[Senate Report 108-281]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 582
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-281

======================================================================



 
 APPROVING THE RENEWAL OF IMPORT RESTRICTIONS CONTAINED IN THE BURMESE 
                   FREEDOM AND DEMOCRACY ACT OF 2003

                                _______
                                

                 June 18, 2004.--Ordered to be printed

                                _______
                                

  Mr. Grassley, from the Committee on Finance, submitted the following

                              R E P O R T

                      [To accompany S.J. Res. 39]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, to which was referred the joint 
resolution (S.J. Res. 39) approving the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act 
of 2003, having considered the same, reports favorably thereon 
without amendment and recommends that the joint resolution do 
pass.

                                CONTENTS

                                                                   Page
 I. Report and Other Matters of the Committee.........................2
        A. Report of the Committee on Finance....................     2
        B. Background............................................     2
            1. The Government of Burma...........................     2
            2. The Burmese Freedom and Democracy Act of 2003 (the 
                Act).............................................     2
            3. Procedures for Renewing the Import Restrictions 
                Contained in the Burmese Freedom and Democracy 
                Act of 2003......................................     3
            4. Committee Consideration of S.J. Res. 39...........     3
            5. Report of the U.S. Department of State on the 
                Trade Sanctions Against Burma....................     4
II. Budgetary Impact of the Joint Resolution.........................10
III.Regulatory Impact of the Joint Resolution and Other Matters......12

IV. Changes in Existing Law..........................................12

              I. REPORT AND OTHER MATTERS OF THE COMMITTEE


                 A. Report of the Committee on Finance

    The Committee on Finance, to which was referred the 
resolution (S.J. Res. 39) to approve the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act 
of 2003, having considered the same, reports favorably thereon 
and recommends that the resolution do pass.

                             B. Background


1. The Government of Burma

    Burma is governed by a military junta that took power in 
September 1988. The junta, the State Peace and Development 
Council (SPDC), violently suppressed pro-democracy 
demonstrators in September 1988. The junta allowed elections to 
a National Assembly in 1990, but it nullified the results when 
the opposition National League for Democracy (NLD) won most of 
the seats. Since 1990, reports from human rights organizations 
and the U.S. State Department have described a pattern of SPDC 
policies featuring the suppression of political liberties, 
jailing of thousands of political prisoners (1,300 estimated 
imprisoned in November 2003), widespread physical abuses 
against civilians, the impressment of civilians into military 
service, and the conscription of thousands of civilians for 
work on economic projects.
    On May 30, 2003, a pro-government group of several hundred 
people assaulted the opposition NLD leader Daw Aung San Suu Kyi 
and her supporters near Mandalay, Burma's second-largest city. 
The attackers were members of the United Solidarity Development 
Association, a pro-government mass organization. Some NLD 
supporters were killed, and Daw Aung San Suu Kyi and other NLD 
leaders were taken into custody. The government closed NLD 
offices in the country.

2. The Burmese Freedom and Democracy Act of 2003 (the Act)

    In response to the May 30th attack, the Burmese Freedom and 
Democracy Act of 2003 was introduced in the U.S. House of 
Representatives (H.R. 2330) and the U.S. Senate (S. 1182) on 
June 4, 2003. A revised version of the legislation was 
introduced in the Senate (S. 1215) on June 9, 2003. That latter 
version, S. 1215, passed the Senate with an amendment on June 
11, 2003, by a recorded vote of 97-1. In the House, H.R. 2330 
passed with an amendment on July 15, 2003, by a recorded vote 
of 418-2, 1 Present. The Senate then passed the House-passed 
version of H.R. 2330 without amendment on July 16, 2003, by a 
recorded vote of 94-1. The legislation was presented to the 
President on July 22, 2003, and signed into law by the 
President on July 28, 2003 (Pub. L. 108-61).
    As enacted, the Act generally bans imports from Burma, 
affecting mainly imports of Burmese textiles and garments. U.S. 
imports of these products from Burma rose from nearly $60 
million in 1994 to $408 million in 2001 before falling to $297 
million in 2002, according to Department of Commerce 
statistics. Total imports from Burma in 2002 were $356 million. 
The ban on imports will remain until the President certifies to 
Congress that the SPDC has made major progress to end human 
rights violations, including rapes, forced and child labor, and 
conscription of child-soldiers, and that the SPDC has released 
political prisoners; allowed political, religious, and civil 
liberties; and reached agreement with the NLD for a civilian 
government chosen through democratic elections. The Act also 
freezes Burmese assets in the United States and requires the 
United States to oppose aid to Burma by international financial 
institutions.
    Pursuant to section 9(b) of the Act, the import ban will 
expire 1 year from the date of enactment unless a joint 
resolution (``renewal resolution'') approving a 1-year renewal 
of the import ban is enacted into law prior to the first 
anniversary of the date of enactment and each anniversary date 
thereafter. The purpose of S.J. Res. 39 is to comply with this 
requirement in order to renew the import ban for another year, 
i.e. until July 28, 2005. An identical resolution (H.J. Res. 
97) was passed by the House on June 14, 2004 by a recorded vote 
of 372-2. H.J. Res. 97 was placed on the Senate Calendar on 
June 15, 2004.

3. Procedures for renewing the import restrictions contained in the 
        Burmese Freedom and Democracy Act of 2003

    Section 9(c)(2)(B) of the Act incorporates the procedures 
set forth in section 152(b), (c), (d), (e), and (f) of the 
Trade Act of 1974 (19 U.S.C. 2192(b), (c), (d), (e), and (f)), 
for consideration of a renewal resolution to renew the import 
ban for another year.
    Pursuant to those procedures, a renewal resolution 
introduced in the Senate shall be referred to the Finance 
Committee, which is afforded 30 days in which the Senate is in 
session in which to consider and report the resolution. A 
renewal resolution is not amendable. If the Committee does not 
report the resolution within that period, it is in order for 
any Member favoring the resolution to move to discharge the 
Committee from further consideration of the resolution.
    If, as in this case, a renewal resolution is introduced in 
the Senate before receipt of an identical resolution from the 
House, and the House passes its resolution before the Committee 
reports the Senate measure, then upon receipt of the House-
passed measure the House resolution shall be placed on the 
Senate calendar and the Committee shall continue to report the 
Senate measure or be discharged from further consideration of 
the Senate measure, as noted. After the Committee reports the 
Senate measure, the vote on passage in the Senate shall then be 
on the identical House-passed measure.

4. Committee consideration of S.J. Res. 39

    The Committee considered S.J. Res. 39 in open executive 
session on June 15, 2004. The Committee voted unanimously, and 
without amendment, to favorably report S.J. Res. 39, Approving 
Renewal of Import Restrictions Contained in the Burmese Freedom 
and Democracy Act of 2003.
    Approved by rollcall vote, a quorum being present, 21 Ayes, 
0 Nays. Ayes: Mr. Grassley, Mr. Hatch, Mr. Nickles, Mr. Lott, 
Ms. Snowe, Mr. Kyl, Mr. Thomas, Mr. Santorum, Mr. Frist, Mr. 
Smith, Mr. Bunning, Mr. Baucus, Mr. Rockefeller, Mr. Daschle, 
Mr. Breaux, Mr. Conrad, Mr. Graham, Mr. Jeffords (proxy), Mr. 
Bingaman, Mr. Kerry (proxy), Mrs. Lincoln.

5. Report of the U.S. Department of State on the trade sanctions 
        against Burma

    On April 27, 2004, the State Department submitted to 
Congress a report regarding the trade sanctions against Burma, 
as required by section 8(b)(3) of the Burmese Freedom and 
Democracy Act of 2003. At the request of the Chairman, that 
report was made a part of the record of the Committee's 
consideration of S.J. Res. 39. The State Department report is 
reprinted below:

              REPORT ON U.S. TRADE SANCTIONS AGAINST BURMA

Introduction and summary

    Pursuant to section 8(b)(3) of Pub. L. 108-61 (the Burmese 
Freedom and Democracy Act of 2003), this report reviews 
bilateral and multilateral measures to promote human rights and 
democracy in Burma and assesses the effectiveness of the Act's 
trade-provisions relative to the improvement of conditions in 
Burma and the furtherance of United States policy objectives.
    Over the past months, the import ban, combined with an 
array of other sanctions, has helped bring about some notable 
political responses. The Act initially encouraged ASEAN nations 
to take a critical stance on Burma. These pressures were likely 
a factor behind the junta's August announcement of a seven-step 
process for a democratic transition and the appointment of a 
new Prime Minister. While the Burmese government has released 
the majority of those arrested in connection with its attack on 
the National League for Democracy (NLD) on May 30, 2003, it has 
not yet released NLD leader and Nobel Peace Prize Laureate Aung 
San Suu Kyi and one other senior NLD leader.
    Continued pressure by the U.S. government sends a clear 
signal to the junta that the U.S. seeks reform. Such pressure 
also serves as a strong symbol of support for the members of 
the democratic opposition, as they continue their struggle 
inside the country. Many of those who have fled from the 
oppression inside Burma have supported the U.S. position and 
have called for other countries to follow the U.S. lead.
    The Administration continues diplomatic efforts, at all 
levels, to encourage other nations to sustain pressure on the 
Burmese junta. Some countries' governments are unlikely to do 
more than offer public support for a democratic transition, but 
it is through such sustained publicmessages that an atmosphere 
of change can come to Burma. U.S. punitive measures and calls for 
others to follow suit have not damaged U.S. relations with countries 
other than Burma. To date no other country has implemented U.S.-style 
economic sanctions. Cooperation on Burma issues with other members of 
the international community continues at the UN and in other 
multilateral fora, such as the International Labor Organization (ILO), 
and the Financial Action Task Force.

Bilateral and multilateral measures

            USG efforts
    The U.S. has a broad range of sanctions in place including 
those enacted in 2003: a ban on all imports from Burma, a ban 
on the export of financial services by U.S. persons to Burma, 
and an asset freeze on certain named Burmese institutions. The 
U.S. also expanded existing visa restrictions to include the 
managers of state-owned enterprises and their immediate family 
members. The Treasury Department reports that it has blocked 
513.3 million worth of transactions since prohibiting the 
provision of financial services to Burma. Of that amount, $1.7 
million has been subsequently licensed by the U.S. By July 30, 
2003, U.S. banks maintaining correspondent accounts with 
Burmese banks had blocked the balances in those accounts, an 
amount that exceeds $320,000. Other measures put in place 
against the Burmese junta before 2003 include a ban on new 
investment in Burma, a ban on arms sales to Burma, limits on 
humanitarian assistance to Burma, and a ``no'' vote on any loan 
or assistance to Burma by international financial institutions.
    The State Department also produces an annual report on the 
human rights situation in Burma. In 2003, the report noted that 
the Government's extremely poor human rights record had 
worsened, particularly highlighting the premeditated, 
government-sponsored, May 2003 attack on Aung San Suu Kyi and 
her supporters, in which government-affiliated agents killed as 
many as 70 pro-democracy activists. The report also noted that 
citizens of Burma still do not have the right to change their 
government, and that security forces continued to commit 
extrajudicial killings and rape, forcibly relocate persons, use 
forced labor, and have reestablished forced conscription of the 
civilian population into militia units. Other annual reports 
detail U.S. concerns for the situation in Burma in such areas 
as trafficking in persons, international religious freedom, and 
the control of narcotics.
    In Burma itself, U.S. Embassy officials maintain frequent 
and active contacts with representatives of the democratic 
opposition and major ethnic groups to learn their views of the 
situation. Meetings with members of multilateral organizations 
and other diplomatic missions likewise help focus the 
international community's efforts in support of national 
reconciliation. Although Embassy officials have limited contact 
with Burmese government officials due to the poor state of 
U.S.-Burma relations, even limited contact is important to 
urging reform and facilitating communication by all parties. 
The continued detention of senior officials of the NLD as well 
as over one thousand political prisoners by the military junta 
blocks progress toward national reconciliation. The U.S. has 
repeatedly called and continues to call for the immediate and 
unconditional release of all political prisoners.
    The U.S. coordinates with other members of the 
international community in support of democratic change in 
Burma. The U.S. has consistently co-sponsored resolutions at 
the UN General Assembly and the UN Commission on Human Rights 
that condemn the human rights situation in Burma and call for 
national reconciliation. Such resolutions support the ongoing 
efforts of UN Special Envoy Razali Ismail and UN Special 
Rapporteur for Human Rights Paulo Sergio Pinheiro. U.S. 
representatives participate in other UN discussions of Burma as 
part of the Informal Consultative Group on Burma and raised 
Burma at the Security Council under ``Other Matters'' in July 
2003. Similarly, U.S. participants in the meetings of the ILO 
have been supportive of ILO efforts to eliminate the use of 
forced labor in Burma and to respect fundamental workers' 
rights.
            Efforts by other governments
    No other nation has implemented the same set of sanctions 
as the U.S., and none has adopted the new economic sanctions 
the U.S. put in place after the May 30 attack on Aung San Suu 
Kyi's motorcade. Nonetheless, over the last year many have 
indicated concern for the situation in Burma and instituted new 
or expanded measures to promote democracy and human rights. In 
2003, the European Union (EU) expanded its existing visa and 
travel restrictions and its asset freeze list to identify a 
broader set of Burmese who benefit from the oppressive policies 
of the junta. The EU also has in place a ban on arms sales and 
limits on assistance to the government. The EU has 
traditionally drafted the annual General Assembly and 
Commission on Human Rights resolutions on Burma. EU ``troika'' 
visits to Burma have drawn attention to the continuing lack of 
progress on democracy and human rights issues. The United 
Kingdom has called on its companies to review their investments 
in Burma; two major British investors, British American Tobacco 
Company and Premier Oil, have sold their investments in the 
country to outside parties in the past year, and at least 18 UK 
companies cut ties with Burma in 2003.
    Canada has also expressed concern for the lack of progress 
in Burma and imposed visa and travel restrictions on Burmese 
officials in the wake of May 30. Under Canadian government and 
popular pressure, major Canadian investor Ivanhoe Mines is 
reported to be considering selling its operations in the 
country to Chinese investors.
    Norway has sanctions similar to the EU, banning arms sales 
and enforcing a broad visa ban and asset freeze. In addition, 
Norway has been a supporter of the Burmese exile movement and 
hosts a radio service dedicated to providing uncensored 
information to those inside Burma.
    Japan has frozen all new development assistance to the 
government in response to the May 30 attacks. However, Japan 
does continue funding, on a case-by-case basis, certain urgent 
humanitarian programs, democracy capacity-building projects, 
and those projects supporting economic structural reform. 
Senior Japanese officials, including Prime Minister Koizumi, 
have called for the release of Aung San Suu Kyi and progress 
toward democratization.
    Since May 30, Australia has deferred its recurring human 
rights training program and put certain agricultural assistance 
programs on hold. Australian officials have also called 
publiclyfor Aung San Suu Kyi's release.
    ASEAN nations issued an unprecedented call for change from 
fellow member state Burma at their June 2003 ministerial 
meeting. In mid-June, then Malaysian Prime Minister Mahathir 
issued a statement indicating the Burmese government's actions 
were creating a ``dilemma for the [ASEAN] organization.'' 
However, at their October 2003 meeting in Bali, ASEAN states 
took a different path and welcomed ``positive developments'' in 
Burma, including the junta's road map to democracy. The U.S. 
continues its dialogue with countries in the region and has 
made clear the important role that ASEAN has to play in 
encouraging reform. Administration officials have noted to 
ASEAN counterparts that there would not be high-level U.S. 
participation in ASEAN events hosted by the Burmese junta in 
2006 unless the country adopted significant reforms.
    While we share with Thailand the goal of advancing 
democracy in Burma, our approaches differ. Thailand is unlikely 
to change its policies or adopt sanctions against Rangoon. 
Thailand, however, has played a critical role for many years as 
a refuge to Burmese fleeing their country, and we have stressed 
to the Thai the importance of continuing to fulfill this role 
and supporting UNHCR in its work with Burmese refugees. The 
Royal Thai Government has also organized the ``Bangkok 
Process,'' envisioned to be a series of meetings of interested 
governments discussing political reform with the Burmese 
government. At the initial December 2003 meeting, all 
participants except India called on the Burmese junta to 
release Aung San Suu Kyi and include the democratic opposition 
in the democratic reform process. Neither the United States nor 
Burmese opposition groups were invited to the initial meeting, 
although some European countries participated. The United 
States did not seek to participate in this meeting.
    China continues to be Burma's primary financial and one of 
its primary military supporters. Chinese officials participated 
in the Bangkok Process, though they did not make any public 
statements critical of the government's presentation. China 
has, however, expressed support for, rational reconciliation 
and according to some observers, is encouraging reform in 
discussions with the Burmese government.
    India has neither provided strong public support for the 
democratic opposition nor called for an improvement in the 
human rights situation. Since the 1990s, India has vied with 
China for influence in Burma, sending high-level delegations, 
including a July 2003 visit by the Commerce Minister and a 
November 2003 visit by the Vice President, and offering 
significant financial and diplomatic support. Burma has also 
cooperated with India on the question of Indian insurgent 
groups operating out of Burmese territory.
            United Nations efforts
    The U.S. supports the work of UN Special Envoy Razali 
Ismail and UN Special Rapporteur Paulo Sergio Pinheiro. 
Ambassador Razali continues his efforts to facilitate a 
dialogue toward national reconciliation among the parties in 
Burma. Special Rapporteur Pinheiro has drawn attention to the 
continuing human rights violations in Burma and called for the 
immediate and unconditional release of political prisoners and 
an investigation into the premeditated attacks on Aung San Suu 
Kyi in May 2003.
    The UN country team inside Burma has focused its efforts on 
a range of humanitarian issues. The United States backs UN 
initiatives to address the HIV/AIDS epidemic, support returned 
refugees, and fight narcotics. UN High Commissioner for 
Refugees (UNHCR) provides protection and humanitarian 
assistance for the communities of Muslim Burmese in Northern 
Rakhine State [Rohingya] who have returned to Burma after 
fleeing to Bangladesh in 1991. UNHCR representatives recently 
gained access to areas in the east of the country to begin 
measures to create the necessary conditions for the large-scale 
return of refugees from Thailand. U.S. officials in Rangoon 
maintain close communication with UN counterparts.

Effects of trade-related measures

            Political and economic situation
    The U.S. trade-related sanctions have had an effect on the 
situation in Burma. Coincident with the June 4, 2003, 
introduction in the House and Senate of the Burmese Freedom and 
Democracy Act, U.S. embassies in ASEAN capitals made a strong 
demarche to the respective host governments. This in part led 
to statements critical of the junta's behavior made by 
individual ASEAN leaders and by the ASEAN leaders as a group 
during the June 2003 ministerial meeting in Phnom Penh. With 
this increasing pressure from Burma's closest allies, and the 
passage of the Act on July 28, 2003, the junta on August 30 
publicly recognized the need for democracy with its ``road 
map.'' In April 2004, the government issued invitations to a 
National Convention starting in May designed to draft a new 
constitution, taking up where the failed 1993-1996 National 
Convention left off. It is unclear to what extent, if any, the 
democratic opposition and ethnic groups have been involved in 
planning the Convention. For a constitutional convention to be 
successful, the political opposition and ethnic groups must 
support it and must be involved in preparations for it. We do 
not know whether participants will be able to voice their 
opinions or make changes to Convention documents. The junta has 
not announced an overall timetable for a transition to 
democracy.
    In September 2003, Aung San Suu Kyi was moved from prison 
to house arrest, and in November, five of the NLD's most senior 
leaders were allowed out of their homes. Two more were released 
from detention in April 2004. Aung San Suu Kyi and one other 
senior NLD leader remain under house arrest. NLD officials who 
participated in the Convention in the mid-1990s have been 
invited to attend the one that will convene in May. The NLD 
Central Executive Committee has called for the procedures of 
the Convention to be in line ``with democratic principles.''
    In recent months, the military junta and Burma's largest 
remaining ethnic insurgent group, the Karen National Union 
(KNU), entered into serious cease-fire negotiations. KNU leader 
General Bo Mya visited Rangoon in January, and subsequent talks 
in February helped to secure progress toward a lasting cease-
fire. If a final agreement between the parties is reached, it 
could end over five decades of conflict, and could open up 
Karen and Mon States for badly needed internationaleconomic and 
humanitarian assistance and the eventual voluntary repatriation of 
thousands of refugees from Thailand with UNHCR involvement and return 
home of thousands of internally displaced persons. Over twenty groups 
have concluded cease-fire agreements with the junta.
    It is the Burmese junta's dismal economic policies that 
have led to widespread poverty and the flight of most foreign 
investors from the country. Likewise, Burma's dreadful 
employment situation reflects decades of economic mismanagement 
by the Burmese government. However, the 2003 U.S. ban on 
Burmese imports had an impact on at least one sector of the 
economy: the garment industry. More than 100 garment factories, 
already in dire economic straits, that had relied on exports to 
the United States have now closed. There has been an estimated 
loss of around 50,000 to 60,000 jobs. However, new orders from 
importers in EU member countries helped remaining factories 
continue production.
            Human rights
    Despite the Burmese Government's stated desire to make 
progress toward democracy, its extremely poor human rights 
record has worsened over the past year, and it continued to 
commit serious abuses. Citizens still do not have the right to 
change their government. Security forces continued to commit 
extrajudicial killings and rape, forcibly relocate persons, and 
use forced labor. The military junta continues to be hostile to 
all forms of political opposition. After the May 30 attack, in 
which government-affiliated agents killed as many as 70 pro-
democracy activists, the government cracked down severely on 
the NLD and shuttered all 300 NLD offices in Burma. Arrests and 
disappearances of political activists continue, and members of 
the security forces torture, beat, and otherwise abuse 
prisoners and detainees. The government has allowed two visits 
by Amnesty International and maintained cooperation with the 
International Committee of the Red Cross.
    Our expanded sanctions represent a clear and powerful 
expression of American opposition to the developments in Burma 
over the past year and signal strong support for the pro-
democracy movement. Sanctions are a key component of our policy 
in bringing democracy to Burma and have been a key source of 
support for the morale of many democracy activists.

Effects of sanctions policy on broader policy interests and relations

    It is U.S. steadfastness that sends a clear signal to the 
junta of U.S. support for change. The measures in place have 
the broad backing of Burmese democracy activists.
    Although the EU and others have taken some steps, no other 
country has taken measures similar to those of the U.S. We 
continue diplomatic efforts at all levels to urge other 
countries to adopt broad sanctions similar to ours or targeted 
approaches to dealing with Burma. We have found that many in 
the international community have a different view on how best 
to achieve our shared goals in Burma.
    The trade-related sanctions implemented pursuant to the 
Burmese Freedom and Democracy Act of 2003 have had limited 
impact on U.S. relations with other nations. Although some 
foreign businesses have complained about the impact on their 
operations, all who have invested in Burma have done so 
recognizing the difficult operating environment and overall 
poor economic climate fostered by the junta. Furthermore, many 
U.S. and other companies had already pulled out of Burma prior 
to the passage of the Burmese Freedom and Democracy Act of 
2003.

Conclusion

    International pressure and support for the Burma democracy 
movement is essential for promoting change in Burma. However, 
the import ban implemented in 2003 would be far more effective 
if countries importing Burma's high-value exports (such as 
natural gas and timber), which also tend to have closer 
economic links with the SPDC, would join us in our actions. 
Other U.S. measures, such as the ban on new investment in Burma 
and the ban on the export of financial services to Burma would 
also be more effective were the EU and others to take similar 
steps. The Administration remains unwavering in its support for 
the establishment of democracy and a greatly improved human 
rights situation in Burma.

                 II. BUDGETARY IMPACT OF THE RESOLUTION


               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 17, 2004.
Hon. Charles E. Grassley,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC,
    Dear Mr. Chairman:
    The Congressional Budget Office has prepared the enclosed 
cost estimate for S.J. Res. 39, a joint resolution approving 
the renewal of import restrictions contained in the Burmese 
Freedom and Democracy Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Annabelle 
Bartsch.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S.J. Res. 39--Approving the renewal of import restrictions contained in 
        the Burmese Freedom and Democracy Act of 2003

    Summary: S.J. Res. 39 would renew for one year the ban of 
all imports from Burma. The ban was enacted as the Burmese 
Freedom and Democracy Act of 2003 (P.L. 108-61) and is 
currently set to expire on July 28, 2004. The import 
restrictions may be lifted if the State Peace and Development 
Council (SPDC), the military regime of Burma, has made 
substantial and measurable progress to end violations of human 
rights, implemented a democratic government, and met its 
obligations under international counter-narcotics agreements. 
The President also would have the authority to terminate the 
restrictions upon the request of a democratically elected 
government in Burma or waive them in the national interest. CBO 
estimates that extending the ban on U.S. imports from Burma 
would reduce federal revenues by $2 million in 2004 and $10 
million in 2005, with no effect thereafter. CBO estimates 
enacting S.J. Res. 39 would not affect federal spending.
    By banning all imports from Burma, S.J. Res. 39 would 
impose private-sector mandates as defined in the Unfunded 
Mandates Reform Act (UMRA). Due to the lack of information on 
the value of lost profits to importers resulting from the ban, 
CBO cannot determine whether the aggregate direct cost of the 
mandates would exceed the annual threshold for private-sector 
mandates established in UMRA ($120 million in 2004, adjusted 
annually for inflation).
    S.J. Res. 39 contains no intergovernmental mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of S.J. Res. 39 is shown in the following 
table.

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2004     2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Estimated Revenues........................................       -2      -10        0        0        0        0
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: Under S.J. Res. 39, the President would 
have the authority to lift or waive the ban that would be 
imposed by the resolution. For this estimate, CBO assumes that 
the President would not exercise this authority before the 
termination of the one-year ban.
    Based on data from the U.S. International Trade Commission 
on recent U.S. imports from Burma, information from several 
government agencies, and CBO's most recent forecast of total 
U.S. imports, CBO estimates that enacting S.J. Res. 39 would 
reduce federal revenues by $2 million in 2004 and $10 million 
in 2005, net of income and payroll tax offsets.
    In recent years, over half of all U.S. imports from Burma 
have been knitted or crocheted clothing and apparel goods. The 
remaining imports include apparel items not knitted or 
crocheted, certain types of fish and crustaceans, goods made of 
wood, certain precious and semiprecious stones and metals, and 
woven fabrics and tapestries. In 2001 and 2002, roughly 80 
percent of duties collected on these imports came from knitted 
and crocheted articles. CBO assumes that a portion of the 
banned imports would be replaced with imports from other 
countries.
    The President could remove the ban on imports upon the 
request of a democratically elected government in Burma or if 
he were to determine and notify Congress that to do so is in 
the national interest. Should the ban be lifted, U.S. companies 
would be allowed to resume importation of goods produced, 
manufactured, grown, or assembled in Burma. It is unclear 
whether or when the President would exercise the authority to 
lift or waive the ban on imports from Burma. If such an action 
were taken during the 2004-2005 period, the impact on federal 
revenues would be reduced accordingly.
    Estimated impact on the private sector: By banning all 
Burmese imports, S.J. Res. 39 would impose private-sector 
mandates as defined in UMRA. Specifically, the bill would ban 
all imports from Burma. Due to the lack of information on the 
value of lost profits to importers resulting from the ban, CBO 
cannot determine whether the aggregate direct cost of the 
mandates would exceed the annual threshold for private-sector 
mandates established in UMRA ($120 million in 2004, adjusted 
annually for inflation).
    Estimated impact on state, local, and tribal governments: 
S.J. Res. 39 contains no intergovernmental mandates as defined 
in UMRA and would impose no costs on state, local, or tribal 
governments.
    Previous CBO Estimate: On June 14, 2004, CBO transmitted a 
cost estimate for H.J. Res. 97, as introduced in the House of 
Representatives on June 3, 2004. The two versions of the 
renewal of the import restrictions are the same and, therefore, 
CBO's estimates of the effects on federal revenues are the 
same.
    Estimate prepared by: Federal Revenues: Annabelle Bartsch; 
Impact on State, Local, and Tribal Governments: Melissa 
Merrell; and Impact on the Private Sector: Paige Piper Bach.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis.

       III. REGULATORY IMPACT OF THE RESOLUTION AND OTHER MATTERS

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee states 
that the resolution will not significantly regulate any 
individuals or businesses, will not affect the personal privacy 
of individuals, and will result in no significant additional 
paperwork.
    The following information is provided in accordance with 
section 423 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(Pub. L. No. 104-04). The Committee has reviewed the provisions 
of S.J. Res. 39 as approved by the Committee on June 15, 2004. 
In accordance with the requirement of Pub. L. No. 104-04, the 
Committee has determined that the bill contains no 
intergovernmental mandates, as defined in the UMRA, and would 
not affect the budgets of State, local, or tribal governments.

                      IV. CHANGES IN EXISTING LAW

    Pursuant to paragraph 12 of rule XXVI of the Standing Rules 
of the Senate, the Committee finds no changes in existing law 
made by S.J. Res. 39, as ordered reported.

                                  
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