“Hotel owned by blacklisted businessman was only option, embassy says”

August 14, 2014

The Myanmar Times on August 14, 2014 released the following:

“By Tim McLaughlin

The United States Embassy in Yangon said that it failed to recognise early enough that a hotel it was assigned by the Ministry of Foreign Affairs was owned and constructed by a blacklisted businessman, leaving no option but to use the venue to host Secretary of State John Kerry last weekend.

The Myanmar Times reported on August 10 that Mr Kerry stayed at the Lake Garden Hotel Nay Pyi Taw owned by sanctioned tycoon U Zaw Zaw and constructed by U Zaw Zaw’s company Max Myanmar, which also appears on the US sanctions list.

The spokesperson said that the US delegation was assigned the hotel by the Ministry of Foreign Affairs and asked for the hotel to be changed when they became aware of the issue, but other accommodation could not be arranged.

“We recognised late the owner of the hotel assigned to us was on the list, but less problematic alternative hotels that also met our safety and security standards were not available,” the spokesperson told The Myanmar Times on August 13.

Mr Kerry, who was in Myanmar to for a round of ASEAN meetings, did not violate any US sanctions with his stay. The International Emergency Economic Powers Act, which details regulations for dealing with SDN Listed individuals and entities includes, “an exemption for activities related to travel, including hotel accommodations. This applies to the U.S. delegation’s use of the Lake Garden Hotel,” the spokesperson said.

During his visit, Mr Kerry touted the significance of what remains of his country’s sanctions regime against Myanmar on August 10, describing it as a sign that Washington is keen to avoid rushing its engagement with Nay Pyi Taw.

“Sanctions now are very much focused on members of the junta and on key individuals who may still be representing a challenge to achieving some of these [Myanmar’s] goals,” he told members of the media while speaking at the Lake Garden.

Marie Harf, deputy spokesperson at the State Department, was insistent that hotel stay did not send mixed messages about US sanctions against Myanmar when questioned by reporters in Washington.

The US has eased most of its sanctions against Myanmar in response to reforms undertaken by President U Thein Sein, but still maintains targeted sanctions against some individuals and companies as piece of its “calibrated” reengagement that has hinged in part on a commitment to responsible investment in Myanmar.

Most companies and persons that appear on the SDN list are alleged to have profited from close relationships with the previous military junta. Entities and individuals that are SDN listed are barred from engaging in business with US companies and their assets are frozen in the US. A number of Myanmar’s largest and best-known firms are on the list.

US Assistant Secretary of State for Democracy, Human Rights and Labor Tom Malinowski, met with individuals who are on the SDN list during his visit to Myanmar in June. He said that many appeared “very eager” to take steps to have themselves and their companies removed from the list.

Mr Malinowski, who did not reveal which SDN-listed individuals he met during his trip, said the legal process for getting removed from the list includes demonstrating responsible business practices and showing that an individual or entity has cut ties with the military

The Lake Garden property where Mr Kerry and his delegation stayed is managed by French hotel chain Accor under its MGallery brand. Both U Zaw Zaw and his Max Myanmg group of companies were added to the Special Designated Nationals (SDN) list in 2009, according to the Treasury Department’s website.

Max Myanmar and Accor signed a contract to develop three properties in Myanmar, including the Lake Garden, in 2013. Two other properties connected to U Zaw Zaw – the Max Hotel at Chaungtha Beach and the Royal Kumudra Hotel in Nay Pyi Taw – are on the SDN list.

According to the Lake Garden website, the luxury property has 165 rooms and suites and boasts a cigar lounge and wine cellar. Rooms were advertised as starting at US$115 a night. It was unclear how many rooms the American delegation was occupying. Other US officials in Nay Pyi Taw for the regional meeting stayed at a separate hotel.”

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Douglas McNabb – McNabb Associates, P.C.’s
OFAC SDN Removal Videos:

OFAC Litigation – SDN List Removal

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OFAC SDN Removal Attorneys

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To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Viktor Bout associates exploited flaws in international law, UN study finds

July 18, 2012

The Guardian on July 17, 2012 released the following:

“Two of the convicted arms dealer’s lieutenants nearly set up fresh gunrunning ring despite being under government watch

[By] Karen McVeigh in New York

Former associates of convicted international arms dealer Viktor Bout exploited loopholes to set up a global trafficking ring with their sights set on selling weapons to war-torn countries like Sudan, Somalia, Iran and possibly Syria, an investigation has revealed.

The report, by Kathi Lynn Austin, a former UN arms investigator and executive director of Conflict Awareness Project (Cap) shows how close two of Bout’s lieutenants came to establishing a fresh gunrunning network in the wake of his conviction last year, despite being under US government watch or subject to US sanctions.

At a press conference on Tuesday at the UN in New York, where representatives from 190 countries are midway through negotiations over the first Arms Trade Treaty, Austin said: “These brokers go to extreme lengths to reap profits form conflict, atrocity and UN sanctions-busting. As we speak, gunrunners are out there exploiting every loophole in a global arms trade that is out of control.”

The six-week investigation describes how “classic techniques” of illicit arms brokers were used including flags of convenience, money laundering and establishing multiple layers of “shell companies” to evade detection and accountability.

The investigation also uncovered new techniques, including a switch away from a previous reliance on aging Russian aircraft to predominately western passenger planes.

The men at the heart of the investigation are two Russians, Sergei Denisenko and Andrei Kosolapov, former associates of Bout, whose gunrunning networks enabled the flow of arms into African conflict including the Democratic Republic of Congo, Angola, and Sudan.

It shows how, even with Bout in prison and US sanctions against them, they were able to circumvent laws and set up US business partners. Denisenko is on the US Special Designated Nationals (SDN) List enforced by the department of treasury, because of his past trafficking activities in Liberia, according to the report.

His SDN listing prohibits US companied dealing with him. Kosolapov is on the US Visas Viper list, a watch list used internationally by the state department to track known or suspected terrorists, according to the report titled Viktor Bout’s Gunrunning Sucessors: A Lethal Game of Catch Me if you Can.

Their plan was to lease a US-registered plane that could be used for arms transfers while flying under a Mauritian aviation certificate.

The report found that the Denisenko-Kosolapov partnership engaged a number of subcompanies and business partners including US, UK, Finnish and Mauritian companies.

One aircraft was located in Bangor, Maine. Human rights advocacy group Human Rights First said the report demonstrated gaps in implementation and enforcement of US sanction regimes.

Sadia Hameed, of Human Rights First, said: “Countries that may have more robust regulations, like the United States, are still unable to singlehandedly prevent illicit arms trafficking operations.”

She said more could have been done by the US to share information with their embassy in Mauritius about Denisenkio and Kosolapov and that it should do more to ensure SDN guidelines are followed by US companies.

“The fact that through Kathi Lynn Austin’s investigations she was able to uncover that they very nearly aquired a US-registered plane and that that plane was intended to service whatever the forward activities of the network were, points out gaps in due diligence of sanctions.”

A US company illegally provided parts and maintenance for the aircraft leased by the pair, according to the report and US pilots were lined up to fly it, which is also illegal.

In early July, the Mauritius Department of Civil Aviation denied the Denisenko-Kosalopov operations application for an Air Operation Certificate – which any plane needs to be able to fly, effectively stopping the operation.

“The multi-jurisdictional nature of arms trafficking rings is why we need a strong arms control, “said Austin. “The Mauritian government said, ‘How were we to know that this US individual was on a designated list?’ A strong arms control treaty would identify who the criminals are and who the traders are.”

In a statement, a spokesman for the US treasury department said: “Sergei (or Serguei) Denissenko was sanctioned by OFAC (Office of Foreign Assets Control) for being involved in two of Bout’s front companies – San Air General Trading FZE (Ajman, UAE; Richardson, Texas) and also with Centrafricain Airlines. US firms are prohibited from doing business with him as with any other sanctioned parties. OFAC does not have an Andrei Kosolapov on its SDN list.”

Campaigners for arms control expressed concern that, after an opening week characterised by delays, international delegates still do not have the basis for negotiations on most of the key elements of the treaty. The optimistic view is that there will be a negotiating text by Wednesday.

The Arms Trade Treaty faces opposition from Egypt, Syria, Algeria, Iran, Cuba and North Korea. However, Russia, China, the UK, France and the US have issued some joint statements in support. The US would like to see ammunition removed from the treaty and wants to water down the rule on human rights.”

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Douglas McNabb – McNabb Associates, P.C.’s
OFAC SDN Removal Videos:

OFAC Litigation – SDN List Removal

OFAC SDN List Removal

OFAC SDN Removal Attorneys

————————————————————–

To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

————————————————————–

International criminal defense questions, but want to be anonymous?

Free Skype Tel: +1.202.470.3427, OR

Free Skype call:

           Office Locations

Email: