This past Tuesday, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) amended and reissued the Burmese Sanctions Regulations in their entirety. This was done to implement a series of executive orders stretching as far back as 2007 issued in response the situation in Burma. Here are some of the big changes that you need to know about:

1. Blockings: 31 C.F.R. 537.201(a) now applies to the blocking of parties designated pursuant to the following executive orders: E.O. 13310, E.O. 13448, E.O. 13464, and E.O. 13619. Furthermore, the new regulations clarify, through 31 C.F.R. 537.416, that the property and interests in property of an entity are blocked if the entity is 50 percent or more owned by a person whose property and interests in property are blocked, whether or not the
name of the entity is incorporated into the Specially Designated Nationals and Blocked Persons (“SDN”) List.

2. Financial Services and Investments: Due to the inclusion of a new general license at 31 C.F.R. 537.529 U.S. persons are now authorized to export or reexport financial services to Burma, subject to certain limitations, such as maintaining the prohibition on debiting of a blocked account. In addition, a new general license at 31 C.F.R. 537.530 allows U.S. persons to engage in limited new investments in Burma. Such investments necessitate compliance with the reporting requirements of the Department of State as set forth in the Reporting Requirements on Responsible Investment in Burma.

Licensing: There were a number of general licenses removed from the regulations, but for good reason: the activities they covered were no longer prohibited. For example, 31 C.F.R. 537.525 which formerly authorized transactions, including with SDNs, by U.S. citizens permanently residing in Burma has been removed, due to the removal of certain prohibitions, and/or the issuance of new general licenses.

In addition, due to the revisions to 31 C.F.R. 537.201(a), the general license for legal services which is located at 31 C.F.R. 537.507 now extends those delineated legal services to all SDNs identified with the [BURMA] identifier on the SDN List. This was previously the topic of a blog post of mine over the confusion resulting from the fact that 537.201(a) did not previously legally include all SDNs identified as [BURMA] and yet made reference to the [BURMA] identifier in its language. With the new changes that issue has been resolved. In the same vein, OFAC has added another general license, similar to the ones they have included in the Iranian Transactions and Sanctions Regulations at 31 C.F.R. 560.553, and the South Sudan Sanctions regulations at 31 C.F.R. 558.507, which obviates the need for a U.S. lawyer or law firm to obtain specific license authorization for receipt of payment from unblocked sources so long as they file a copy of the engagement letter or legal services contract with OFAC before receiving such payment.

While the new Burmese Sanctions Regulations incorporate much of the relaxation that has taken place legally in relation to this sanctions program, they still do prohibit transactions with those parties specifically identified on the SDN List, and entities owned or controlled more than 50% by such parties. Since large swathes of Burma’s economy are still controlled by SDNs, there is still a strong need to remain diligent in dealings with Burma. As such, prior to engaging in such transactions you should seek counsel experienced in matters with both OFAC and Burma, and with a strong knowledge of these new Burmese Sanctions Regulations.