Blocking Property and Prohibiting Certain Transactions Related to Burma

Background

The Implementation of Executive Order 13448

Executive Order 13448, enacted by President George W. Bush in 2007, expanded and deepened the U.S. sanctions against Burma, targeting individuals and entities associated with the Burmese government. By blocking the property of specified individuals and officials, the order aimed to apply economic pressure on the ruling military junta, known as the State Peace and Development Council. These measures were designed to restrict access to international finance and curb the government's income sources, thereby compelling the junta to lessen its repressive actions against democratic movements within the country.

The order also reinforced previous sanctions, enhancing the legal framework established under the International Emergency Economic Powers Act (IEEPA) and the Burmese Freedom and Democracy Act. U.S. departments, notably the Department of the Treasury, were charged with rigorous enforcement of these sanctions, employing both comprehensive asset freezes and transaction prohibitions. These efforts were supported by the Office of Foreign Assets Control (OFAC), which was tasked with identifying and listing individuals and entities subjected to these restrictions.

International and Domestic Repercussions

The implications of these sanctions were significant both internationally and domestically. On one hand, they aligned with international efforts to isolate Burma due to its human rights abuses and lack of democratic governance. Nations such as those within the European Union mirrored similar measures, creating a more cohesive global stance against the Burmese regime. On the domestic front, U.S. compliance required increased vigilance. Financial institutions, for instance, had to ensure that their operations, even those tangentially related to Burma, did not violate these sanctions, prompting the creation of compliance mechanisms and heightened oversight duties.

Impact on Social Policy and Humanitarian Aid

Despite these sanctions' intended targets, the broader Burmese populace also felt their effects. Although humanitarian exemptions existed, the economic isolation contributed to worsening economic conditions for many Burmese citizens. Social policies in Burma faced funding challenges as resources became more constrained, further impacting the civilian population. U.S. diplomatic strategies included efforts to mitigate these impacts by supporting non-governmental organizations and humanitarian projects, yet these initiatives were often tangled with geopolitical limitations, complicating their effectiveness.

Reason for Revocation

Shifts in U.S. Foreign Policy

President Barack Obama's decision to revoke this executive order in October 2016 was reflective of a significant shift in U.S. foreign policy towards Burma, emphasizing engagement over isolation. This move was aligned with a broader strategy to encourage democratic reforms and reconciliation in the country at a critical juncture in its political evolution. Obama's administration believed that lifting these sanctions could facilitate further transitions in Myanmar, supporting moderate voices within its political landscape and incentivizing progressive changes.

Myanmar's Political Transition

The revocation was contextualized by Myanmar's evolving political climate. Following years of military rule, the election of Aung San Suu Kyi's National League for Democracy and the establishment of a quasi-civilian government provided a partner for the United States to engage with directly. This political opening presented an opportunity to recalibrate diplomatic and economic relations with Myanmar, reinforcing the reform trajectory initiated by its leadership.

Economic Considerations

Economic motives also played a role in the decision. By lifting sanctions, the U.S. aimed to facilitate trade and investment, opening Myanmar to global markets and potentially accelerating its economic development. This realignment was anticipated to create mutual benefits, providing American companies with new opportunities while supporting Myanmar in building a sustainable and more diversified economy.

Ideological Underpinnings

The revocation aligned with Obama's broader foreign policy ideology favoring constructive engagement over punitive isolation. This approach was aimed at fostering mutual understanding, reducing tensions, and supporting international stability through diplomatic means rather than coercion. The administration's belief in leveraging economic interdependence to drive political change was evident in numerous foreign policy decisions across the board during Obama's tenure.

Winners

Myanmar's Emerging Industries

The lifting of sanctions provided a substantial boost to Myanmar’s emerging industries, particularly in sectors like telecommunications and consumer goods. Companies such as Telenor and Ooredoo, which had already begun making inroads into Myanmar’s telecom market, stood to gain significantly from increased foreign investments and a more favorable business climate. As barriers to international trade were reduced, these sectors experienced rapid growth and improved access to technology and capital.

U.S. Corporations and Investors

For U.S. corporations and investors, the revocation of sanctions opened a previously closed market rich with opportunities. Major companies in the energy, raw materials, and consumer goods sectors eagerly explored Myanmar’s untapped potential. Firms like Chevron and PepsiCo were poised to reap financial benefits as they sought partnerships and expanded operations within the country, diversifying their production and supply chains in one of Southeast Asia’s last frontier markets.

Local Manufacturers and Entrepreneurs

The relaxation of U.S. sanctions encouraged growth within Myanmar’s manufacturing and entrepreneurial landscape. Local businesses began to access new technologies and expertise through joint ventures and collaborations with international firms. This influx of capital and knowledge facilitated the modernization of Myanmar’s manufacturing capabilities and enhanced the competitiveness of local industries on the international stage.

Losers

Pro-Democracy Advocates

Despite the opportunities presented by the revocation, some pro-democracy advocates viewed the removal of sanctions as premature. They argued that the military continued to exert significant influence, with democratic reforms still in their infancy and ensuring accountability for past human rights violations remained unresolved. These groups feared that lifting sanctions would reduce international pressure on Myanmar’s government, negatively impacting the democratic reform process.

Human Rights Organizations

Human rights organizations expressed concern that the revocation could undermine efforts to hold Myanmar accountable for ongoing abuses against minority groups. The military's role in the Rohingya crisis was particularly concerning, with critics arguing that the U.S. should have maintained a more cautious and conditional strategy. The lifting of economic pressure was perceived as detracting from international safeguards against potential regressions in human rights standards.

Regional Stability Advocates

Some regional stability advocates viewed the revocation as potentially destabilizing in the context of Southeast Asia's geopolitical landscape. By removing leverage that could have been used to navigate diplomatic tensions related to Myanmar's internal ethnic conflicts, the U.S. missed an opportunity to anchor its influence in promoting peaceful solutions to long-standing regional disputes. Critics suggested that this step weakened strategic positioning within a complex regional ecosystem.