US eases sanctions on Myanmar in bid to promote reforms

US officials said they were easing sanctions to encourage the "historic" progress in Myanmar, including the formation of the country's first democratically elected government in more than 50 years.

The moves included removing Myanmar state-owned banks from a US blacklist and the lifting of sanctions against seven key state-owned timber and mining companies.

Officials said they hope the actions will eliminate key obstacles to trade in Myanmar. Potential investors in Myanmar have long complained that the blacklisting of some of the country's biggest banks made business in the country too risky.

Major firms including General Electric, Western Union Co, Gap Inc, and Coca-Cola have made business forays into Myanmar, and the moves announced on May 17 will ease their and other companies' ability to operate there.

The US Treasury Department also extended indefinitely a sanctions exemption that allows banks to finance shipments coming in through Myanmar ports, even though key terminals are controlled by blacklisted businessman Steven Law. 

The issue had forced Western banks to cut financing of trade into the country until the US Treasury granted a six-month exemption in December.

But the United States also strengthened measures targeting Law, who was blacklisted for alleged ties to Myanmar's military. 

Six companies owned 50 percent or more by Law or the company he controls, Asia World, were added to Treasury's blacklist.

The announcement highlighted a key challenge for Washington, as it seeks to both encourage political reform while maintaining pressure on those it sees as spoilers. 

More than 100 individuals and groups remain on Washington's sanctions blacklist for Myanmar, making them radioactive to the international community and barring US banks or companies from making deals with them.