Patriot Act. Section 311 – detailed information, FocusCore and your route to trading in Myanmar.
29 Nov

Patriot Act. Section 311 – detailed information, FocusCore and your route to trading in Myanmar.

We have received many enquiries from companies seeking more information following our recent blogs – on the Executive Order from The White House for the removal of Sanctions, and on Singapore the preferred route for investments into Myanmar.

The proposed lifting of sanctions is a major benefit to Myanmar. Sanctions have been increasingly liberalised in recent years. However you should note some detail here that is not widely reported.

It was after September 11, 2001 that President Bush introduced the Patriot Act. Section 311, of this Act, provides a range of options that can be adapted to target specific money laundering and terrorist financing risks.

However, the result of the Executive Order to lift sanctions is an “administrative exception” to suspend but not rescind the prohibition on US financial institutions facilitating trade with Myanmar.

This is a key point. Due to Myanmar heading a list of nations with the highest forecast for growth, many companies seek to get started in Myanmar. This is why FocusCore started in Myanmar, to help companies become incorporated and operate now in Myanmar.

Over recent years there have been a number of general licenses that authorised most transactions with Myanmar. Exceptions were sanctions relating to parties on the list of The US Office of Foreign Assets Control (OFAC)*. This names Specially Designated Nationals and Blocked Persons, the SDN List, and sanctions on certain activities involving the Myanmar Ministry of Defence or any state or non-state armed group. Their findings led to the designation of Myanmar under Section 311 as a “jurisdiction of primary money laundering concern”.

So how can you invest in Myanmar and what does the lifting of sanctions really mean?

Changes planned following the Executive Order, terminating the sanctions, include:

– Parties blocked under the Myanmar sanctions have been removed from the SDN List.
– Any property that was blocked under the Myanmar sanctions is now unblocked.
The ban on the importation into the United States of Myanmar origin jadeite and rubies, and all
jewellery containing them, has been lifted.
– Compliance with the State Department’s Reporting Requirements is no longer required and is now
– All OFAC administered restrictions regarding banking or financial transactions with Burma are no
longer in effect, but FinCEN administered restrictions remain.

The Financial Crimes Enforcement Network, FinCEN, is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes. The rules remain in place to guard against the flow of illicit proceeds, by demanding compliance with the due diligence programme requirements under the Patriot Act.

FinCEN’s cautious approach in dealing with Myanmar with respect to anti-money laundering matters may be seen as encouragement and recognition of Myanmar’s progress in improving its anti-money laundering regime and its commitment to progressing. FinCEN has indicated that it intends to rescind its action in its entirety when Myanmar has made sufficient progress in addressing the issues.

Clearly many companies wish to benefit sooner rather than later by entering this booming economy and operate with the correct permits, governance and procedures.

So how do you fund your operation in Myanmar? This is how FocusCore can help you.

If you transfer funds from USA to Myanmar, the transfer will be blocked. The 311 Act is aimed at the Central Bank of Myanmar. But Singapore has an AAA rating. As long as you have a Singapore bank account or you are linked to a legitimate business in Singapore there should no reason why that transfer will be blocked. Once the funds are in Singapore then they can be transferred to Yangon.

The Patriot Act, Section 311 is effectively imposed on the Central Bank of Myanmar, so blocking transfers. Following the Executive Order to lift sanctions (that has still to be passed in The Spring by The Senate in the US) US firms will be able to trade with Myanmar but the banks cannot facilitate trade.

The USA is opening up to working more with Myanmar. If you establish your Myanmar corporate structure in the correct way, to facilitate an authorised business type, then you should not have any block on your fund transfers.

As we have said, The Section 311 blocks funds from the USA to Myanmar directly. FocusCore, based in many locations across Asia, including Myanmar and Singapore, can assist you with the correct legal structures, approved by the Singapore authorities so you can remit funds into Myanmar. We help you follow all the rules on corporate governance and with background checks, due diligence, KYC etc.

(Know your customer, KYC, is the process of a business, identifying and verifying the identity of its clients. The term is also used to refer to regulation which governs these activities).

We in FocusCore take great pride in being fully up-to-date and fully compliant with all these elements and operate with the latest technologies.

Contact us now so we can guide you on your route to open your company in Myanmar.

We also provide a wide range of corporate services to help you grow in this economy – an economy that holds the top spot in global forecast ratings for annual growth.

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