By Shibani Mahtani
NAYPYITAW, Myanmar--A U.S. delegation including Secretary of
State John Kerry stayed over the weekend at a hotel owned by a
businessman on a U.S. blacklist of cronies of the former military
regime, showing the difficulties of navigating a country still
wrestling with a legacy of American sanctions.
Mr. Kerry and his delegation stayed Saturday night at The Lake
Garden hotel in Naypyitaw, while attending a foreign ministers'
meeting organized by the Association of Southeast Asian
Nations.
The hotel is managed by France-based hotel giant Accor SA, but
the property was built and is owned by the Max Myanmar group, the
companies said. The group and its chairman and owner, Myanmar
businessman Zaw Zaw, are on the Treasury Department's list of
Specially Designated Nationals who are sanctioned for ties to the
country's former ruling generals, according to the Treasury
Department's website. That designation freezes the assets of
blacklisted entities in the U.S. and bars them from business
dealings with American companies.
The State Department didn't respond to requests for comment. The
hotel stay doesn't violate any sanctions; any transactions related
to travel by an American, regardless of whether on private,
commercial or government business, are exempt, according to
sanctions rules published on the U.S. Government Printing Office
website.
The delegation's choice of hotel "highlights the great
difficulty of doing business in Myanmar that doesn't involve people
on the SDN list," said Sean Turnell, an expert on Myanmar's economy
at Macquarie University in Sydney, Australia. "Wealth and economic
activity is concentrated in very few hands that are linked to the
past regime."
Mr. Turnell added that this is also "embarrassing" for the U.S.,
and highlights the difficulty in their approach of "trying to open
up [Myanmar] but still hoping to have some leverage over bad
actors."
The blacklist includes approximately 200 companies and
individuals who allegedly had ties to the generals who ruled
Myanmar for nearly six decades until a civilian government took
over in 2011. Mr. Zaw Zaw has denied he was a crony of the former
regime.
Though Washington began lifting sanctions against the country in
2012, the list remains. Speaking to reporters gathered in a wing of
The Lake Garden on Sunday, Mr. Kerry defended the list as evidence
that the U.S. isn't fully satisfied with the new government's
progress on the democratic path, though he voiced support for the
efforts made so far.
"Some of the sanctions have been reduced, [but] not all," Mr.
Kerry said. "Sanctions are now very much focused on members of the
junta, and on key individuals that may still be representing the
challenge to achieving some of these goals."
Some U.S. companies view the sanctions list as an impediment to
doing business in Myanmar, which has become a burgeoning economic
frontier for multinationals in recent years, and have privately
complained that it prevents them from working with some of the
largest conglomerates and most competent businessmen. Many
businessmen on the list, including Mr. Zaw Zaw, are in everything
from banks to infrastructure.
Write to Shibani Mahtani at shibani.mahtani@wsj.com
