US removes sanctions on top Myanmar tycoon

One of Myanmar's highest profile tycoons has been unshackled from US sanctions as Washington attempts to bridge the demands of human rights activists and multinationals clamouring to do business in the fast-opening frontier market.

Western multinational interest in the Southeast Asian country is curbed in part by Washington's prohibition on dealings with scores of "crony" individuals and companies allegedly linked to the repressive former military junta.

While rights activists support sanctions against powerful individuals as a means of forcing political reforms they say are slipping, opponents argue they are hampering US-linked investment.

But sanctions can be slippery, as demonstrated by Win Aung, who was removed from the US blacklist along with two of his Dagon group companies.

Even while he was blacklisted, his position as head of Myanmar's chamber of commerce brought him into contact with US business people as well as government officials.

Mr Win Aung did not immediately respond to requests for comment and the detailed reason for his appearance on the US Treasury's blacklist has never been public.

However, he was the subject of a confidential 2007 US embassy cable entitled "A rising crony with connections" and published by WikiLeaks. It alleged he and his family were using "their close connections with the Burmese regime to amass great wealth", via road-building and construction of government housing.

Romain Caillaud, a consultant specialising on Myanmar, described the removal of sanctions against the construction magnate as potentially "very significant", particularly if more followed.

But Eric Rose, a Yangon-based corporate lawyer, was more circumspect, calling the move a "baby-step" towards increasing US economic engagement in a country where Chinese, Japanese and - to a lesser extent - European companies are active.

"The US is lagging way behind in fully engaging the people of Myanmar in trade and investment," Mr Rose said.

Official Myanmar government figures show that since July 2013, fewer than 20 companies - including Colgate-Palmolive, Coca-Cola and Gap - have made mandatory disclosures of investments in excess of $500,000 or in the oil and gas sector, according to the website of the US embassy in Myanmar.

While the Myanmar military ended almost 50 years of rule in 2011 and handed power to a quasi-civilian government, companies that prospered under the army are ubiquitous in the economy and can be hard to avoid.

It emerged last year that John Kerry, US secretary of state, had stayed in a hotel in the capital Naypyidaw owned by Zaw Zaw, a prominent businessman under sanction by Washington.

While the US stresses the sanctions list evolves as circumstances and people change, removals are relatively rare. Exceptions include two former generals with a crucial role in the political transition - President Thein Sein and Thura Shwe Mann, Speaker of the parliament.

Companies say background checks are complicated by individuals' links to other parties not named in official documents. A further technical difficulty is posed by the small number of names that are widely used among Myanmar's estimated 51m population, giving scope for confusion of people's identities.

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