The Office of Foreign Assets Control (“OFAC”) has just released new guidance on the Burma sanctions and, more importantly, what’s left of the Burma sanctions. Buried at the end of the guidance is something of an answer to a conundrum we have addressed before, namely, if a government member is on the SDN list, what restrictions are thereby imposed on dealings by a U.S. person with that government.

This blog first addressed that question not too long ago when Specially Designated National Nalinee Taveesin was appointed the Prime Minister’s Office Minister of Thailand. I suggested that this meant that U.S. persons and companies could not deal with her either in her private or her official capacity and cautioned that transactions in which she was any way involved for the Thai government should be avoided.

That question is posed again by Burma where many members of the current government are holdovers from the military regime and remain on the SDN list. The omnipresence of designated cronies of the old junta in Burma was uncomfortably brought home to U.S. Assistant Secretary of State Jose Fernandez when he got caught in a grip and grin photo op in Burma with the Union of Myanmar Federation of Chamber of Commerce and Industry President (and Specially Designated National) Win Aung. Oops.

Here is what OFAC has to say about Burmese government officials who also happen to be SDNs:

285. If a Burmese Government minister is an SDN, how does that impact the ministry he leads?

A government ministry is not blocked solely because the minister heading it is an SDN. U.S. persons should, however, be cautious in dealings with the ministry to ensure that they are not, for example, entering into any contracts that are signed by the SDN.

Unfortunately, the more you examine this “guidance,” the less actual guidance it provides. The problem, of course, is with the phrase “for example” stuffed into the last sentence. The SDN can’t “for example” sign any contracts. But what else “for example” would pose a problem? Negotiating the contract? Approving the contract? Recommending changes to the contract? Taking actions that implement the contract? To be safe, a U.S. company needs to make sure that the SDN official has never heard of the contract and is on a different continent when the contract is negotiated, signed and performed.