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Ban on Myanmar may hit US firms thr
- Subject: Ban on Myanmar may hit US firms thr
- From: moe@xxxxxxxxxxxxx
- Date: Wed, 28 May 1997 15:25:00
Subject: Ban on Myanmar may hit US firms throughout South-east Asia
Ban on Myanmar may hit US firms throughout South-east Asia
28/5/97
WASHINGTON -- American companies may find that the White House ban on
new investment in Myanmar has implications extending far beyond that
country,
jeopardising projects in other South-east Asian economies as well, some
experts
have said.
A broad interpretation of the presidential ban could threaten billions
of dollars worth
of business throughout South-east Asia, crippling US firms in one of their
fastest-growing markets, according to a group representing 450 major
companies
active in the region.
While business executives and trade lawyers are still studying the
executive order
issued last week implementing the ban, the US-Asean Business Council
has said it
could even prohibit participation in regional projects that extend from
another country
into Myanmar.
If Myanmar joins Asean as expected this year, "all of these regional
transportation,
telecommunications, all of these regional networks are going to have a
Burma
element in them," said Mr Ernest Bower, president of the council. "We
stand to lose
enormous amounts of business."
Other experts have said that the ban casts a wider net than expected
around projects
within Myanmar and may create more problems for energy companies already
involved in projects there -- like Unocal Corp, Atlantic Richfield Co
and Texaco, the
leading US investors -- than those companies realise.
President Bill Clinton's order last Tuesday formalised the administration's
announcement last month that the ban on new investment was forthcoming.
The order prohibits US citizens from entering into contracts that
involve the economic
development of resources in Myanmar.
It also prohibits Americans from purchasing ownership shares in developing
resources in the country or helping non-US citizens who wish to perform
activities
forbidden under the ban.
While the executive order allows companies to complete ongoing
contracts, it is not
clear whether they will be able to engage in any additional work that
would require
new funds, such as building a pipeline to get their gas to market,
according to legal
and government sources.
"Unocal is going to have trouble going forward under this," said Mr David
Schmahmann, an international legal expert with the Boston law firm of
Nutter,
McClennen & Fish.
Mr Schmahmann said that the ban did not define "new investment" clearly and
prohibited -- unexpectedly -- investment into not only natural
resources but
agriculture, financial, industrial and human resources.
And while it did not cover foreign subsidiaries of US companies, it
prohibited US
businesses from approving or facilitating any transactions by
foreigners that would be
considered illegal under the presidential ban.
The ban carries a penalty of up to 10 years in prison and a US$55,000
(S$78,650)
fine for violators.
But no one is certain yet just what is illegal, which is why these US
companies are
lining up to meet officials of the Treasury Department, whose Office of
Foreign
Assets Control will be enforcing this measure.
Treasury is expected to issue its enforcement regulations for the
Mynmar ban in a
month. -- LA Times.