Last July, the US Treasury Department’s Office of Foreign Assets Control (OFAC) officially lifted certain longstanding sanctions against American companies doing business in Myanmar, marking a noticeable détente in relations between the United States and the South East Asian nation which officially changed its name from Burma after a military coup in 1962. And while much has been said in the press about the opening of political liberties there of late, the U.S. Government’s decision to allow investment in Myanmar comes with serious stipulations, including unprecedented reporting requirements of anti-bribery compliance.
Among the proposed requirements (to be published in 31 C.F.R. § 537) are conditions that companies adopt specific “policies and procedures on anti-corruption in Burma” and that they “report total payments during the reporting year to each Government of Burma entity and/or any sub-national or administrative entity that possesses or claims to possess authority over the submitter’s new investment activities in Burma.” These requirements reflect a sober reality that Myanmar remains one of the most corrupt countries in the world. As an article published last July by the New York Times noted: “A modern banking system does not exist, communications are spotty, and ingrained corruption linked to military officers is widespread.” Some progress is being made though. Recently, President Thien Sein said that he had made it an official program to clean up graft in the country, and just last week Reuters reported that Myanmar’s former telecommunications minister and dozens of officials in the telecoms ministry were being investigated on charges of corruption.
Prudent companies looking to embark on new business in Myanmar should be committed to making compliance, due diligence and ethical behavior part of their business model. Simply relying on “best practices” may not be enough, and companies would do well to employ the full scope of anti-bribery measures available to them to ensure that they do not run afoul of the Foreign Corrupt Practices Act and the US Government’s other strict regulations for doing business in Myanmar. For more information on the risks of doing business in Myanmar, you may be interested in this webinar entitled Navigating the Evolving Regulatory Landscape in Myanmar to Address Anti-Bribery Challenges, offered by TASA, the TRACE Anti-bribery Specialist Accreditation program.