Secretary of State John Kerry. Pic: AP.

YANGON, Burma (AP) — The U.S. says 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 Burma’s former military regime.

Cronies own almost all the biggest and best-known firms in the Southeast Asian country — including hotels in the capital Naypyitaw, so Kerry would have been hard-pressed to find anywhere else to stay during a weekend meeting of Southeast Asian foreign ministers. But the move illustrates a conundrum: Washington is eager to engage the government, but wants, too, to avoid bad business practices.

State Department spokeswoman Jen Psaki said Kerry did nothing wrong.

She says the International Emergency Economic Powers Act, which outlines dealings with blacklisted nationals, exempts travel activity, including hotel accommodations.