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US says sanctions weren't violated when Sec of State Kerry stayed at blacklisted Myanmar hotel

U.S. Secretary of State John Kerry, second from right, along with U.S. Secretary of Defense Chuck Hagel, right, addresses the start of the Australia-US Ministerial Consultations (AUSMIN) talks at Admiralty House in Sydney, Tuesday, Aug. 12, 2014. Kerry and Hagel are meeting with their Australian counterparts at the annual AUSMIN, which will focus on regional security and enhanced military co-operation. (AP Photo/Dan Himbrechts, Pool)

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U.S. Secretary of State John Kerry, second from right, along with U.S. Secretary of Defense Chuck Hagel, right, addresses the start of the Australia-US Ministerial Consultations (AUSMIN) talks at Admiralty House in Sydney, Tuesday, Aug. 12, 2014. Kerry and Hagel are meeting with their Australian counterparts at the annual AUSMIN, which will focus on regional security and enhanced military co-operation. (AP Photo/Dan Himbrechts, Pool)

YANGON, Myanmar - The U.S. said Tuesday that Secretary of State John Kerry wasn't breaking any rules when he stayed in a hotel owned by a tycoon blacklisted by the U.S. because of ties with Myanmar's former military regime.

In a country where cronies own almost all the biggest and best-known firms — including hotels in the capital Naypyitaw — Kerry would have been hard-pressed to find anywhere else to stay as he attended a weekend gathering of Southeast Asian foreign ministers.

But the move illustrates the conundrum of American policies. Washington is eager to engage Myanmar's new nominally civilian government, but does not want to be accused of engaging in bad business practices.

U.S. State Department spokeswoman Jen Psaki said Kerry did nothing wrong.

She said Myanmar's Foreign Ministry assigned Kerry and members of his delegation to the Lake Garden Hotel, owned by blacklisted Zaw Zaw's Max Myanmar group.

The International Emergency Economic Powers Act, which outlines dealings with "specially designated" or "blacklisted" nationals, "includes an exemption for activities related to travel, including hotel accommodations," she added.

Though most economic U.S. sanctions imposed on Myanmar during its days of dictatorship have been lifted, American companies are still barred from doing business with individuals and entities perceived as having profited from past or current military ties.

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Associated Press writer Matt Lee contributed to this report from Sydney.

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