The statement said US sanctions on Myanmar under the International Emergency Economic Powers Act included an exemption for all activities related to travel, including hotel accommodation.
Sanctions under the IEEPA include the Special Designated Nationals list, to which U Zaw Zaw and his companies were added in 2009.
Mr Kerry and his delegation stayed the Lake Garden hotel on August 9 during their visit to Nay Pyi Taw to attend meetings hosted by Myanmar in its capacity as the chair of the Association of Southeast Asian Nations.
The hotel was built by U Zaw Zaw's Max Myanmar company and has been managed by French group Accor, under its luxury MGallery brand, since opening earlier this year.
Responding to questions from Mizzima based on a report posted on the Myanmar Times website, the US embassy said in its August 12 statement that hotels for delegations attending the ASEAN Regional Forum were assigned by Myanmar's Foreign Ministry.
"The ministry assigned the Lake Garden hotel to the US delegation," the statement said.
Asked by Mizzima if the US delegation's stay at the Lake Garden hotel was an indication that U Zaw Zaw might be taken off the blacklist, the statement said the US Government could not comment on individual cases.
"The stay of the Secretary of State's delegation is in no way tied to decisions related to the Specially Designated Nationals, or SDNs, list," the statement said, adding that SDNs may seek to be delisted by submitting evidence that the circumstances resulting in the designation no longer apply.
"This process is administered by the Treasury Department's Office of Foreign Assets Control. The United States Government cannot comment on specific cases," it said.