involvement as long as transactions are not to, from, or on behalf of an SDN.
Updating General License Authorizing Certain Banking Services
OFAC is also updating an existing general license at §537.531 of the BSR (available here) to now authorize most transactions involving all current SDN financial institutions in Burma. Two (2) of the financial institutions that were included in this general license (i.e., Myanma Economic Bank and Myanma Investment and Commercial Bank) have been delisted as of 17 May 2016, and therefore authorization is no longer needed for U.S. Persons (i.e., entities organized under the laws of the United States and their non-U.S. branches; and parties physically located in the United States; U.S. citizens and permanent resident aliens / Green Card holders, wherever located or employed) to deal with them or in their property. OFAC has also added to this general license two (2) other Burmese financial institutions that are currently designated as SDNs (i.e., Innwa Bank and Myawaddy Bank), thereby authorizing most transactions involving all Burmese financial institutions.
General License Authorizing Personal Transactions related to U.S. Persons Residing in Burma
As part of the Burma Developments, OFAC is adding a new general license at §537.525 of the BSR (available here) that allows U.S. Persons to engage in most transactions in Burma ordinarily incident to the routine and necessary maintenance within Burma of U.S. Persons residing in the country. Authorized activities under this general license include paying rent and other living expenses and purchasing goods and services for personal use. This general license is consistent with the travel exemption at §537.210(c) of the BSR and is intended to make it easier for U.S. Persons to reside and work in Burma.
Amendments to the SDN List
SDN List Removals
As part of the Burma Developments, OFAC removed the following seven (7) state-owned enterprises from the SDN List: Myanmar Timber Enterprise; Myanmar Pearl Enterprise; Myanmar Gem Enterprise; No. 1 Mining Enterprise; No. 2 Mining Enterprise; No. 3 Mining Enterprise; and Co-Operative Export-Import Enterprise. OFAC also removed the following three (3) state-owned banks from the SDN List: Myanma Economic Bank; Myanmar Foreign Trade Bank, and Myanma Investment and Commercial Bank.
The removal of these ten (10) entities from the SDN List means that U.S. Persons no longer require a specific license from OFAC to directly or indirectly engage in transactions with, involving, or benefitting these entities or entities 50% or more owned by them. U.S. Persons are also no longer required to treat the property and property interests of these entities as blocked (i.e., frozen).
SDN List Additions
As part of the Burma Developments, OFAC also designated as SDNs six (6) companies that are 50% or more owned by Steven Law and Asia World—both on the SDN List since February 2008. The six new SDNs are: Asia Mega Link Co., Ltd.; Asia Mega Link Services Co., Ltd.; Pioneer Aerodrome Services Co., Ltd.; Green Asia Services Co., Ltd.; Global World Insurance Company Limited; and Shwe Nar Wah Company Limited.
The addition of these six (6) entities to the SDN List means that U.S. Persons are now prohibited from directly or indirectly engaging in transactions with, involving, or benefitting these entities as well as any entities 50% or more owned by one or more of them. U.S. Persons must also block any property or property interest of these entities that come within the United States or within the possession or control of a U.S. Person.