Derek Mitchell, a veteran US policy-maker on Asia, arrived on Wednesday as the first US ambassador to Burma since the then junta’s violent crackdown on pro-democracy protests in 1988.
Obama made the announcement as Secretary of State Hillary Clinton, who paid a historic visit to Burma in December, landed in Cambodia for talks with Southeast Asian nations.
Two other senior US officials, Robert Hormats and Francisco Sanchez, plan to hold talks this weekend in Burma on stepping up trade.
Suu Kyi, who spent years under house arrest but won a seat in parliament since the reforms, said on a recent tour of Europe that MOGE needed first to sign up to international standards such as the IMF code on transparency.
Under the new rules, US companies will have the right to enter into business with MOGE but must notify the State Department within 60 days.
All US companies that invest more than $500,000 in Burma will be required to file reports to the State Department each year that show their consideration for human rights, workers’ rights and the environment.
The administration’s decision came under fire from human rights activists, who until recently had largely supported the US engagement with Burma.
Human Rights Watch said that the reporting requirements were not enough and that the United States should have insisted on reforms in governance and human rights before opening up investment.
“I am sure Obama will be appreciated by the Burmese generals, cronies and US corporations, but not by the people of Burma,” he said.
Obama voiced concern about the role of the military and said that the United States would continue to ban investment in companies owned by the defence ministry or armed groups.
“This order is a clear message to Burmese government and military officials: those individuals who continue to engage in abusive, corrupt, or destabilising behaviour going forward will not reap the rewards of reform,” he said.
Obama also issued sanctions on Burma’s Directorate of Defense Industries over its agreement in 2008 with North Korea on missile development.
The relationship between Burma and North Korea has long been murky. South Korean President Lee Myung-Bak said after a visit to Burma in May that he won a promise to refrain from military co-operation with the North.