[Weekly Compilation of Presidential Documents Volume 33, Number 50 (Monday, December 15, 1997)]
[Pages 2000-2002]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders Reporting on 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

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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, 
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

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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.