THE EFFECT OF THE LIFTING OF US SANCTIONS ON THE EB 5 PROGRAMME
The US has finally lifted all remaining sanctions against Myanmar on 7 October 2016. President Obama signed an Executive Order terminating the national emergency with respect to Myanmar, revoking the Myanmar sanctions Executive Orders, and waiving other statutory blocking and financial sanctions on Myanmar. As a result, the economic and financial sanctions administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) are no longer in effect.
The precise impacts of the lifting of sanctions are as follows:
All individuals and entities blocked pursuant to the Burmese Sanctions Regulations (BSR) have been removed from OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List.
All property and interests in property blocked pursuant to the BSR are unblocked.
The ban on the importation into the United States of Burmese-origin jadeite and rubies, and any jewellery containing them, has been revoked.
All OFAC-administered restrictions under the Burma sanctions program regarding banking or financial transactions with Burma are no longer in effect.
OFAC will remove the BSR from the Code of Federal Regulations.
Compliance with the State Department’s Responsible Investment Reporting Requirements is no longer required by OFAC’s regulations and is now voluntary.
However, the termination of the Burma sanctions program does not impact Burmese individuals or entities blocked pursuant to other OFAC sanctions authorities, such as counter-narcotics sanctions. They remain on the SDN List, and their property and interests in property remain blocked. Further, pending or future OFAC enforcement investigations or actions related to apparent violations of the BSR when in effect may still be carried out.
There will be no reported changes regarding tourist or business visas for Myanmar citizens who wish to enter the USA and the EB 5 is no exception. The only impact of note is that individuals formerly on the Myanmar SDN list are no longer barred from entering the USA, as was prescribed in Executive Order 13310, Executive Order 13448, and Executive Order 13464. Serving members of the Tatmadaw (Myanmar armed forces) are still barred from entry to the USA.
The indirect impact of the lifting of sanctions for EB 5 prospects would be vast. The increased inflow of American FDI will be the much needed shot in the arm for the current state of the Burmese economy. Greater inflows of foreign investment, guided by a coherent state economic policy would go a long way in putting the country on the right track for growth.
Should the economy be positively affected by greater American investment, many high net worth and upper middle class individuals would be experiencing greater cash flows as well as greater confidence in investing overseas. While there is certainly more hope in the Burmese people about prospects of living in their homeland, their desire to send their children abroad for an overseas education has not abated.
One of the two hallmarks of the executive order, apart from the legalisation of jadeite and ruby imports, is the lifting of restrictions regarding American banking or financial transactions with Myanmar. Previously, there was a situation where international banks would simply stop a transaction with a key word associating it with Myanmar in them. Furthermore, Myanmar IP addresses were blocked from accessing most e-banking services. The removal of these restrictions would allow more flexibility from consumers and businesses alike and would facilitate easier remittances of money in and out of the country.
In general, the market will become more transparent and foreign companies will no longer have to worry about who they joint venture with to start business in Myanmar. Previously many American firms didn’t dare to invest; the risk of a potential partner being on the sanctions list was too great. The service industry such as legal, auditing, consulting and banking services will receive a boost from the greater transparency offered by a reduced need to use proxies. This can only be good for creating a positive sentiment amongst investors in Myanmar; however, the need for adequate state guidance is still a salient point. In both good times and bad, a second residency is always a wise investment and Harvey Law stands at the ready to lead Myanmar’s citizens into the globalised world that awaits them.
Please do not hesitate to contact HLG Managing Partner Mr. Bastien Trelcat or Country Manager - Myanmar & Singapore Mr. Kevin Heng, for any questions you may have regarding EB 5 Program.
Country Manager Myanmar - Singapore