In a cable released by Wikileaks, dating from the summer of 2009, the U.S. embassy in Rangoon, Burma recommended that the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) designate a number of businesses of Burmese regime supporter Zaw Zaw by placing them on the list of Specially Designated Nationals (“SDN List”). Those parties placed on the SDN List have their property or interests in property under U.S. jurisdiction blocked and U.S. persons are prohibited from engaging in transactions with the designated party.

Zaw Zaw, considered one of the Burmese regime’s up and coming cronies, already has seen his Max Myanmar Group of Companies designated on the SDN list. Zaw Zaw also owns Pinya Manufacturing Co. Ltd., which produces beverages including Max Cola for the local market. That company began operating in 1998 with an initial investment of approximately USD 41,000 in 1998. Pinya Manufacturing now employs over 70 workers. Pinya Manufacturing Co. Ltd. has 13 distribution branches throughout Burma.

In the cable, Zaw Zaw is alleged to be actively attempting to curry favor with the Burmese regime and using his government ties to expand his commercial enterprises. Zaw Zaw, his family, and many of his companies had already been listed on OFAC’s SDN List. Despite these designations, Embassy Rangoon also recommended that OFAC designate a number of companies and senior management of those companies also owned by Zaw Zaw.

It is interesting to note that Zaw Zaw is not implicated in any criminal activity in this cable; other than his support of regime which has been sanctioned by the United States. This cable highlights exactly how the U.S. government applies pressure to rogue regimes by attempting to cut off their financial support from wealthy supporters of those regimes. This is a tactic that is not only employed in Burma, but in other places throughout the world.

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