On Friday, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a general license authorizing U.S. persons to engage in transactions with four (4) banks in Burma. Those banks include Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank, and Myanma Investment and Commercial Bank. The general license allows U.S. persons including individuals, companies, and financial institutions to conduct most transactions with these banks to include opening and maintaining accounts and conducting a range of other financial services. As a result of this new general licenses, funds transferring between Burma and the U.S. will become much easier.

While the general license issued by OFAC authorizes most types of transactions with U.S. persons, it doesn’t authorize the exportation or reexportation of financial services, directly or indirectly, to the Burmese Ministry of Defense, including the Office of Procurement; any state or non-state armed group; or anyone in which any of the foregoing maintains an interest in greater than 50%. The general license also does not authorize any new investment with these four banks. New investment includes transactions for the economic development of resources located in Burma, the general supervision and guarantee of another person’s performance of a contract that includes the economic development of resources located in Burma, the purchase of an ownership interest in the economic development of resources located in Burma, or the participation in royalties, earnings, or profits in the economic development of resources located in Burma, without regard to the form of the participation.

Equally important, OFAC noted that the issuance of the general license also has the effect of lifting the Section 311 of the USA PATRIOT Act measures on operation of correspondent accounts with these four Burmese banks, although U.S. depository institutions are not absolved from carrying out enhanced due diligence on those accounts. This is not the first time such an authorization has been granted. It is rumored that in the 1990’s OFAC issued a similar specific license authorization for a Yugoslavian bank to have a correspondent account at a U.S. depository institution. However, unlike that license, these general licenses were a result of the overall easing of sanctions on Burma in light of the political reforms taking place in the country, and not for any other particular reason.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.