(Reuters) – The United States plans to ease sanctions this week to allow its companies to invest in and provide financial services to Myanmar but will require them to make detailed disclosures about their dealings, sources briefed on the matter said on Wednesday.
The unusual reporting requirement aims to promote greater transparency in the country — among the world’s most corrupt according to watchdog Transparency International — as it emerges from nearly half a century of authoritarian military rule.
The sources, who spoke on condition that they not be named, said the U.S. Treasury Department was expected to issue two so-called general licenses, one giving general permission for investment in Myanmar and the other allowing financial services.
The moves would fulfill a May 17 announcement made by U.S. Secretary of State Hillary Clinton to ease U.S. sanctions on investment and financial services in recognition of Myanmar’s startling political reforms over the last 15 months.
While carving out exceptions to allow U.S. companies to work in Myanmar, also known as Burma, the moves would leave the sanctions laws on the books, giving Washington leverage should Myanmar start to backslide on its reforms.
Clarification of the rules for investment could prompt a rush of U.S. companies into the country.
Coca-Cola Co, for instance, said last month it wanted to work in Myanmar as soon as the government allowed it. It is one of just three countries in the world where the soft drinks giant does not operate. The other two are North Korea and Cuba.
Conglomerate General Electric Co has also expressed strong interest in the country, particularly in the healthcare and electricity sectors. In the face of street protests over power outages, Myanmar’s government promised in May it would buy two 25-megawatt gas turbines from the company.
Sanctions have also been suspended or lifted by other developed countries, including Canada, Australia, Japan and European Union states.
The British government’s trade promotion body, UK Trade & Investment, opened an office in Myanmar’s commercial capital, Yangon, on Wednesday and its chief executive, Nick Baird, said it had the expertise to help with power generation.
“The financial sector is another area, because none of these projects will happen unless there is significant investment, including from the private sector, into the area,” he told a news conference.
ANNOUNCEMENT COULD COME WEDNESDAY
Myanmar’s quasi-civilian government took office in March 2011 and has started overhauling its economy, easing media censorship, legalizing trade unions and protests and freeing political prisoners.
The United States has responded with diplomatic and economic gestures, sending Hillary Clinton to Myanmar last year as the first U.S. secretary of state to visit in more than 50 years, as well as tentatively easing sanctions this year.
One source said the long delay between Clinton making her announcement and the Treasury issuing the licenses — which could come as early as on Wednesday — was partly because of a debate among officials over how much disclosure to require.
In a land of widespread poverty but rich in timber, gems, and gas, Myanmar’s crony capitalists — a clique of fewer than 20 families — grew rich with help from Than Shwe, a military dictator who ruled from 1992 until he stepped aside last year.
The Obama administration hopes the reporting requirements will shed some light on Myanmar’s notoriously murky business practices and, over time, improve them.
“The central point of all of this is to focus on transparency, the theory being that the more information the greater the incentive to comply with responsible norms and practices,” the source said.
This source said that some disclosures would be to the public while others would be in confidence to the U.S. government to protect proprietary business information.
The sources said one idea under consideration was to have a public comment period for the private sector to study the reporting requirements and to flag any problems.
The latest step in easing sanctions comes as Derek Mitchell, an Asia expert with long think tank and Pentagon experience, traveled to Myanmar this week to present his credentials as the first U.S. ambassador to the country in decades.
The target for formalizing the U.S. sanctions relief was Friday, allowing Clinton to trumpet the new business opportunities in a speech to executives in Siem Reap, Cambodia.
A spokeswoman for the U.S. State Department declined all comment on the matter, as did an official at the U.S. Treasury Department.
(Editing by Jonathan Thatcher)