Order Code RS22737
October 10, 2007
Burma Sanctions: Background and Options
Larry A. Niksch and Martin A. Weiss
Foreign Affairs, Defense, and Trade Division
Summary
On September 25, 2007, President George W. Bush announced that sanctions
against Burma, which have been in place since 1997, would be tightened to specifically
target leading Burmese officials. On September 27, the Bush Administration imposed
financial and travel sanctions on 14 senior Burmese government officials. This report
provides background information on existing Burma sanctions and possible future
options. It will be updated as events warrant.
The following table provides summary information on existing Burma sanctions.

---

CRS-2
Summary of U.S. Sanctions on Burma
Statutory Action
Sanction
Exemption
Executive Order 13047,
Prohibits new investment in Burma by U.S. persons and companies on
Companies with investments in Burma prior to May 21,
May 20, 1997. Issued
or after May 21, 1997. New investment is defined as a contract with the
1997, and companies or persons with an investment
under Section 570 of the
Government of Burma or a non-governmental entity in Burma for the
agreement in place prior to May 21, 1997. The
Foreign Appropriations
development of resources located in Burma, purchasing a share of
exemption includes the U.S. corporation UNOCAL and
Act, 1997 (P.L. 104-
ownership in a project, or entering into an agreement that provides for a
its investment with the French corporation Total in
208)
participation in royalties, earnings, or profits from the economic
natural gas exploration and pipeline offshore and across
development of resources located in Burma.
Burma into Thailand. It is estimated that the project
provides $400 million to $647 million to the Burmese
government annually. (Seekins, Donald M. "Burma and
U.S. Sanctions: Punishing an Authoritarian Regime."
Asian Survey, May-June 2005. p. 452.)
P.L. 108-61, Burmese
Requires the President to ban the importation into the United States of
The President may waive the prohibition on the import
Freedom and
certain products of Burma, beginning 30 days after the date of
of any product from Burma if the President determines
Democracy Act of 2003,
enactment. The import ban expires in one year unless renewed. The
and notifies the appropriate congressional committees
July 28, 2003.
President may impose a freeze on funds or assets in the United States of
that to do so “is in the national interest of the United
Extended by P.L. 108-
the Burmese Government and individuals who hold senior positions in
States.”
272 and P.L. 109-39.
that government. Requires the U.S. government to vote against the
extension of any financial assistance to Burma by international financial
institutions. Authorizes the President to deny visas and entry into the
United States to former and present leaders of the Burmese government
or the Union Solidarity Development Association (a pro-government
mass organization).

---

CRS-3
Statutory Action
Sanction
Exemption
Executive Order 13310:
Issued to implement P.L. 108-61. Blocks property and property
Transactions prior to May 21, 1997, between a U.S.
July 28, 2003;
interests of persons listed in the Annex to the Executive Order and
person or company and any entity in Burma, but such
announced
persons designated by the Treasury Department as being senior officials
transactions with banks in Burma must be conducted
modifications,
of the Government of Burma and the Union Solidarity and
through a non-U.S. bank. No prohibition on the export
September 25 and 27,
Development Association. Authorizes the Treasury to designate
of goods and services other than financial services.
2007
individuals or entities that are owned or controlled by, or acting on
Exemption for transfer of personal remittances of less
behalf of any of those officials or groups. Bans the importation into the
than $300 to and from Burma for “an individual
United States of products of Burma and the export or re-export of
ordinarily resident in Burma, provided that the funds are
financial services to Burma by U.S. persons. Prohibits a U.S. person or
not being sent by, to or on behalf of a blocked party.”
company from approving, aiding, or supporting a foreign party’s
The U.S. Office of Foreign Assets Control can issue
investment in Burma. Prohibits U.S. persons from purchasing shares in
licenses to non-government organizations to engage in
a third-country company if the company’s profits are predominantly
humanitarian or religious activities in Burma.
derived from the company’s development of resources in Burma.
On September 25 and 27, 2007, the White House and the Treasury
announced that under Executive Order 13310, officials of the Burmese
government and its supporting organizations would be designated by
name as coming under the restrictions of the Executive Order with
respect to the blocking of their property and financial interests in the
United States and visa restrictions on their travel to the United States.
On September 27, 2007, the Department of the Treasury announced that
it was freezing the assets under U.S. jurisdiction of 14 senior Burmese
government officials.
Source: Compiled by the Congressional Research Service.

---

CRS-4
Future Options to Expand Sanctions
Existing sanctions against Burma may be viewed as adequate and as necessitating
no further action. However, policymakers may seek to exercise additional options.
Options to expand sanctions include the following:
Steps to produce U.S. business disinvestment: Legislation could compel or place heavy
pressure on U.S. businesses to disinvest from natural resource projects in Burma.
Legislative provisions could include a ban on U.S. investment in Burma based on
investment agreements prior to May 20, 1997, a high or confiscatory tax on profits from
natural resource projects, or a prohibition on U.S. businesses’ access to Burmese banks
in connection with money associated with natural resource projects.
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 restrictions, known as “special measures.”1 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 payable-through account2 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. financial institutions also are similarly
prohibited with regard to any correspondent or payable-through account in the United
1 For more information on Title III of the USA PATRIOT Act, see CRS Report: RL31208,
International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Title III
of P.L. 107-56 (USA PATRIOT Act), by M. Maureen Murphy.
2 A payable-through account is an account established at a U.S. financial institution that extends
check-writing privileges to the customers of other, often foreign, financial institutions.

---

CRS-5
States for any foreign bank if the account is used by the foreign bank to provide banking
services to a Burmese banking institution.
The special measure applied to Burmese banks does not prohibit U.S. financial
institutions from dealings with foreign banks overseas that allow Burmese banks or
individuals or companies connected with the Burmese government to maintain accounts
with those banks. 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
designation, over two dozen financial institutions ceased their transactions with North
Korea.3 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 China near the North Korean border.4
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 the Myanmar Foreign Trade Bank and the
Myanmar Investment and Commercial Bank.5
3 “Press reports indicate that some two dozen financial institutions across the globe have
voluntarily cut back or terminated their business with North Korea, notably including institutions
in China, Japan, Vietnam, Mongolia, and Singapore. The result of these voluntary actions is that
it is becoming very difficult for the Kim Jong-Il regime to benefit from its criminal conduct.”
Testimony of Daniel Glaser, Deputy Assistant Secretary for Terrorist Financing and Financial
Crimes, U.S. Department of the Treasury before the Senate Committee on Banking, Housing, and
Urban Affairs. September 12, 2006.
4 Ibid.
5 Turnell, Sean. Burma’s Economic Prospects. Testimony before the Subcommittee on East
Asian and Pacific Affairs, Senate Foreign Relations Committee, March 29, 2006. Sweeney, John.
"How Junta protects Mr. Heroin." The Observer (London, internet version), April 8, 2001.
Casanier, Francois. "A Narco-dictatorship in progress." BurmaNet News, June 13, 1996.

---