Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?
                                                       Calendar No. 281
110th Congress                                                   Report
                                 SENATE
 1st Session                                                    110-146

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



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

                August 29, 2007.--Ordered to be printed

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

                                _______
                                

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

                              R E P O R T

                      [To accompany S.J. Res. 16]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, to which was referred the joint 
resolution (S.J. Res. 16) approving the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act 
of 2003, having considered the same, reports favorably thereon 
without amendment and recommends that the joint resolution do 
pass.

                                CONTENTS

                                                                   Page
 I. Report and Other Matters of the Committee.........................2
        A. Report of the Committee on Finance....................     2
        B. Background............................................     2
            1. The Government of Burma...........................     2
            2. The Burmese Freedom and Democracy Act of 2003 (the 
                Act).............................................     2
            3. Expedited Procedures for Renewing the Import 
                Restrictions Contained in the Burmese Freedom and 
                Democracy Act of 2003............................     3
            4. Committee Consideration of S.J. Res. 16...........     4
            5. Report of the U.S. Department of State on the 
                Trade Sanctions Against Burma....................     4
II. Budgetary Impact of the Joint Resolution.........................12
III.Regulatory Impact of the Joint Resolution and Other Matters......15

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

              I. REPORT AND OTHER MATTERS OF THE COMMITTEE


                 A. Report of the Committee on Finance

    The Committee on Finance, to which was referred the joint 
resolution (S.J. Res. 16) approving the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act 
of 2003, having considered the same, reports favorably thereon 
without amendment and recommends that the resolution do pass.

                             B. Background


1. The Government of Burma

    Burma is governed by a military junta that took power in 
September 1988. The junta, the State Peace and Development 
Council (SPDC), violently suppressed pro-democracy 
demonstrators in September 1988. The junta allowed elections to 
a National Assembly in 1990, but it nullified the results when 
the opposition National League for Democracy (NLD) won most of 
the seats. Since 1990, reports from human rights organizations, 
the International Red Cross, and the U.S. State Department have 
described a pattern of SPDC policies featuring the suppression 
of political liberties, jailing of political prisoners (more 
than 1,100 estimated imprisoned in July 2007), widespread 
physical abuses, forced relocation of civilians, the 
impressment of civilians into military service, and the 
conscription of thousands of civilians for work on economic 
projects.
    On May 30, 2003, a pro-government group of several hundred 
people assaulted the opposition NLD leader Daw Aung San Suu Kyi 
and her supporters near Mandalay, Burma's second-largest city. 
The attackers were members of the United Solidarity Development 
Association, a pro-government mass organization. Some NLD 
supporters were killed, and other NLD leaders were taken into 
custody. Serious human rights abuses by the Burmese Government 
have worsened in 2007. Arrests and disappearances of political 
activists continue. The military regime continues to be hostile 
to all forms of political opposition. Daw Aung San Suu Kyi 
remains under strict house arrest.

2. The Burmese Freedom and Democracy Act of 2003 (the Act)

    In response to the May 30th attack, the Burmese Freedom and 
Democracy Act of 2003 was introduced in the U.S. House of 
Representatives (H.R. 2330) and the U.S. Senate (S. 1182) on 
June 4, 2003. A revised version of the legislation was 
introduced in the Senate (S. 1215) on June 9, 2003. That latter 
version, S. 1215, passed the Senate with an amendment on June 
11, 2003, by a recorded vote of 97-1. In the House, H.R. 2330 
passed with an amendment on July 15, 2003, by a recorded vote 
of 418-2, 1 Present. The Senate then passed the House-passed 
version of H.R. 2330 without amendment on July 16, 2003, by a 
recorded vote of 94-1. The legislation was presented to the 
President on July 22, 2003, and signed into law by the 
President on July 28, 2003 (Pub. L. 108-61).
    The Act bans the importation of any article produced in 
Burma. This ban affects mainly imports of Burmese textiles and 
garments. The Act allows the President to lift these import 
restrictions if he certifies to Congress that the SPDC has made 
major progress to end human rights violations, including rapes, 
forced and child labor, and conscription of child-soldiers, 
released political prisoners, allowed political, religious, and 
civil liberties, and reached agreement with the NLD for a 
civilian government chosen through democratic elections. Under 
the Act, the import ban must be renewed on a yearly basis. In 
addition to the import ban, the Act freezes Burmese assets in 
the United States and requires the United States to oppose aid 
to Burma by international financial institutions.
    As originally enacted, section 9(a)(1) of the Act limited 
the imposition of import restrictions to a maximum of three 
years. In 2006, a joint resolution was introduced to permit the 
renewal of import restrictions for a maximum of 6 years; 
specifically, H.J. Res. 86 was introduced in the House on May 
19, 2006, and S.J. Res. 38 was introduced in the Senate on May 
26, 2006. The House passed H.J. Res. 86 on July 11, 2006 by 
voice vote. H.J. Res. 86 was placed on the Senate calendar on 
July 26, 2006 and passed without amendment by voice vote. The 
President signed the joint resolution on August 1, 2006 (Pub. 
L. 109-251). H.J. Res. 86 also provided for a 1-year renewal of 
import restrictions, i.e. until July 28, 2007.
    Pursuant to section 9(b) of the Act, the import ban will 
expire after 1 year unless a new joint resolution (``renewal 
resolution'') approving a 1-year renewal of the import ban is 
enacted into law prior to the anniversary of the date of 
enactment of the Act. The purpose of S.J. Res. 16 is to comply 
with the Act's requirement in order to renew the import ban for 
another year, i.e. until July 28, 2008. A similar resolution 
(H.J. Res. 44), which included budgetary offsets, was passed by 
the House on July 23, 2007 by voice vote. H.J. Res. 44 was 
placed on the Senate Calendar on July 24, 2007 and passed by a 
recorded vote of 93-1. The President signed the joint 
resolution on August 1, 2007 (Pub. L. 110-52).

3. Expedited Procedures for Renewing the Import Restrictions Contained 
        in the Burmese Freedom and Democracy Act of 2003

    Section 9(c)(2)(B) of the Act incorporates the expedited 
procedures set forth in section 152 (b), (c), (d), (e), and (f) 
of the Trade Act of 1974 (19 U.S.C. 2192 (b), (c), (d), (e), 
and (f)), for consideration of a joint resolution to renew the 
import ban for another year.
    Pursuant to those procedures, a renewal resolution 
introduced in the Senate shall be referred to the Finance 
Committee. The Finance Committee has 30 days to consider and 
report the resolution, not counting any day excluded under 
section 154(b) of the Trade Act of 1974. Section 154(b) 
excludes Saturdays and Sundays when either House is not in 
session, any day during which either House is adjourned for 
more than 3 days, and any day while Congress is adjourned sine 
die. A renewal resolution is not amendable. If the Committee 
does not report the resolution within that period, it is in 
order for any Member favoring the resolution to move to 
discharge the Committee from further consideration of the 
resolution.
    If, as in this case, a renewal resolution is introduced in 
the Senate before receipt of an identical resolution from the 
House, and the House passes its resolution before the Committee 
reports the Senate measure, then upon receipt of the House-
passed measure the House resolution shall be placed on the 
Senate calendar and the Committee shall continue to report the 
Senate measure or be discharged from further consideration of 
the Senate measure, as noted. After the Committee reports the 
Senate measure, the vote on passage in the Senate shall then be 
on the identical House-passed measure.

4. Committee Consideration of S.J. Res. 16

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

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

    On May 29, 2007, the State Department submitted to Congress 
a report regarding the trade sanctions against Burma, as 
required by section 8(b)(3) of the Burmese Freedom and 
Democracy Act of 2003. At the request of the Chairman, that 
report was made a part of the record of the Committee's 
consideration of S.J. Res. 16. The State Department report is 
reprinted below:

            Report on U.S. Economic Sanctions Against Burma


                      i. introduction and summary


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


                ii. bilateral and multilateral measures


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


                   iii. effects of economic sanctions


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


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


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


                               conclusion


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

              II. BUDGETARY IMPACT OF THE JOINT RESOLUTION

                                                     July 30, 2007.
Hon. Max Baucus,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S.J. Res. 16, a joint 
resolution approving the renewal of import restrictions 
contained in the Burmese Freedom and Democracy Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Emily 
Schlect.
            Sincerely,
                                         Robert A. Sunshine
                                   (For Peter R. Orszag, Director).
    Enclosure.

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

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

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2007    2008    2009    2010    2011    2012
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES
 
Estimated Revenues..............................................       *      -2       0       0       0       0
----------------------------------------------------------------------------------------------------------------
*=Loss of less than $500,000.

    H.J. Res. 44, recently cleared by the Congress, would have 
the same effect on federal revenues in 2007 and 2008. S.J. Res. 
16 would have no additional budgetary impact, relative to H.J. 
Res. 44.
    Basis of estimate: Under S.J. Res. 16, the President would 
have the authority to lift or waive the ban imposed by the 
resolution. For this estimate, CBO assumes that the President 
would not exercise this authority before the termination of the 
one-year ban.
    Based on data from the U.S. International Trade Commission 
on recent U.S. imports from Burma, information from several 
government agencies, and CBO's most recent forecast of total 
U.S. imports, CBO estimates that enacting S.J. Res. 16 would 
reduce federal revenues by less than $500,000 in 2007 and by 
about $2 million in 2008, net of income and payroll tax 
offsets.
    In recent years, over half of all U.S. imports from Burma 
have been knitted or crocheted clothing and apparel goods. The 
remaining imports include apparel items not knitted or 
crocheted, certain types of fish and crustaceans, goods made of 
wood, certain precious and semiprecious stones and metals, and 
woven fabrics and tapestries. In 2001 and 2002, roughly 80 
percent of duties collected on these imports came from knitted 
and crocheted articles. CBO assumes that most of the banned 
imports would be replaced with imports from other countries.
    The President could remove the ban on imports upon the 
request of a democratically elected government in Burma or if 
he were to determine and notify the Congress that to do so is 
in the national interest. Should the ban be lifted, U.S. 
companies would be allowed to resume importation of goods 
produced, manufactured, grown, or assembled in Burma. It is 
unclear whether or when the President would exercise the 
authority to lift or waive the ban on imports from Burma. If 
such action were taken during the 2007-2008 period, the impact 
on federal revenues would be reduced accordingly.
    Estimated impact on state, local, and tribal governments: 
CBO has determined that S.J. Res. 16 contains no 
intergovernmental mandates as defined in UMRA and would impose 
no costs on state, local, or tribal governments.
    Estimated impact on the private sector: By renewing the ban 
on all imports from Burma, S.J. Res. 16 would impose private-
sector mandates as defined in UMRA. CBO cannot estimate the 
cost of those mandates because information on the value of lost 
profits to importers resulting from the ban is not available. 
Thus, CBO cannot determine whether the aggregate direct cost of 
the mandates would exceed the annual threshold for private-
sector mandates established by UMRA ($131 million in 2007, 
adjusted annually for inflation).
    Previous CBO estimate: On July 25, 2007, CBO transmitted a 
cost estimate for H.J. Res. 44, approving the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act 
of 2003, as cleared by the Congress on July 24, 2007. That 
legislation, like S.J. Res. 16, renews the ban on imports from 
Burma for one year; H.J. Res. 44 also extends merchandise 
processing fees and increases the amount of corporate income 
taxes due in 2012.
    Estimate prepared by: Federal Revenues: Emily Schlect; 
Impact on State, Local, and Tribal Governments: Neil Hood; 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis.

    III. REGULATORY IMPACT OF THE JOINT RESOLUTION AND OTHER MATTERS

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee states 
that the resolution will not significantly regulate any 
individuals or businesses, will not affect the personal privacy 
of individuals, and will result in no significant additional 
paperwork.
    The following information is provided in accordance with 
section 423 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(Pub. L. No. 104-04). The Committee has reviewed the provisions 
of S.J. Res. 16 as approved by the Committee on July 23, 2007. 
In accordance with the requirement of Pub. L. No. 104-04, the 
Committee has determined that the bill contains no 
intergovernment mandates, as defined in the UMRA, and would not 
affect the budgets of state, local, or tribal governments.

                      IV. CHANGES IN EXISTING LAW

    Pursuant to paragraph 12 of rule XXVI of the Standing Rules 
of the Senate, the Committee finds no changes in existing law 
made by S.J. Res. 16, as ordered reported.