    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book II)]
    [December 9, 1997]
    [Pages 1729-1730]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Reporting on the National Emergency With
    Respect to Burma
    December 9, 1997

    Dear Mr. Speaker:  (Dear Mr. President:)
        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 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.
        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

    [[Page 1730]]

    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,
    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.
        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

    Note: Identical letters were sent to Newt Gingrich, Speaker of the House
    of Representatives, and Albert Gore, Jr., President of the Senate.