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                                                       Calendar No. 461
111th Congress                                          
                                 SENATE                 
2d Session                                        Report No.  111-279
======================================================================
 
 APPROVING THE RENEWAL OF IMPORT RESTRICTIONS CONTAINED IN THE BURMESE 
                   FREEDOM AND DEMOCRACY ACT OF 2003

                                _______
                                

                 August 5, 2010.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                      [To accompany S.J. Res. 29]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, to which was referred the joint 
resolution (S.J. Res. 29) 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...     2
              3. S.J. Res. 29 Is a ``Renewal Resolution'' for 
                  Purposes of Extending Import Restrictions......     4
              4. Committee Consideration of S.J. Res. 29.........     4
              5. Report of the U.S. Department of State on the 
                  Trade Sanctions Against Burma..................     4
              6. Additional International Sanctions Against Burma     8
II. Budgetary Impact of the Joint Resolution..........................9
III.Regulatory Impact of the Joint Resolution and Other Matters.......9

IV. Changes in Existing Law..........................................10

              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. 29) 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 the State Peace and Development 
Council (SPDC), a military junta that took power in September 
1988. Since taking power, the junta has violently suppressed 
pro-democracy movements. International human rights 
organizations and the U.S. Department of State have reported a 
pattern of SPDC policies that include the suppression of 
political and civil liberties, jailing of political prisoners, 
widespread physical abuses, forced relocation of civilians, 
conscription of civilians--including children--into military 
services, and conscription of thousands of civilians for work 
on economic projects. Recent examples of these human rights 
abuses are provided below.
    In May 2003, a pro-government group of several hundred 
people assaulted the opposition National League for Democracy 
(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 
(USDA), an organization affiliated with the SPDC. Some NLD 
supporters were killed, and others were taken into custody.
    In September 2007, the Burmese government engaged in a 
violent crackdown against Buddhist monks and other Burmese 
citizens who were demonstrating peacefully against the poor 
economic conditions in Burma and the repressive policies of the 
SPDC. The Burmese government also failed to provide adequate 
humanitarian assistance or allow speedy entry of international 
aid in response to Cyclone Nargis in May 2008.
    In August 2009, the regime convicted Burmese human rights 
leader and Nobel Prize winner Aung San Suu Kyi of spurious 
charges of violating the terms of her house arrest, and 
sentenced her to three years in prison with hard labor, 
commuting that sentence to 29 months of house arrest. United 
Nations investigators allege that the Burmese Government has 
violated Suu Kyi's substantive and procedural rights during the 
course of her trial. All told, the SPDC continues to hold an 
estimated 2,100 political prisoners. And, in March 2010, the 
SPDC announced that it intended to hold national elections this 
year, but promulgated a series of electoral laws that seem 
intended to ensure that the elections will not be fair and 
transparent.

2. The Burmese Freedom and Democracy Act of 2003

    On June 4, 2003, the Burmese Freedom and Democracy Act of 
2003 (the BFDA) was introduced in the U.S. House of 
Representatives (H.R. 2330) and the U.S. Senate (S. 1182) in 
response to the attack on Daw Aung San Suu Kyi on May 30, 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 BFDA bans the importation of any article that is a 
product of Burma. The BFDA allows the President to lift these 
import restrictions if he certifies to Congress that (1) the 
SPDC has made substantial progress to end human rights 
violations, including rapes, and no longer systematically 
violates workers' rights, including forced and child labor, and 
conscription of child soldiers; (2) the SPDC has made 
substantial progress toward implementing a democratic 
government, including by releasing political prisoners, by 
allowing freedom of speech, press, association, and religion, 
and by reaching agreement with the NLD for a democratically 
elected civilian government; and (3) Burma has not been 
designated as a country that has failed to abide by its 
obligations under international counternarcotics agreements and 
to take other effective counternarcotics measures. In addition 
to the import ban, the BFDA also freezes the assets of the 
Burmese regime and its officials held by U.S. financial 
institutions, directs the Secretary of the Treasury to instruct 
the U.S. representatives to international financial 
institutions to oppose loans or other assistance to Burma, and 
authorizes the President to deny visas to the leaders of the 
Burmese regime.
    In July 2008, Congress amended the BFDA when it passed the 
Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) 
Act of 2008 (JADE Act). The JADE Act was introduced in the 
House on October 18, 2007, and passed by voice vote on December 
11, 2007. The Senate passed an amended version of the bill on 
December 19, 2007. After resolving the differences between the 
two bills, the revised legislation was passed by the House on 
July 15, 2008 by voice vote and by the Senate on July 22, 2008 
by Unanimous Consent. The President signed the legislation into 
law on July 29, 2008. The JADE Act amends the import 
restrictions of the BFDA by prohibiting the importation into 
the United States of jewelry from any country that contains 
jadeite or rubies mined in Burma. The JADE Act also imposes 
additional financial and visa sanctions on members of the SPDC 
or USDA and their immediate family members.
    Pursuant to section 9(b) of the BFDA, the import ban 
expires after 1 year unless a new joint 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 BFDA. The 
current import ban remains in effect through July 28, 2010.
    As originally enacted, section 9(b)(3) also limited the 
imposition of import restrictions to a maximum of 3 years from 
the date of enactment, or until 2006. In 2006, a joint 
resolution was introduced to extend this period to a maximum of 
6 years from the date of enactment, or until 2009. 
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).
    In 2009, S.J. Res. 17 was introduced to extend the 
limitation on the import restrictions for an additional three 
years, to a maximum of 9 years from the date of enactment, or 
until 2012. A similar resolution (H.J. Res. 56), which included 
budgetary offsets, was passed by the House on July 21, 2009, by 
voice vote. H.J. Res. 56 was received by the Senate on July 22, 
2009, and passed by Unanimous Consent on July 23, 2009. The 
resolution was signed by the President on July 28, 2009 (Pub. 
L. 111-42).
    On May 5, 2010, S.J. Res. 29 was introduced to renew the 
import ban for another year, in accordance with section 9(b) of 
the BFDA. On May 11, 2010, a companion resolution, H.J. Res. 
83, was introduced in the House of Representatives.

3. S.J. Res. 29 Is a ``Renewal Resolution'' for Purposes of Extending 
        Import Restrictions

    As described above, the import restrictions in the BFDA may 
be renewed for a 1-year period if Congress approves a ``renewal 
resolution,'' which section 9(c)(1) defines as a joint 
resolution whose sole matter after the resolving clause is 
language to renew the import restrictions for 1 year. Section 
9(c)(2)(B) applies 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)), to Finance 
Committee and floor consideration of a renewal resolution. S.J. 
Res. 29 meets the definition of ``renewal resolution'' under 
section 9(c)(1) of the BFDA.
    S.J. Res. 29 was introduced and approved by the Finance 
Committee before receipt of H.J. Res. 83 from the House. After 
the Committee reported the Senate measure, the vote on passage 
in the Senate was on the House-passed measure. The Senate 
approved H.J. Res. 83 by a vote of 99 to one on July 22, 2010.

4. Committee Consideration of S.J. Res. 29

    The Committee considered S.J. Res. 29 in open executive 
session on June 30, 2010. With a quorum present, the Committee 
approved S.J. Res. 29, without amendment, by a roll call vote, 
22 ayes, one nay.
    Ayes: Baucus, Rockefeller, Conrad, Bingaman, Kerry, 
Lincoln, Wyden, Schumer, Stabenow, Cantwell, Nelson, Menendez, 
Carper, Grassley, Hatch Snowe, Kyl, Bunning, Crapo, Roberts, 
Ensign, Cornyn (proxy).
    Nays: Enzi.
    The Chairman reported the resolution to the Senate on July 
14, 2010.

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

    On April 21, 2010, the U.S. Department of State submitted 
to Congress a report regarding the trade sanctions against 
Burma, as required by section 8(b)(3) of the BFDA. At the 
request of the Chairman, that report was made a part of the 
record of the Committee's consideration of S.J. Res. 29. The 
State Department report is reprinted below:
                         United States Department of State,
                                    Washington, DC, April 21, 2010.
Hon. Max Baucus,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The enclosed report reviews measures to 
promote human rights and democracy in Burma and assesses the 
effectiveness of the trade provisions in the Burmese Freedom 
and Democracy Act of 2003 (P.L. 108-61) to improve conditions 
in Burma and advance U.S. policy objectives. This report also 
discusses the importance of maintaining the import ban 
contained in the Act.
    We hope this information is useful to you. Please do not 
hesitate to contact us if we may be of further assistance in 
this matter.
            Sincerely,
                                          Richard R. Verma,
                          Assistant Secretary, Legislative Affairs.
    Enclosure: As stated.

            Report on U.S. Economic Sanctions Against Burma


                        INTRODUCTION AND SUMMARY

    Pursuant to section 8(b)(3) of the Burmese Freedom and 
Democracy Act of 2003, (Pub. L. 108-61) (the BFDA), and in view 
of the impending expiration of the import ban contained in the 
BFDA, as amended by the Tom Lantos Block Burmese JADE (Junta's 
Anti-Democratic Efforts) Act of 2008 (Pub. L. 110-286) (the 
JADE Act) this report reviews bilateral and multilateral 
measures to promote human rights and democracy in Burma and 
assesses the effectiveness of the BFDA's trade provisions 
relative to the improvement of conditions in Burma and the 
furtherance of U.S. policy objectives.
    During this reporting period (July 2009 to March 2010), the 
Administration completed its Burma policy review. The review 
was undertaken to find the best ideas to influence the regime 
because, as Secretary Clinton noted, neither sanctions nor 
efforts to engage the regime alone have proven successful in 
influencing the authorities in Burma. The review reaffirmed the 
Administration's fundamental goals in Burma: we support a 
unified, peaceful, prosperous, and democratic nation. To 
achieve these goals, the Administration has pursued senior-
level dialogue with the Burmese government and has announced 
plans to expand humanitarian assistance directly to Burma's 
people. Sanctions remain an important element of our strategy 
and there will be no change to the sanctions regime until 
Burmese authorities take concrete steps to address core 
concerns. Given the absence of concrete progress by the Burmese 
government on respect for human rights, release of political 
prisoners, transition to democracy via inclusive dialogue, and 
an end to conflict with ethnic minorities, the State Department 
supports a renewal resolution to maintain the import ban.

                  BILATERAL AND MULTILATERAL MEASURES

    During the reporting period, the United States intensified 
its efforts to promote human rights and democracy in Burma 
through diplomatic engagement with key stakeholders in 
Southeast Asia and beyond by supporting U.N. action on Burma 
and by delivering a direct message on these issues to the 
Burmese regime through senior-level engagement. The United 
States continued to lead efforts in the international community 
to ensure that others echo the call for Burmese authorities to 
begin a dialogue with the democratic opposition and ethnic 
minority representatives on a transition to democracy. The U.S. 
embassy in Rangoon maintained regular contact with 
representatives of democratic parties including the National 
League for Democracy and its allies, civil society, and ethnic 
minority groups, and used every interaction with Burmese 
officials to advocate respect for human rights and encourage 
political reform.
    Senior U.S. officials encouraged their counterparts in the 
region and other like-minded states to press the regime to take 
concrete and credible actions toward national reconciliation 
and democratic transition. The European Union, Australia, and 
Canada maintain financial and trade sanctions against the 
Burmese regime, including targeted financial sanctions against 
senior junta members and their inner circle of supporters.
    The United States has consistently pushed for the United 
Nations, including the U.N. Security Council, Human Rights 
Council, and the U.N. Secretary General's Good Offices Mission 
to keep pressure on the regime. On September 28, 2009, 
Secretary of State Clinton briefed the Secretary General's 
Group of Friends on the conclusions of the policy review and 
advocated a unified position on the need for dialogue and 
support for those working for democracy in Burma. The United 
States co-sponsored resolutions on the human rights situation 
in Burma in the General Assembly's Third Committee and in the 
Human Rights Council. On March 15, following a February trip to 
Burma, U.N. Special Rapporteur Tomas Ojea Quintana presented 
his report to the Human Rights Council and recommended that 
U.N. institutions consider establishment of a Commission of 
Inquiry for Burma to investigate whether human rights abuses 
there amount to war crimes or crimes against humanity. The 
United States is considering his recommendations carefully, 
including the Commission of Inquiry.
    The United States continues active efforts to identify 
regime officials and cronies who should be subject to 
sanctions. To date, the United States has sanctioned 17 persons 
providing financial and other support to the regime and certain 
family members, and 41 companies. The United States also 
maintains a broad travel ban on key regime officials, their 
family members, and their supporters.

               EFFECTS OF SANCTIONS ON SITUATION IN BURMA

    U.S. economic sanctions have made it more difficult and 
more costly for the Burmese regime and its financial supporters 
to continue profiting from its repressive policies. Senior 
Burmese officials, such as the Foreign Minister, have publicly 
complained about sanctions and called for them to be lifted. 
Influential businessmen in Rangoon with connections to the 
regime have increasingly complained about the detrimental 
effects sanctions have had on their business operations and 
personal lives. Between July 1, 2009 and March 26, 2010, 58 
transactions totaling approximately $1,770,000 and involving 
Burmese individuals or entities were reported to the Treasury 
Department as blocked.
    During the reporting period, the Treasury Department issued 
14 licenses authorizing the release of blocked funds or 
otherwise prohibited transactions to allow, for example, NGOs 
to conduct assistance-related transactions, including 
agricultural development, microfinance, and education projects. 
In the aftermath of Cyclone Nargis, which devastated Burma in 
May 2008, the Department of the Treasury issued General License 
14, which, as subsequently amended, continues to provide a 
broad authorization for funds transfers in support of 
humanitarian and religious activities in Burma.
    Although the United States and others continue to look at 
ways to target sanctions against the Burmese authorities, 
growing trade with countries in the region and increased income 
from the exploitation of oil and natural gas deposits enable 
the regime to retain power. According to the Economist 
Intelligence Unit, Burma's GDP grew roughly 1.8 percent in 
2009, due primarily to rising prices for petroleum and 
agricultural exports. According to Burma's Central Statistical 
Organization (CSO), total trade in 2009 (up to November) 
reached $9.4 billion, with exports of $5.6 billion and imports 
of $3.8 billion. Nevertheless, foreign investment falls well 
below potential investment levels, as the Burmese business 
climate continues to worsen. Notably, during the reporting 
period the regime began a wide-scale sell-off of state assets 
including some state-owned enterprises and valuable real 
estate, via a process that lacked transparency. It is too soon 
to gauge the effects of this privatization on Burma's economy 
or long-term development.
    The regime continued to commit grave human rights abuses 
during this reporting period. The military regime severely 
restricted and frequently violated freedoms of assembly, 
expression, association, movement, and religion. Human rights 
abuses have included custodial abuses and deaths, 
disappearances, rape, torture, recruitment of child soldiers, 
and forced labor. The government continued to infiltrate and 
covertly and overtly monitor meetings and activities of vitally 
all non-governmental organizations, including religious 
organizations. Although the regime released more than 100 
political prisoners during the reporting period, it continued 
to arrest, detain, and convict activists on politically-
motivated charges. The regime continues to hold an estimated 
2,100 political prisoners, including democratic opposition 
leader Aung San Suu Kyi, who was convicted in August 2009 on 
spurious charges of violating the terms of her house arrest. 
She was sentence to three years in prison with hard labor, 
which was commuted to 18 months of house arrest. The United 
States condemned these actions against her and urged many other 
countries to join us in doing so.
    In March 2010 the regime established an Election Commission 
under the control of the SPDC and promulgated a series of 
electoral laws and by-laws that appear to ensure the elections 
planned for 2010 will not be transparent, inclusive or 
credible. The United States has expressed deep concern over 
these laws, and urged the regime to engage in genuine political 
dialogue with all stakeholders and to release all political 
prisoners unconditionally. Furthermore, we have called on 
countries around the world to deliver a similar message to the 
Burmese government.

             EFFECTS OF SANCTIONS ON BROADER U.S. INTERESTS

    Sanctions targeting regime leaders and their financial 
supporters send a clear signal to the regime and to the Burmese 
people of our support for a transition to democracy. Many 
individuals in the Burmese democracy movement support U.S. 
sanctions. However, some academics, exiled Burmese, and 
independent Burmese business people argue that U.S. sanctions 
will continue to have only limited economic impact so long as 
Burma continues to enjoy the benefits of trade and investment 
from China, India, ASEAN members, and other countries.
    The trade-related and financial sanctions implemented 
pursuant to the BFDA and Executive Orders 13047, 13310, 13448, 
and 13464 have had a limited impact on U.S. relations with 
other nations. Although some foreign businesses and their 
representative embassies have complained about the impact of 
sanctions, those investing in Burma since 2003 have done so 
recognizing the difficult operating environment and overall 
poor economic climate created by the regime.
    The regulations and restrictions contained in the JADE Act, 
amending the BFDA to (i) prohibit the important of jadeite and 
rubies mined or extracted from Bruma, and articles of jewelry 
containing jadeite or rubies mined or extracted from Burma, and 
(ii) regulate the importation of jadeite and rubies mined or 
extracted from a country other than Burma, and articles of 
jewelry containing jadeite or rubies mined or extracted from a 
country other than Burma have an impact on other countries that 
process jadeite and rubies. Thailand, specifically, has 
expressed strong concern over the negative impact the JADE Act 
provisions have had on its ruby-processing and jewelry 
manufacturing industry. It is in such processing and 
manufacture that the majority of the value is added to the 
final imported product.

                               CONCLUSION

    The Administration's support for Burma's democracy movement 
remains firm. The United States continues to work within the 
U.N. and with countries in Southeast Asia and beyond to promote 
a peaceful transition to democracy. Economic sanctions are one 
important tool for exerting pressure on the regime to respect 
the will of the Burmese people and to cooperate with the 
international community's efforts to facilitate a genuine 
dialogue with democratic and ethnic minority representatives on 
a transition to democracy. The Administration believes we must 
send a consistent message to Burma's generals that in the 
absence of concrete progress in key areas of democracy and 
human rights, sanctions will remain in place. The Department of 
State supports renewal of the import ban in the Burmese Freedom 
and Democracy Act, as amended by the JADE Act.

6. Additional International Sanctions Against Burma

    The international community has joined with the United 
States in protesting human rights conditions in Burma. The 
European Union, Australia, and Canada each maintain financial 
and trade sanctions against the Burmese regime. All three 
continue to impose restrictions on Burmese imports, focusing on 
gems and timber, as well as targeted financial sanctions 
against senior Burmese government members and their inner 
circle of supporters. In May 2008, the United Nations Security 
Council issued a Presidential Statement that called on the 
Burmese Government to hold a free and fair constitutional 
referendum, and to allow greater humanitarian aid to enter the 
country.

              II. BUDGETARY IMPACT OF THE JOINT RESOLUTION


                                                              CBO ESTIMATE FOR H.J. RES. 83
                                                          [Estimate is in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           2010    2011    2012    2013    2014     2015     2016    2017    2018    2019    2020   2010-2015  2010-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Changes in Revenues

Section 1: Renewal of import ban........       *      -2       0       0       0        0        0       0       0       0       0        -2         -2
Section 3: Corporate timing shift.......       0       0       0       0       0      153     -153       0       0       0       0       153          0
    Total Revenues......................       *      -2       0       0       0      153     -153       0       0       0       0       151         -2

                                                                   Changes in Outlays

Section 2: Customs user fees............       0       0       0       0       0        0        0       0      -3      -7       0         0         10

                                                       Net Increase or Decrease (-) In the Deficit

    Total Budgetary effecta.............       *       2       0       0       0     -153      153       0      -3      -7       0      -151         -8
--------------------------------------------------------------------------------------------------------------------------------------------------------
aNegative numbers indicate a reduction in the deficit; positive numbers indicate the opposite.
Source: Congressional Budget Office and Joint Committee on Taxation.
Note:*denotes a revenue loss of less than $500,000.

    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. 104-04). The Committee has reviewed the provisions of 
S.J. Res. 29 as approved by the Committee on June 30, 2010. In 
accordance with the requirement of Pub. L. 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. 29, as ordered reported.