‘Crony’ Win Aung Removed From US Blacklist: Who’s Next?

By Kyaw Hsu Mon & Feliz Solomon 24 April 2015

RANGOON —Burma’s business community roundly welcomed the US Treasury Department’s announcement on Thursday that sanctions had been lifted against business mogul Win Aung, predicting that the delisting could signal a tide of redemption for a long list of so-called cronies ostracized by the Western superpower.

State Department spokeswoman Marie Harf said in a statement on Thursday that Win Aung and two of his businesses had been removed from the Specially Designated Nationals (SDN) list, a roster of individuals and entities that cannot conduct business with the United States.

The statement offered little in the way of explanation for his removal, but affirmed that the United States’ “sanctions architecture for Burma remains in place.” Blacklisted individuals can petition for removal from the list, which is maintained by the Treasury’s Office of Foreign Assets Control (OFAC), though the delisting criteria arefar from transparent.

The State Department said that “positive steps and changed behavior” could warrant removal, but the US Embassy and OFAC declined to elaborate on what specific progress motivated the decision to absolve Win Aung, who was described as “a regime crony” in a 2007 US diplomatic cable published by Wikileaks.

The leaked cable shows that the US Embassy recommended Win Aung be added to the SDN list because he “not only financially supports the Than Shwe regime, but also uses his contacts with the senior generals to amass and maintain his fortune.” The cable further said that Win Aung had been awarded permission from the generals to log in protected forests, and that he was believed to have illegally exported US$5 million of teak annually.

Win Aung is the cofounder and CEO of Dagon International Ltd., one of Burma’s biggest conglomerates with interests in timber, rubber, energy and construction. He is also the chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), the nation’s largest business association, representing more than 10,000 domestic companies.

Controversially, he also serves as chairman of the Myanmar Thilawa SEZ Holdings Public Company (MTSH), a nine-member consortium invested in a major development near Rangoon associated with opaque business deals and unresolved land disputes. Credible researchers monitoring the development, who wished to remain anonymous, told The Irrawaddy that Win Aung’s SDN status risked compromising his position as chairman of MTSH because of pressure from Japanese implementing partners. The researchers said they believed Win Aung’s interest in Thilawa, which may include ambitions beyond his current chairmanship, to be a main driver of his petition for delisting. They added that he may have been “removed from the SDN list without adequate investigation from the US Department of Treasury.”

Local businessmen have been less critical. Maung Aung, a senior advisor to the Ministry of Commerce, said the business community urged Treasury officials to remove Win Aung from the list because of his high standing in the UMFCCI, claiming that his blacklisted status was causing a bottleneck in bilateral commerce.

“Win Aung plays a major role here, but due to his US sanctions he wasn’t able to do as much as he could,” said Maung Aung, speaking to The Irrawaddy on Friday. “That’s why, when US delegates came here, we told them about the impact of sanctions against him.”

Like several of his colleagues, Maung Aung predicted that “more Burmese businessmen will be removed from the US sanctions list” in the near future. Some suggested that ZawZaw, chairman of the Max Myanmar Group of Companies, could be next in line. Htoo Group’s TayZa and Asia World’s TunMyintNaing were also contenders, according to several prominent businessmen. Neither the State Department nor the Treasury could confirm the speculations, thoughTreasury officials are known to have met with TayZa and several other blacklisted individuals in June 2014, when they were briefed on procedures for seeking removal.

While several members of the business community were pleased with Thursday’s delisting—UMFCCI central committee member Myat Thin Aung welcomed the “good news” as “a benefit to us all”—one lawmaker argued that while longstanding Western sanctions ultimately hurt the Burmese public, rewarding “cronies” simply makes the rich richer.

“Burmese people suffered many impacts of Western economic sanctions,” said Khine Maung Yi, an Upper House parliamentarian from the National Democratic Force (NDF) party.“Though the US targeted cronies, the real impact was felt by the people. … By lifting sanctions against Win Aung, I believe that only he will benefit.”

Burma’s economy stagnated under the former military regime, which ruled the country until ceding power to a quasi-civilian government in 2011. Since that time, the relationship between the United States and Burma has undergone rapid transformation. Diplomatic relations have been fully restored after more than two decades of reproach, and US legislation has been amended to allow for limited military and humanitarian cooperation.

US economic sanctions were eased beginning in 2012, though some restrictions remain. An arms embargo and a ban on US imports of jade and other minerals from Burma remain in place, and the SDN list still limits American partnerships with certain Burmese businessmen and companies. Some individuals, such as Win Aung, have been removed from the list, while others have since been added.

Last November, shortly before US President Barack Obama made his second visit to Burma in as many years, Lower House lawmaker Aung Thaung was added to the SDN list for undermining reforms and “perpetuating violence.”