US Set to Ease Sanctions for Asia World Port in Rangoon

The Obama administration looks set to ease some sanctions targeting Asia World, a firm widely believed to have built its initial fortune on the drug trade before becoming one of Burma’s largest conglomerates, after sustained lobbing from the US banking industry.

According to reports from Bloomberg and AP, the US Treasury Department’s Office of Foreign Assets Control (OFAC) is expected to alter sanctions against Asia World as early as this week in order to allow US companies to ship goods through the firm’s Rangoon port.

In July, the Clearing House Association, a New York-based group that includes 24 of the world’s largest commercial banks, and the Bankers Association of Finance and Trade sent a joint letter to OFAC calling for an exemption to the sanctions that would permit US banks to facilitate payments to the Asia World Port Terminal (AWPT).

According to the letter, portions of which were published by Reuters and the Myanmar Times, because of its location and modern facilities, in the years to come the AWPT is expected to handle the “vast majority of containerized trade of the sort financed or facilitated by US and other global financial institutions”.

The letter warned that blocking port-related payments to Asia World “could amount to a de facto trade embargo”, as half of the country’s trade passes through the Rangoon port. Hong Kong-based Hutchison Port Holdings Ltd does however operate a port south of Rangoon larger than the AWPT which is not subject to US sanctions, but is further away from the city center.

Senator Cory Gardner, the Republican chairman of the US Senate Foreign Relations subcommittee on Asia, has questioned the timing of the move to lift sanctions on the port, a move that would not require congressional approval.

“Any modification of remaining US sanctions toward Burma during this sensitive time would only weaken US leverage as Burma’s democratic transition continues. Furthermore, Congress should be involved in any actions relating to sanctions, and I hope the administration takes that into account should it move forward,” he told Bloomberg.

The expected removal of the port from the blacklist will undoubtedly boost the bottom line of Asia World, which has extensive business across much of the Burmese economy.

Asia World’s chief Steven Law—also known by his Burmese name Htun Myint Naing and his Chinese name Lo Ping Zhong—is the son of the late Kokang warlord Lo Hsing Han, whose time as one of the towering figures of the global narcotics trade earned him the moniker “Godfather of Heroin”.

Law, his father and Asia World were added to the US sanctions list in 2008. A statement issued by the US government at the time of their inclusion claimed that Law had followed Lo into the heroin trafficking business.

“Steven Law joined his father’s drug empire in the 1990s and has since become one of the wealthiest individuals in Burma,” the statement claimed.

A US diplomatic cable leaked by Wikileaks alleged that Asia World, which was founded in 1992 benefited significantly from the Lo’s close to ties to Military Intelligence chief Khin Nyunt.

“According to DEA [Drug Enforcement Agency] Rangoon, Khin Nyunt gave Lo Hsing Han a ‘concession’ for heroin production and trade in return for his help brokering a ceasefire agreement,” the cable stated, referring to a peace deal negotiated between the former military regime and the Myanmar National Democratic Alliance Army (MNDAA), itself a Kokang offshoot of the defunct Communist Party of Burma.

Asia World’s numerous construction projects over the course of the 1990s, often underwritten by investors from Singapore or Malaysia, include Rangoon’s iconic Traders Hotel. According to The Economist’s 2013 obituary of Lo Hsing Han, by 1998, more than half of Singapore’s US$1.3 billion of investments in Burma were made in partnership with Asia World and its affiliates.

In the final years of Snr-Gen Than Shwe’s military regime, Asia World also joined up with Chinese state-owned firms on two of Burma’s biggest construction projects—the Shwe gas pipeline, connecting the Arakan coast to China’s landlocked Yunnan province, and the suspended Myitsone hydroelectric dam in Kachin State, an immensely unpopular development focused almost exclusively on serving China’s huge electricity needs.

UK Firm Scrubbed Asia World’s Wikipedia Page

A lengthy story in the Wall Street Journal published in August revealed that Asia World had hired the UK based PR firm Bell Pottinger for its services. The PR firm has a reputation in the industry for taking on controversial clients, including the government of Belarus and the wife of Syrian dictator Bashir al-Assad. Mark Canning, a former British Ambassador to Burma, is a member of Bell Pottinger’s Asia team.

In an effort to help improve Asia World’s disreputable image, “Bell Pottinger executives say they amended Asia World’s Wikipedia page, removing references to drug connections and sanctions,” the WSJ reported. Bell Pottinger has a history of removing unflattering content from the Wikipedia pages of its clients, leading to public rebuke by Wikipedia founder Jimmy Wales, who accused the firm of “ethical blindness”.

According to the same WSJ story, Asia World’s relationship with Bell Pottinger was terminated last year. The report cited a figure familiar with the deal, who claimed that “Asia World wasn’t prepared to be as transparent as the public-relations firm hoped.”

The WSJ also reported that Asia World had won a $300 million government contract to upgrade Rangoon’s airport, despite the fact that a rival bid put forward by a Japanese-led consortium was ranked higher by an independent government consultant. Government officials justified granting the contract to Asia World, which operates the airport already, because the firm was “willing to spend money on the project before a contract was signed, unlike foreign bidders.”

Asia World Chief’s Jade Trade Ties

A report released in October by London-based NGO Global Witness alleged that Stephen Law had an interest in Burma’s lucrative jade trade through his Yadanar Taung Tann Gems firm.

When Law traveled to Canada last year as part of a Burmese government trade delegation, he participated under his Chinese name as the managing director of the little known firm. According to Global Witness, a government registry of Burmese firms also listed Law as managing director and a shareholder of the firm, alongside another director listed as “Mr Asiaworld”.

Research by Global Witness found that Yadanar Taung Tann controls a large jade mine at Met Lin Chaung, west of Hpakant town. Individuals involved in the jade trade interviewed by Global Witness also said that the firm controls mines in the Gwi Hka area south of Hpakant.

Government maps obtained by Global Witness show that he Gwi Hka Joint Venture is held by Dagon Yadanar Gems Co. Ltd, a firm which Global Witnesses said is controlled by two of Yadanar Taung Tann’s directors.

Source: The Irrawaddy

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Puma Energy", “MOGE”, “yangon new town”,"MECTEL", "hydropower", etc.