US embassy cable - 03RANGOON921

UNCLAS RANGOON 000921 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EAP/EX, EB/ESC/ESP 
COMMERCE FOR ITA JEAN KELLY 
TREASURY FOR OFAC, OASIA JEFF NEIL 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: EFIN, AFIN, BM, Economy 
SUBJECT: NATIVES RESTLESS OVER SCOPE OF NEW SANCTIONS 
 
 
1. This is an action request.  Please see paragraph 5. 
 
2. The Charge d'Affaires, a.i. and Econoff held briefings on 
the new U.S. sanctions on July 30th for U.S. citizens, and 
July 31st for Burmese and third-country businesspeople, NGOs, 
and the diplomatic and UN community.  Both briefings were 
well-received.  We asked the attendees not to debate U.S. 
policy, but to stay focused on technical issues.  Generally 
the two audiences complied, but were genuinely shocked, and 
in some cases irked, by the ramifications of the sanctions -- 
particularly the ban on financial services.  We tried to give 
general advice and explanations about the sanctions, but 
advised all to contact an attorney or OFAC directly to 
discuss specific cases. 
 
3. The U.S. citizens, including representatives of U.S. 
companies and U.S.-based NGOs, were concerned that they would 
not be able to import their personal effects when they 
returned to the United States.  Many have lived in Burma for 
years, and have accumulated Burmese-made products of 
significant value.  Several asked whether there might be some 
kind of waiver for U.S. citizens to carry home personal 
effects, or for those who could prove they had purchased 
Burmese products before the import ban went into effect. 
U.S. citizens conducting business in Burma were quite worried 
that they would no longer be able to get U.S. dollars 
transferred to Burma from the United States or a 
third-country.  The businesspeople agreed that the impact of 
the sanctions would depend in part if the GOB can adapt its 
trade policy to accept letters of credit in currencies other 
than the U.S. dollars. 
 
4. The second briefing filled the American Center auditorium 
beyond capacity and was somewhat more heated than the first. 
Representatives of foreign embassies in Rangoon were upset 
that remittances of dollars into Burma to fund Embassy 
payrolls and operations were not covered by the first general 
license.  Several Ambassadors urged us to pressure Treasury 
to issue such a license for them as soon as possible.  The UN 
representatives were pleased to be included in the initial 
general license, but confused as to how they would be able to 
bring in funds without relying on frozen correspondent 
accounts in the United States.  Many businesspeople and NGO 
representatives asked about the status of payments that fall 
afoul of the remittance ban and asset freeze, whether these 
payments would also be frozen, or merely returned to sender. 
 
5. Action requested:  We would appreciate specific guidance 
on the legality of transactions (both for those with general 
licenses and those without licenses) in U.S. dollars from a 
third-country bank outside the United States, directly to a 
state-owned bank in Burma.  Also, please advise whether U.S. 
dollar letters of credit, even if between a third-country 
bank and a Burmese bank, will become problematic under the 
new law. 
McMullen