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Ban on Myanmar may hit US firms thr



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.