[House Report 110-418]
[From the U.S. Government Publishing Office]
110th Congress Rept. 110-418
HOUSE OF REPRESENTATIVES
1st Session Part I
======================================================================
BLOCK BURMESE JADE (JUNTA'S ANTI-DEMOCRATIC EFFORTS) ACT OF 2007
_______
October 31, 2007.--Ordered to be printed
_______
Mr. Lantos, from the Committee on Foreign Affairs, submitted the
following
R E P O R T
[To accompany H.R. 3890]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs, to whom was referred the
bill (H.R. 3890) to amend the Burmese Freedom and Democracy Act
of 2003 to waive the requirement for annual renewal resolutions
relating to import sanctions, impose import sanctions on
Burmese gemstones, expand the number of individuals against
whom the visa ban is applicable, expand the blocking of assets
and other prohibited activities, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.................................................... 2
Summary.......................................................... 5
Background and Purpose for the Legislation....................... 5
Hearings......................................................... 7
Committee Consideration.......................................... 7
Votes of the Committee........................................... 7
Committee Oversight Findings..................................... 7
New Budget Authority and Tax Expenditures........................ 7
Congressional Budget Office Cost Estimate........................ 7
Performance Goals and Objectives................................. 11
Constitutional Authority Statement............................... 12
New Advisory Committees.......................................... 12
Congressional Accountability Act................................. 12
Earmark Identification........................................... 12
Section-by-Section Analysis and Discussion....................... 12
Changes in Existing Law Made by the Bill, as Reported............ 14
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Block Burmese JADE (Junta's Anti-
Democratic Efforts) Act of 2007''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The Burmese regime has continued and worsened its
obstruction of democratic processes and mass violation of human
rights identified in the Burmese Freedom and Democracy Act of
2003 (Public Law 108-61; 50 U.S.C. 1701 note). In August and
September 2007, Burmese people from all walks of life conducted
their largest peaceful public protests since 1988. The peaceful
public protests responded to a drastic increase in fuel prices,
as well as the Burmese regime's ongoing denial of the
democratic and human rights of the Burmese people. On September
24, 2007, Buddhist monks actively participated and increasingly
led these peaceful demonstrations, culminating in an estimated
100,000 people marching through Rangoon, Burma. The protesters
peacefully demanded the release of 1991 Noble Peace Prize
Winner Daw Aung San Suu Kyi, the leader of the National League
for Democracy (NLD), marching past security barricades to her
house in a show of support for Burmese democracy. The Burmese
regime continues to refuse to recognize the results of the 1990
election, won by the NLD, which gave Aung San Suu Kyi the right
to be named Prime Minister.
(2) The Burmese regime, which calls itself the State Peace
and Development Council (SPDC), responded to these peaceful
protests with a violent crackdown leading to the reported
killing of some 200 people, including a Japanese
photojournalist, and hundreds of injuries. Human rights groups
further estimate that over 2,000 individuals have been
detained, arrested, imprisoned, beaten, tortured, or otherwise
intimidated as part of this crackdown. The Burmese regime
continues to detain, torture, and otherwise intimidate those
individuals whom it believes participated in or led the
protests and it has closed down or otherwise limited access to
several monasteries and temples that played key roles in the
protests.
(3) The Burmese regime and its supporters finance their
ongoing violations of human rights, undemocratic policies, and
military activities through financial transactions, travel, and
trade involving the United States, including the sale of
gemstones. Despite the sanctions imposed in the Burmese Freedom
and Democracy Act of 2003, the Burmese regime seeks out ways to
evade these restrictions. Millions of dollars in gemstones that
are exported from Burma ultimately enter the United States but
the Burmese regime attempts to conceal the origin of the
gemstones in an effort to evade the sanctions in the Burmese
Freedom and Democracy Act of 2003. For example, over 90 percent
of the world's ruby supply originates in Burma but only three
percent of the rubies entering the United States are claimed to
be of Burmese origin. The value of Burmese gemstones is more
than 99 percent a function of their original quality and
geological origin, and not a result of the labor involved in
cutting and polishing the gemstones.
SEC. 3. AMENDMENTS TO THE BURMESE FREEDOM AND DEMOCRACY ACT OF 2003.
(a) Annual Renewal Resolutions No Longer Required.--
(1) In general.--Subsection (b) of section 9 of the Burmese
Freedom and Democracy Act of 2003 is amended to read as
follows:
``(b) Continuation of Import Sanctions.--The import restrictions
under section 3(a)(1) shall continue until such time as such
restrictions are terminated--
``(1) pursuant to the enactment into law of a joint
resolution of the two Houses of Congress, the sole matter after
the resolving clause of which is as follows: `That Congress
terminates the import restrictions under section 3(a)(1) of the
Burmese Freedom and Democracy Act of 2003.'; or
``(2) by the President in accordance with subsection
(a).''.
(2) Repeal.--Section 9 of such Act is amended by striking
subsection (c).
(b) Import Restrictions on Gemstones.--Paragraph (1) of section
3(a) of the Burmese Freedom and Democracy Act of 2003 is amended by
striking the period at the end and inserting the following: ``,
including the importation of any gemstone, pearl, or rough unfinished
geological or mineral material mined or extracted from Burma, whether
imported as a loose item or as any part or component of a finished
piece of jewelry. Such restriction on such importation shall not be
deemed to be an amendment to the general rules of origin applied by the
United States.''.
(c) Visa Ban.--Paragraph (1) of section 6(a) of the Burmese Freedom
and Democracy Act of 2003 is amended to read as follows:
``(1) Visa ban.--
``(A) In general.--The Secretary of State shall
deny the issuance of a visa and the Secretary of
Homeland Security shall deny admission to the United
States to--
``(i) former and present leadership of the
SPDC or the Union Solidarity Development
Association;
``(ii) any member of the Burmese military
involved in the violent repression of the
public protests in Burma in August, September,
and October 2007;
``(iii) any Burmese official who has
engaged in, ordered, or facilitated acts of
gross violations of internationally recognized
human rights (as defined in section 502B(d)(1)
of the Foreign Assistance Act of 1961 (22
U.S.C. 2304(d)(1)), either as an individual or
as a member of a group or government; and
``(iv) any member of the immediate family
of any individual described in clauses (i),
(ii), or (iii).
``(B) Waiver.--The ban described in subparagraph
(A) may be waived only if the President determines and
certifies in writing to Congress that such is in the
national interests of the United States.''.
(d) Freezing Assets of the Burmese Regime in the United States.--
Section 4 of the Burmese Freedom and Democracy Act of 2003 is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d); and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Blocking of Assets and Other Prohibited Activities.--
``(1) In general.--The President shall block all property
and interests in property, including all commercial,
industrial, or public utility undertakings or entities, that,
on or after the date of the enactment of the Block Burmese JADE
(Junta's Anti-Democratic Efforts) Act of 2007--
``(A) are owned, in whole or in part, by an
individual on the list specified in section 6(a)(1)(A);
and
``(B) are in the United States, or in the
possession or control of the Government of the United
States or of any United States financial institution,
including any branch or office of such financial
institution that is located outside the United States.
``(2) Prohibited activities.--Activities prohibited by
reason of the blocking of property and interests in property
under paragraph (1) shall include--
``(A) payments or transfers of any property, or any
transactions involving the transfer of anything of
economic value by any United States person, including
any United States financial institution and any branch
or office of such financial institution that is located
outside the United States, to an individual on the list
specified in section 6(a)(1)(A);
``(B) direct or indirect payments of any tax,
cancellation penalty, or other amount to the Burmese
Government;
``(C) the export or reexport to any entity owned,
controlled, or operated by such an individual directly
or indirectly, of any goods, technology, or services by
a United States person; or
``(D) the performance by any United States person
of any contract, including a contract providing a loan
or other financing, in support of an industrial,
commercial, or public utility operated, controlled, or
owned by such an individual.
``(3) Extension of authority.--The President may block all
property and interests in property of the following persons, to
the same extent as property and interests in property of a
foreign person determined to have committed acts of terrorism
for purposes of Executive Order No. 13224 of September 21,
2001, (50 U.S.C. 1701 note) may be blocked:
``(A) Persons and financial institutions who assist
or provide financial, material, or technological
support for, or financial or other services to or in
support of, an individual on the list specified in
section 6(a)(1)(A) or entities owned or effectively
controlled by such an individual.
``(B) Persons otherwise associated with such an
individual.
``(4) Rule of construction.--Nothing in this subsection
shall be construed to prohibit any contract or other financial
transaction with any nongovernmental humanitarian organization
in Burma.
``(5) Exceptions.--The prohibitions and restrictions
described in paragraphs (1), (2), and (3) shall not apply to
medicine, medical equipment or supplies, food, or any other
form of humanitarian assistance provided to Burma as relief in
response to a humanitarian crisis.
``(6) Penalties.--Any person who violates any prohibition
or restriction described in paragraph (1), (2), or (3) shall be
subject to the penalties under section 6 of the International
Emergency Economic Powers Act (50 U.S.C. 1705) to the same
extent as for a violation under that Act.
``(7) United states person defined.--In this subsection,
the term `United States person' means--
``(A) any United States citizen or alien lawfully
admitted for permanent residence to the United States;
``(B) any entity organized under the laws of the
United States, and any foreign branch or subsidiary of
such an entity; and
``(C) any person in the United States.''.
SEC. 4. DENIAL OF TAX BENEFITS RELATING TO THE BURMESE REGIME.
(a) In General.--No deduction or credit against tax shall be
allowed under the Internal Revenue Code of 1986 with respect to amounts
paid or incurred with respect to the Burmese Government, the SPDC, or a
joint production agreement relating to the Yadana gas field or
pipeline.
(b) Effective Date.--This section shall apply to amounts paid or
incurred after the date of the enactment of this Act.
SEC. 5. SUPPORT FOR DEMOCRACY PROMOTION AND HUMANITARIAN ASSISTANCE IN
BURMA.
(a) In General.--The President is authorized to use all available
resources to assist Burma democracy activists and humanitarian aid
workers in their efforts to promote freedom, democracy, and human
rights in Burma.
(b) Authorization of Appropriations.--There are authorized to be
appropriated $20,000,000 to the Secretary of State for each of the
fiscal years 2008 and 2009 for the following purposes:
(1) To provide aid to democracy and human rights activists
and organizations inside and outside of Burma working to bring
a transition to democracy inside Burma, including to
individuals and groups that--
(A) promote democracy and human rights;
(B) represent the ethnic minorities of Burma;
(C) broadcast radio and television programs into
Burma that promote democracy and report on human rights
conditions inside Burma; or
(D) compile evidence of human rights violations by
the SPDC and its civilian militia, the Union Solidarity
and Development Association (USDA), and of the SPDC and
its entities' efforts to repress peaceful activities.
(2) To provide aid to humanitarian workers who--
(A) provide food, medical, educational, or other
assistance to refugees and internally displaced
persons;
(B) assist women and girls after incidents of rape
and other forms of sexual violence; or
(C) assist in the rehabilitation of child soldiers.
(c) Protecting Funds From Enriching the SPDC.--None of the funding
made available under this section may be provided to SPDC-controlled
entities, entities working with or providing cash or resources to the
SPDC, including organizations affiliated with the United Nations, or
entities requiring the approval of the SPDC to operate within the
borders of Burma.
SEC. 6. REPORT ON MILITARY AND INTELLIGENCE AID TO BURMA.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of State shall submit to the
Committee on Foreign Affairs of the House of Representatives and the
Committee on Foreign Relations of the Senate a report containing a list
of countries, companies, and other entities that provide military or
intelligence aid to the SPDC and describing such military or
intelligence aid provided by each such country, company, and other
entity.
(b) Military or Intelligence Aid Defined.--For the purpose of this
section, the term ``military or intelligence aid'' means, with respect
to the SPDC--
(1) the provision of weapons, weapons parts, military
vehicles, or military aircraft;
(2) the provision of military or intelligence training,
including advice and assistance on subject matter expert
exchanges;
(3) the provision of weapons of mass destruction and
related materials, capabilities, and technology, including
nuclear, chemical, or dual-use capabilities;
(4) conducting joint military exercises;
(5) the provision of naval support, including ship
development and naval construction;
(6) the provision of technical support, including computer
and software development and installations, networks, and
infrastructure development and construction; or
(7) the construction or expansion of airfields, including
radar and anti-aircraft systems.
(c) Form.--The report required under subsection (a) shall be
submitted in unclassified form but may include a classified annex.
Summary
H.R. 3890, the Block Burmese JADE (Junta's Anti-Democratic
Efforts) Act of 2007 (the ``Act'') strengthens sanctions
against Burma in the wake of the regime's violent crackdown on
peaceful protest. It bans import of gems from Burma; authorizes
the freezing of assets; imposes broad financial sanctions,
including on third-country banks and supporters of the regime;
removes tax deductions for American companies investing in
Burma and prevents American firms from making payments to the
regime, including those related to the Yadana gas pipeline;
extends the visa ban against human rights violators and other
leaders of the regime; eliminates the requirement for annual
renewal of sanctions; authorizes $20 million in each of the
fiscal years 2008 and 2009 for pro-democracy and humanitarian
programs inside and outside of Burma and requires the State
Department to report on Burma's sources of military support.
Background and Purpose for the Legislation
The Act aims to tighten and add sanctions against Burma's
regime and its supporters in the wake of the September 2007
violent suppression of mass peaceful protests. In August 2007,
peaceful protesters took to the streets of Rangoon, Mandalay
and other cities in Burma, conducting the country's largest
peaceful public protests since 1988. Initially motivated by
drastic fuel price increases, the demonstrations later took a
political turn. On September 24, 2007, Buddhist monks actively
participated and increasingly led these peaceful
demonstrations, culminating in an estimated 100,000 people
marching through Rangoon. The protesters peacefully demanded
the release of 1991 Noble Peace Prize Winner Daw Aung San Suu
Kyi, the leader of the National League for Democracy (NLD).
Aung San Suu Kyi remains a symbol of Burma's democracy as the
regime refuses to recognize her party's 1990 victory in Burma's
last free elections. Protesters marched past security
barricades to Aung San Suu Kyi's house, where she has been held
under house arrest for more than 12 of the past 17 years.
The regime responded to these peaceful protests with a
violent crackdown, beating and opening fire on unarmed peaceful
protesters. The regime says 10 were killed, including a
Japanese photojournalist, while NGOs estimate that hundreds
were killed. Burmese troops and the regime's hired thugs in the
Union Solidarity and Development Association beat and detained
more than 2,900 people, according to the regime. NGOs estimate
that even more have been detained, imprisoned, beaten, tortured
or otherwise intimidated so far as part of this crackdown. More
than a month later, the regime and its security authorities
continue to round up participants in the protests and in an
attempt to frighten Burma's people into submission,
loudspeakers broadcast announcements saying ``We have pictures.
We will find you.''
The Act aims to tighten and close loopholes with regard to
past Congressional and Executive efforts to sanction Burma and
its leaders. In 1997, the Congress passed a comprehensive ban
on new investment in Burma. Unocal's investment in Burma's
Yadana pipeline and gas production sharing project, which has
since transferred to Chevron as a result of a merger, was
explicitly permitted under a provision grandfathering
investments that occurred before May 21, 1997. The Burmese
Freedom and Democracy Act of 2003 (``2003 Act'') banned import
into the United States of any article that is a product of
Burma. The 2003 Act authorized, but did not require, the
president to freeze assets of certain elements of the regime
and to ban travel by regime leaders. Intermittent Executive
Orders have been issued to implement provisions of the 1997 and
2003 Acts. The most recent Executive Orders issued since the
August crackdown identify 11 regime officials for inclusion on
the Department of the Treasury's ``Specially Designated List''
and make 5 individuals and 7 companies in Burma subject to
financial restrictions and the asset freeze.
The Act responds to a series of steps taken by the regime
to evade these previous sanctions. The regime continues to
profit from the sale of Burma's vast natural resources while
the bulk of Burma's people live in poverty. Most economic
enterprises in Burma are state-owned and proceeds from most
economic activity of those enterprises inure to the regime's
economic benefit. The state-run Myanmar Oil and Gas Enterprise
is the largest of these, earning $2.16 billion in 2006-07 (43%
of Burma's export earnings) mainly through the sale of natural
gas to Thailand. Gem and timber exports account for significant
revenues. The state-run Myanmar Gems Enterprise earned some
$300 million in 2006-07, a 45% increase over the previous
year's exports. Under Lieutenant-General Thein Sein, chairman
of the Leading Committee for Development of Myanmar Gems
Industries, Burma authorized some 585 new mining blocks for
jade exploration in the past year. Labor groups report that
conditions in the gem mines are very dangerous, access to the
mines is forbidden to outsiders, and forced labor is exploited
there. Despite the ban against imports contained in the 2003
Act, the regime launders its sale of gems to the United States
through third countries. Rubies, fine quality (or imperial)
jade and pearls are among the top items that are ultimately
imported to the United States. As a result of these factors,
leading American jewelers and jewelry associations have asked
the Congress to close loopholes in the 2003 Act and to ban the
import of Burmese gemstones.
The regime has also used various financial measures to
avoid sanctions and to enhance its economic position. It uses
third-country banks to process transactions in U.S. dollars and
to process payments using U.S.-issued credit cards. Regime
members often hide their funds under the names of their
immediate relatives. Recently, industry and government leaders
in Burma reportedly met to discuss restructuring trade and
financial dealings to evade potential new sanctions. Currently,
a majority of Burma's international business transactions are
conducted through Singaporean banks, specifically United
Overseas Bank and the Development Bank of Singapore, according
to reports that the regime was considering changes to this
practice to keep its finances safe from the reach of U.S.
sanctions.
In addition to the regime's suppression of democracy and
peaceful protest and its exploitation of the country's natural
resources, Burma's history of political and economic disorder
provide other reasons for U.S. sanctions. Burma's rampant drug
trade, its role as a source for international trafficking in
persons and illicit goods, its interest in uranium and nuclear
sciences, and its increasing imports of sophisticated military
technology pose other threats to regional peace and security
and to U.S. interests in Southeast Asia.
Hearings
The Subcommittee on Asia, the Pacific, and the Global
Environment held a hearing on Burma on October 17, 2007.
Committee Consideration
On October 23, 2007, the Committee held a markup and
considered H.R. 3890. A motion to report the bill, as amended,
to the House, a quorum being present, was agreed to by
unanimous consent.
Votes of the Committee
There were no recorded votes on H.R. 3890.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
In compliance with Clause 3(c)(2) of House Rule XIII, the
Committee adopts as its own the estimate of new budget
authority, entitlement authority, or tax expenditures or
revenues contained in the cost estimate prepared by the
Director of the Congressional Budget Office, pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 29, 2007.
Hon. Tom Lantos, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3890, the Block
Burmese JADE (Junta's Anti-Democratic Effort) Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Michelle S.
Patterson, who can be reached at 226-2840.
Sincerely,
Peter R. Orszag.
Enclosure
cc:
Honorable Ileana Ros-Lehtinen
Ranking Member
H.R. 3890--Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of
2007.
SUMMARY
H.R. 3890 would expand the current financial and diplomatic
restrictions against government officials from Burma and would
further restrict imports from that country. It also would
authorize the appropriation of funds to aid individuals and
organizations to promote democracy in Burma. CBO estimates that
implementing H.R. 3890 would cost $5 million in 2008 and $36
million over the 2008-2012 period, assuming the appropriation
of the necessary amounts. In addition, enacting the bill would
have an insignificant effect on direct spending.
H.R. 3890 also would eliminate the need for annual
extensions by the Congress on the ban of all imports from Burma
and would repeal the six-year maximum for those extensions. It
would ban the importation of all geological and mineral
materials originating from Burma that pass through other
countries. It also would prohibit certain tax benefits for
persons doing business with Burma. CBO estimates that enacting
H.R. 3890 would reduce federal revenues by less than $500,000
in 2008, by about $8 million over the 2008-2012 period, and by
$18 million over the 2008-2017 period, net of income and
payroll tax offsets.
CBO reviewed the non-tax provisions of H.R. 3890 and
determined that the provisions contain private-sector mandates,
as defined in the Unfunded Mandates Reform Act (UMRA). The bill
would extend the one-year ban on imports from Burma until the
Congress or the President terminate the ban. The bill also
would expand the existing ban on Burmese imports to include any
gems mined or extracted from Burma. 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 in UMRA ($131 million in 2007,
adjusted annually for inflation).
CBO has reviewed the non-tax provisions of H.R. 3890 and
has determined that they contain 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 H.R. 3890 is shown in the
following table. The costs of this legislation fall mostly
within budget function 150 (international affairs).
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level 20 20 0 0 0
Estimated Outlays 5 11 10 6 4
CHANGES IN REVENUES\1\
Estimated Revenues * -2 -2 -2 -2
----------------------------------------------------------------------------------------------------------------
Note: * = between zero and -$500,000.
\1\In addition to the revenue effects shown here, H.R. 3890 would have additional effects on revenues after
2012. The estimated changes (net of income and payroll tax offsets) decrease revenues by $8 million over the
2008-2012 period and by $18 million over the 2008-2017 period.
BASIS OF ESTIMATE
For this estimate, CBO assumes that H.R. 3890 will be
enacted before the end of calendar year 2008, that the
specified authorization amounts will be appropriated near the
beginning of each fiscal year, and that outlays will follow
historical patterns for similar programs.
Spending Subject to Appropriation
Section 5 would authorize the appropriation of $20 million
for each of fiscal years 2008 and 2009 to aid democracy and
human rights activists and organizations and humanitarian
workers. The funds could be used by those inside or outside
Burma to promote democracy and human rights through various
means, including using radio and television programs to promote
democracy and compiling evidence of human rights violations.
CBO estimates that implementing this provision would cost $5
million in 2008 and $36 million over the 2008-2012 period,
assuming the appropriation of the authorized amounts.
Other provisions of the bill would have an insignificant
effect on spending subject to appropriation. Section 3(d) would
freeze any assets of certain Burmese government officials and
their families that are held by the U.S. government or by U.S.
financial institutions. Section 6 would require the Secretary
of State to issue a report containing a list of countries,
companies, and other entities that provide military and
intelligence aid to the military regime and a description of
such aid.
Direct Spending
Section 3 would expand the number of people whose assets
must be frozen by the Secretary of the Treasury and who would
be denied a visa by the Secretary of State. Under current law,
leaders of the military regime are prohibited from receiving
visas to travel to the United States. H.R. 3890 would expand
the visa ban to any Burmese government official or military
member who was involved in the repression of recent public
protests or who has engaged in the violation of human rights.
The ban would also extend to the immediate family members of
these individuals. CBO estimates that enacting this provision
would have an insignificant effect on direct spending.
Revenues
Imports into the United States from Burma have been banned
on a year-by-year basis since the enactment of the Burmese
Freedom and Democracy Act of 2003. Public Law 110-52, enacted
in the summer of 2007, renewed the ban for one additional year
through its current expiration date of July 28, 2008. H.R. 3890
would repeal the expiration date. Under the bill, the President
or the Congress would have the authority to lift or waive the
ban. For purposes of this cost estimate, CBO assumes that the
ban would continue for all years through 2017.
In the years immediately before the ban went into effect,
over half of all U.S. imports from Burma were knitted or
crocheted clothing and apparel goods. The remaining imports
included 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 bill places an additional ban on the importation of all
geological and mineral materials originating in Burma. This
includes jewelry set with Burmese gemstones that are imported
from other nations. CBO estimates that such a ban would not
have a significant effect on customs duties over the 2008-2017
period.
CBO estimates that continuation of the import ban would
reduce customs duties. 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 for total U.S. imports, CBO estimates that
enacting H.R. 3890 would reduce federal revenues by less than
$500,000 in 2008, by about $8 million over the 2008-2012
period, and by $18 million over the 2008-2017 period, net of
income and payroll tax offsets.
The President or the Congress could remove the ban on
imports upon Burma's compliance with the bill's conditions for
the progression toward democratization. CBO has no basis for
estimating the likelihood of such political change. Should the
ban be lifted, U.S. companies would be allowed to resume
importation of goods produced, manufactured, grown, or
assembled in Burma. If the President or the Congress were to
exercise such authority during the 2008-2017 period, the impact
on customs duties would be reduced accordingly.
The Joint Committee on Taxation estimates that there would
be an insignificant revenue effect for enacting a provision of
this bill that would prohibit a tax deduction or credit for
amounts paid or incurred with respect to certain parties,
including the Burmese government.
ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS
CBO has reviewed the non-tax provisions of H.R. 3890 and
has determined that they contain no intergovernmental mandates
as defined in UMRA and would impose no costs on state, local,
or tribal governments.
ESTIMATED IMPACT ON THE PRIVATE SECTOR
CBO reviewed the non-tax provisions of H.R. 3890 and
determined that the provisions contain private-sector mandates,
as defined in UMRA. The bill would extend the one-year ban on
imports from Burma until the Congress or the President
terminate the ban. The bill also would expand the existing ban
on Burmese imports to include any gems (as defined in the bill)
mined or extracted from Burma. 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 in UMRA ($131 million in 2007, adjusted
annually for inflation).
PREVIOUS CBO ESTIMATES
On July 25, 2007, CBO completed an 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. On July 30, 2007, CBO completed
an 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, as reported by the Senate Committee
on Finance on July 24, 2007. Section 1 of H.J. Res 44 and S.J.
Res 16 would extend the ban on imports from Burma through July
of 2008. Section 3 of H.R. 3890 would make the ban permanent;
thus, it would have an effect on revenues for the remainder of
the 2008-2017 period. As a result, CBO estimates H.R. 3890
would have a larger effect on revenues than the earlier
legislation. In addition, both resolutions and H.R. 3890
include private-sector mandates as defined in UMRA. CBO could
not estimate the cost of the mandates for the two resolutions
because information on the value of lost profits to importers
resulting from the ban was not available.
ESTIMATE PREPARED BY:
Federal Revenues: Zachary Epstein (226-2680)
Federal Spending: Michelle S. Patterson (226-2840)
Impact on State, Local, and Tribal Governments: Neil Hood (225-
3220)
Impact on the Private Sector: Paige Piper/Bach (226-2960)
ESTIMATE APPROVED BY:
Peter H. Fontaine
Assistant Director for Budget Analysis
G. Thomas Woodward
Assistant Director for Tax Analysis
Performance Goals and Objectives
The Act is intended to strengthen sanctions against Burma
and to support democracy in Burma. The goal of this requirement
is to end the brutal repression of the Burmese people by the
military regime that governs Burma and to end direct or
indirect financial support for the regime coming from the
United States government, companies or consumers.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
New Advisory Committees
H.R. 3890 does not establish or authorize any new advisory
committees.
Congressional Accountability Act
H.R. 3890 does not apply to the Legislative Branch.
Earmark Identification
H.R. 3890 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) of rule XXI. Section 4 removes
limited tax benefits currently enjoyed by U.S. companies
operating in Burma.
Section-by-Section Analysis and Discussion
Section 1. Short Title.
This section provides that the short title of the Act is
the ``Block Burmese JADE (Junta's Anti-Democratic Efforts) Act
of 2007.''
Section 2. Findings.
This section contains findings highlighting the repressive
and anti-democratic nature of the Burmese regime. The findings
specifically condemn the regime's actions in September of
violently oppressing peaceful political protestors and note the
regime's ongoing repression of the National League for
Democracy and Aung San Suu Kyi. It also includes findings
related to the gem trade and efforts by the Burmese regime to
evade existing sanctions concerning its gem exports to the
United States. It finds that the value of Burmese gems imported
to the United States is a function of their geology in Burma,
not the minimal labor involved in subsequent cutting and
polishing. It notes that the regime seeks to hide other
financial transactions involving the United States, including
those done via third country financial institutions, so as to
avoid sanctions.
Section 3. Amendments to the Burmese Freedom and Democracy Act of 2003.
Subsection (a) states that annual renewal resolutions
required by the Burmese Freedom and Democracy Act of 2003 are
no longer required. The sanctions outlined by the 2003 Act
shall continue until such time as the Congress or the President
terminates those sanctions.
Subsection (b) states that gems, pearls, imperial jade and
other mineral material with geological origin in Burma are
covered by the provisions of the Burmese Freedom and Democracy
Act of 2003. Import of such items and jewelry made from them is
prohibited. The provision clarifies Congress' intent to ban the
import of Burmese gems in its previous Burma sanctions act and
tightens those sanctions to make those initial sanctions
effective. In so doing, it overturns a December 11, 2004,
United States Customs and Border Protection ruling and provides
that gems and related jewelry should be treated as a product of
Burma. As noted in the findings, the value of gems, jade and
pearls coming from Burma is over 90 percent a function of their
geological origin, not the minimal, low-cost labor involved in
cutting and polishing such stones. The provision explicitly
states that this change is done to make the pre-existing Burma
sanctions regime effective and not to change rule of origin or
discriminate against any gem cutting, polishing or processing
countries.
Subsection (c) states that the Secretaries of State and
Homeland Security shall deny issuance of visas and entry into
the United States to certain classes of individuals. Such
individuals include former and present leadership of the SPDC
and the Union Solidarity Development Association, any member of
the Burmese military involved in repression of public protests
in August-October 2007 (even if the repression occurred at a
later date), any Burmese official who has engaged in, ordered
or facilitated gross human rights violations, and immediate
family members of individuals in the preceding three groups.
The provision defines categories of individuals subject to a
visa ban, rather than rely on the lists of individuals
previously announced by Executive Order. The provision requires
implementing agencies to ensure that individuals who are
members of the defined classes are covered by the sanctions.
Subsection (d) provides several types of financial
sanctions against the Burmese regime, its financial supporters
and associates. In an expansion of authority, this subsection
extends financial sanctions to activities by third-country
entities, including financial institutions, which support the
Burmese regime. As a result, this subsection attempts to serve
as a catalyst to make sanctions more effective and
multilateral. Subsection (d) has five main provisions. First,
it creates a new subsection (b) in Section 4 of the 2003 Act to
block assets and prohibit other activities. It requires the
President to block all property interests in the United States
of entities owned by individuals who fall in the classes
defined previously. For those same groups of individuals, it
requires the blocking of assets that come into the possession
or control of the United States or U.S. financial institutions,
including overseas bank branches. Second, it lists prohibited
activities, including: payments or transfer of anything of
value to individuals who are members of the defined groups of
leaders, human rights abusers and their families; and export of
items to such persons or the performance of contracts,
including financing contracts, involving such persons.
Subsection (2)(B) specifies that direct or indirect tax
payments or other payments to the Burmese Government are
blocked and is designed to specifically prohibit Chevron from
making a payment to the Burmese regime or its supporters as a
result of any business decision Chevron might make to withdraw
from Burma. Third, it defines the extension of authority to the
President to block property and interests in property of
financial institutions, corporations and other ``persons'' who
assist or provide support to the defined groups of leaders,
human rights abusers and their families. Fourth, it creates
exceptions such that nothing in the subsection shall prohibit
the work of humanitarian NGOs in Burma and shall not apply to
supplies of medicine or other humanitarian assistance. Fifth,
it provides that violators are subject to penalties in Section
6 of the International Emergency Economic Powers Act.
All of the amendments contained in this section are
designed to expand, not to limit, the sanctions outlined in the
1997 and 2003 Acts.
Section 4. Denial of Tax Benefits Relating to the Burmese Regime.
This section provides that no tax deduction or credit shall
be allowed for amounts paid to the Burmese Government, the SPDC
or with respect to a joint production agreement relating to the
Yadana gas field. It prevents U.S. tax benefits from accruing
to companies that continue to operate in Burma. It specifically
mentions the Yadana gas field, which is part of Chevron's
investment in Burma and which had been permitted under an
exception to previous Burma sanctions. This section prevents
Chevron or subsequent entities related to the Yadana gas field
or pipeline from enjoying tax benefits related to Burma or the
Yadana investment. It would also prevent any other American
firm from making tax payments to the Burmese regime. The
section applies to payments made after enactment of the Block
Burmese JADE Act of 2007. It is not intended to impose or
increase tax obligations of humanitarian organizations in
Burma.
Section 5. Support for Democracy Promotion and Humanitarian Assistance
in Burma.
This section authorizes $20,000,000 for each fiscal year
2008 and 2009 to be appropriated for pro-democracy and
humanitarian programs in Burma. The section specifies that the
aid should be used to support democracy and human rights,
represent ethnic minorities, and to broadcast information into
Burma about human rights and democracy to counter the regime's
propaganda. It also specifies that funds should be used to
document the SPDC and USDA's efforts to repress peaceful
activities, and as such, provides resources to identify the
persons in categories subject to sanctions elsewhere in the
bill. It includes funds for humanitarian workers assisting
internally displaced persons, victims of sexual violence and
rehabilitation of child soldiers.
Section 6. Report on Military or Intelligence Aid to Burma.
This section requires the Department of State to prepare a
report identifying countries and companies who provide military
or intelligence support to Burma. The aid to be discussed in
the report includes: military supplies; intelligence; weapons
parts and servicing; technical support, including software and
network infrastructure; nuclear, chemical and biological
capabilities, including weapons and dual-use civilian programs
and technologies.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
BURMESE FREEDOM AND DEMOCRACY ACT OF 2003
* * * * * * *
SEC. 3. BAN AGAINST TRADE THAT SUPPORTS THE MILITARY REGIME OF BURMA.
(a) General Ban.--
(1) In general.--Notwithstanding any other
provision of law, until such time as the President
determines and certifies to Congress that Burma has met
the conditions described in paragraph (3), beginning 30
days after the date of the enactment of this Act, the
President shall ban the importation of any article that
is a product of Burma[.], including the importation of
any gemstone, pearl, or rough unfinished geological or
mineral material mined or extracted from Burma, whether
imported as a loose item or as any part or component of
a finished piece of jewelry. Such restriction on such
importation shall not be deemed to be an amendment to
the general rules of origin applied by the United
States.
* * * * * * *
SEC. 4. FREEZING ASSETS OF THE BURMESE REGIME IN THE UNITED STATES.
(a) * * *
(b) Blocking of Assets and Other Prohibited Activities.--
(1) In general.--The President shall block all
property and interests in property, including all
commercial, industrial, or public utility undertakings
or entities, that, on or after the date of the
enactment of the Block Burmese JADE (Junta's Anti-
Democratic Efforts) Act of 2007--
(A) are owned, in whole or in part, by an
individual on the list specified in section
6(a)(1)(A); and
(B) are in the United States, or in the
possession or control of the Government of the
United States or of any United States financial
institution, including any branch or office of
such financial institution that is located
outside the United States.
(2) Prohibited activities.--Activities prohibited
by reason of the blocking of property and interests in
property under paragraph (1) shall include--
(A) payments or transfers of any property,
or any transactions involving the transfer of
anything of economic value by any United States
person, including any United States financial
institution and any branch or office of such
financial institution that is located outside
the United States, to an individual on the list
specified in section 6(a)(1)(A);
(B) direct or indirect payments of any tax,
cancellation penalty, or other amount to the
Burmese Government;
(C) the export or reexport to any entity
owned, controlled, or operated by such an
individual directly or indirectly, of any
goods, technology, or services by a United
States person; or
(D) the performance by any United States
person of any contract, including a contract
providing a loan or other financing, in support
of an industrial, commercial, or public utility
operated, controlled, or owned by such an
individual.
(3) Extension of authority.--The President may
block all property and interests in property of the
following persons, to the same extent as property and
interests in property of a foreign person determined to
have committed acts of terrorism for purposes of
Executive Order No. 13224 of September 21, 2001, (50
U.S.C. 1701 note) may be blocked:
(A) Persons and financial institutions who
assist or provide financial, material, or
technological support for, or financial or
other services to or in support of, an
individual on the list specified in section
6(a)(1)(A) or entities owned or effectively
controlled by such an individual.
(B) Persons otherwise associated with such
an individual.
(4) Rule of construction.--Nothing in this
subsection shall be construed to prohibit any contract
or other financial transaction with any nongovernmental
humanitarian organization in Burma.
(5) Exceptions.--The prohibitions and restrictions
described in paragraphs (1), (2), and (3) shall not
apply to medicine, medical equipment or supplies, food,
or any other form of humanitarian assistance provided
to Burma as relief in response to a humanitarian
crisis.
(6) Penalties.--Any person who violates any
prohibition or restriction described in paragraph (1),
(2), or (3) shall be subject to the penalties under
section 6 of the International Emergency Economic
Powers Act (50 U.S.C. 1705) to the same extent as for a
violation under that Act.
(7) United states person defined.--In this
subsection, the term ``United States person'' means--
(A) any United States citizen or alien
lawfully admitted for permanent residence to
the United States;
(B) any entity organized under the laws of
the United States, and any foreign branch or
subsidiary of such an entity; and
(C) any person in the United States.
[(b)] (c) Additional Authority.--The President may take
such action as may be necessary to impose a sanctions regime to
freeze such funds or assets, subject to such terms and
conditions as the President determines to be appropriate.
[(c)] (d) Delegation.--The President may delegate the
duties and authorities under this section to such Federal
officers or other officials as the President deems appropriate.
* * * * * * *
SEC. 6. EXPANSION OF VISA BAN.
(a) In General.--
[(1) Visa ban.--The President is authorized to deny
visas and entry to the former and present leadership of
the SPDC or the Union Solidarity Development
Association.]
(1) Visa ban.--
(A) In general.--The Secretary of State
shall deny the issuance of a visa and the
Secretary of Homeland Security shall deny
admission to the United States to--
(i) former and present leadership
of the SPDC or the Union Solidarity
Development Association;
(ii) any member of the Burmese
military involved in the violent
repression of the public protests in
Burma in August, September, and October
2007;
(iii) any Burmese official who has
engaged in, ordered, or facilitated
acts of gross violations of
internationally recognized human rights
(as defined in section 502B(d)(1) of
the Foreign Assistance Act of 1961 (22
U.S.C. 2304(d)(1)), either as an
individual or as a member of a group or
government; and
(iv) any member of the immediate
family of any individual described in
clauses (i), (ii), or (iii).
(B) Waiver.--The ban described in
subparagraph (A) may be waived only if the
President determines and certifies in writing
to Congress that such is in the national
interests of the United States.
* * * * * * *
SEC. 9. DURATION OF SANCTIONS.
(a) * * *
[(b) Continuation of Import Sanctions.--
[(1) Expiration.--The import restrictions contained
in section 3(a)(1) shall expire 1 year from the date of
enactment of this Act unless renewed under paragraph
(2) of this section.
[(2) Resolution by congress.--The import
restrictions contained in section 3(a)(1) may be
renewed annually for a 1-year period if, prior to the
anniversary of the date of enactment of this Act, and
each year thereafter, a renewal resolution is enacted
into law in accordance with subsection (c).
[(3) Limitation.--The import restrictions contained
in section 3(a)(1) may be renewed for a maximum of six
years from the date of the enactment of this Act.
[(c) Renewal Resolutions.--
[(1) In general.--For purposes of this section, the
term ``renewal resolution'' means a joint resolution of
the 2 Houses of Congress, the sole matter after the
resolving clause of which is as follows: ``That
Congress approves the renewal of the import
restrictions contained in section 3(a)(1) of the
Burmese Freedom and Democracy Act of 2003.''.
[(2) Procedures.--
[(A) In general.--A renewal resolution--
[(i) may be introduced in either
House of Congress by any member of such
House at any time within the 90-day
period before the expiration of the
import restrictions contained in
section 3(a)(1); and
[(ii) the provisions of
subparagraph (B) shall apply.
[(B) Expedited consideration.--The
provisions of 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)) apply to a
renewal resolution under this Act as if such
resolution were a resolution described in
section 152(a) of the Trade Act of 1974.]
(b) Continuation of Import Sanctions.--The import
restrictions under section 3(a)(1) shall continue until such
time as such restrictions are terminated--
(1) pursuant to the enactment into law of a joint
resolution of the two Houses of Congress, the sole
matter after the resolving clause of which is as
follows: ``That Congress terminates the import
restrictions under section 3(a)(1) of the Burmese
Freedom and Democracy Act of 2003.''; or
(2) by the President in accordance with subsection
(a).