U.S. Restrictions on Relations with Burma

July 22, 2016 (R44570)
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Contents

Appendixes

Summary

Major changes in Burma's political situation have precipitated a broad discussion in Congress, the Obama Administration, and elsewhere about the appropriate role for U.S. restrictions on relations with Burma (Myanmar). These discussions are examining U.S. policy toward Burma in general, the appropriate framework for analyzing the current situation in Burma, and what adjustments to make on U.S. restrictions on relations with Burma. On May 17, 2016, President Obama continued the national emergency with respect to Burma to extend some of the restrictions, as well as renew past presidential waivers of other restrictions. In addition, on that same day, the State Department and Treasury Department announced some changes in the implementation of the existing restrictions.

Between 1989 and 2008, Congress passed several laws placing political and economic sanctions on Burma's military junta as part of a policy to foster the reestablishment of democratically-elected civilian government, promote the protection of human rights, and identify individuals responsible for repression in Burma and hold them accountable for their actions. In 2011, Burma's military junta, known as the State Peace and Development Council (SPDC) transferred power to a mixed civilian/military government led by the SPDC's ex-Prime Minister General Thein Sein. Over the next five years, Congress and the Obama Administration waived or ended some of the sanctions on Burma in part in response to political and economic reforms undertaken by the Thein Sein government.

In November 2015, Burma held nationwide parliamentary elections, from which Aung San Suu Kyi's political party, the National League for Democracy (NLD), emerged with an absolute majority in both chambers of Burma's Union Parliament. The NLD-led Union Parliament chose Htin Kyaw, a long-standing NLD member and close friend of Aung San Suu Kyi, as President. Aung San Suu Kyi was subsequently appointed to the newly-created position of State Counselor, as well as Foreign Minister.

While the NLD controls the Union Parliament and the executive branch, the Burmese military, or Tatmadaw, continue to exercise significant power under the provisions of Burma's 2008 constitution. For example, 25% of the seats in both chambers of the Union Parliament are military officers appointed by the Tatmadaw's Commander in Chief Senior General Min Aung Hlaing, creating a voting bloc that can prevent any changes in the constitution. In addition, the Tatmadaw engages in active fighting with several ethnic armed organizations (EAOs) in a continuation of a nearly six decade-old low grade civil war. As such, it is uncertain if the NLD-led government will have the ability to address its top priorities—national reconciliation and peace; further democratic reforms; respect for human rights; and greater prosperity for the Burmese people.


U.S. Restrictions on Relations with Burma

Introduction

The overwhelming victory of the National League for Democracy (NLD) in Burma's November 2015 parliamentary elections,1 and the formation of an NLD-led government in March 2016,2 has led to a discussion in Washington about U.S. policy toward Burma, and a more focused discussion of the current restrictions on relations with that nation. During the U.S.-ASEAN3 Summit in February 2016, Burma's then-Vice President Nyan Tun reportedly asked President Obama to remove remaining sanctions on Burma.4

Some people and organizations have called for the removal of many, but not necessarily all restrictions on U.S. relations with Burma.5 Other observers support a more selective relaxation of restrictions, given the Burmese military's role in the government, and its apparent opposition to additional political reforms.6 Congress and the Obama Administration have an opportunity to examine the new and complex political reality in Burma, and determine what changes, if any, to make in U.S. policy, as well as to consider what adjustments, if any, to make on the current restrictions on U.S. relations with Burma.

On May 17, 2016, President Obama informed Congress of his decision to continue the national emergency with respect to Burma, pursuant to the National Emergencies Act (P.L. 94-412, as amended), thereby maintaining a number of restrictions on relations with Burma, as well as extending past waivers of other restrictions.7 On the same date, the State Department and the Treasury Department announced some adjustments in the implementation of some of the restrictions on relations with Burma.8 During his subsequent visit to Burma, Secretary of State John Kerry stated on May 22, 2016:

[W]e have adjusted our sanctions policy now to strengthen democracy, to encourage inclusive economic growth, and to facilitate foreign investment in the civilian-led government; and at the same time, we are maintaining some sanctions in order to encourage all institutions, investors, and members of society to support the government's continued reform efforts that are aimed at consolidating a civilian-led democracy.9

For several years, Congress has utilized appropriations legislation to set limits on bilateral relations.10 For this reason, Congress may deliberate and conduct oversight over U.S. policy toward Burma as it formulates appropriations legislation, including that for the Department of Defense and the Department of State. At the same time it also may consider U.S. policy toward Burma independent of the appropriations process.

At the time it passed legislation imposing sanctions on Burma, Congress articulated goals of U.S. policy toward Burma, and by extension, how the sanctions would facilitate the achievement of those goals. Among the goals stated in those laws were:

For the 114th Congress, circumstances in Burma have raised a number of questions regarding U.S. policy toward and the restrictions on relations, such as:

Brief History of U.S. Sanctions on Burma

Between 1989 and 2008, Congress passed a series of laws imposing political and economic sanctions on Burma's military junta, in response to its violent suppression of the people of Burma and the expressed desire of many of them for democratic reforms.11 In 2008, Burma's military junta, then known as the State Peace and Development Council (SPDC), began a process to transform the nation's government into what it called a "disciplined democracy." On May 8, 2008, the SPDC held a national referendum on a new constitution that would establish a mixed civilian/military government. Many observers viewed the results of the referendum—in which over 90% of the voters supported the new constitution—as fraudulent.12 On November 7, 2010, the SPDC held parliamentary elections that were boycotted by many political parties, including Aung San Suu Kyi's NLD. The pro-military Union Solidarity and Development Party (USDP) won nearly 80% of the contested seats (25% of the seats in Burma's Union Parliament are not contested, but rather appointed by the Commander-in-Chief of Defence Services). The new Union Parliament appointed SPDC Prime Minister Lt. General Thein Sein as President. He was sworn in on March 30, 2011, after the SPDC officially transferred power to the new government.

Following the establishment of a new government in Burma under the provisions of the 2008 constitution, the Obama Administration adopted a new policy of greater engagement while maintaining existing sanctions.13 Over the last five years, President Obama has utilized the waiver provisions in sanction laws to waive the enforcement of many sanctions, in part in response to President Thein Sein's undertaking some political reforms and releasing many of the political prisoners. As a result, fewer restrictions remain on U.S. relations with Burma than existed prior to 2010, and many of those still enforced are based on presidential executive orders or the policies of the Executive Branch. Congress has also utilized annual appropriations legislation to impose some restrictions on U.S. relations with Burma.

Political Restrictions

The primary political restriction is a prohibition on providing visas to enter the United States to certain Burmese nationals. Section 570(a)(3) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 (P.L. 104-208) states, "Except as required by treaty obligations or to staff the Burmese mission to the United States, the United States should not grant entry visas to any Burmese government official." Section 5(a)(1) of the Tom Lantos Block Burmese JADE (Junta's Anti-democratic Efforts) Act of 2008 (JADE Act; P.L. 110-286) states:

The following persons shall be ineligible for a visa to travel to the United States:

(A) Former and present leaders of the SPDC, the Burmese military, or the USDA.14

(B) Officials of the SPDC, the Burmese military, or the USDA involved in the repression of peaceful political activity or in other gross violations of human rights in Burma or in the commission of other human rights abuses, including any current or former officials of the security services and judicial institutions of the SPDC.

(C) Any other Burmese persons who provide substantial economic and political support for the SPDC, the Burmese military, or the USDA.

(D) The immediate family members of any person described in subparagraphs (A) through (C).

The JADE Act authorizes the President to waive the visa ban if "the President determines and certifies in writing to Congress that travel by the person seeking such a waiver is in the national interest of the United States."

Economic Restrictions

Congress and the Executive Branch have placed several economic restrictions on relations with Burma, including:

Ban on the Import of Burmese Jadeite and Rubies

Executive Order 13651, issued by President Obama on August 6, 2013, prohibits the "importation into the United States of any jadeite or rubies mined or extracted from Burma and any articles of jewelry containing jadeite or rubies mined or extracted from Burma."15 In addition, the Executive Order prohibits any "transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate" the ban on the importation of prohibited Burmese items. This Executive Order replaced a similar ban on importing Burmese jadeite and rubies in Section 3(a)(2) of the BFDA (as amended by the JADE Act) that lapsed on July 26, 2013 (see "Waived or Lapsed Restrictions" below).

Ban on Imports from Certain Burmese Companies

Section 3(a)(2) of the BFDA (as amended by the JADE Act) prohibits the import on any article that is a product of certain Burmese companies, including :

Section 3(a)(2) begins with the phrase, "The import restrictions contained in paragraph (1) shall apply to, among other entities …" The import restrictions contained in paragraph (1), however, lapsed in August 2013. Therefore, it is unclear if the ban in section 3(a)(2) remains in force. Treasury's Burmese Sanctions Regulations (31 C.F.R. 537) do not include prohibitions on products from the companies cited above.16 A summary of U.S. restrictions on relations with Burma published by the Council of Foreign Relations, reportedly based on materials distributed by U.S. officials to Aung San Suu Kyi and the NLD-led government, does include the import ban contained in section 3(a)(2).17

The Role of Treasury's Specially Designated Nationals and Blocked Persons (SDN) List for Burma

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is responsible for maintaining and administering a list of persons (including companies) subject to financial sanctions under U.S. law or Executive Orders. OFAC publishes its list of such persons in its webpage, https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx. As of July 22, 2016, 96 separate entries and persons appear on the SDN list under the Burma sanctions program.

None of the laws imposing restrictions on Burma specifically mention Treasury's SDN list. Some of the presidential documents specifying the manner by which the restrictions are to be implemented (such as Presidential Determination 2009-11 and Executive Order 13651) do explicitly refer to the SDN list.

"Freezing" of Assets of Certain Burmese Nationals

The assets of some Burmese nationals held by U.S. financial institutions and other entities have been frozen. Section 5(b)(1) of the JADE Act blocks the "transferal, payment, export, withdrawal" or otherwise handling of property or interest in property belonging to a person described in Section 5(a)(1) of the act that is "located in the United States or within the possession or control of a U.S. person"18 (including the overseas branch of a U.S. person); or "comes into the possession or control of a U.S. person after the date of the enactment of this Act" [July 29, 2008].

On January 15, 2009, President George W. Bush issued Presidential Determination 2009-11, stating:

I hereby waive, pursuant to section 5(i) of the JADE Act, the provisions of section 5(b) of the Jade Act with respect to those persons described in section 5(a)(1) of the JADE Act who are not included on the Department of Treasury's List of Specially Designated Nationals and Blocked Persons [SDN list].19

He also delegated the authority to "invoke or revoke" the waiver to the Secretary of the Treasury, as is frequently the practice in other contexts not related to Burma.

President Obama's Executive Order 13651, invoking the authority provided by section 5(i) of the JADE Act, waived the sanctions in section 5(b) of the JADE Act, but also states:

Except as authorized or exempt, transactions with persons included on the Department of the Treasury's List of Specially Designated Nationals and Blocked Persons continue to be prohibited pursuant to IEEPA [International Emergency Economic Powers Act].

Prohibition on the Provision of Financial Services to Certain Burmese Nationals and Entities

U.S. persons, including individuals and companies, are prohibited from engaging in financial transactions with certain Burmese persons and entities. Section 5(b)(2) of the JADE Act bars the payment or transfer of any property, or "any transactions involving the transfer of anything of economic value," as well as the "export or reexport directly or indirectly, of any goods, technology, or services" to persons described by section 5(a)(1) of the act, or to "any entity, owned, controlled, or operated by the SPDC or by an individual described in such subsection." As described above, President Bush waived these restrictions for Burmese nationals and entities not on the SDN list in January 2009. President Obama waived the enforcement of section 5(b) of the JADE Act in August 2013, while maintaining such restrictions under the International Emergency Economic Powers Act (IEEPA) for those Burmese persons on the SDN list.

In addition, section 311 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act, P.L. 107-56) provides the Secretary of the Treasury the authority to require U.S. financial institutions to take "special measures" with regard to overseas financial institutions involved in money laundering.20 On November 18, 2003, the Secretary of the Treasury designated Burma as a jurisdiction of primary money laundering concern, and proposed restrictions on U.S. financial institutions establishing accounts with Burmese financial institutions. On April 2, 2004, the Department of Treasury issued final regulations for these restrictions.21 The Treasury Department subsequently issued general license no. 19 on February 22, 2013, to permit U.S. persons to open accounts with four previously restricted Burmese banks. On June 18, 2014, the Treasury Department released new regulations for Burmese sanctions, which incorporated the provisions of general license No. 19.22 On May 17, 2016, the Treasury Department announced that U.S. persons could engage in financial transactions with two more previously restricted Burmese banks.

Restrictions on U.S. Investments in Burma

Section 570(b) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 (P.L. 104-208) prohibited new investments in Burma as of its date of enactment (September 30, 1996), unless the President could certify that "Burma has made measurable and substantial progress in improving human rights practices and implementing democratic government." On July 11, 2012, the Department of the Treasury's Office of Foreign Assets Control issued General License No. 17, allowing new investments in Burma provided that:

Programmatic Restrictions

The Department of State, Foreign Operations, and Related Programs Appropriations Act, 2016 (division K of the Consolidated Appropriations Act, 2016 (P.L. 114-113)) contains several restrictions on U.S. programs or activities in Burma. Section 7034(b)(2) prohibits the appropriation of funds "to support any military training or operations that include child soldiers," or for "tear gas, small arms, light weapons, ammunition, or other items for crowd control purposes for foreign security forces that use excessive force to repress peaceful expression, association, or assembly in countries undergoing democratic transition." This would apply to Burma as it does to other countries. Section 7043 prohibits the use of Economic Support Fund appropriations to:

Restrictions on Relations with Burma's Military

In addition to the programmatic restrictions in P.L. 114-113, various U.S. laws, Executive Orders, and current U.S. policy place restrictions on U.S. relations with Burma's military. These include:

Pursuant to section 5(i) of the JADE Act, I hereby determine and certify that it is in the national interest of the United States to waive, and hereby waive, the sanctions described in section 5(b) of the JADE Act. Except as authorized or exempt, transactions with persons included the Department of Treasury's List of Specially Designated Nationals and Blocked Persons continue to be prohibited pursuant to IEEPA.26

President Obama also issued Executive Order 13619 on July 11, 2012, blocking the transfer of property for various categories of persons, determined by the Secretary of the Treasury, to:

To the extent that the Secretary of the Treasury determines that any Burmese military officer or soldier has engaged in any of the acts delineated by Executive Order 13619, their property is blocked.

Waived or Lapsed Restrictions

As noted above, some of the laws imposing sanctions on Burma also included provisions whereby the President could waive, temporarily or permanently, the sanctions under certain conditions. In addition, some of the laws also contain provisions by which the President can terminate the sanctions. To date, no President has exercised the authority to terminate sanctions on Burma, but some have utilized the waiver authority to suspend the imposition of certain restrictions. President Obama has waived several restrictions, but has repeatedly stated that these waivers could be reversed, and the restrictions reimposed, if conditions in Burma so warrant.27 In addition, Congress has permitted certain trade restrictions contained in the BFDA to lapse by not passing the necessary annual renewal resolution.

Restrictions on the Provision of Financial Services

As described above, Section 5(b) of the JADE Act freezes the assets of persons described by section 5(a)(1) of the act, and bars the payment or transfer of any property, or "any transactions involving the transfer of anything of economic value," as well as the "export or reexport directly or indirectly, of any goods, technology, or services" to persons described by section 5(a)(1) of the act, or to "any entity, owned, controlled, or operated by the SPDC or by an individual described in such subsection." Pursuant to Section 5(i) of the same law, President Obama determined and certified to Congress on August 6, 2013, that it was in the national interest of the United States to waive these sanctions.

Ban on Import of Products of Burma

Section 3 and 3A of the BFDA (as amended) bans the importation of "any article that is a product of Burma," goods and services from certain Burmese companies, jadeite and rubies from Burma, and articles of jewelry containing jadeite or rubies from Burma. This ban, however, is subject to annual renewal by Congress passing a resolution as stipulated in Section 9(b) of the same Act. From 2004 to 2012, Congress passed the annual renewal resolution, but has not done so for the last three years. On August 7, 2013, President Obama issued Executive Order 13651, reinstating the ban on the import of jadeite and rubies from Burma, and articles of jewelry containing jadeite or rubies from Burma. As a consequence, these restrictions contained in Section 3 and 3A of the BFDA have lapsed, but could be reinstated by the passage of the required resolution.

Ban on Investment in Burma

Section 570(b) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 (P.L. 104-208) states:

The President is hereby authorized to prohibit, and shall prohibit United States persons from new investment in Burma, if the President determines and certifies to Congress that, after the date of enactment of this Act, the Government of Burma has physically harmed, rearrested for political acts, or exiled Daw Aung San Suu Kyi or has committed large-scale repression of or violence against the Democratic opposition.

Pursuant to Section 570(e) of the same Act, the Department of State (having been delegated authority by President Obama) waived the investment restrictions on Section 570(b) effective July 11, 2012, having determined that it would be contrary to the national security interests of the United States to continue the restrictions.28 On that same date, the Department of the Treasury issued General License No. 17, authorizing new investment in Burma, subject to certain restrictions (such as prohibiting investments with Burmese nationals subject to financial sanctions).

The Role of the International Emergency Economic Powers Act of 1977 (IEEPA)

Although Congress has passed legislation providing the President with the authority to place restrictions on relations with Burma, Presidents Clinton, Bush, and Obama have chosen to invoke powers pursuant to the International Emergency Economic Powers Act of 1977 (IEEPA) to place certain additional restrictions on Burma. The following executive actions cite IEEPA (among other sources) as providing the authority to impose restrictions on relations with Burma:

In addition, some executive actions cited IEEPA authority to waive or restrict the scope of some of the sanctions placed on Burma. For example, section 8 of Executive Order 13310 limited the scope of the general import ban in section 3 of the BFDA to exclude the import of goods under obligations in the Vienna Convention on Diplomatic Relations, the Vienna Convention on Consular Relations, the United Nations Headquarters Agreement, and "other legal instruments providing equivalent privileges and immunities." Similarly, Presidential Determination No. 2009-11 refers to IEEPA to waive the provisions of section 5(b) of the JADE Act for individuals not on the SDN list.

Because IEEPA authority is contingent on the continuation of the national emergency that is an "unusual and extraordinary threat to the national security and foreign policy of the United States," if the President does not extend the continuation for another year, the presidential executive orders and determinations made using IEEPA authority lapse, and with them, the restrictions or waivers of restrictions made by those documents.

Preferences of the NLD-Led Government

As of the writing of this report, the NLD-led government and Aung San Suu Kyi do not appear publicly to have made definitive statements regarding their views on the current U.S. restrictions on relations with Burma. In November 2015, when asked in an interview with the Washington Post if she would like to see U.S. sanctions lifted, Aung San Suu Kyi reportedly said, "Well, with a genuinely democratic government in power, I do not see why they would need to keep sanctions on."29 In March 2016, however, Han Thar Myint, an NLD central executive committee member, reportedly said that the NLD will not push for a lifting of U.S. restrictions given the military retains considerable power in the government, as well as in Burma's economy.30

In a joint press availability after her meeting with Secretary Kerry on May 22, 2016, Aung San Suu Kyi stated:

"[W]e're not afraid of sanctions. We're not afraid of scrutiny. We believe that if we are going along the right path, all sanctions should be lifted in good time.… I understand and I accept and I believe that United States is a friend, and are not keeping the sanctions to hurt us.… I'm sure that the time will come soon where the United States will rule that this is not the time for sanctions."31

Issues for the Obama Administration

The Obama Administration has adopted a measured approach to relations with Burma since the November 8, 2015, parliamentary elections, with a focus on achieving the goals of peace, democracy, and development. On the day of the elections, Secretary John Kerry issued a press statement congratulating the people of Burma for holding "a peaceful and historic poll," and stating, "The United States remains committed to supporting the people of Burma in their pursuit of democracy, development, and national reconciliation going forward."32 In his testimony to the House Committee on Foreign Affairs on April 28, 2016, Deputy Secretary of State Antony Blinken said:

The recent elections and peaceful transition of power in Burma represent a historic milestone, and they offer a moment of opportunity for Burma to move forward with additional reforms to tackle the many challenges that still remain. The national reconciliation process must continue, the rights of ethnic and religious minorities must be respected, remaining political prisoners must be released, and broad-based economic growth must be sustained. We continue to work with the new government to offer any support we can to aid in Burma's success.33

The Obama Administration's measured approach apparently also applies to the remaining restrictions on relations with Burma. In response to a question during his nomination hearing about lifting the remaining sanctions on Burma, Ambassador Scot Marciel replied:

[W]e had broad sanctions against kind of Burma writ large up until 2011 when the reforms started. After those reforms began we suspended some of those sanctions, kind of the broad sanctions against the overall economy, while maintaining targeted sanctions on individuals and entities who were either involved in human rights violations or were clearly blocking reforms or undermining reforms.… [A]t this point and certainly going forward with the transition, I wouldn't anticipate nor recommend any dramatic change to that. I think we want to see how this transition works. And then I think we'd want to consult with the new government as well as Congress closely on any changes.

A few days later, another senior administration official, speaking under the condition of anonymity, reportedly said, "Eventually there will be a broader Burma policy discussion, depending on how events unfold. At this point there are no significant changes to our sanctions policy."34 On May 10, 2016, in an interview with the Burmese media, Ambassador Marciel told reporters that the United States was reviewing the remaining restrictions, but he did not know the outcome of that review.35

As previously mentioned, President Obama notified Congress on May 17, 2016, that he was continuing the national emergency with respect to Burma "to deal with the unusual and extraordinary threat to national security and foreign policy of the United States constituted by the actions and policies of the Government of Burma."36 In doing so, President Obama kept in effect the measures contained in Executive Orders 13047, 13310, 13448, 13464, 13619, and 13651, including those measures imposing restrictions on certain entities and those waiving restrictions contained in the various laws imposing sanctions on Burma.

On the same day, the Department of the Treasury announced some adjustments in the implementation of restrictions on relations with Burma.37 The implementation adjustments announced by Treasury included:

Revising or adding three general licenses (GL):

a new GL permitting financial transactions in Burma for U.S. persons residing in Burma, such as payment of rent and other living expenses.

GL20, which allows trade-related financial transactions, was made permanent, and expanded to include warehousing and local transportation costs.

GL19, which allows U.S. persons to conduct financial transactions with otherwise prohibited Burmese financial institutions that are on OFAC's SDN list, was changed to add Innwa Bank and Myawaddy Bank, and remove Myanma Economic Bank and Myanma Investment and Commercial Bank.

Changes to the SDN list, specifically:

Removing seven State-owned enterprises—Myanmar Timber Enterprise; Myanmar Pearl Enterprise; Myanmar Gem Enterprise; No. 1 Mining Enterprise; No. 2 Mining Enterprise; No. 3 Mining Enterprise; and Co-Operative Export-Import Enterprise—from the SDN list either because they are now under the authority of a civilian-led ministry or they no longer exist.

Removing three State-owned banks—Myanma Economic Bank; Myanmar Foreign Trade Bank; and Myanma Investment and Commercial Bank—from the SDN list.

Adding six companies owned by Stephen Law or Asian World—Asia Mega Link Co., Ltd., Asia Mega Link Services Co., Ltd., Pioneer Aerodrome Services Co., Ltd., Green Asia Services Co., Ltd., Global World Insurance Company Limited, and Shwe Nar Wah Company—to the SDN list [note: doing business with these six companies was already prohibited under the restrictions on doing business with companies owned by persons or entities on the SDN list].

The Department of State also made an adjustment in its implementation of restrictions on relations with Burma on May 17, 2016. As part of July 2012 waiver of ban on new investments in Burma, the State Department required all U.S. investors of $500,000 or more in Burma to report various details of the investment to the State Department under its Responsible Investment Reporting Requirement (RIRR) program.38 On May 17, 2016, the State Department increased the RIRR reporting threshold to $5 million or more.

In a speech given at the Center for New American Security on May 17, 2016, Deputy National Security Advisor Ben Rhodes described the Administration's rationale for the various charges in the implementation of restrictions on relations with Burma announced on that day:

The remaining targeted sanctions and our diplomatic efforts more broadly are designed to support Burma's efforts to continue democratic reforms while supporting inclusive economic growth. To that end, today we are announcing steps to support Burma's government through changes to our sanctions regime.39

Secretary John Kerry, during his May 22, 2016, visit to Burma, provided a similar explanation for the changes in U.S. restrictions on relations with Burma:

[W]e have adjusted our sanctions policy now to strengthen democracy, to encourage inclusive economic growth, and to facilitate foreign investment in the civilian-led economy; and at the same time, we are maintaining some sanctions in order to encourage all institutions, investors, and members of society to support the government's continued reform efforts that are aimed at consolidating a civilian-led democracy.40

Congressional Considerations

A number of different factors may play a role in any congressional consideration of U.S. restrictions on relations with Burma. One factor is the need to assess the goals of U.S. policy toward Burma, the prospects for their achievement, and the possible contradictions among those goals. Another factor is the perspective one takes on the current political situation in Burma, and the possibility for further political and economic reforms. Congress also may examine to what extent restrictions on relations may enhance or harm developments in Burma that are consistent with U.S. policy objectives, and as a consequence, which restrictions to maintain, impose, or remove.

Goals of U.S. Policy

For many years, Congress and the Executive Branch have, in general, shared a common view on the broader goals of U.S. policy in Burma—the establishment of a democratically-elected civilian government that respects the human rights of its people and promotes peace and prosperity to its nation. Current U.S. ambassador to Burma, Scot Marciel, reiterated this policy in a press interview on May 10, 2016, stating, "But our goal, the United States' goal, remains the same: We want to see a peaceful, prosperous, democratic Myanmar. One whose people live in harmony and enjoy full rights."41

What Congress determines should be the current objectives of U.S. policy toward Burma, and within those goals, which have greater priority, could affect what Congress may do with respect to U.S. restrictions on relations with that nation. Among the more specific objectives for U.S. policy in Burma being discussed are:

Moving beyond these general goals, however, may reveal underlying contradictions between the different goals. For example, efforts to promote economic prosperity in Burma may run counter to establishing a democratically-elected civilian government. The Burmese military, via such entities as the Myanmar Economic Corporation (MEC) and the Union of Myanmar Economic Holdings Limited (UMEHL), control many sectors of the Burmese economy, including most of the nation's natural resources. Efforts to promote economic prosperity by permitting U.S. trade and investment in portions of the economy controlled by the Burmese military may bolster their economic and political power, and as such, lead Burma's military leaders to resist further political and economic reforms, which may necessitate that the Burmese military relinquish some or all of its seats in the Union Parliament, as well as their control over the appointment of the Ministers of Border Affairs, Defence, and Home Affairs. Alternatively, permitting U.S. economic relations with MEC, UMEHL, and other companies owned by the Burmese military, its leaders and/or relatives and close friends of the military leaders, may lead to Burma's military leaders to be more willing to relinquish some of their political power.

Burma's Current Political Situation

Aung San Suu Kyi has emerged as the dominant political figure in the NLD-led government, and is using her authority as State Counselor and Foreign Minister to set priorities and oversee implementation of government policy. Depending on how the dynamics between Aung San Suu Kyi and other influential figures and forces (such as Commander-in-Chief Min Aung Hlaing and the ethnic armed organizations) proceed, Congress may choose to assess if her views on specific issues are consistent with U.S. policy, and how best to work with her to advance those efforts.

Understanding the views of Burma's military leaders has always been crucial in forming a framework to understand Burmese political conditions. It was Burma's military leaders that effectively wrote the 2008 constitution, held the parliamentary elections in 2010 and 2015, and formed the core of the Thein Sein government that ran the country from 2011-2015. The political and economic reforms that have occurred in Burma since 2008 are either the direct results of the actions of Burma's military leaders or where undertaken with the support of the military leaders. Those reforms, in addition, are generally consistent with the "seven step roadmap to a disciplined democracy" announced by General Khin Nyunt, the military junta's Prime Minister, on 30 August 2003. As a result, it remains uncertain if Burma's military leaders are supportive of or willing to allow further political and economic reforms, or if they will resist efforts to fundamentally alter the current governance system.

Similarly, the opinions of the various ethnic armed organizations (EAOs) may play a vital role in achieving U.S. goals in Burma. Ending the civil war will either require the EAOs agree to a ceasefire and the terms of Burma's governance system, and/or their military defeat. Achieving the former may require major changes in the 2008 constitution (including its possible replacement with a new constitution) and Burma's economy, particularly control over the nations' natural resources. Such changes may be unacceptable to Burma's military and the NLD-led government. Defeating the EAOs in the battlefield, however, may beyond the capabilities of the Burmese military without substantial international assistance, as well as the support of the NLD-led government. At this time, neither Aung San Suu Kyi or the NLD-led government appear to support a military solution to Burma's civil war.

Another potentially important force in Burma's current political dynamics is the community of emerging civil society organizations (CSOs). During the decades of military rule, Burma's military leaders actively suppressed the establishment of CSOs as part of their desire to keep control over the Burmese people. The Thein Sein government allowed the emergence of issue-driven CSOs in Burma, and some of them have undertaken causes generally consistent with U.S. policy.

Besides their potential support for U.S. goals in Burma, some observers have suggested that the CSOs may play a vital role in the discussion of political reform and the peace process. Some fear that if left to the NLD-led government, the Burmese military, and the EAOs, national reconciliation may result in the establishment of a federation of "crony states," in which the current military leaders and their supporters in each region of Burma control both the political and economic systems, and prevent the establishment of a democratic civilian government based on the rule of law and the will of the Burmese people.

Addressing the Restrictions

Depending on what goals it sets for U.S. policy in Burma and its perspective on the current political situation in the country, Congress may decide to address the existing restrictions on U.S. relations. In the past, this has been done by passing specific legislation to impose or recommend restrictions on bilateral or multilateral relations, or by including provisions in appropriations legislation setting limits on bilateral or multilateral assistance to Burma. Congress has also passed legislation creating conditions on certain forms of bilateral relations contingent on acceptable behavior with regard to specific issues, such as the recruitment and induction of under-aged children into the military. In addition, Congress may actively or passively permit the President and the Executive Branch to determine what restrictions, if any, should be placed on relations with Burma, and provide the necessary authority and appropriations to implement U.S. policy toward Burma.

In the months remaining in the 114th Congress, the opportunity to take action with respect to U.S. policy in Burma will arise on certain dates or at particular junctures. For example, on May 17, 2016, President Obama decided to continue the national emergency with respect to Burma, and thereby continued the restrictions on relations with Burma imposed by Executive Orders 13047, 13310, 13448, 13464, 13169, and 13651, including provisions that waive restrictions. Given the President's decision, Congress may decide if it wishes to take action to support or oppose his decision, as well as those measures announced by the State Department and Treasury Department on that same day.

Congressional consideration of appropriations legislation—or continuing resolutions—also represent a legislative juncture when restrictions on relations with Burma may be considered and altered, if Congress determines it warranted. The Obama Administration has submitted some suggested changes in the provisions of P.L. 113-114 for the fiscal year 2017 appropriations bill for the Department of State, foreign operations, and related programs.42 Among those changes are:

These requested changes relax some of the restrictions on U.S. assistance to Burma, particularly those pertaining to engagement with the Burmese military.

In addition, in his May 2016 speech to the Center for New American Security, Deputy National Security Advisor Ben Rhodes indicated that the Obama Administration was considering reinstating Burma as a beneficiary nation to the U.S. Generalized System of Preferences (GSP) program.43 Burma was removed from the GSP program on April 13, 1989, by Presidential Proclamation 5955. The President has the authority to designate a nation as a GSP beneficiary without the involvement of Congress. Congress may, however, consider legislation pertaining to Burma's reinstatement to the GSP program.

Appendix. Chronology of Burmese Sanction Legislation and Related Executive Orders

Starting in 1989 and continuing through 2008, Congress and the Executive Branch imposed a series of political and economic sanctions on Burma's ruling military junta. Since 2008, most of the congressional or executive actions have been to waive or eliminate some of those sanctions. The following table provides a list of such congressional or presidential actions in chronological order.

Chronology

Date

Document

Description

April 13, 1989

Presidential Proclamation 5955

  • Suspended Burma as a beneficiary of the U.S. Generalized System of Preferences (GSP)

August 20, 1990

Section 138 of the Customs and Trade Act of 1990 (P.L. 101-382)

  • Required President to "impose such economic sanctions upon Burma as the President determines to be appropriate …"

June 9, 1993

Public Notice 1820

  • Suspended the issuance of export licenses and other approvals "to export or otherwise transfer defense articles or defense services to Burma"

April 30, 1994

Section 431 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (P.L. 103-236)

  • Amended Section 307 of the Foreign Assistance Act of 1961 to withhold the "United States proportionate share for certain programs of international organizations" in Burma (exception provided for International Atomic Energy Agency and the United Nations Children's Fund)

September 30, 1996

Section 570(a) of the Omnibus Consolidated Appropriations Act, 1997 (P.L. 104-208)

  • Prohibited new investment in Burma; limited bilateral assistance to Burma to humanitarian assistance, counter-narcotics assistance, and "assistance promoting human rights and democratic values"
  • Required the Secretary of the Treasury to "instruct the United States executive director of each international financial institution to vote against any loan or other utilization of funds of the respective bank to or for Burma"
  • Stipulated that "the United States should not grant entry visas to any Burmese government official" except as required by "treaty obligations or to staff the Burmese mission in the United States"

October 3, 1996

Presidential Proclamation 6925

  • Suspended "the entry into the United States as immigrants and nonimmigrants of persons who formulate, implement, or benefit from policies that impede Burma's transition to democracy, and the immediate family members of such persons" [section 1]

May 20, 1997

Executive Order 13047

  • Prohibited new investment in Burma by United States persons as of 12:01 a.m. (EDT) on May 21, 1997 [section 1]
  • Prohibited any financial transaction by a United States person or within the United States that "would constitute new investment in Burma prohibited by this order" [section 2]

July 28, 2003

Burmese Freedom and Democracy Act (BFDA; P.L. 108-61)

  • Banned the import of "any article that is a product of Burma" [section 3(a)(1)]
  • Banned the import of goods from certain Burmese companies [section 3(a)(2)]
  • Authorized the President to "Freeze" the assets held by any U.S. financial institution belonging to "those individuals who hold senior positions" in the State Peace and Development Council (SPDC) or the Union Solidarity Development Association (USDA) [section 4]
  • Required the Secretary of the Treasury to instruct the U.S. executive director "to each appropriate international financial institution in which the United States participates to oppose, and vote against the extension by such institution of any loan or financial or technical assistance to Burma" [section 5]
  • Authorized the President to deny visas to "former and present leadership" of the SPDC and USDA [section 6]

July 28, 2003

Executive Order 13310

  • Blocked the transfer, payment, export, or withdrawal of all property or interest in property of any person determined by the Secretary of the Treasury to be: a senior official of the Government of Burma (GOB), the SPDC, the USDA, or any successor entity to the forgoing; or "to be owned, or controlled by, or acting or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order" [Section 1]
  • Prohibited "the exportation or reexportation, directly or indirectly, to Burma of financial services either (i) from the United States or (ii) by a United States person, wherever located"; and "any approval, financing, facilitating or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this order if performed by a United States person or within the United States" [section 2]
  • Prohibited "the importation into the United States of any article that is a product of Burma" [Section 3]
  • Revoked Sections 1-7 of Executive Order 13047 "to the extent they are inconsistent with this order" [Section 12]

October 23, 2007

Executive Order 13448

  • Blocked the transfer, payment, export, or withdrawal of all property or interest in property of any person determined by the Secretary of the Treasury to: be a senior official of the GOB, the SPDC, the USDA, or any successor entity to the forgoing; be "responsible for, or to have participated in, human rights abuses related to political repression in Burma; "engaged, or to have engaged, in activities facilitating corruption" by senior officials of the GOB; "have materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods and services in support of" the GOB, SPDC, USDA, any successor entity to any of the forgoing, any senior official of the forgoing, or any person whose property and interests in property is blocked pursuant to Executive Order 13310; or to be a spouse or dependent child of any person whose property and interests in property are blocked pursuant to this order or Executive Order 13310 [Section 1]

April 30, 2008

Executive Order 13464

  • Blocked the transfer, payment, export, or withdrawal of all property or interest in property of any person determined by the Secretary of the Treasury to: be owned or controlled by, directly or indirectly, the GOB or an official or officials of the GOB; "have materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods and services in support of" the GOB, SPDC, USDA, any successor entity to any of the forgoing, any senior official of the forgoing, or any person whose property and interests in property is blocked pursuant to Executive Order 13310, Executive Order 13448, or this order; or be "owned or controlled by, or to have acted or purported to act for or on the behalf of, directly or indirectly, any person whose property and interests in property is blocked pursuant to Executive Order 13310, Executive Order 13448, or this order" [Section 1]

July 29, 2008

The Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of 2008 (JADE Act; P.L. 110-286)

  • Rendered ineligible for a visa to travel to the United States: former and present leaders of the SPDC, the Burmese military, or the USDA; officials of the SPDC, Burmese military or the USDA "involved in the repression of peaceful political activity in in other gross violations of human rights in Burma or in the commission of other human rights abuses"; any other Burmese persons "who provide substantial economic or political support" for the SPDC, Burmese military, or the USDA; or the immediate family members of any person described by the preceding text [Section 5(a)(1)]
  • Blocked the transfer, payment, export or withdrawal of property or interest in property belonging to a person subject to the visa restriction above if the property is in the United States or "within the possession or control of a United States person"44 [section 5(b)(1)]
  • Except with respect to financial transactions authorized under EO 13047 and 13310, prohibited a United States person from engaging in a financial transaction with the SPDC or any person subject to the visa restriction above [section 5(b)(2)]
  • Authorized the Secretary of the Treasury to prohibit or impose conditions on the opening or maintaining of correspondent accounts or payable-through accounts if the Secretary determines the account may be used by a foreign banking institution that holds property or interest in property belonging to the SPDC or any person subject to the visa restriction [section 5(c)]
  • Amended the BFDA (by the addition of section 3A) to prohibit the import of jadeite and rubies from Burma or articles of jewelry containing jadeite or rubies from Burma [section 6]

September 26, 2008

Presidential Proclamation 8294

  • Determined procedures to implement sections 3 and 3A of the BFDA, as amended by the JADE Act
  • Modified Chapter 71 of the Harmonized Tariff Schedule of the United States to reflect the prohibition of goods from Burma in headings 7103, 7113, and 7116

January 15, 2009

Presidential Determination 2009-11

  • Waived the provisions of section 5(b) of the JADE Act with respect to those persons described in section 5(a)(1) of the JADE Act who are not included on the Department of Treasury's List of Specially Designated Nationals and Blocked Persons (SDN List)

July 11, 2012

Executive Order 13619

  • Blocked the transfer, payment, export, or withdrawal of all property or interests in property of any person determined by the Secretary of the Treasury to: have engaged in acts that directly or indirectly threaten the peace, security, or stability of Burma; be responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, or to have participated in, the commission of human rights abuses in Burma; have, directly or indirectly, imported, exported, reexported, sold or supplied arms or related materiel from North Korea or the Government of North Korea to Burma or the GOB; be a senior official of an entity that has engaged in the acts described in the forgoing; have materially assisted, sponsored, or provided financial, material, or technological support for, or goods and services to or in support of, the acts described in the forgoing or any person whose property or interests in property are blocked pursuant to this order; or be owned or controlled by, or to have acted or purported to act for on behalf of, directly or indirectly, any person whose property or interests in property are blocked pursuant to this order [Section 1]
  • Suspended the entry into the United States of aliens determined to meet one or more of the forgoing criteria [Section 5]

September 20, 2012

P.L. 112-192

  • Provided the President the authority to determine that "it is in the national interest of the United States to support assistance to Burma," and allow the Secretary of the Treasury to instruct the United States executive director of any international financial institution to vote in favor of the provision of assistance to Burma

August 6, 2013

Executive Order 13651

  • Prohibited the import into the United States of "any jadeite or rubies mined or extracted from Burma or any articles of jewelry containing jadeite or rubies mined or extracted from Burma" [Section 1]
  • Revoked sections 3 and 8 of Executive Order 13310 [section 2]
  • Waived section 5(b) of the JADE Act [Section 8]

Author Contact Information

[author name scrubbed], Specialist in Asian Affairs ([email address scrubbed], [phone number scrubbed])

Footnotes

1.

See CRS Report R44436, Burma's 2015 Parliamentary Elections: Issues for Congress, by [author name scrubbed].

2.

See CRS Insight IN10464, Burma's Union Parliament Selects New President, by [author name scrubbed].

3.

ASEAN is the Association of Southeast Asian Nations.

4.

Kyaw Hsu Mon, "Burma Govt Looks to Shed Burden of US Sanctions," Irrawaddy, February 19, 2016.

5.

For example, on February 18, 2016, the American Chamber of Commerce in Burma, the National Foreign Trade Council, the U.S.-ASEAN Business Council, the U.S. Chamber of Commerce, and the U.S. Council for International Business sent a joint letter to Secretary of State John Kerry, Secretary of the Treasury Jacob Lew, and Commerce Secretary Penny Pritzker calling for an end to the remaining economic restrictions (https://www.uschamber.com/letter/us-business-community-statement-us-myanmar-relations).

6.

For example, see Doug Bandow, "Burma on the Road to Democracy: How Far How Fast?," The World Post, April 23, 2016.

7.

White House, "Notice—Continuation of the National Emergency with Respect to Burma," press release, May 17, 2016.

8.

Department of the Treasury, "Treasury Amends Burmese Sanctions Regulations, Identifies Blocked Companies Owned by Designated Persons, and Delists Several Burmese State-owned Entities," press release, May 17, 2016.

9.

Department of State, "Joint Press Availability with Burmese Foreign Minister Daw Aung San Suu Kyi," press release, May 22, 2016.

10.

For example, Section 7043(b) of the Consolidated Appropriations Act, 2016 (P.L. 114-113) establishes a number of restrictions on bilateral, international security, and multilateral assistance to Burma. Similar restrictions were included in the Consolidated Appropriations Act, 2012 (P.L. 112-74); the Consolidated Appropriations Act, 2014 (P.L. 113-76); and the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235).

11.

See Appendix. For more about the history of the imposition of sanctions, see CRS Report R42939, U.S. Sanctions on Burma: Issues for the 113th Congress, by [author name scrubbed].

12.

For example, the Public International Law & Policy Group (PILPG) published a report of Burma's constitutional referendum on May 26, 2008, sharply criticizing the conduct of the plebiscite, calling the results, "Neither Free nor Fair." (The Public International Law & Policy Group, Burmese Constitutional Referendum: Neither Free Nor Fair, May 2008). For more about the circumstances under which the constitutional referendum was held, see CRS Report RL34481, Cyclone Nargis and Burma's Constitutional Referendum, by [author name scrubbed] and [author name scrubbed].

13.

For more information, see CRS Report R43035, U.S. Policy Towards Burma: Issues for the 113th Congress, by [author name scrubbed].

14.

The USDA, or Union Solidarity and Development Association, was an organization formed in 1992 by Burma's military junta to operate as the eyes and ears of the military junta at the local level. In March 2010, the USDA was transformed into a political party, the Union Solidarity and Development Party (USDP).

15.

Executive Order 13651, "Prohibiting Certain Imports of Burmese Jadeite and Rubies," 78 Federal Register, August 9, 2013.

16.

See http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=b2e175f927703c81da0def09cc4f2470&mc=true&n=pt31.3.537&r=PART&ty=HTML

17.

Priscilla A. Clapp, Securing a Democratic Future for Myanmar, Council on Foreign Relations, Council Special Report No. 75, New York, NY, March 2016.

18.

For purposes of this act, a U.S. person is defined, by Section 3(6) as "any United States citizen, permanent resident alien, juridical person organized under the laws of the United States (including foreign branches), or any person in the United States."

19.

Presidential Determination 2009-11, "Limited Waiver of Certain Sanctions Imposed by, and Delegation of Certain Authorities Pursuant to, the Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts Act of 2008," 74 Federal Register 3957-8, January 15, 2009.

20.

For more about these provisions in the USA PATRIOT Act, see CRS Report RL31377, The USA PATRIOT Act: A Legal Analysis, by [author name scrubbed].

21.

Department of the Treasury, "Imposition of Special Measures Against Burma," 69 Federal Register, April 12, 2004.

22.

Department of the Treasury, "Burmese Sanctions Regulations; Final Rule," 79 Federal Register, June 30, 2014.

23.

Ma Ba Tha is a Burmese acronym for the "Association for the Protection of Race and Religion" (also translated as the "Organization for the Protection of Race and Religion"), a Buddhist nationalist organization that seeks to preserve Burma's Theravada Buddhist culture, and opposes the further spread of Islam in Burma. Ma Ba Tha has been accused of encouraging violence against Burma's Muslim population.

24.

Department of State, "Suspension of Munitions Export Licenses to Burma," 58 Federal Register 33293, June 16, 1993.

25.

Presidential Determination 2015-13, "Determination with Respect to the Child Soldiers Prevention Act of 2008," 80 Federal Register 62431, October 16, 2015.

26.

Executive Order 13651, "Prohibiting Certain Imports of Burmese Jadeite and Rubies," 78 Federal Register 48793-4, August 9, 2013.

27.

For example, in his statement of May 17, 2012, President Obama said, "We are also maintaining our current authorities to help ensure further reform and to retain the ability to reinstate selected sanctions if there is backsliding." The White House, "Statement by the President on Burma," press release, May 17, 2012, https://www.whitehouse.gov/the-press-office/2012/05/17/statement-president-burma.

28.

Department of State, "Allowing New Investment in Burma," 77 Federal Register 62596, October 15, 2012.

29.

Lally Weymouth, "Aung San Suu Kyi: 'I'm Going to Be the One Who Is Managing the Government,'" Washington Post, November 19, 2015.

30.

Shibani Mahtani, "U.S. Companies Caught in Sanctions Gray-Zone in Myanmar," Wall Street Journal, March 28, 2016.

31.

Department of State, "Joint Press Availability with Burmese Foreign Minister Daw Aung San Suu Kyi," press release, May 22, 2016.

32.

Department of State, "Burma's Parliamentary Election," press release, November 8, 2015, http://www.state.gov/secretary/remarks/2015/11/249297.htm.

33.

Department of State, "America as a Pacific Power: Challenges and Opportunities in Asia," press release, April 28, 2016.

34.

Austin Ramzy, "Myanmar Political Shift Revives Debate on Sanctions," New York Times, December 9, 2015.

35.

Andrew D. Kaspar, "New US Ambassador Flags Many Old Problems for Burma," Irrawaddy, May 10, 2016.

36.

White House, "Notice—Continuation of the National Emergency with Respect to Burma," press release, May 17, 2016.

37.

Department of the Treasury, "Treasury Amends Burmese Sanctions Regulations, Identifies Blocked Companies Owned by Designated Persons, and Delists Several Burmese State-owned Entities," press release, May 17, 2016.

38.

For details of the RIRR program, see http://burma.usembassy.gov/reporting-requirements.html.

39.

National Security Council, "Remarks on Burma Policy," press release, May 17, 2016.

40.

Department of State, "Joint Press Availability with Burmese Foreign Minister Daw Aung San Suu Kyi," press release, May 22, 2016.

41.

Andrew D. Kaspar, "New US Ambassador Flags Many Old Problems for Burma," Irrawaddy, May 10, 2016.

42.

See https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/sta.pdf.

43.

For more about the GSP program, see CRS Report RL33663, Generalized System of Preferences: Overview and Issues for Congress, by [author name scrubbed].

44.

"A United States person" is defined as "any United States citizen, permanent resident alien, juridical person organized under the laws of the United States (including foreign branches), or any person in the United States."