[House Document 105-175]
[From the U.S. Government Publishing Office]



105th Congress, 2d Session  - - - - - - - - - - House Document 105-175


 
   DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH RESPECT TO 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)





January 27, 1998.--Referred to the Committee on International Relations 
                       and ordered to be printed


                                           The White House,
                                      Washington, December 9, 1997.
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 (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.
    On May 20, 1997, I issued Executive Order 13047 (62 FR 
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 provided to the 
Congress on May 20, 1997.
    By its terms, nothing in Executive Order 13047 is to be 
construed to 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 the 
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 or resources located in Burma; or (ii) 
participation in royalties, earnings, or profits in the 
economic development of resources located in Burma.
    The prohibitions of Executive Order 13047 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.
    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.
    Since the issuance of Executive Order 13047 on May 20, 
1997, the Department of the Treasury's Office of Foreign Assets 
Control (OFAC), acting under authority delegated by the 
Secretary of the Treasury, has implemented sanctions against 
Burma imposed by the order. During the current 6-month period, 
OFAC 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 granted authorizing a United States person's 
disinvestment in Burma, since this transaction necessarily 
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 10 computer 
bulletin boards and 2 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, 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, 
providedclarification 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.
    The expenses incurred by the Federal Government in the 6-
month period from May 20 through November 19, 1997, 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, the Bureau of 
Intelligence and Research, and the Office of the Legal 
Adviser).
    The situation reviewed above continues to represent an 
extraordinary and unusual threat to the national security, 
foreign policy, and economy 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) 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 
narcotics 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 
further weakening and that 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.

                                
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