Blocking Property and Prohibiting Certain Transactions Related to Burma

Background

Prior to its revocation, Executive Order 13464 was a critical instrument in the United States' arsenal for exerting economic pressure on Burma, also known as Myanmar. It bolstered the efficacy of earlier sanctions regimes by specifically targeting the financial and material interactions between U.S. entities and the Burmese military junta. This order was embedded within a wider set of sanctions that had been evolving since the 1990s, mandating the freezing of assets of individuals and entities tied to the Burmese government. Entities under the control of the Burmese government had their assets within the U.S. blocked, effectively cutting off their access to U.S. financial systems.

The enforcement of this order required robust coordination between the Department of the Treasury, particularly its Office of Foreign Assets Control (OFAC), and the Department of State. OFAC was tasked with identifying and cataloging persons and enterprises linked to the Burmese military regime, utilizing intelligence and diplomatic channels to ensure accuracy and comprehensiveness. These efforts culminated in a list of sanctioned parties, which U.S. financial institutions were required to observe, barring any transaction with the listed entities. Banks were urged to incorporate compliance checks into their systems to detect and halt transfers involving blacklisted parties, a move that led to significant operational shifts.

Aside from the financial containment, the 2008 order also played a symbolic role in underscoring U.S. foreign policy objectives concerning human rights and democratic governance. Sanctions did more than limit economic interactions; they functioned as a statement of opposition to the Burmese regime's policies, reinforcing international condemnation. Reports and insights from non-governmental organizations revealed that these executive-level interventions contributed to raising global awareness about Burma’s internal human rights issues. This amplified the diplomatic calls for change, albeit with mixed success in altering the junta's behavior.

Reason for Revocation

The decision by President Barack Obama to revoke Executive Order 13464 in October 2016 was aligned with broader shifts in U.S. foreign policy towards engagement and normalization. The context of this decision was rooted in the gradual political reforms that began to unfold in Burma around 2011, following the military junta's decision to embrace a nominally civilian governance structure. This period of political liberalization, marked by the release of political prisoners, media freedom, and the election of opposition figures, provided an opening for strategic recalibration by the U.S. administration.

President Obama's administration capitalized on these reforms by advocating for increased engagement with Burma, aiming to incentivize further progress through the promise of economic integration into the global system. The ideological pivot from isolation to engagement was predicated on the idea that building economic and diplomatic ties could effectively encourage and consolidate the democratic gains made thus far. This approach was reflective of a broader diplomatic strategy under the Obama administration that favored dialogue and economic integration as mechanisms for achieving political reform across different global contexts.

Moreover, the revocation was part of a larger effort to support the civilian government led by Aung San Suu Kyi, who had ascended to a prominent governmental role following electoral victories. By lifting sanctions and thus promoting economic growth, the Obama administration aimed to foster conditions conducive to democratic consolidation, allowing the civilian government to deliver on its promises of economic development and political stability. The United States, along with other Western nations, envisioned a gradual but irreversible transition to a fully democratic Burma, a process thought to be impeded by a continued sanctions regime.

Nevertheless, the lifting of sanctions was not without its critics. Some experts and human rights advocates questioned whether the U.S. was prematurely removing leverage before assured democratic entrenchment and resolution of ongoing ethnic conflicts within Burma were achieved. Yet, for the Obama administration, the interplay of economic opportunity and diplomatic engagement was seen as the most pragmatic path forward, balancing geopolitical and developmental objectives.

Winners

The revocation of the sanctions created newfound opportunities for American businesses, particularly those in extractive industries such as oil and gas, which stood to benefit from access to Burma's untapped natural resources. Energy companies operating in Southeast Asia found in Burma an alluring frontier market with its rich deposits of natural gas and minerals. Companies with existing regional footholds, like Chevron and Total, could now consider expansion into Burma without the barriers posed by the sanctions.

Furthermore, the revocation opened doors for infrastructure development companies and financial institutions. Construction firms saw potential in participating in Burma's infrastructure overhaul, including roads, ports, and public utilities, essential for the country's economic transformation. Similarly, American banks and investment firms could explore partnerships and financing opportunities within Burma's nascent market-oriented economy, bolstering capital flows and driving investment into promising sectors.

The Burmese economy itself was anticipated to benefit significantly from the revocation. With the relaxation of constraints, local businesses gained access to international markets and financing, facilitating technology transfers, enhancing productivity, and creating job opportunities. The financial sector, in particular, stood to gain from increased liquidity and foreign exchange options, critical for stabilizing the economic transition and attracting further investment.

Losers

The lifting of sanctions, however, presented challenges for human rights groups and advocates focused on ethical investment and corporate responsibility. These organizations argued that without appropriate safeguards, the economic engagement could inadvertently bolster the same military-linked economic interests that had dominated Burma’s political landscape for decades. They expressed concerns over insufficient monitoring mechanisms to ensure that new wealth would not entrench military influence under the guise of civilian governance.

Competitors within the region, particularly those in neighboring countries, may have found themselves at a disadvantage as U.S. corporations, with their economic prowess and technological capabilities, entered Burma’s market. Furthermore, local businesses unaccustomed to international competition faced pressure to rapidly modernize and comply with global standards, a transition that could be both financially and operationally challenging.

Internally displaced and marginalized ethnic communities in Burma were also apprehensive about the potential losses. The fear was that rapid economic development could exacerbate land grabbing and resource competition, potentially leading to conflict and further displacement. These communities argued that without comprehensive legal and social safeguards, the economic transformation would mirror past exploitations, with scant benefits trickling down to the vulnerable populations.