International Law Advisory - New EU Financial Sanctions Against Burma (Myanmar) Take Effect

Effective October 25, 2004, the European Union renewed and extended its sanctions against Burma (Myanmar), by adopting Council Regulation (EC) No 1853/2004 ("Regulation"), as an amendment to Council Regulation (EC) No 798/2004. The original sanctions under the latter resolution, adopted in April 2004, include:

• a requirement to freeze all funds and economic resources belonging to certain individual members of the Government of Burma, and persons or entities associated with them as listed in an annex to the sanctions regulation ("Persons");
  
• a prohibition on making funds or economic resources available, directly or indirectly, to or for the benefit of the Persons;
  
• a ban -- with respect to any person or entity in, or for use in, Burma -- on (a) provision of technical assistance, brokering services, financing or financial assistance related to military activities, or (b) provision, manufacture, maintenance or use of arms and related material;
  
• a travel ban preventing certain Burmese military officials from entering the EU; and
  
• a prohibition on the sale, supply and export to Burma of equipment which may be used for internal repression or terrorism.

The new sanctions adopted at the end of October also prohibit:

• granting any financial loan or credit to Burmese state-owned enterprises as listed in an annex to the sanctions regulation ("Enterprises") (including acquiring bonds, certificates of deposit, warrants, or debentures issued by the Enterprises);
  
• acquiring or extending a participation in the Enterprises (including acquiring full ownership, or shares and securities of a participating nature); and
  
• knowingly and intentionally participating in activities, the aim or effect of which is (directly or indirectly) to circumvent such a ban.

The new sanctions, however, include exceptions for the execution of trade contracts for the supply of goods or services on usual commercial payment conditions, including usual supplementary agreements such as export credit insurance. Nor do the sanctions apply to the execution of obligations arising from loan or credit contracts concluded before October 26, 2004.

Companies should update their EU sanctions compliance mechanisms to ensure that any existing business relationships or future transactions are in compliance with the new sanctions regulation. If you have any questions regarding the new sanctions, please contact Maury Shenk (+44.207.367.8092) or Winnie Chang.