Secretary of State beds down with blacklisted businessman

US Secretary of State John Kerry touted the significance of what remains of his country’s sanctions regime against Myanmar on Sunday, describing it as a sign that Washington is keen to avoid rushing its engagement with Nay Pyi Taw.

But the strength of his message, which talked up the importance of targeted sanctions, was tempered by the fact he spoke at a hotel owned by a blacklisted business tycoon where Mr Kerry and other members of his delegation had been staying since arriving in the capital yesterday.

“Sanctions now are very much focused on members of the junta and on key individuals who may still be representing a challenge to achieving some of these [Myanmar’s] goals,” Mr Kerry told members of the media gathered at Lake Garden Nay Pyi Taw.

One of these sanctioned individuals is tycoon U Zaw Zaw, whose company Max Myanmar built the luxury Lake Garden last year. U Bo Chan Tun, project manager at Max Myanmar’s hotel arm, confirmed to The Myanmar Times that Max Myanmar built and owns the recently opened Lake Garden property, which is managed by French hotel group Accor under its MGallery brand.

Both U Zaw Zaw and his Max Myanmar Group of Companies are on the Special Designated Nationals (SDN) list maintained by the US Treasury Department’s Office of Foreign Assets Control. U Zaw Zaw and his companies were added to the SDN list in 2009, according to the Treasury Department’s website.

A Max Myanmar flag was flying outside of the hotel as journalists made their way into a large meeting room for a press conference with Mr Kerry on Sunday. He arrived in Nay Pyi Taw on August 9 to attend the ASEAN Foreign Ministers’ Meeting along with other top US diplomats and was scheduled to depart Myanmar on August 10.

A spokesperson for the US embassy in Yangon was not immediately available for comment.

The US has eased most of its sanctions against Myanmar in response to reforms undertaken by President U Thein Sein, but still maintains targeted sanctions against some individuals and companies as part of its “calibrated” reengagement that has hinged in part on a commitment to responsible investment in Myanmar.

Most companies and persons that appear on the SDN list are alleged to have profited from close relationships with the previous military junta. Entities and individuals that are SDN listed are barred from engaging in business with US companies. A number of Myanmar’s largest and best-known firms are on the SDN list.

US Assistant Secretary of State for Democracy, Human Rights and Labor Tom Malinowski, met with individuals who are on the SDN list in June. He said that many appeared “very eager” to take steps to have themselves and their companies removed from the list.

Mr Malinowski, who did not reveal which SDN-listed individuals he met during his trip, said the legal process for getting removed from the list includes demonstrating responsible business practices and showing that an individual or entity has cut ties with the military.

Max Myanmar and Accor signed a contract to develop three properties in Myanmar, including the Nay Pyi Taw location, in 2013. Two other properties connected to U Zaw Zaw – the Max Hotel at Chaungtha Beach and the Royal Kumudra Hotel in Nay Pyi Taw – are also on the SDN list.

According to the hotel’s website, the property has 165 rooms and suites and boasts a cigar lounge and wine cellar. Rooms were advertised as starting at US$115 a night. It was unclear how many rooms the American delegation was occupying. Other US officials in nay Pyi Taw for the regional meeting were staying at a separate hotel.


NB: Take note that Myanmar has been taken off the US Sanction List by President Obama’s Executive Order signed on 7th October 2016. See US terminated remaining sanctions against Myanmar on 7 Oct 2016.

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