Senate Report 110-146 - APPROVING THE RENEWAL OF IMPORT RESTRICTIONS CONTAINED IN THE BURMESE FREEDOM AND DEMOCRACY ACT OF 2003

[Senate Report 110-146]
[From the U.S. Government Publishing Office]

Calendar No. 281
110th Congress Report
SENATE
1st Session 110-146

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

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

August 29, 2007.--Ordered to be printed

Filed, under authority of the order of the Senate of August 3, 2007

_______

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

R E P O R T

[To accompany S.J. Res. 16]

[Including cost estimate of the Congressional Budget Office]

The Committee on Finance, to which was referred the joint
resolution (S.J. Res. 16) 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. Expedited Procedures for Renewing the Import
Restrictions Contained in the Burmese Freedom and
Democracy Act of 2003............................ 3
4. Committee Consideration of S.J. Res. 16........... 4
5. Report of the U.S. Department of State on the
Trade Sanctions Against Burma.................... 4
II. Budgetary Impact of the Joint Resolution.........................12
III.Regulatory Impact of the Joint Resolution and Other Matters......15

IV. Changes in Existing Law..........................................15

I. REPORT AND OTHER MATTERS OF THE COMMITTEE

A. Report of the Committee on Finance

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,
the International Red Cross, and the U.S. State Department have
described a pattern of SPDC policies featuring the suppression
of political liberties, jailing of political prisoners (more
than 1,100 estimated imprisoned in July 2007), widespread
physical abuses, forced relocation of 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 other NLD leaders were taken into
custody. Serious human rights abuses by the Burmese Government
have worsened in 2007. Arrests and disappearances of political
activists continue. The military regime continues to be hostile
to all forms of political opposition. Daw Aung San Suu Kyi
remains under strict house arrest.

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).
The Act bans the importation of any article produced in
Burma. This ban affects mainly imports of Burmese textiles and
garments. The Act allows the President to lift these import
restrictions if he 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,
released political prisoners, allowed political, religious, and
civil liberties, and reached agreement with the NLD for a
civilian government chosen through democratic elections. Under
the Act, the import ban must be renewed on a yearly basis. In
addition to the import ban, the Act freezes Burmese assets in
the United States and requires the United States to oppose aid
to Burma by international financial institutions.
As originally enacted, section 9(a)(1) of the Act limited
the imposition of import restrictions to a maximum of three
years. In 2006, a joint resolution was introduced to permit the
renewal of import restrictions for a maximum of 6 years;
specifically, H.J. Res. 86 was introduced in the House on May
19, 2006, and S.J. Res. 38 was introduced in the Senate on May
26, 2006. The House passed H.J. Res. 86 on July 11, 2006 by
voice vote. H.J. Res. 86 was placed on the Senate calendar on
July 26, 2006 and passed without amendment by voice vote. The
President signed the joint resolution on August 1, 2006 (Pub.
L. 109-251). H.J. Res. 86 also provided for a 1-year renewal of
import restrictions, i.e. until July 28, 2007.
Pursuant to section 9(b) of the Act, the import ban will
expire after 1 year unless a new joint resolution (``renewal
resolution'') approving a 1-year renewal of the import ban is
enacted into law prior to the anniversary of the date of
enactment of the Act. The purpose of S.J. Res. 16 is to comply
with the Act's requirement in order to renew the import ban for
another year, i.e. until July 28, 2008. A similar resolution
(H.J. Res. 44), which included budgetary offsets, was passed by
the House on July 23, 2007 by voice vote. H.J. Res. 44 was
placed on the Senate Calendar on July 24, 2007 and passed by a
recorded vote of 93-1. The President signed the joint
resolution on August 1, 2007 (Pub. L. 110-52).

3. Expedited 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 expedited
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 joint 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. The Finance Committee has 30 days to consider and
report the resolution, not counting any day excluded under
section 154(b) of the Trade Act of 1974. Section 154(b)
excludes Saturdays and Sundays when either House is not in
session, any day during which either House is adjourned for
more than 3 days, and any day while Congress is adjourned sine
die. 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. 16

The Committee considered S.J. Res. 16 in open executive
session on July 23, 2007. The Committee voted unanimously, and
without amendment, to favorably report S.J. Res. 16.
With a quorum present, the Committee approved S.J. Res. 16
by roll call vote, 21 ayes, 0 nays:
Ayes: Baucus, Rockefeller, Conrad, Bingaman (proxy), Kerry,
Lincoln (proxy), Wyden, Schumer, Stabenow, Cantwell, Salazar,
Grassley, Hatch, Lott (proxy), Snowe, Kyl (proxy), Smith,
Bunning, Crapo, Roberts, Ensign.
The Chairman reported the resolution to the Senate on July
24, 2007.

5. Report of the U.S. Department of State on the Trade Sanctions
Against Burma

On May 29, 2007, 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. 16. The State Department report is
reprinted below:

Report on U.S. Economic Sanctions Against Burma

i. introduction and summary

In view of the impending expiration of the import ban
contained in the Burmese Freedom and Democracy Act of 2003,
P.L. 108-61 (the BFDA), as amended by H.J. Res. 86, P.L. 109-
251 (2006), 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 U.S. policy objectives.
Growing pressure by the United States and other countries
sends a clear signal that the international community expects
the Burmese regime, the State Peace and Development Council
(SPDC), to take meaningful steps toward genuine national
reconciliation and the establishment of democracy. U.S.
sanctions are an important tool to exert such pressure on the
regime to undertake democratic reforms.
The Administration continues diplomatic efforts at all
levels to encourage other nations to press the Burmese regime
to implement a genuine transition to democratic rule--and
willingness to call for reforms in Burma is growing. U.S.
punitive measures have not damaged U.S. bilateral relations
with countries other than Burma, as a growing number of
governments realize the need for concerted international
pressure in many forms.
The European Union recently renewed its Common Position,
which includes a variety of sanctions, such as a freeze on
Burmese regime assets and a prohibition on extending credit to
a list of state-run enterprises. Cooperation on Burma issues
with other members of the international community continues
bilaterally, as well as multilaterally at the various UN fora.

ii. bilateral and multilateral measures

United States government efforts
The United States has a broad range of sanctions in place,
including those enacted in 2003 under the BFDA and most
recently renewed in 2006, and those set forth in Executive
Order 13310 of July 28, 2003. These latest measures include
bans on all imports from Burma and the export of financial
services from the United States or by U.S. persons to Burma and
an asset freeze that targets regime institutions and
enterprises. In addition, on November 12, 2003, the Treasury
Secretary designated Burma a jurisdiction of primary money
laundering concern, resulting in additional restrictions on
U.S. financial institutions, prohibiting them from establishing
or maintaining any correspondent account for, or on behalf of,
a Burmese financial institution. This designation was done
pursuant to Section 311 of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Obstruct
Terrorism (USA PATRIOT) Act of 2001. These measures reinforce
the existing restrictions on transactions with Burma under
Executive Order 13310. The United States also maintains a
variety of sanctions imposed against Burma before 2003,
including a prohibition on new investment in Burma, a ban on
arms sales to Burma, restrictions on bilateral assistance, and
opposition to lending by international financial institutions.
Pursuant to Presidential Proclamation 6925 of 1996, a U.S. visa
ban restricts travel to the United States for all SPDC members;
government ministers and other senior Burmese government
officials; military officers above the rank of colonel; all
officials of the Union Solidarity and Development Association
(USDA); civil servants above the rank of Director General; and
managers of state-owned enterprises. The visa restrictions
cover the immediate family members of all the categories of
individuals listed above.
Inside Burma, U.S. Embassy officials maintain frequent and
active contacts with dissidents, representatives of the
democratic opposition, major ethnic groups, and members of
civil society. Most Burmese support U.S. sanctions and
continued international pressure on the regime. Close relations
with members of multilateral organizations and other diplomatic
missions in Rangoon help focus the international community's
efforts in support of national reconciliation. Although Embassy
officials have limited contact with Burmese government
officials, the Mission uses every opportunity to urge reform,
an inclusive political dialogue, and respect for human rights.
The continued detention of senior officials of the National
League for Democracy (NLD) as well as over 1,100 political
prisoners by the military junta blocks progress toward national
reconciliation. The United States continues to call for the
immediate and unconditional release of all political prisoners.
The United States coordinates with other members of the
international community in support of democratic change in
Burma. Historically, the United States has co-sponsored
resolutions at the UN General Assembly that condemn the human
rights situation in Burma and call for national reconciliation.
On December 22, 2006, by a vote of 82 in favor, including the
United States, 25 opposed, and 45 abstaining, the UN General
Assembly adopted a resolution expressing its grave concern over
human rights violations in Burma and calling on the regime to
take urgent measures to address these violations. The General
Assembly's Third Committee had adopted the same resolution on
November 22, 2006. The United States successfully proposed
placing Burma on the UN Security Council's agenda on September
15, 2006. The United States and the United Kingdom subsequently
sponsored a resolution on Burma before the UN Security Council.
In a vote on January 12, 2007, nine countries supported the
resolution, three abstained, and three voted against. The
``no'' votes of China and Russia blocked the resolution.
Efforts by other governments
There is increasing agreement in the international
community that the status quo in Burma is not sustainable, that
it poses growing problems for the region, and that the regime
needs to implement political and other reforms. The Chair of
the Association of Southeast Asian Nations (ASEAN) Summit in
Cebu, Philippines, issued a statement on January 13, 2007,
which highlighted ASEAN's calls for the release of ``those
placed under detention and for effective dialogue with all
parties concerned.'' The statement acknowledged that
effectively managing important issues within the region, such
as Burma, is key to preserving ASEAN's credibility. ASEAN
foreign ministers expressed ``concern on the pace of the
national reconciliation process in Burma, and hope to see
tangible progress that would lead to a peaceful transition to
democracy in the near future.'' In Nuremberg, Germany, on March
15, 2007, EU and ASEAN foreign ministers called for greater
progress toward national reconciliation in Burma, inclusive
dialogue with all political parties and ethnic groups, and the
release of political prisoners.
In April 2007, the European Union renewed restrictive
measures that it had expanded in 2004, including visa and
travel restrictions, an asset freeze list, and a ban on
extending credit to a list of Burmese state-run enterprises.
The EU also has in place a ban on arms sales and limits on
assistance to the regime and calls on its members to vote
against assistance to Burma by international financial
institutions, though they are not required to do so.
The United Kingdom has called on its companies to review
their investments in Burma. During the UN Human Rights
Council's fourth session in March 2007, Foreign Office Minister
Ian McCartney decried the lack of respect for human rights and
absence of good governance in Burma and looked forward to the
Council addressing that situation.
Canada has epressed concern over the lack of progress in
Burma and imposed visa and travel restrictions on Burmese
officials following the May 30, 2003 attack on Aung San Suu Kyi
and her supporters. Canada also has in place restrictions on
exports and assistance to Burma.
Norway has sanctions similar to those of the EU, banning
arms sales and enforcing a broad visa ban and asset freeze.
Norway's Finance Ministry announced in April 2007 new
guidelines that will prevent the country's pension fund from
investing in Burmese government bonds. In addition, Norway has
been a supporter of the Burmese exile movement and hosts a
radio service and satellite TV station dedicated to providing
uncensored information to those inside Burma.
Japan froze new development assistance to the regime in
response to the May 30, 2003, attack, but continues funding
humanitarian programs, democracy capacity-building projects,
and those projects supporting structural economic reform on a
case-by-case basis. The Government of Japan lamented the
extension of Aung San Suu Kyi's house arrest in May 2006 and
supported the U.S. proposal to add Burma to the UN Security
Council's agenda in September 2006.
Australia has banned defense exports to Burma since 1988
and, following the May 2003 assault on Aung San Suu Kyi and
other members of the National League for Democracy, has
suspended certain forms of assistance. Foreign Minister Downer
met with Burmese Foreign Minister Nyan Win in Kuala Lumpur on
July 26, 2006, and urged the regime to address the need for
democratic reform.
China continues to be Burma's primary economic partner and
one of its primary military supporters. Although China vetoed
the U.S. and U.K.-sponsored UN Security Council resolution on
Burma, the Chinese explanation of its vote acknowledged ``grave
challenges relating to refugees, child labor, HIV/AIDS, human
rights, and drugs'' in Burma and called for an inclusive
dialogue and accelerated reform in Burma. The United States
continues to express our concerns about Burma in discussions
with China.
In an apparent attempt to secure more effective Burmese
cooperation in targeting Indian insurgent groups operating from
within Burma, India reportedly has offered military equipment
to the Burmese Army. India also seeks to tap Burma's natural
gas reserves to meet its growing energy demands and to improve
the transportation infrastructure in western Burma to enhance
India's remote northeastern states' access to the sea. The
United States will continue to urge India to take steps to
promote human rights and democracy in Burma.
United Nations efforts
Following the January 2006 resignation of Tan Sri Razali
Ismail the UN Secretary General's Special Envoy to Burma, Under
Secretary General Ibrahim Gambari visited Burma in May and
November 2006. Under Secretary General Gambari briefed the UN
Security Council following each trip. Although it granted
Gambari access to Aung San Suu Kyi and regime leaders, the SPDC
did not respond to his substantive requests that the regime
free political prisoners, engage in an inclusive political
dialogue, end violence against civilians in ethnic minority
areas, and lift restrictions on humanitarian organizations. The
United States and others have voiced their support for the
appointment of a new Special Envoy to continue the UN Secretary
General's ``Good Offices Mission'' to Burma.
On October 20, 2006, UN Special Rapporteur on human rights
in Burma Paulo Sergio Pinheiro reported to the UN General
Assembly his concerns about the continued systematic human
rights violations and other human rights issues in Burma. These
included the persecution of democracy activists and human
rights advocates, forced labor, the military offensives in
eastern Burma, and the generally poor social and economic
conditions. In his February 12, 2007, report to the Human
Rights Council, Pinheiro asserted that because the regime has
severely curtailed the civil and political space within Burma,
its ``road map to democracy faces too many obstacles to bring
about a genuine transition.'' Burma's military regime has not
permitted Pinheiro to visit Burma since November 2003.
The Sixth Secretary General's report to the General
Assembly on Children and Armed Conflict, submitted in November
2006, cited reliable reports of continued recruitment of child
soldiers by the Burmese military and by non-state armed groups.
The report observed that the regime's decision to prosecute
those who make ``false'' allegations of forced labor and its
restrictions on access to certain areas due to ``security
reasons'' prevented the UN from providing more detailed
information on the impact of armed conflict on Burma's
children.
During its November 15-16, 2006, meeting, the International
Labor Organization's (ILO) Governing Body expressed frustration
that the Burmese authorities had not agreed on a mechanism to
deal with complaints of forced labor. It called for the Burmese
authorities to conclude with the ILO an agreement on such a
mechanism as a matter of utmost urgency. In addition, the
Governing Body stated that any move to prosecute complainants
of forced labor would be a violation of ILO Convention No. 29
and would open the way to legal options, including potential
referral of Burma to the International Court of Justice (ICJ).
On February 26, 2007, the ILO announced that it had reached an
agreement that would allow its liaison officer to conduct
preliminary probes into alleged instances of forced labor
without complainants being victimized. At its March 2007
meeting, the Governing Body welcomed this agreement and
stressed the importance of its full implementation given the
serious forced labor problems in Burma. The Governing Body also
called on the Burmese government to facilitate the expansion of
staff at the ILO liaison office.
The UN country team inside Burma has focused its efforts on
a range of humanitarian issues, though its efforts have been
hampered by regime-imposed restrictions on programs implemented
by UN agencies and NGOs providing humanitarian assistance and
carrying out other projects. The United States backs UN
initiatives to address the spread of HIV/AIDS, prevent and
contain outbreaks of avian influenza, support returned Burmese
Muslim (Rohingya) refugees and other vulnerable individuals,
and fight narcotics trafficking/production. The UN High
Commissioner for Refugees (UNHCR) provides protection and
humanitarian assistance for the communities of Rohingya in
Northern Rakhine State, many of whom returned to Burma after
fleeing to Bangladesh in the 1990s. U.S. officials in Rangoon
maintain close communication with UN counterparts.

iii. effects of economic sanctions

The Treasury Department reports that it blocked 53
transactions involving Burmese entities totaling $1.1 million
between October 27, 2006, and April 9, 2007. Over the same
period, the Treasury Department issued 26 licenses authorizing
the release of blocked funds or otherwise prohibited
transactions.
Political and economic situation
The regime continues to follow its seven-step ``road map to
democracy,'' which it announced in 1993 following international
pressure. A key component of the roadmap is the convening of
the National Convention to draft a set of ``guiding
principles'' for a new constitution. The regime handpicked pro-
regime delegates to attend the Convention, imposed conditions
that effectively barred the NLD and other pro-democracy groups
from participating, and prohibited free and open debate. The
Convention's most recent session took place from October 10 to
December 29, 2006. The regime has stated its intention to
conclude the National Convention before the end of 2007. Absent
the participation of the democratic opposition and pro-
democracy ethnic minority political groups, the National
Convention does not reflect the true political aspirations of
the Burmese people, nor does it serve as a real forum for the
meaningful dialogue that is needed to achieve genuine national
reconciliation. Given these deep flaws, any constitution that
emerges from the National Convention would lack legitimacy and-
would not constitute a meaningful step toward the establishment
of democracy in Burma. The regime has not announced a timetable
for future steps on its road map, including a transition to
democracy.
In May 2006, the regime extended the detention of Aung San
Suu Kyi for an additional twelve months. Her current period of
house arrest is due to expire on May 27, 2007. If renewed, her
access to medical care and contacts with the outside world
would continue to be restricted, leaving her virtually
incommunicado. In February 2007, authorities also extended the
detention of National League for Democracy Vice Chairman U Tin
Oo. In late September 2006, authorities detained five democracy
activists and held them in custody until January 11, the day
before the UN Security Council voted on a resolution regarding
Burma.
The Karen National Union (KNU), an ethnically based
insurgent group that also seeks a transition to democracy in
Burma suffered open rifts following the December 26 death of
former KNU leader Bo Mya. One faction, the Karen National
Liberation Army--Peace Council, reportedly has engaged in talks
with the SPDC. After over five decades of conflict and in the
absence of a final peace agreement, portions of Karen and Mon
States remain isolated from international economic and
humanitarian assistance. The lingering conflict also precludes
the voluntary repatriation from Thailand of thousands of
refugees with UNHCR involvement and the return home of
thousands of internally displaced persons.
Burma's economy continued to grow slowly, due largely to
rising energy exports. The Asian Development Bank (ADB)
estimated that Burma's economy would grow at a rate of 2-4
percent for 2006 and 2007. Nonetheless, Burmese citizens saw
little to no benefit from this growth due to high inflation,
widespread corruption, excessive government control of the
economy, and a fiscal policy that woefully under-invests in
public goods and services. The ADB estimated that inflation was
rising and could reach an average of 30 percent--compared with
an official rate of 10 percent--in 2006-07. In Transparency
International's latest--Corruption Perceptions Index, released
November 6, 2006, only Haiti surpassed Burma in the extent of
perceived corruption. Routine delays and unpredictability in
the issuance of licenses and import permits also impeded
entrepreneurship. By requiring businesses to conduct all
government transactions in the newly declared administrative
capital of Nay Pyi Taw, the regime imposed additional costs and
delays on businesses. Farmers were forced to sell their produce
to the regime at prices far below market value, undermining
rural incomes. The military regime, its commercial entities,
and crony companies continued to control the most lucrative
sectors of the Burmese economy, such as natural gas, precious
gemstones, and timber. Despite these unsound policies, the
economy continues to function.
Human rights
Despite the Burmese Government's purported desire to make
progress toward democracy, its extremely poor human rights
record has worsened over the past year, and it has continued to
commit serious abuses. The State Department's annual report on
the human rights situation in Burma for 2006 noted that
citizens of Burma still do not have the right to change their
government, and that security forces have continued to commit
extrajudicial killings and rape, forcibly relocate persons, use
forced labor, and forcibly conscript civilians into militia
units. The military regime continues to be hostile to all forms
of political opposition. With the exception of its Rangoon
headquarters, all of the NLD's offices remain closed. Arrests
and disappearances of political activists continue, and members
of the security forces torture, beat, and otherwise abuse
prisoners and detainees. On March 15, 2007, the International
Committee of the Red Cross (ICRC) announced that, as a result
of restrictions placed upon its activities in Burma by the
military regime, it would have to close two of its field
offices. The regime bars ICRC staff from conducting
unaccompanied visits to places of detention and from conducting
its activities independently in Burma's border areas.

iv. effects of sanctions policy on broader policy interests and
relations

U.S. steadfastness sends a clear signal to the regime and
the Burmese people of U.S. support for positive change. The
measures in place have the broad backing of Burmese democracy
activists.
The trade-related and financial sanctions implemented
pursuant to the Burmese Freedom and Democracy Act of 2003 and
Executive Order 13310 have had a limited impact on U.S.
relations with other nations. Although some foreign businesses
and their representative embassies complained about the
immediate impact in 2003 on their operations, all who have
invested in Burma have done so recognizing the difficult
operating environment and overall poor economic climate created
by the regime. 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.
The vast majority of the democratic opposition remains very
supportive of U.S. sanctions and urges additional steps to
pressure the government However, some opposition figures,
academics, and exiled Burmese have questioned whether the
sanctions have any chance of success without the participation
of Burma's major trading partners, including ASEAN members,
China, India, and other regional countries.
Sanctions and multilateral pressure on Burma have advanced
U.S. national security interests in the international effort
against money laundering. The Financial Action Task Force
(FATF), an intergovernmental body whose purpose is the
development and promotion of national and international
policies to combat money laundering and terrorist financing,
placed Burma on its list of non-cooperating countries and
territories in June 2001 as a result of laws and practices that
impeded international cooperation in the fight against money
laundering. In November 2003, the U.S. Secretary of the
Treasury designated Burma a jurisdiction of primary money
laundering concern, prohibiting U.S. financial institutions
from establishing or maintaining any correspondent account for,
or on behalf of, a Burmese financial institution. These steps
by the international community, including the United States,
produced results in Burma. Following a series of legal and
regulatory reforms, FATF informed the Burmese regime on October
24, 2006, that, ``as a result of Myanmar's enactment of and on-
going efforts to implement reforms to its anti-money laundering
regime, the FATF Plenary has decided to remove Myanmar trom the
non-cooperative countries and territories list.'' The FATF is
monitoring Burma to ensure that it makes further progress in
this area.

conclusion

International pressure on the Burmese regime and support
for the Burmese democracy movement continue to be essential for
promoting change in Burma. The Administration remains
unwavering in its support for the establishment of democracy
and a greatly improved human rights situation there. Our
sanctions send a strong message about the U.S. desire to see
positive change in Burma, constantly remind the regime that its
behavior is unacceptable, and provide crucial moral support to
Burma's democratic opposition. Failure to renew the import ban,
absent positive change by the regime, would send the wrong
political message. The State Department unequivocally supports
a renewal resolution maintaining in place the current import
ban.

II. BUDGETARY IMPACT OF THE JOINT RESOLUTION

July 30, 2007.
Hon. Max Baucus,
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. 16, 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 Emily
Schlect.
Sincerely,
Robert A. Sunshine
(For Peter R. Orszag, Director).
Enclosure.

S.J. Res. 16--A joint resolution approving the renewal of import
restrictions contained in the Burmese Freedom and Democracy Act
of 2003

Summary: S.J. Res. 16 would renew for one year the ban of
all imports from Burma. The ban was originally enacted as the
Burmese Freedom and Democracy Act of 2003 (Public Law 108-61)
and was set to expire on July 28, 2004. Public Law 108-272
renewed the ban for one year through July 28, 2005; Public Law
109-39 renewed the ban for one year through July 28, 2006; and
Public Law 109-251 renewed the ban for one additional year
through its current expiration date of July 28, 2007. The
original legislation limited renewals of the ban to a total of
three years. Public Law 109-251 increased that limit to six
years, thereby allowing three additional one-year bans.
On July 24, 2007, the Congress cleared H.J. Res. 44, which
renews the import ban for one year, as S.J. Res. 16 would. As a
result, S.J. Res. 16 would not have any additional budgetary
effect relative to Congressional actions to date.
In the absence of H.J. Res. 44, CBO estimates that
extending the ban on U.S. imports from Burma would reduce
federal revenues by less than $500,000 in 2007 and by about $2
million in 2008, with no effect thereafter. CBO estimates
enacting S.J. Res. 16 would not affect federal spending.
Under S.J. Res. 16, the President could lift the import
restrictions if the State Peace and Development Council, 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.
By renewing the ban on all imports from Burma, S.J. Res. 16
would impose private-sector mandates as defined in the Unfunded
Mandates Reform Act (UMRA). CBO cannot estimate the cost of
those mandates because information on the value of lost profits
to importers resulting from the ban is not available. Thus, CBO
cannot determine whether the aggregate direct cost of the
mandates would exceed the annual threshold for private-sector
mandates established by UMRA ($131 million in 2007, adjusted
annually for inflation). CBO has also determined that S.J. Res.
16 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. 16--in the absence of H.J. Res.
44--is shown in the following table.

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------
2007 2008 2009 2010 2011 2012
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CHANGES IN REVENUES

Estimated Revenues.............................................. * -2 0 0 0 0
----------------------------------------------------------------------------------------------------------------
*=Loss of less than $500,000.

H.J. Res. 44, recently cleared by the Congress, would have
the same effect on federal revenues in 2007 and 2008. S.J. Res.
16 would have no additional budgetary impact, relative to H.J.
Res. 44.
Basis of estimate: Under S.J. Res. 16, the President would
have the authority to lift or waive the ban 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. 16 would
reduce federal revenues by less than $500,000 in 2007 and by
about $2 million in 2008, 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 most 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 the 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 action were taken during the 2007-2008 period, the impact
on federal revenues would be reduced accordingly.
Estimated impact on state, local, and tribal governments:
CBO has determined that S.J. Res. 16 contains no
intergovernmental mandates as defined in UMRA and would impose
no costs on state, local, or tribal governments.
Estimated impact on the private sector: By renewing the ban
on all imports from Burma, S.J. Res. 16 would impose private-
sector mandates as defined in UMRA. CBO cannot estimate the
cost of those mandates because information on the value of lost
profits to importers resulting from the ban is not available.
Thus, CBO cannot determine whether the aggregate direct cost of
the mandates would exceed the annual threshold for private-
sector mandates established by UMRA ($131 million in 2007,
adjusted annually for inflation).
Previous CBO estimate: On July 25, 2007, CBO transmitted a
cost estimate for H.J. Res. 44, approving the renewal of import
restrictions contained in the Burmese Freedom and Democracy Act
of 2003, as cleared by the Congress on July 24, 2007. That
legislation, like S.J. Res. 16, renews the ban on imports from
Burma for one year; H.J. Res. 44 also extends merchandise
processing fees and increases the amount of corporate income
taxes due in 2012.
Estimate prepared by: Federal Revenues: Emily Schlect;
Impact on State, Local, and Tribal Governments: Neil Hood;
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: G. Thomas Woodward, Assistant
Director for Tax Analysis.

III. REGULATORY IMPACT OF THE JOINT 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. 16 as approved by the Committee on July 23, 2007.
In accordance with the requirement of Pub. L. No. 104-04, the
Committee has determined that the bill contains no
intergovernment 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. 16, as ordered reported.