Economy

The Irrawaddy Business Roundup (June 14, 2014)

By William Boot 14 June 2014

Fined Dutch Firm Used ‘Deceit’ to Avoid US Sanctions Against Burma

A Netherlands-based company has been fined millions of dollars for selling airplane parts to Burma during the period of US economic sanctions.

Fokker Services, a division of Fokker Technologies Holding BV, is being fined US$21 million for “deceit and trickery” in selling equipment to Burma, Iran and Sudan over a five-year period of sanctions, said UPI news agency quoting the US Attorney’s Office.

The firm falsified documents suggesting parts were destined for other airlines when they were actually sent to airlines in the banned countries, UPI said.

“For years, Fokker Services treated US export laws as inconveniences to be ‘worked around’ through deceit and trickery. Today’s prosecution sends a clear message that there will be consequences for those who seek to profit from violating and circumventing US trade laws,” US Attorney Ronald C. Machen said in a statement.

The company made over 1,100 illegal shipments of parts and equipment to the three countries, the US Attorney’s Office said.

The report did not identify which companies in Burma bought the Fokker equipment.

Thai Coup Slows Cross-Border Import of Vehicles, Say Traders

The military takeover in Thailand has slowed car imports into Burma, a report said.

More than 1,000 vehicles are stockpiled on the Thai side because “border trade has been limited to basic commodities and only at certain hours of the day,” said Eleven Media quoting traders.

At one crossing point, into Myawaddy, up to 100 cars per day were imported before the coup, but now they were only crossing the border a few at a time, traders reportedly said.

The surge in vehicle numbers in Burma has also led to sharp rise in oil fuel imports. Demand for diesel and petrol grew 5 percent in the financial year ended in March to over 40,000 barrels a day, Reuters said quoting Ministry of Energy data.

Some of this fuel also has to come from Thailand across land borders because Rangoon port cannot handle large tankers.
Car imports in the 2012-13 financial year totaled over 330,000, and trucks over 74,000, according to Reuters.

Scores of Vietnamese Firms to Showcase Goods and Services in Rangoon

Vietnam will stage a large trade and investment promotion exhibition in Rangoon later this month.
The five-day event starting June 26 will involve 80 firms and feature agricultural equipment, construction machinery, cosmetics and food products.

The trade exhibition coincides with a series of market research visits to Burma by 50 Vietnamese businesses, said Pho Nam Phuang, director of Vietnam’s trade promotion office in Rangoon, quoted by Eleven Media.

The research is being conducted at shopping malls and supermarkets in Rangoon and Mandalay, she said in a press conference at the Union of Myanmar Federation of Chamber of Commerce and Industry (UMFCCI).

The research will look at trends in Burma as well as possible obstacles to Vietnamese companies, UMFCCI official Myo Thant told Eleven Media.

Burma Still to Sign Visa-Free Travel Deals With Four Asean Countries

Visa-free travel into Burma for all citizens of Asean, the Association of Southeast Asian Nations, should be implemented by the end of this year, the country’s tourism industry chief said.

Burma has already signed visa-free agreements with five of the 10 Asean members, but negotiations have still to be finalized with four other countries, including neighbor Thailand, said tourism federation secretary-general Kyi Thein Ko.

Burma is current chairman of Asean and the aim is to achieve visa-free travel across the 10 member countries by the time Naypyidaw hands over the chairmanship in January, he told regional travel trade publication TTR Weekly.

Next year is also supposed to herald the beginning of the Asean Economic Community, a European Union-style open trading market.

Burma has signed visa-free agreements with Cambodia, Laos, Vietnam Philippines and Brunei, but has still to sign with Thailand, Indonesia, Singapore and Malaysia, TTR Weekly said.

The political disruption in Bangkok, the ousting of former Prime Minister Yingluck Shinawatra and the subsequent military coup has disrupted an agreement with Thailand, said Kyi Thein Ko.

“We understand Thailand agreed to visa-free facilitation at international airports, but not overland checkpoints, which was part of the proposal from our side,” he was quoted by TTR Weekly as saying at a tourism conference.
Bangkok has still not resolved the issue of work visa renewals for hundreds of thousands of Burmese migrant workers who cross the land border in Thailand.

Indian Firm Builds Port, Road and Dredges River ‘Without Consultation’

A group of NGOs has called for greater transparency on plans for India’s US$214 million transport project to link the Arakan State port of Sittwe with the landlocked Indian state of Mizoram.

The development, involving port reconstruction, dredging of the Kaladan River, and a new 130 kilometer-long road, is going on without any consultation with affected communities in Arakan and Chin states, the Kaladan Movement alleged in a statement this week.

The Indian industrial conglomerate Essar is overseeing the project and is currently reconstructing Sittwe port to handle large ships and renovating Paletwa town port facilities.

“The highway component of the Kaladan Project is to be built by an as yet unnamed Burmese construction company, and the exact route of the highway or timeframe for its construction has never been publicly announced,” said the group of NGOs.

The entire project is scheduled to be completed in 2016.

The group said “significant riverbed dredging at four locations” will be necessary to make the river usable for 300-ton vessels which will carry container cargoes transferred from larger ships docking in Sittwe.

The NGOs said at one location villagers were told 16 acres of their agricultural land was to be confiscated for use as a mud dump, until they resisted and managed to negotiate to save their land.

Elsewhere, dredging had forced village homes and a monastery to be abandoned.

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