Cronies Disappointed As US Sanctions Extended

By Kyaw Hsu Mon & Saw Yan Naing 18 May 2016

RANGOON — In wake of the extension of most of the US sanctions on Burma on Tuesday, several cronies have remained on the Specially Designated Nationals (SDN) list, despite the expectation that they would be removed.

Sanctioned businessman Khin Shwe, chairman of the Zay Kabar Group of companies, told The Irrawaddy, “Some people have suggested that I hire a lawyer, but this is an American policy matter, so I have decided not to pursue the issue.”

He said nine of the individuals on the SDN list believed they had a good chance of being removed, and, therefore, eight of them had hired lawyers to negotiate with the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). Ultimately, their pleas fell on deaf ears—all nine of the businessmen remained on the list.

“I didn’t participate in the arms trade or any other illegal businesses, so I don’t care what they do,” said Khin Shwe. “After [the sanctions], many Burmese businesses went to China because they couldn’t do business with the US.”

The statement from OFAC said, “To incentivize further democratic reforms and maintain pressure on targeted individuals and entities and the military, certain sanctions remain in place.”

“As such, OFAC identified as blocked and added to the SDN List six companies that are owned 50 percent or more by Steven Law or Asia World Co. Ltd.,” read the statement.

In December 2015, the US temporarily eased sanctions on Asia World Company, by extending a six-month waiver for use of Rangoon’s Asia World Port by American companies. The owner of Asia World, Steven Law (also known as Htun Myint Naing), is linked to the illicit drug trade through his father, Lo Hsing Han, a notorious drug kingpin who died in 2013.

Another businessman, “Pepsi” Thein Tun, chairman of Tun Foundation Bank and MGS Distribution, told The Irrawaddy that it is significant that the US lifted the ban on seven state-owned business enterprises, but it seemed the US had not changed its policy toward certain individuals.

“People in Burma were expecting US assistance when the country became democratic,” Thein Tun said. “The economy can develop more quickly if they lift sanctions, but now the US has shown that it doesn’t support us.”

He also said that there remain some private firms that tried hard to be removed from the US sanctions list, but failed.

“They were deliberately trying to get the [sanctions] lifted,” said Thein Tun. “But now, the US is still sanctioning them.”

“The US sanctions prevent Burma from developing our businesses,” he added.

Khin Shwe remarked that the American government’s behavior in this regard has been very different from that of some of its allies.

“[The US] is not like Japan,” Khin Shwe said. “They don’t help us like Japan. They just pay lip service to the notion of helping Burma.”

He also said that the US should support Aung San Suu Kyi’s government in order to drive economic growth.

“If Daw Aung San Suu Kyi fails to deliver economic growth due to the US sanctions, she will face serious problems and the Burma Army might be back,” he said. “The US should take a broader view and consider long-term issues.”

Another blacklisted businessman, Zaw Zaw, CEO of Max Myanmar Holding Co. Ltd., also voiced disappointment at remaining on the SDN list.

“Burmese companies that run accountable businesses and are not involved in land confiscation issues should be removed from the sanction list,” he said. “These companies help serve the people of Burma.”

“I will keep working to follow [the US] rules and serve the people of Myanmar,” said Zaw Zaw.

Kristine Gould, the head of PACRIM Research Associates, an American research firm that studies Burma, told The Irrawaddy that individuals on the SDN list must do more to show the OFAC they are not involved in improper business deals and that they have taken steps to correct the behavior that initially led to their inclusion on the list.

“In Zaw Zaw’s case, he has to prove that he is no longer receiving preferential treatment from the Myanmar Army and that he isn’t involved in improper business deals, land grabbing, and other human rights abuses,” said Gould.

Adam Szubin, Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, said in the statement that Burma had reached an historic milestone over the last year by holding competitive elections and peacefully transitioning to a democratically elected government.

“Our actions today demonstrate our strong support for this political and economic progress while continuing to pressure designated persons in Burma to change their behavior,” wrote Szubin.

Seven state-owned enterprises and three state-owned banks were removed from the SDN, giving the institutions the right to engage in commercial activities with US businesspeople and banking institutions.

The seven state-owned enterprises are: Myanmar Timber Enterprise, Myanmar Pearl Enterprise, Myanmar Gem Enterprise, No. 1 Mining Enterprise, No. 2 Mining Enterprise, No. 3 Mining Enterprise, and the Cooperative Export-Import Enterprise. The three state-owned banks are Myanma Economic Bank, Myanmar Foreign Trade Bank, and Myanma Investment and Commercial Bank.