Reporting requirements
Investment treaty protections


On July 11 2012 the Office of Foreign Assets Control (OFAC) authorised new investment(1) in and exportation of financial services(2) to Myanmar, easing sanctions that have been in place for over 15 years. The authorisations come in the wake of Secretary of State Hillary Clinton's April 4 2012 pledge(3) to ease US sanctions on travel, investment and other activities involving Myanmar. It also followed the European Union's(4) temporary suspension of its sanctions and Canada's decision(5) to lift restrictions on trade and investment in Myanmar. The statutory framework for the US sanctions remains in place, thereby permitting the US government to re-impose sanctions should reforms in Myanmar not proceed as hoped.

As a result of these new authorisations, US persons may now:

  • facilitate investment in Myanmar (eg, underwrite the securities offerings of Myanmar companies and provide financing for projects in Myanmar);
  • provide insurance, investment, brokerage and banking services to Myanmar;
  • enter into contracts to develop economic resources located in Myanmar;
  • supervise or guarantee a third-party contract in Myanmar;
  • purchase a share or equity interests in economic resources located in Myanmar; and
  • enter into contracts involving royalties, earnings or profit-sharing from a project in Myanmar.

These actions place US companies on a footing similar to that enjoyed by Canadian and European competitors. They also appear to permit combined services, such as US investment banks exporting services to Myanmar to facilitate foreign investment in the Myanmar market.

The importation into the United States of Myanmar-origin goods remains prohibited by the Burmese Freedom and Democracy Act 2003.(6) This import ban includes jewellery and other items containing gems mined or extracted from Myanmar. Additionally, no changes were made to existing US export controls involving Myanmar, including the longstanding arms embargo. The following chart summarises the current US sanctions affecting Myanmar:




Exportation of goods to Myanmar



Exportation of services to Myanmar, including financial services



Investment in Myanmar



Exportation of arms, related material or defence services to Myanmar



Importation of Myanmar-origin goods into the United States, whether from Myanmar or third countries





The new authorisations for financial services and investment are subject to certain limitations. US persons are still prohibited from dealing in blocked property of Myanmar specially designated nationals. Further, OFAC has not authorised the exportation of financial services, in connection with the provision of security services, to the Myanmar Ministry of Defence, including the Office of Procurement, any state or non-state armed group or entities in which the Ministry of Defence or any state or non-state armed group own a 50% or greater interest. These restrictions reflect concerns regarding ongoing human rights abuses in Myanmar. Similarly, the new authorisation does not permit investment undertaken pursuant to an agreement with the Ministry of Defence, any state or non-state armed groups operating in Myanmar or any entity in which the foregoing own a 50% or greater interest.

The easing of sanctions was coupled with a new executive order(7) authorising the US treasury secretary to block the property of parties that "have engaged in acts that directly or indirectly threaten the peace, security, or stability of Burma", including efforts "that have the purpose or effect of undermining or obstructing the political reform process or the peace process with ethnic minorities…". These new blocking provisions may also be applied to parties involved in human rights abuses in Myanmar or that supply arms or related material from North Korea to Myanmar, as well as third parties that provide financial, material or technological support to such entities. US companies should watch for future designations under this new executive order.

Reporting requirements

In addition to the limitations, any US person undertaking a new investment pursuant to an agreement with the Myanmar Oil and Gas Enterprise, or making aggregate investments exceeding $500,000 in Myanmar, will be required to report(8) such investments to the US State Department. Annual reports for aggregate investments exceeding $500,000 must include a public version, which will be published on the State Department website. Although the reporting requirements will not take effect until after a notice-and-comment period, the preliminary reporting requirements currently include:

  • the name, location and number of employees for each company (including subsidiaries) operating in Myanmar;
  • copies of the investor's human rights, worker rights, anti-corruption and environmental policies and procedures;
  • detailed information regarding the investor's relationships with local security service providers; and
  • total payments during the reporting year to each government of Myanmar entity and/or any sub-national or administrative entity that asserts authority over the submitter's new investment activities in Myanmar.

The extensive reporting obligations may discourage some US companies from investing in the Myanmar market, particularly because the reports will be made public. Equally problematic is the prospect that the suspended US sanctions could be re-imposed at any time. Given these considerations, US companies should carefully examine the risks and benefits of entering the Myanmar market.

Investment treaty protections

Companies that are interested in investing in Myanmar should bear in mind the protections available under investment treaties. Some (but not all) treaties provide foreign investors with protections against a variety of governmental acts and confer important rights, such as the following:

  • Fair and equitable treatment -host governments may be required to provide 'fair and equitable treatment' to investors and investments made within their jurisdiction. This protection is typically interpreted to protect the legitimate expectations of investors and prohibit arbitrary or discriminatory conduct.
  • National treatment/most favoured nation -governments must treat investments from the country with which they have signed the treaty no less favourably than they treat those of their own investors or those from other jurisdictions.
  • Expropriation- governments cannot expropriate investments unless certain criteria are met (generally, that the expropriation is for a public purpose and without discrimination, and the investor is provided with prompt, adequate and effective compensation).
  • Free transfers- investors generally have the right to repatriate profits and make free transfers of capital into and out of the host state.

In some cases, insurers will not provide political risk insurance coverage if the investment is not subject to treaty protections of this kind, or will charge higher premiums. Most investment treaties also allow investors to enforce their rights by asserting claims for damages in international arbitration.(9)

The United States is not a party to any investment treaties with Myanmar. However, Myanmar has entered into a limited number of such agreements with other countries, including bilateral investment treaties with China and India and a multilateral investment agreement with other Association of Southeast Asian Nations members. Investors may be able to structure their investments in Myanmar through countries that are party to these treaties.

For further information on this topic please contact Robert Torresen or Lisa Crosby at Sidley Austin LLP by telephone (+1 202 736 8000), fax (+1 202 736 8711) or email (rtorresen@sidley.comor


(1) See
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(9) Arbitral awards are usually enforceable in most jurisdictions under either the Convention on the Recognition and Enforcement of Arbitral Awards (the New York Convention) or the International Centre for Settlement of Investment Disputes Convention. Unfortunately, Myanmar is not yet a party to either convention, and thus enforcement would be more difficult.

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