Blocking Property of Persons Threatening the Peace, Security, or Stability of Burma

Background

The Executive Order signed in 2012 aimed to address ongoing concerns of instability and human rights abuses in Burma by blocking the property and interests of persons deemed to be undermining the political reform process or perpetuating conflict with ethnic minorities. It was a continuation of the U.S.’s commitment to supporting democratic transformation in Burma, building upon previous orders addressing similar issues. The legal framework primarily involved the International Emergency Economic Powers Act, which empowered the U.S. Treasury to target individuals and entities involved in undermining peace in Burma by freezing their assets.

In practice, the enforcement of this order saw the U.S. Treasury Department actively engage in identifying and designating individuals, businesses, and governmental entities involved in activities that threatened Burma’s peace and stability. Specific directives were issued to financial institutions to ensure compliance, including the prohibition of transactions with designated persons and entities. The operational adjustments required rigorous due diligence to prevent any engagement with blocked parties, emphasizing the need for financial institutions to enhance their monitoring systems.

Further, the Executive Order had implications for diplomatic relations and social policy as it situated the United States as a proactive player in Burma’s reform agenda. The U.S. government used this policy tool to exert pressure on the Burmese government and military to continue on a path of democratization and reconciliation with ethnic minorities. While ostensibly aimed at fostering stability, some critics argued that the order risked isolating elements that might otherwise engage in dialogue, given the breadth of restrictions placed on financial dealings.

Reason for Revocation

The revocation of the order in October 2016 marked a significant shift in U.S. policy towards Burma, reflecting an assessment that the previous restrictions were no longer necessary. This change came amidst a broader context of warming relations between the U.S. and Burma, as the latter had undertaken notable political and economic reforms. Under President Obama's administration, there was an ideological pivot towards engaging more fully with nations showing progress in human rights and democratic governance.

The decision to lift the sanctions was aligned with the broader strategy of integrating Burma into the international community to support and sustain its democratic transition. President Obama’s visit to Burma and meetings with leaders such as Aung San Suu Kyi underscored a confidence that engagement, rather than isolation, would further incentivize reforms. The administration believed that removing sanctions could provide the Burmese government and its people with greater opportunities for economic development and integration into the global economy.

Moreover, the revocation can be seen as part of a pragmatic approach to facilitate more direct economic and diplomatic relations. The administration weighed that the economic sanctions were increasingly viewed as a hurdle to U.S. businesses interested in entering Burmese markets. By lifting the sanctions, the U.S. aimed to support burgeoning economic sectors in Burma, thereby fostering stability through prosperity and international cooperation.

While the ideological shift aimed to reflect support for the progress made, it did not signal an end to U.S. vigilance regarding human rights in Burma. The administration maintained that it would continue monitoring the situation closely and reserved the right to reimpose sanctions should conditions deteriorate. This ensured a balance between optimism for reform and a cautious approach to newly-established diplomatic ties.

Winners

The revocation of the sanctions notably benefited U.S. companies looking to invest in Burma’s emerging markets. With restrictions lifted, sectors such as energy, telecommunications, and banking saw opportunities for growth and partnership. Companies involved in infrastructure development and technology were particularly well-positioned to tap into the growing demands of a liberalizing economy. Multinational corporations, like General Electric, which had already engaged in discussions with Burmese counterparts, stood to benefit significantly from the eased regulatory environment.

Burmese businesses and entrepreneurs also emerged as winners, gaining greater access to foreign investment and technologies necessary to modernize and expand their operations. This renewed international economic engagement provided opportunities for partnerships, joint ventures, and the infusion of capital that could spur development across various sectors. Moreover, the overall business climate improved as previously restricted access to international banking and financial services opened up, facilitating smoother transactions and building investor confidence.

Overall, the Burmese populace benefitted from enhanced economic prospects and the promise of increased job opportunities, which accompanied foreign investments. The lifting of sanctions allowed humanitarian and development efforts more freedom to operate, potentially improving social conditions and public welfare. This shift held promise for tangible improvements in living standards driven by international cooperation and economic integration.

Losers

Despite the optimism following the revocation, there were concerns about potential negative impacts on certain groups within Burma. Human rights organizations expressed worry that lifting sanctions might reduce external pressure on the Burmese government and military to continue substantive reforms. The fear was that without the leverage of sanctions, the impetus for continuing progress in ethnic reconciliation and human rights could wane, leaving marginalized ethnic communities vulnerable.

Some local industries, previously sheltered from foreign competition due to sanctions, faced new challenges. The influx of multinational corporations forced smaller local businesses to compete against well-capitalized global players with more advanced technologies and extensive networks. Sectors like agriculture, which traditionally relied on local investments, encountered increased competition from international firms capable of quickly modernizing operations and capturing market share.

Furthermore, regional actors involved in illicit activities, such as illegal arms trade and drug trafficking, stood to lose as the normalization of relations included increased scrutiny and efforts to strengthen law enforcement capabilities. This presented risks for these groups by disrupting their networks and limiting their operating spaces as the government and international partners sought to ensure a stable and reform-oriented environment in Burma.