Trade Sanctions - Clyde & Co Seminar Debates The Potential For A New Flow Of Trade In Myanmar

After 50 years of military rule Myanmar is opening up its borders to foreign companies. EU sanctions against the country were partially suspended in January 2012 for a 12 month period (except for the arms embargo which remains in force) while US sanctions were relaxed in September 2012. Already companies in countries bordering Myanmar are actively trading there, and, with the rules on foreign direct investment due to change imminently1 it is expected that Australian, US and European companies will soon join them.

To facilitate debate around the issues and obstacles foreign investment in Myanmar presents and to give some perspectives from those who have advised on other emerging market situations, Clyde & Co's global commodities team hosted a seminar in London on 9 October 2012, attended by around 50 commodity producers, intermediaries and bankers.

Panellists at the debate included Clyde & Co Trade Finance Partner Phillip Prowse, Sapna Jhangiani, Counsel at Clasis LLP, the associated law firm of Clyde & Co in Singapore, Bruce Goslin, Managing Director at K2 Intelligence, Beany McLean, Director of Communications and Public Affairs specialist Luther Pendragon and Nick Williams, Head of Corporate Sales, Trade and Supply Chain Europe at ANZ Bank.

This newsletter provides a brief summary of the discussion and the issues raised. We are delighted to provide further advice and insight on request.

How do the US and UK governments currently view Myanmar?

Is there genuine political will to get things moving in Myanmar? Both the UK Prime Minister and the US President seem supportive and encouraging of Myanmar's move towards democracy. David Cameron was the first UK Prime Minister to visit Myanmar since it gained independence in 1948, meeting with pro-democracy leader Aung San Suu Kyi in April. During his visit, Cameron announced at a joint press conference that sanctions should be suspended sending "a signal that we want to help see the changes that can bring the growth of freedom of human rights and democracy in your country", a clear indication of the UK's commitment to help Myanmar escape the shackles of military rule. President Obama welcomed Ms. Suu Kyi to the Oval Office in September, the strongest indication yet that US sanctions may be eased further.

Can foreign companies do business in Myanmar ahead of the lifting of sanctions?

"Countries along Myanmar's long land borders – including India, China, Laos and Thailand - have been doing business in Myanmar for some time, so there is a strong established history of cross border trading. Western companies currently invest in Myanmar via entities in the ASEAN region that have bi - or multi-lateral trading agreements, ensuring tax efficiency via double taxation treaties", said Sapna Jhangiani, Legal Director at Clasis Singapore, Clyde & Co's local firm.

The debate commenced with Philip Prowse highlighting some of the...

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