President Obama, hosting Myanmar’s leader Aung San Suu Kyi, pledged today to lift all remaining sanctions on the country. We don’t take a position on sanctions – but Obama should be careful, because simply scrapping the “sanctions” regime would also do away with critically important transparency requirements for investors in Myanmar.
The U.S. government’s Reporting Requirements for Responsible Investment in Burma were first issued in 2013 and re-issued just a few months ago. That re-issue was already in slightly weakened form, even though all but two of the more than 60 comments received by the State Department strongly supported the Reporting Requirements. These are transparency requirements – they don’t prohibit any investment, but just require public disclosure of a few important categories of information when US businesses invest in Myanmar. Even Suu Kyi’s own party, the National League for Democracy, supported keeping the Reporting Requirements.
Commentators have praised the Reporting Requirements as “an unprecedented way to ease sanctions in Myanmar while also promoting transparency and cementing the brand of U.S. companies as transparent and accountable.”
But if the sanctions are lifted completely, without further action, the Reporting Requirements go away. This is because of a quirk of how the Reporting Requirements came to be. The sanctions used to include a ban on new U.S. investment. Rather than simply lifting that ban, the US government issued a “general license” – blanket permission to US businesses to invest in Myanmar. This was framed as an exception to the ban, not getting rid of it. Critically, the general license authorized new U.S. investment, but stated that anyone engaging in new investment “shall report to the Department of State in compliance with” the Reporting Requirements.
Get rid of the investment ban, and you don’t need the general license. Without the general license, there’s no requirement to follow the Reporting Requirements.
There are other ways the U.S. government could lift the sanctions and keep the Reporting Requirements – either by Congressional or Executive action. But simply scrapping the sanctions regime wholesale would be a terrible step backward in transparency and undermine what is currently the gold standard in responsible investment. The U.S. should be seeking to expand such transparency requirements – including to other countries which could benefit from greater disclosure – not end this successful experiment.