EU judge recommends removal of sanctions on Tay Za’s son – The Irrawaddy

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http://www.irrawaddy.org/article.php?art_id=22594

HO CHI MINH CITY – Pye Phyo Tay Za, the 25-year-old son of Burmese businessman Tay Za, could be set to win an appeal against the EU sanctions imposed on him at the European Court of Justice.

A Nov. 29 opinion by a Court Advocate-General said that the previous May 2010 judgment upholding sanctions on Pye Phyo should be reversed, and that the European Commission as well as the United Kingdom should bear legal costs, as the losing parties in the case. The assessment stated that the Court’s original ruling “gave an excessively broad interpretation of those articles (that allowed sanctions on Pye Phyo) and erred in law.”

Tay Za’s legal team argued that that the link between Pye Phyo Tay Za and “the Burmese regime is not sufficient to form a legal basis for the freezing of his assets.”

Tay Za is one of Burma’s wealthiest and best-known businessmen, often seen by Western countries as benefiting from a close association with Burma’s former military rulers.

The sanctions on Tay Za were extended to include immediate family members, and measures affecting Pye Phyo were imposed in 2003, justified by fears that father Tay Za could conduct business operations in his son’s name as a way to get around sanctions.

Tay Za’s Htoo Trading Co. runs an airline, a bank, several hotels, and has interests in Burma’s mineral and mining sectors and in agriculture. In its argument against the appeal, the European Commission said “that the General Court did not commit any error of law in endorsing the presumption that family members benefit from the functions exercised by leading business figures in Burma and that they too must be listed in order to safeguard the effectiveness of the restrictive measures.”

Tay Za’s wealth is hard to estimate, as Burmese law does not require companies to declare earnings. The US Treasury described Tay Za as “an arms dealer and financial henchman of Burma’s repressive junta.” Despite backing his son’s appeal in Europe, Tay Za himself has laughed off Western sanctions, boasting that they have killed off competition in Burma, making life easier for those already well-placed inside the country.

The opinion came on the eve of US Secretary of State Hillary Clinton’s landmark visit to military-dominated state, whose rulers and cronies, including Tay Za, have been under Western economic sanctions since the 1990s.

Media reports on the Clinton visit have discussed Burma’s possible appeal to Western investors as a frontier market in Asia. However, if Western companies are to invest in Burma’s economy, sanctions will have to be lifted first.

Clinton said that sanctions could be dropped if Burma’s now nominally civilian rulers expand reforms implemented since former general and junta Prime Minister Thein Sein took over as president in March 2011. Sanctions, therefore, will have finally proved their utility as a lever to persuade Burma’s rulers that political reforms are necessary.

However, if and when post-sanctions investors come to Burma will have to deal with what Transparency International, perhaps the leading global graft watchdog, pinned as the second-most corrupt country in the world in its newly released worldwide corruption index.

Burma is listed next-to-bottom alongside Afghanistan, marginally ahead of Somalia and North Korea, with a tight nexus of military-linked cronies such as Tay Za the main beneficiaries in a sluggish but resource-laden economy.

But while cronies and insiders such as Tay Za were on the make under Burma’s military rule, ordinary Burmese are ranked the second poorest people in Asia, after Afghanistan’s war-wracked citizens.

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