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Saturday, December 9, 2023
Courthouse News Service
Saturday, December 9, 2023 | Back issues
Courthouse News Service Courthouse News Service

Myanmar Man Regains Access to Frozen Funds

(CN) - Europe should not have frozen a man's personal bank account to enforce economic sanctions against Myanmar, the Court of Justice ruled Tuesday.

The European Council has imposed sanctions against the republic formally known as Burma since 1996 because of persistent human rights violations and a failure to embrace democracy.

These sanctions include freezing the funds of members of the ruling junta and individuals and entities associated with them.

One name included on the council's list of members and associates is Pye Phyo Tay Za, whose father is a politically connected businessman in Myanmar. Tay Za petitioned the General Court of the European Union in 2008 to remove his name from the list.

Concluding that Tay Za benefits from Myanmar's governmental policies, however, the General Court dismissed his action last year. It left the door open to an appeal if Tay Za could prove he did not have a close link with his father or his father's business dealings.

"In Myanmar, the commercial activity of those businesses cannot prosper unless they enjoy the favor of the regime. As persons in charge of those businesses they benefit, by their function, from the economic policies of that country," that May 2011 decision said. "Accordingly, there is a close link between those business figures and the military regime.

"As regards family members of such leading business figures, it may be presumed that they benefit from the functions exercised by those businessmen, so that there is nothing to prevent the conclusion that such family members also benefit from the economic policies of the government," the court wrote.

"However, the presumption that the family members of leading business figures in a third country also benefit from the economic policies of the government of that country can be rebutted if an applicant successfully demonstrates that he does not have a close link with the businessman who is part of his family."

Tay Za testified that he had lived with his mother in Singapore from the age of 13, that he had never worked for his father and that he had no shareholdings in companies in Myanmar, but he left certain other questions unanswered.

The court noted that Tay Za "did not indicate the source of the funds which allowed him to be a shareholder in two of his father's companies established in Singapore between 2005 and 2007."

On appeal to the Court of Justice in Luxembourg, Tay Za sought "a ruling on the conditions under which a system of sanctions introduced by the council against a third country may apply to natural persons, and on how close the link between those persons and the governing regime has to be," according to the court.

Tay Za claimed that he did not hold shares in his father's company when his name first appeared on the list in 2003, or in 2008 when he first brought suit against the EU Council. He says he is in no way connected to his father's business interests.

The Court of Justice credited these arguments Tuesday, finding that economic sanctions imposed on individuals of a third country must be directed only at the leaders of that country and the persons associated with them.

"Accordingly, by finding that such restrictive measures could not be directed at persons associated with that country 'in some other way,' the court intended to restrict the categories of natural persons at whom targeted restrictive measures may be directed to those whose connection with the third country concerned is quite obvious, namely the leaders of the third countries and the individuals associated with those leaders," the court said in a statement. "Therefore, the application of such measures to natural persons on the sole ground of a family connection with such persons who are associated with the leaders of the third country concerned - irrespective of the personal conduct of such natural persons - is contrary to EU law. It is difficult to establish a link, even an indirect link, between the absence of progress toward democratization and the continuing violation of human rights in Myanmar ... and the conduct of the family members of those in charge of businesses, which, in itself, has not been criticized.

"Consequently, a measure to freeze funds and economic resources belonging to the appellant could have been adopted within the framework of a regulation intended to impose sanctions on a third country ... only in reliance upon precise, concrete evidence which would have enabled it to be established that the appellant benefits from the economic policies of the leaders of the Republic of the Union of Myanmar," the statement continues.

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