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Focus: More nations ease sanctions against Myanmar

23 August 2012

In brief: We recently reported on the easing of US sanctions against Myanmar. In this follow up article, we report on changes to the Australian, EU and Canadian sanctions against Myanmar. Allens Partner Anthony Patten , Linklaters Partner Satindar Dogra and Allens Law Graduate Laura Bellamy provide a brief overview of the changes to these sanctions regimes.

How does it affect you?

  • Those who were previously prohibited from certain dealings with Myanmar and its citizens by Australian, Canadian or European sanctions may now be able to do so as a result of the easing of sanctions. (See our previous Focus: US eases sanctions on Myanmar)
  • Arms embargoes remain in force across the board, as do prohibitions on other forms of military assistance. Transacting with certain listed individuals and entities (typically those associated with the military) may also remain subject to sanctions.
  • Those wishing to pursue trade and investment opportunities with Myanmar must be mindful of the ongoing sanctions that remain in effect in each jurisdiction and the differences in sanctions between jurisdictions. A number of entities with international offices, seeking international finance or using foreign vessels may be subject to multiple sanctions regimes, and will need to check their obligations under each regime.

Sanctions eased: Australia

Who is affected?

The Australian sanctions regime applies to Australian citizens and persons situated in Australia. Additionally, anyone using an Australian ship or aircraft, or any entity under the effective control of an Australian body corporate is caught by the sanctions. This may include a foreign branch of an Australian entity, or a foreign entity in which an Australian body corporate has a significant shareholding.

What has changed?

Australia's Myanmar autonomous sanctions regime contains an arms embargo and a list of individuals or entities with whom it is prohibited to trade or contract. Australia has restricted the assets and movements of these listed persons since 2007, by prohibiting Australians from making any asset available to such persons, and restricting their entry into Australia. After removing civilians from this list earlier this year, the restrictions were lifted on all listed Myanmar people and entities on 3 July 2012.

Second, Australia prohibits the supply of arms and defence materiel to Myanmar, or for the use in, or benefit of, Myanmar. The provision of technical assistance, financial assistance and services, and any other services is also prohibited if it would assist in the supply of arms or is otherwise related to military activities. This aspect of the sanctions remains in effect.

Australia also announced on 16 April 2012 that it would normalise its trade relationship with Myanmar, meaning that it will more actively encourage trade with Myanmar.

Sanctions eased: EU

Who is affected?

The EU Council decision concerning restrictive measures against Myanmar applies to all nationals of EU member states, and anyone importing into the EU. Any action originating from the territory of a member state, and anyone using a Member State's flag vessel or aircraft, is also covered by the EU decision.

European states that are not members of the EU, including Liechtenstein, Iceland, Croatia, Serbia, Montenegro, Macedonia, Albania, Moldova, Armenia and Georgia, have aligned themselves with the EU decision and have national policies that reflect the EU regime.

What has changed?

The EU-wide sanctions regime, operative since 1996, comprises a list of persons subject to asset freezes and travel bans, and prohibitions on dealings in certain industries. Each of these prohibitions has been suspended for the duration of one year, until 30 April 2013, so as to encourage Myanmar's democratic reform. This suspension came into full effect on 14 May 2012.

The sanctions had previously prohibited the supply of technical equipment, technical assistance or financial assistance to the timber and mining industries. This included mining for gold and other metals, as well as precious and semi-precious stones. Entities subject to the sanctions were barred from engaging in business, including loans, joint ventures and commercial agreements with companies that participate in these industries. The importation of timber, minerals and precious and semi-precious stones, whether processed or in raw form, was also prohibited.

Bans on the provision of arms, related defence materiel and the export of other equipment that may be used for internal repression remain in force. The provision of financial or technical assistance to any military body is also barred. This prohibition has certain exemptions, such as the provision of mine-clearing equipment, or non-lethal military equipment used by humanitarian missions. It is thus important to consider these sanctions carefully before providing military equipment to Myanmar, or any kind of assistance or trade with Myanmar military groups.

The EU now encourages companies to explore trade and investment opportunities in Myanmar, while being mindful of their international corporate social responsibility obligations, such as those under the OECD Guidelines for Multinational Enterprises.

Sanctions eased: Canada

Who is affected?

The Canadian sanctions regulations apply to Canadian citizens, wherever they are in the world, and any person, natural or legal, that is in Canada. This would include a local Canadian office of a foreign entity, even if that entity is not incorporated or listed in Canada. Anyone using a Canadian vessel in Myanmar, or a Myanmar vessel in Canada will also be affected.

What has changed?

The Canadian Special Economic Measures (Burma) Regulations were introduced in 2007 and contained a wide range of prohibitions, including:

  • importation and exportation of all goods from and to Myanmar;
  • investment in Myanmar property or assets;
  • communication of technical data and assistance;
  • provision of any financial service to anyone in Myanmar, or a Myanmar person; and
  • landing/docking of Canadian ships and aircraft in Myanmar, and Myanmar ships and aircraft in Canada.

The regulations also, like other Myanmar sanctions regimes, contain a list of persons with whom it is prohibited to transact.

All these activities may now be undertaken, subject to certain restrictions. Certain listed individuals and entities remain subject to an asset freeze and transaction prohibition. Additionally, the provision of arms and related materiel remains prohibited, as does technical and financial assistance to military groups. It is also no longer required to obtain a permit to export from Myanmar, unless products are on Canada's Export Control List.

Conclusion

The transnational sanctions that had previously limited western investment in Myanmar have undergone substantial changes in recent months. Nationals of Australia, Canada and many European nations, as well as those operating out of those countries, now have far greater options when considering dealing with Myanmar and its nationals. Europe and Australia have also moved to a policy of encouraging investment in and trade with Myanmar.

However, restrictions in relation to the provision of arms, dealing with listed individuals and entities and assisting military groups remain in force. These restrictions vary between jurisdictions, and entities may be subject to multiple regimes if they operate internationally, transact with other entities covered by sanctions or use foreign vessels. Those wishing to invest in or trade with Myanmar must therefore be mindful of all sanctions regimes that may apply to their transaction and should be vigilant as to their ongoing obligations under each regime.

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