[House Document 105-334]
[From the U.S. Government Publishing Office]
105th Congress, 2d Session - - - - - - - - - - - House Document 105-334
DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH BURMA
__________
COMMUNICATION
FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT
TO BURMA THAT WAS DECLARED IN EXECUTIVE ORDER 13047 OF MAY 20, 1997,
PURSUANT TO 50 U.S.C. 1703(c)
December 17, 1998.--Referred to the Committee on International
Relations and ordered to be printed
--------
U.S. GOVERNMENT PRINTING OFFICE
69-011 WASHINGTON : 1998
The White House,
Washington, November 23, 1998.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: I hereby report to the Congress on
developments concerning the national emergency with respect to
Burma that I declared in Executive Order 13047 of May 20, 1997,
pursuant to section 570 of the Foreign Operations, Export
Financing, and Related Programs Appropriations Act, 1997,
Public Law 104-208 (the ``Act''), and the International
Emergency Economic Powers Act (IEEPA). This report is submitted
pursuant to section 204(c) of IEEPA, 50 U.S.C. 1703(c) and
section 401(c) of the National Emergencies Act, 50 U.S.C.
1641(c). This report discusses only matters concerning the
national emergency with respect to Burma that was declared in
Executive Order 13047.
1. On May 20, 1997, I issued Executive Order 13047 (62 Fed.
Reg. 28301, May 22, 1997), effective on May 21, 1997, to
declare a national emergency with respect to Burma and to
prohibit new investment in Burma by United States persons,
except to the extent provided in regulations, orders,
directives, or licenses that may be issued in conformity with
section 570 of the Act. The order also prohibits any approval
or other facilitation by a United States person, wherever
located, of a transaction by a foreign person where the
transaction would constitute new investment in Burma prohibited
by the order if engaged in by a United States person or within
the United States. This action was taken in response to the
large-scale repression of the democratic opposition by the
Government of Burma since September 30, 1996. A copy of the
order was transmitted to the Congress on May 20, 1997.
By its terms, Executive Order 13047 does not prohibit the
entry into, performance of, or financing of a contract to sell
or purchase goods, services, or technology, except: (1) where
the entry into such contract on or after May 21, 1997, is for
the general supervision and guarantee of another person's
performance of a contract for the economic development of
resources located in Burma; or (2) where such contract provides
for payment, in whole or in part, in (i) shares of ownership,
including an equity interest, in the economic development of
resources located in Burma; or (ii) participation in royalties,
earnings, or profits in the economic development of resources
located in Burma.
2. On May 21, 1998, the Department of the Treasury's Office
of Foreign Assets Control (OFAC) issued the Burmese Sanctions
Regulations (the ``Regulations''), 31 C.F.R. Part 537, to
implement the prohibitions of Executive Order 13047 (63 Fed.
Reg. 27846, May 21, 1998). The Regulations apply to United
States persons, defined to include U.S. citizens and permanent
resident aliens wherever they are located, entities organized
under U.S. law (including their foreign branches), and entities
and individuals actually located in the United States. The
sanctions do not apply directly to foreign subsidiaries of U.S.
firms, although foreign firms' activities may be affected by
the restriction on United States persons' facilitation of a
foreign person's investment transactions in Burma. A copy of
the Regulations is attached to this report.
The term ``new investment'' means any of the following
activities, if such an activity is undertaken pursuant to an
agreement, or pursuant to the exercise of rights under such an
agreement, that is entered into with the Government of Burma,
or a nongovernmental entity in Burma, on or after May 21, 1997:
(a) the entry into a contract that includes the economic
development of resources located in Burma: (b) the entry into a
contract providing for the general supervision and guarantee of
another person's performance of a contract that includes the
economic development of resources located in Burma; (c) the
purchase of a share of ownership, including an equity interest,
in the economic development of resources located in Burma; or
(d) the entry into a contract providing for the participation
in royalties, earnings, or profits in the economic development
of resources located in Burma, without regard to the form of
participation.
3. Since the issuance of Executive Order 13047 on May 20,
1997, OFAC, acting under authority delegated by the Secretary
of the Treasury, has implemented sanctions against Burma as
imposed by the order. OFAC has issued several determinations
with respect to transactions provided for by agreements and/or
rights pursuant to contracts entered into by United States
persons prior to May 21, 1997. One license was issued to
authorize a United States person's disinvestment in Burma,
since this transaction facilitated a foreign person's
investment in Burma.
On May 21, 1997, OFAC disseminated details of this program
to the financial, securities, and international trade
communities by both electronic and conventional media. This
included posting notices on the Internet and on ten computer
bulletin boards and two fax-on-demand services, and providing
the material to the U.S. Embassy in Rangoon for distribution to
U.S. companies operating in Burma.
In addition, in early July 1997, OFAC sent notification
letters to approximately 50 U.S. firms with operations in or
ties to Burma informing them of the restrictions on new
investment. The letters included copies of Executive Order
13047, provided clarification of several technical issues, and
urged firms to contact OFAC if they had specific questions on
the application of the Executive order to their particular
circumstances.
4. The expenses incurred by the Federal Government in the
6-month period from May 20 through November 19, 1998, that are
directly attributable to the exercise of powers and authorities
conferred by the declaration of a national emergency with
respect to Burma are estimated at approximately $300,000, most
of which represent wage and salary costs for Federal personnel.
Personnel costs were largely centered in the Department of the
Treasury (particularly in the Office of Foreign Assets Control,
the Office of the Under Secretary for Enforcement, and the
Office of the General Counsel), and the Department of State
(particularly the Bureau of Economic and Business Affairs, the
Bureau of East Asian and Pacific Affairs, and the Office of the
Legal Adviser).
5. The situation reviewed above continues to present an
extraordinary and unusual threat to the national security and
foreign policy of the United States. The declaration of the
national emergency with respect to Burma contained in Executive
Order 13047 in response to the large-scale repression of the
democratic opposition by the Government of Burma since
September 30, 1996, reflected the belief that it is in the
national security and foreign policy interests of the United
States to seek an end to abuses of human rights in Burma, to
support efforts to achieve democratic reform that would promote
regional peace and stability, and to urge effective
counternarcotics policies.
In the past 6 months the State Law and Order Restoration
Council (SLORC), recently renamed the State Peace and
Development Council, has shown no sign of willingness to cede
its hold on absolute power. Since refusing to recognize the
results of the free and fair 1990 elections in which the
National League for Democracy won a vast majority of both the
popular vote and the parliamentary seats, the ruling junta has
continued to refuse to negotiate with pro-democracy forces and
ethnic groups for a genuine political settlement to allow a
return to the rule of law and respect for basic human rights.
Burma has taken limited but insufficient steps to counter
narcotic production and trafficking.
The net effect of U.S. and international measures to
pressure the SLORC to end its repression and move toward
democratic government has been a further decline in investor
confidence in Burma and deeper stagnation of the Burmese
economy. Observers agree that the Burmese economy appears to be
weakening further and the government has a serious shortage of
foreign exchange reserves with which to pay for imports. While
Burma's economic crisis is largely a result of the SLORC's own
heavy-handed mismanagement, the SLORC is unlikely to find a way
out of the crisis unless political developments permit an
easing of international pressure. I shall continue to exercise
the powers at my disposal to deal with these problems and will
report periodically to the Congress on significant
developments.
Sincerely,
William J. Clinton.