As we discussed in a previous post, the United States terminated its economic sanctions program targeting Myanmar (which the U.S. Government still calls “Burma”) on October 7, 2016. Building upon the normalization of relations that led to the lifting of sanctions, the U.S. Government has determined that the circumstances now allow for a resumption of certain types of government-to-government assistance as well. On December 2, 2016, the President issued a determination pursuant to Section 570(a) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 (Public Law 104-208) that “that Burma has made measurable and substantial progress in improving human rights practices and implementing democratic government.” Under Section 570(a), such a determination renders inapplicable a statutory prohibition on government-to-government assistance to Myanmar and allows for the possibility that government-to-government assistance may now resume. (A few areas were never affected by the statutory prohibition in the first place, specifically humanitarian assistance, counter-narcotics or crop substitution assistance, and assistance promoting human rights and democratic values. Those areas of assistance can continue as before.) This determination also does away with the requirement that the United States vote in international financial institutions (IFIs) against any loans or other assistance for Myanmar, and allows the U.S. Government to begin granting entry visas in the normal course to government officials from Myanmar. Pending appropriations from Congress and lending decisions at IFIs, this could potentially unleash a considerable amount of development assistance for Myanmar and make it easier for multinational companies to invest there.
This move continues the Obama Administration’s effort to reward Myanmar’s new democratically-elected government by seeking to normalize both the commercial and government-to-government aspects of the relationship, despite the increasingly loud criticism that has focused on the human rights situation in the past several weeks. In making this determination, the Obama Administration has continued to espouse the view that engagement with Myanmar will be a more effective long-term strategy than isolation, despite the existence of these ongoing human rights concerns. The incoming Trump Administration has not publicly focused on the Myanmar sanctions regime, and seems to be more focused on sanctions policy vis-à-vis other sanctions targets. It appears unlikely that reversing this human rights-based determination will be a priority for the incoming administration, and it therefore seems probable that the statutory prohibition on government-to-government assistance will remain inapplicable for the foreseeable future.