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US Government Officially Terminates Sanctions Targeting Myanmar

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On 7 October 2016, following his prior announcement of the intention to terminate US sanctions targeting Myanmar (also known as Burma), President Obama issued an Executive Order (“the 7 October Executive Order”) terminating US sanctions targeting Myanmar. As a result of this action, the sanctions that previously restricted US Persons (i.e., US citizens or permanent residents, wherever located or employed; entities organized under US law (and their non-US branches); and persons located in the United States) from engaging in certain activities involving Myanmar or specific entities associated with Myanmar are no longer in effect. The US Treasury Department’s Office of Foreign Assets Control (“OFAC”) simultaneously published a Fact Sheet explaining these changes and updated its list of Frequently Asked Questions regarding Myanmar.

The 7 October Executive Order officially terminated the national emergency with respect to Myanmar, revoked Executive Orders 13047, 13310, 13448, 13464, 13619, and 13651, and waived financial and blocking sanctions in the Tom Lantos Block Burmese JADE Act of 2008. Given that many restrictions on Myanmar had already been relaxed in recent years, the most significant impact of the 7 October Executive Order is that all entities and individuals designated as Specially Designated Nationals (“SDNs”) solely pursuant to the Burmese Sanctions Regulations (“BSR”)—i.e., those SDNs identified with the [BURMA] tag on OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”)—are no longer blocked. OFAC warned, however, that the termination of this sanctions program does not impact Burmese individuals designated pursuant to other OFAC sanctions authorities, such as the counter-narcotics sanctions. OFAC has not done so to date, but companies should use caution in dealing with former SDNs given the possibility that OFAC could potentially designate them under another US sanctions program.

Besides the delisting of all [BURMA] SDNs, the 7 October Executive Order unblocks all property and interests in property that are blocked solely pursuant to the BSR, revokes the import ban on Burmese origin jadeite and rubies, and makes compliance with the US State Department’s Responsible Investment Reporting Requirements voluntary. In addition, the 7 October Executive Order terminates all OFAC-administered restrictions and authorizations related to banking with Myanmar.

In coordination with OFAC’s actions, the Financial Crimes Enforcement Network (“FinCEN”) suspended its 2003 prohibition on US financial institutions maintaining correspondent accounts for Burmese banks provided that certain due diligence requirements are met. FinCEN’s finding that Myanmar is a “jurisdiction of primary money laundering concern” under Section 311 of the USA PATRIOT Act, however, remains in place. Accordingly, companies must ensure they have adequate anti-money laundering controls in place when engaging in financial dealings involving Myanmar.

Finally, despite the termination of these sanctions, OFAC FAQ 481 provides that any active and ongoing investigations related to violations of the BSR will proceed. Companies should also be aware that OFAC will continue to act on apparent BSR violations even if they come to the agency’s attention after the termination of the Burma sanctions program.

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Ryan Fayhee is a partner in Baker McKenzie´s Washington, DC. Mr. Fayhee previously was with the United States Department of Justice for 11 years, where he was a leading national security prosecutor in the areas of economic espionage, export controls, sanctions enforcement and cybercrime. Through a number of investigations and prosecutions, Mr. Fayhee received special recognition from the Attorney General for devising a model approach to the identification and disruption of foreign military supply and proliferation networks. He also led an investigation and prosecution of a multinational company that resulted in the largest criminal fine to date for sanctions violations. Mr. Fayhee later served a term as the National Export Control Coordinator, the principal Department of Justice attorney overseeing export control and embargo investigations and prosecutions nationally. He was also a Trial Attorney with the Civil Frauds Section and an Assistant United States Attorney in the Northern District of Illinois, assigned most recently to the National Security and Cybercrime Section.

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Joseph Schoorl is an associate in Baker & McKenzie's Washington, DC office. Prior to joining the Firm, he worked as a clerk in the spring of 2012 and as a summer associate in 2011 at Baker & McKenzie. In addition, he interned with the Department of Commerce’s Office of Chief Counsel for Industry and Security. He advises US and non-US companies on licensing, enforcement actions, internal investigations and compliance audits, mergers and acquisitions and other cross-border transactions, and on the design, implementation, and administration of compliance programs.

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Inessa Owens is an associate in the Washington, D.C. office and member of the Firm’s International Trade practice group. She focuses on outbound trade compliance issues, including compliance with the Export Administration Regulations, anti-boycott rules, and economic sanctions administered by the US Treasury Department’s Office of Foreign Assets Control, including those targeting Cuba, Iran, North Korea, Syria, and Russia. She has worked with clients in diverse industries that include finance, pharmaceuticals, and energy.

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