Friday, August 18, 2017

US relaxes sanctions on Yangon port

The US treasury department has issued a general licence allowing trade to pass freely through Yangon’s blacklisted Asia World Port Terminal and other key infrastructure hubs with a specially designated national connection.

This is Washington’s first relaxation of sanctions on Myanmar since the country’s historic election on November 8. The move will allow US trade to pass through Yangon port without violating sanctions, and is likely to boost nascent trade ties.

Senior administration officials said the general licence, initially valid for six months, is “not in any way a reaction to the recent elections in Burma” nor an overall change in Washington’s sanctions policy. It is instead a “discreet technical fix”, they said.

A large percent of Myanmar’s trade passes through AWPT.

“For the past several months after discovering there was a connection between AWPT and [sanctioned individual] Steven Law, banks have been delaying and freezing trade transactions related to AWPT,” they said.

The Office of Foreign Assets Control had received over 100 requests to issue a general licence to allow trade to flow through the port, officials said, adding that not only US financial institutions, but also third-country exporters and financial institutions were beginning to hold up trade going into and out of Myanmar.

While Yangon has other ports, Washington was concerned that fears of sanctions and an increase in compliance costs would lead US banks to pull out of the Myanmar market.

“With the historic election in Burma it’s a US government priority to support the National League for Democracy as it makes its economic and political transition,” the officials said. “We see this general licence as potentially the single most important thing that we can do on the economic front to give the NLD some breathing space over the next several months as it forms its government.”

In addition to relieving US banks, the licence is aimed at rectifying the impact of sanctions on small and medium enterprises, they said.

The licence applies not only to AWPT but also to Yangon International Airport, which is operated by an Asia World Group subsidiary, and to all other trade links.