Germany’s reticence towards sanctions on Burma has been highlighted for a second time after a leaked diplomatic cable recorded foreign affairs director for Southeast Asia Wolfgang Piecha informing a US official that Berlin had doubts over the impact of the policy.

The cable dates from 4 April 2008 and confirms recent suggestions from activists that a number of countries, such as Germany and Austria, are keen to see the removal of punitive, but weak, EU measures. “Germany had doubts about the effectiveness of EU sanctions, which have already been in place for 12 years,” it said.

The cable however gives a more frank reasoning for Germany’s position, with the head of the foreign trade division, Ursina Krumpholz, noting that “it is difficult to get German companies to accept sanctions– not just in BURMA, but in other countries, such as Iran.”

The other prime German concerns highlighted in the cable were that sanctions, according to Piecha, “had helped to forge solidarity within the [Burmese] military, had increased China’s influence, and had given the regime excuses for legitimising its rule”.

Any talk of human rights is absent in the cable, released by whistleblowing site Wikileaks, and will confirm suspicions about the incentives for nations to bid for a removal of sanctions on economic grounds, as opposed to conditions for Burmese people.

The US Treasury Office of Foreign Assets Control (OFAC) Director, Adam Szubin, meanwhile “suggested considering lifting investment restrictions on the 1,207 companies listed in Annex 5” of the sanctions package. This was because banks were “screening against this list”, thus “prompting financial institutions to either let all transactions through or block the transactions of a large number of innocents”.

This will ring true with British bank Barclays which was fined $US300 million in a US court last year for doing business with sanctions-listed entities, including Burmese banks, but faced no censure in Europe.

Another worrying aspect of sanctions enforcement was highlighted in the meeting by Michael Findeisen, German Finance Ministry Director for Terrorism Finance and Financial Crimes. He said that “incomplete identifier information on UN and EU lists (terrorism, Iran, BURMA, etc.) was an obstacle to effective implementation of financial […].

“He argued that informal financial transfer arrangements, such as hawala, also posed difficulties”, indicating that the West’s intelligence about Burma is incomplete and poor, making effective targeting difficult.

The leak dates from a time when German companies, Deckel Maho Gildemeister (DMG) and Trumpf, were allegedly installing equipment that a defector claims were for a nuclear project.

DMG sent an engineer with inspectors from the German consulate to visit the site of the alleged factory, but when confronted the German government later claimed that the highly sophisticated laser cutters and metal bending machines were only for training purposes. This claim is contradicted by evidence reviewed by a former director in the IAEA, Robert Kelley.

Germany’s interest in business in Burma was matched by Austria, who earlier in the year sent a business delegation to the country led by the Ambassador Johan Peterlik. Despite the official presence, the delegation included an arms contractor, a company involved in the trade of forest products and precious stones company, Swarovski, all areas of commerce that are specifically banned by sanctions.