Burma: Economic Sanctions

^Pr^ep^ar^{ed f}^o^r^M^e^m^b^ers^an^d^Com^mⁱ^t^t^ees^of^C^ong^r^e^ss

On October 19, 2007, President George W. Bush issued Executive Order 13449. This followed a
September 25, 2007 statement by President Bush that sanctions against Burma, which have been
in place since 1997, would be tightened to specifically target leading Burmese officials and
impose additional financial and travel sanctions. This report provides background information on
existing economic sanctions against Burma and possible options to expand sanctions. It will be
updated as events warrant.

Future Options to Expand Sanctions...............................................................................................8
Table 1. Summary of U.S. Economic Sanctions on Burma.............................................................5
Author Contact Information..........................................................................................................10

he following table provides summary information on existing Burma sanctions.
Table 1. Summary of U.S. Economic Sanctions on Burma T

^{Statutory Action}^Sanction^Exemption
^Exec^{utive Order}¹³⁰^{47, May}^{Prohibits new investm}^{ent in B}^u^r^{ma by U.S. persons a}^{nd compa}^{nies on}^{Companies with investm}^{ents in}^Burma^{prior to May}^{21, 1}⁹⁹^{7, and}
^{20, 1}⁹⁹^{7. Issu}^{ed unde}^r^{or after May}²^{1, 19}^{97. N}^{ew inves}^{tment is defined as a}^{contract wit}^h^{companies or pe}^{rsons with}^{an in}^{vestment ag}^reement^{in place}^{prior to}
^{Section 570 of t}^{he Foreign}^{the Gover}^nme^{nt of Bur}^{ma or a n}^{on-governmental e}^{ntity in Burma}^for^{May 2}^{1, 19}^{97. The}^exem^{ption inc}^{ludes the U.S. corporation}
^Approp^{riations Act, 19}⁹⁷^{the development of}^resourc^{es located in Burma, p}^urc^{hasing a s}^har^{e of}^{UNOCAL and its inve}^stment^{with the F}^renc^{h corporation Total in}
^{(P.L. 104-20}⁸⁾^{ownership in}^{a p}^{roject, or entering into an agre}^ement^that^{provides for}^{natural gas e}^{xploration and}^{pipeline offshore}^{and across}^{Burma int}^o
^{a participation in royalties, earnin}^{gs, or profits from th}^{e economic}^{Thailand. It is estimated that the}^{project provides $4}⁰⁰^{million to}
^{development of resou}^{rces locate}^{d in Burma.}^$64^{7 million to the Burmese gov}^ernme^{nt an}^{nually. (Seekins, Donald}
^{M. “Burma a}^{nd U.S. Sanctions: Pu}^{nishing an}^Aut^{horitarian Regime.”}
^{Asian Survey}^{, May-June}²⁰^05.^{p. 4}^52.)
^{P.L. 108-6}^{1, Burmese}^{Requires t}^{he President to ba}^{n t}^h^e^{importation into the United States}^{The President may waive t}^{he p}^{rohibition on the import of a}^ny
^{Freedom and Democracy}^{of certain p}^{roducts of Bu}^{rma, be}^{ginning 3}⁰^{days afte}^{r the}^{date of}^{product f}^{rom Burma if t}^{he Presid}^{ent determines}^{and notifies the}
ⁱ^{ki/CRS-RS22737}^{Act of 20}^{03, J}^{uly 2}^{8, 20}^03.^Exte^{nded by P.L. 10}^8-2⁷²^{enactment. The}^{import ba}^{n e}^xpir^{es in one year}^u^{nless re}^{newed. The}^{President may impose a f}^{reeze on fu}^{nds or asset}^{s in th}^{e United States}^approp^{riate congressional committees that to do so “is in the}^national^{interest of the}^{United States.”}
^g/w^{and P.L. 109-3}^9.^{of the Bur}^{mese Gove}^rnme^{nt and}^{individuals who hold senior posit}^ions
^s^.or^{in that gover}^{nment. Req}^{uires t}^h^e^{U.S. government to vote against}^the
^le^ak^{extension of a}^{ny fina}^{ncial assistan}^{ce to Burma}^{by inter}^{national financial}
^{institutions. Authorizes the Presi}^{dent to deny visas a}^{nd entr}^{y into}^the
^://wiki^{United States to former and}^pres^{ent leaders of the}^Burme^se^government^{or the U}^{nion Solidar}^{ity Development Association (a pro-}
^h^ttp^government^{mass orga}^nization).
^Exec^{utive Order}¹³³^{10, July}^{Issued to implement}^{P.L. 108-}^61.^{Blocks property a}^{nd prope}^rty^{Transactions p}^{rior to May 2}^{1, 19}^{97, betwee}^{n a U.S. person or}
^{28, 2}⁰⁰^3.^{interests of}^{persons listed in th}^e^Anne^{x to the}^Exec^{utive Orde}^{r a}^nd^{company a}^{nd any}^{entity in Bu}^rma^{, but s}^{uch t}^{ransactions wit}^{h ba}^nk^{s in}
^{persons designat}^{ed by t}^{he Treas}^u^{ry Departme}^{nt as}^{being se}^nior^{Burma m}^{ust be}^{conducted t}^hrou^{gh a non-U.S. bank. No p}^rohibition
^{officials of the Governme}^{nt of Bu}^{rma and t}^{he Union Solidarity and}^{on the e}^{xport of goods and ser}^{vices other t}^han^{financial services.}
^{Development Association. Authorizes the Treasu}^{ry to designate}^Exem^{ption for tra}^nsfer^{of pe}^rson^{al remittances of less tha}^{n $}³⁰⁰^t^o
^{individuals or entities that are owned or controlled by, or acting on}^{and from Bur}^{ma for “a}^{n individual ordinarily resident in Burma,}
^{behalf of a}^{ny of those officials or}^{groups. Bans t}^{he importation int}^{o the}^{provided that the}^fu^{nds are}^{not b}^{eing sent}^{by, to or on be}^{half of a}
^{United States of products of Bu}^r^{ma and the}^ex^{port or re-ex}^port^of^{blocked party.” The U.S. Office of Foreign Assets Control can}^issu^e
^{financial services to Burma}^{by U.}^{S. persons. Prohibits a U.S. person or}^{licenses to non-governme}^{nt orga}^{nizations to engage in h}^umanitari^an
^{company f}^{rom ap}^{proving, aiding, or sup}^{porting a foreign}^party’s^{or religious activities}^{in Burma.}
^{investment in}^{Burma. Prohibits U}^{.S. persons from p}^urc^{hasing s}^har^{es in}
^{a third-country}^company^{if the}^c^{ompany’s p}^{rofits are p}^redominan^tly
^{derived from the com}^{pany’s deve}^{lopment of resou}^{rces in B}^urma.

^{Statutory Action}^Sanction^Exemption
^Exec^{utive Order}¹³⁴^48,^Grants^{the Trea}^sury^Departm^ent^expa^{nded authority to designate}^for
^{October 19,}²⁰⁰^7.^{sanctions individuals responsible f}^{or huma}^{n rights}^ab^{uses as well as}
^{public corr}^{uption, and t}^{hose who}^{provide material and financial ba}^cking
^{to these individuals or to the governme}^{nt of Bur}^ma.
^{Section 489(a)(1) of the}^{Burma is listed by the}^Departme^{nt of State as a “major illicit drug}
^{Foreign Assistance Act of}^{producing cou}^{ntry” a}^{nd is su}^bse^q^{uently ba}^{rred f}^{rom receiving som}^e
¹⁹⁶^{1, as ame}^nded.^{U.S. foreign assistance.}
^{Narcotics Control Trade Act}^{Due to its designation as a major drug p}^{roducing state, Bur}^{ma is}
^{(19 U.S.C. 2491-2}⁴⁹^{5) and}^{subject to seve}^{ral trade sanctions}^{including: (1) deny to any or all}^of
^{the Customs a}^{nd Trade Act}^{the p}^{roducts of that}^count^{ry tarif}^{f treatme}^{nt u}^{nder t}^{he Ge}^neralized
^{of 19}^{90 (P.L. 10}^1-38^2).^{System of Prefere}^{nces, the}^Carib^{bean Basin}^{Economic Recovery A}^ct
^{[19 U.S.C. 2701}^{et se}^{q.], or any other law p}^{roviding prefere}^{ntial tariff}
^{treatment; (2) a}^{pply to an}^{y or all of the dutiable p}^{roducts of t}^hat
^{country a}ⁿ^{additional duty at a ra}^{te not to exceed}⁵⁰^perce^{nt ad}
^{valorem or the sp}^{ecific rate eq}^uiv^{alent; (3) apply to one or}^{more duty-}
^{free p}^{roducts of t}^{hat count}^{ry a d}^{uty at a rat}^{e not to ex}^{ceed 5}⁰^pe^rcent
ⁱ^{ki/CRS-RS22737}^{ad valorem; (4) take the ste}^{ps de}^{scribed in su}^{bsection (d)(1) or (d)(2)}^{of this section, or both, to curtail air trans}^{portation betwee}^{n the}
^g/w^{United States and that cou}^{ntry; a}^{nd/or withdraw the}^perso^{nnel an}^d
^s^.or^{resources of t}^{he U}^{nited States fr}^{om participation in any a}^rrang^em^ent
^le^ak^{with that cou}^ntry^{for the}^pre-cle^{arance of c}^ustoms^{by visitors bet}^ween
^{the United States and t}^{hat cou}^ntr^y.
^://wiki^Exec^{utive Order}¹³⁴^64,^{Froze assets in the U}^{nited States and prohibited U.S. firms from d}^oing

^h^ttp^{April 30, 2}⁰⁰^8.^busines^{s with t}^{hree Bu}^{rmese co}^{mpanies: Mya}^{nmar Pearl}^Ente^rpri^se,
^Myanma^{r Gem}^E^nterp^{rise, and M}^{yanmar Timbe}^{r E}^nter^prise.

^{Statutory Action}^Sanction^Exemption
^{P.L. 110-2}^{86, Tom Lantos}^{Bans the im}^{port of jadeite and ru}^{bies mined in Bur}^{ma and jewelry}
^{Burmese JAD}^{E Act of}²⁰^08,^{containing jadeite or rubies made}^{in Burma. E}^xporte^{rs of jadeite,}
^{July 2}^{9, 20}⁰⁸^{rubies, and jewelry f}^{rom other c}^{ountries to the U}^{nited States mu}^{st act}
^{to prohibit inclusion of articles fr}^{om Burma; must}^{maintain f}^{ull rec}^ords
^{of non-Burmese}^{articles and cont}^{rols from mine to final finishing t}^o
^{export. Gover}^nme^{nts m}^{ust esta}^b^{lish “dissuasive penalties” against}
^{persons w}^{ho violate laws and reg}^{ulations against trade in Bur}^mese^-
^{origin articles. The President shall appoint a Special Represe}^{ntative and}
^Pol^{icy Coordinator for Burma. The State Departm}^{ent s}^{hall submit}^to
^{Congress re}^{ports on cou}^{ntries a}^{nd entities that s}^u^p^{ply arms a}^nd
^{intelligence aid to the Burmese g}^{overnment; a}^{nd cou}^{ntries and fo}^reign
^{banks t}^hat^{hold assets of senior Burmese of}^{ficials. The Act expres}^s^es
^{the “sen}^{se of Congress”}^{that t}^he^{investors in the}^{Yadana nat}^{ural g}^as
^{project (including the U.S. firm, Chevron) s}^{hould “consider volunta}^ry
^{divestment over time” if the}^Bur^{mese governme}^{nt fails to reform}
^politica^{lly; and the investors s}^hou^{ld publicly disclose their role in the}
^{investment a}^{nd the}^{amount of}^fin^{ancial sup}^{port to the Bu}^rmese
ⁱ^{ki/CRS-RS22737}^government^generat^{ed by t}^{he Ya}^{dana project.}
^g/w^Source:^{Compiled by the}^Congr^{essional Research Service.}

^s^.or
^le^ak
^://wiki
^h^ttp

In response to the Burmese government’s suppression of demonstrations at the end of September
2007, the Bush Administration published a large number of names of persons and companies
connected with the Burmese government, imposed bans on their travel to the United States, and
froze their financial assets in the United States. Existing sanctions against Burma may be viewed
as adequate and as necessitating no further action. However, policymakers may seek to exercise
additional options. P.L. 110-286, the Tom Lantos Block Burmese JADE Act of 2008 struck
provisions in the House version of the bill that would have prohibited “United States persons”
from entering into economic-financial transactions, paying taxes, or performing “any contract”
with Burmese government institutions or individuals under U.S. sanctions. The prohibition of the
payment of taxes specifically included the payments of taxes to the Burmese government by the
Yadana natural gas project, in which the U.S. corporation, Chevron, is a major partner. These
stricken provisions were replaced in the final bill by a “sense of Congress” statement that
Chevron and the other foreign investors should consider voluntary disinvestment from the
project. Other options to expand sanctions include the following.
Impose provisions of the USA PATRIOT Act on third country banks and financial
institutions that do business with Burmese banks and individuals associated with the
Government of Burma: Under Section 311 of the USA PATRIOT Act, Special Measures for
Jurisdictions, Financial Institutions, or International Transactions of Primary Money Laundering
Concern, the Secretary of the Treasury is authorized to impose any of five certain regulatory ¹
restrictions, known as “special measures.” These can be used upon finding that a foreign
jurisdiction, financial institution, or certain transactions or accounts is “of primary money
laundering concern.” Prior to making such a finding, the Treasury Secretary must consult with the
Secretary of State and the Attorney General and consider certain factors relating to the foreign
jurisdiction or the particular institution targeted. Among the factors to be considered are:
involvement with organized crime or terrorists, bank secrecy laws and regulations, the existence
of a mutual legal assistance treaty with the United States, and level of official corruption.
Of the five types of special measures, four of the five impose information-gathering and record-
keeping requirements on U.S. financial institutions dealing either directly with the jurisdiction
designated as one of primary money laundering concern, or dealing with those having direct
dealings with the designated jurisdiction. Under the fifth special measure, a U.S. financial
institution may be prohibited from opening or maintaining in the United States a correspondent or ²
payable-through account for a foreign financial institution if the account involves the designee.
On November 18, 2003, the Secretary of the Treasury designated Burma as a jurisdiction of
primary money laundering concern and applied a “special measure” under Section 311 of the
USA PATRIOT Act. The special measure prohibits covered U.S. financial institutions from
establishing, maintaining, administering, or managing in the United States any correspondent or
payable-through account for, or on behalf of, a Burmese banking institution. Covered U.S.

¹^{For m}^o^re^inf^o^rm^a^{tion o}ⁿ^T^itle^III^of^the^USA^P^A^T^R^IO^T^A^c^{t, se}^e^{CRS Re}^port^RL³¹²^08,^Iⁿ^te^rⁿ^ati^o^{nal M}^o^ne^y
^La^uⁿ^d^e^rin^g^A^b^a^t^e^m^eⁿ^{t a}ⁿ^d^An^ti-^Te^rro^{rist Fin}^aⁿ^cⁱⁿ^g^Ac^t^o^f²⁰⁰¹^,^Title^III^o^f^P.^L.¹⁰⁷^-⁵⁶⁽^U^S^A^PAT^{RIOT Ac}^t)^{, by}^M.
^Ma^ur^e^eⁿ^M^u^r^p^hy^.
²^A^p^a^y^a^b^l^e-t^h^ro^u^g^h^acco^un^tⁱ^s^aⁿ^acc^{ount e}^s^ta^blis^he^{d a}^t^a^U^.^S^.^fⁱ^na^nc^ia^{l ins}^tit^uti^on^tha^t^e^x^te^nds^c^h^e^c^k^-^w^riting
^pr^iv^ile^g^e^s^{to the}^c^u^s^t^om^e^r^s^of^othe^r^,^of^te^{n f}^o^r^e^ig^{n, f}ⁱ^na^nc^ia^{l ins}^tit^ut^ions^.

financial institutions also are similarly prohibited with regard to any correspondent or payable-
through account in the United States for any foreign bank if the account is used by the foreign
bank to provide banking services to a Burmese banking institution. However, the special measure
applied to Burmese banks does not prohibit U.S. financial institutions from maintaining
correspondent accounts otherwise prohibited by this rule if such accounts are permitted to be
maintained pursuant to Executive Order 13310 and the Burma-related activity of those accounts
is solely for the purposing of conducting exempted activity. This is in contrast to the Treasury
Department’s imposition of Section 311 on Banco Delta Asia in the Chinese territory of Macau
for money laundering for North Korea. Section 311 measures have arguably had their largest
success in this designation of Macau-based Banco Delta Asia in September 2005 and the full
imposition of Section 311 in March 2007. The North Korean government had used Banco Delta
for the majority of its international transactions. Reportedly, following the U.S. proposed ³
designation, over two dozen financial institutions ceased their transactions with North Korea.
Most importantly, China froze North Korean accounts in the Macau branch of the Bank of China
and reportedly cracked down on North Korean efforts to circulate counterfeit U.S. dollars in ⁴
China near the North Korean border.
Reports of third country banks that do business with Burmese banks or individuals connected to
the Burmese government (including drug traffickers) are sparse. Past reports have cited banks in
Thailand, Singapore, and China. Burmese accounts in Chinese banks were confirmed in January

2006 when the Bank of China ordered Chinese banks to terminate all U.S. dollar business with ⁵

the Myanmar Foreign Trade Bank and the Myanmar Investment and Commercial Bank.

³^“P^{ress repo}^rt^{s i}ⁿ^dⁱ^cat^{e t}^h^at^s^o^m^e^t^w^o^d^o^zen^fⁱⁿ^aⁿ^cⁱ^a^lⁱⁿ^stⁱ^t^u^tⁱ^on^{s acro}^{ss t}^h^{e gl}^o^b^e^h^a^{ve vo}^l^uⁿ^t^ari^l^y^cu^t^b^{ack o}^r
^te^r^m^ina^t^e^d^theⁱ^r^busⁱⁿ^e^s^s^w^{ith N}^o^r^t^{h K}^o^r^e^a^,^nota^b^ly^inc^l^udi^ng^ins^tit^utio^nsⁱⁿ^C^hⁱⁿ^a^,^J^a^paⁿ^,^Vie^t^na^m^,^Mong^ol^ia^{, a}ⁿ^d
^Sⁱⁿ^g^ap^o^r^e.^T^h^{e resu}^l^t^o^f^t^h^{ese vo}^l^uⁿ^t^ary^actⁱ^oⁿ^sⁱ^s^t^h^atⁱ^t^is^be^c^o^mⁱ^ng^v^e^r^y^diff^ic^{ult f}^o^{r the}^Kim^{Jong-Il re}^gⁱ^m^e^to
^b^eⁿ^e^fⁱ^t^f^r^o^mⁱ^t^s^cri^mⁱⁿ^al^coⁿ^d^u^c^t^.^{” T}^e^stⁱ^m^oⁿ^y^o^f^Danⁱ^el^G^l^aser,^De^p^u^t^y^A^s^si^st^an^t^S^ecret^ar^y^f^o^{r T}^e^rro^ri^st^Fⁱⁿ^aⁿ^cⁱⁿ^{g an}^d
^Fina^nc^ia^{l C}^r^im^e^s^{, U}^.^{S. D}^e^pa^r^t^m^e^{nt of}^the^T^r^e^a^s^ur^y^bef^o^r^e^the^Se^na^te^C^o^m^m^itte^e^{on B}^a^nk^ing^,^H^ousⁱⁿ^g^,^a^{nd U}^r^baⁿ
^A^f^f^a^ir^s^.^Se^ptem^be^r^12,²⁰^06.
⁴^Ibid^.
⁵^T^u^rne^{ll, Se}^aⁿ^.^Burm^a^’^s^Ec^onom^ic^P^r^os^pe^c^t^s^.^T^e^s^tim^on^y^be^f^o^re^{the Su}^bc^om^m^itte^e^{on Ea}^s^t^A^s^ia^{n a}ⁿ^d^P^a^cⁱ^fⁱ^c^A^f^f^a^irs^,
^Se^na^te^For^e^ig^{n R}^e^la^ti^ons^C^o^m^m^it^te^e^,^Ma^r^c^{h 2}⁹^,²⁰^06.^Sw^e^eⁿ^ey^{, J}^{ohn. “}^H^ow^J^unta^pr^ote^c^t^s^Mr^{. H}^e^r^o^in.”^T^h^{e Ob}^server
⁽^L^ondo^{n, i}ⁿ^te^rⁿ^e^t^v^e^r^s^ioⁿ⁾^{, A}^p^r^il^{8, 2}⁰⁰¹^{. C}^a^s^a^nie^r^,^Fr^aⁿ^c^o^is^{. “}^A^Na^r^c^o-^dic^t^a^t^or^s^hⁱ^pⁱⁿ^p^r^og^r^e^s^s^.^”^Bu^rma^N^{et News}^,
^J^une¹³^,¹⁹^96.

^La^r^r^y^A.^Nⁱ^ks^c^h ^Mar^tin^A^.^W^e^iss
^Sp^ecialistⁱⁿ^A^s^iaⁿ^Af^f^a^ir^s^An^al^y^s^{t i}ⁿ^In^terⁿ^ation^a^{l T}^r^ade^an^{d Fin}^aⁿ^ce
^lⁿⁱ^k^s^c^h^@^cr^s^.^l^o^c.g^o^v^,^7-⁷⁶⁸⁰^mw^ei^s^s^@^c^rs^.l^oc.g^ov^{, 7}^-⁵⁴⁰⁷