Originally published in V&E Export Controls and Economic Sanctions E-communication, July 16, 2012
On July 11, 2012, President Obama issued an Executive Order, and the Department of the Treasury, Office of Foreign Asset Control (OFAC) issued two General Licenses (GL-16 and GL-17), authorizing both the export of financial services to Burma and "new investment" in Burma, both of which were previously prohibited by the Burmese Sanctions Regulations. "New investment" in Burma is broadly defined and involves the development of Burma's resources. Generally, the licenses authorize these transactions unless they are in connection with blocked parties or property, the Ministry of Defense, or other any "armed groups," including the military. For "new investment" in Burma, there is an affirmative reporting requirement to the Department of State if the investment exceeds $500,000, or if the investment is pursuant to an agreement with the Myanma Oil and Gas Enterprise (MOGE). The executive order also provides new authority for OFAC to impose additional sanctions on persons who, among other things, are found to have "engaged in acts that directly or indirectly threaten the peace, security, or stability of Burma."
Before engaging in any transaction covered by the two General Licenses, parties should first assess (1) whether any parties to the transaction are sanctioned, or likely to be sanctioned pursuant to OFAC's broadened authority; (2) whether the transaction involves "new investment" in connection with MOGE; and (3) whether the transaction is "new investment" that exceeds $500,000.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
