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WHITE HOUSE PRESS RELEASE



THE WHITE HOUSE 
Office of the Press Secretary 

For Immediate Release 
May 26, 1998 

TEXT OF A LETTER FROM THE PRESIDENT TO 
THE SPEAKER OF THE HOUSE OF REPRESENTATIVES 
AND THE PRESIDENT OF THE SENATE 

May 26, 1998 

Dear Mr. Speaker: (Dear Mr. President:) 

I hereby report to the Congress on developments concerning the national
emergency with respect to Burma that I declared in Executive Order 13047 of
May 20, 1997, pursuant to section 570 of the Foreign Operations, Export
Financing, and Related Programs Appropriations Act, 1997, Public Law
104-208 (the "Act") and the International Emergency Economic Powers Act
(IEEPA). This report is submitted pursuant to section 204(c) of IEEPA, 50
U.S.C. 1703(c) and section 401(c) of the National Emergencies Act, 50
U.S.C. 1641(c). This report discusses only matters concerning the national
emergency with respect to Burma that was declared in Executive Order 13047. 

On May 20, 1997, I issued Executive Order 13047 (62 Fed. Reg. 28301, May
22, 1997), effective on May 21, 1997, to declare a national emergency with
respect to Burma and to prohibit new investment in Burma by United States
persons, except to the extent provided in regulations, orders, directives,
or licenses that may be issued in conformity with section 570 of the Act. I
renewed this order on May 19, 1998. The order also prohibits any approval
or other facilitation by a United States person, wherever located, of a
transaction by a foreign person where the transaction would constitute new
investment in Burma prohibited by the order if engaged in by a United
States person or within the United States. This action was taken in
response to the large-scale repression of the democratic opposition by the
Government of Burma since September 30, 1996. A copy of the order was
transmitted to the Congress on May 20, 1997. 

By its terms, Executive Order 13047 does not prohibit the entry into,
performance of, or financing of a contract to sell or purchase goods,
services, or technology, except: (1) where the entry into such contract on
or after May 21, 1997, is for the general supervision and guarantee of
another person's performance of a contract for the economic development of
resources located in Burma; or (2) where such contract provides for
payment, in whole or in part, in (i) shares of ownership, including an
equity interest, in the economic development of resources located in Burma;
or (ii) participation in royalties, earnings, or profits in the economic
development of resources located in Burma. 

On May 21, 1998, the Department of the Treasury's Office of Foreign Assets
Control (OFAC) issued the Burmese Sanctions Regulations (the "BSR" or the
"Regulations"), 31 C.F.R. Part 537, to implement the prohibitions of
Executive Order 13047. The Regulations apply to United States persons,
defined to include US citizens and permanent resident aliens wherever they
are located, entities organized under US law (including their foreign
branches), and entities and individuals actually located in the United
States. The sanctions do not apply directly to foreign subsidiaries of US
firms, although foreign firms' activities may be affected by the
restriction on United States persons' facilitation of a foreign person's
investment transactions in Burma. 

The term "new investment" means any of the following activities, if such an
activity is undertaken pursuant to an agreement, or pursuant to the
exercise of rights under such an agreement, that is entered into with the
Government of Burma, or a nongovernmental entity in Burma, on or after May
21, 1997: (a) The entry into a contract that includes the economic
development of resources located in Burma; (b) the entry into a contract
providing for the general supervision and guarantee of another person's
performance of a contract that includes the economic development of
resources located in Burma; (c) the purchase of a share of ownership,
including an equity interest, in the economic development of resources
located in Burma; or (d) the entry into a contract providing for the
participation in royalties, earnings, or profits in the economic
development of resources located in Burma, without regard to the form of
participation. 

Since the issuance of Executive Order 13047 on May 20, 1997, OFAC, acting
under authority delegated by the Secretary of the Treasury, has implemented
sanctions against Burma as imposed by the order. OFAC has issued several
determinations with respect to transactions provided for by agreements
and/or rights pursuant to contracts entered into by United States persons
prior to May 21, 1997. One license was necessary to authorize a United
States person's disinvestment in Burma, since this transaction facilitated
a foreign person's investment in Burma. 

On May 21, 1997, OFAC disseminated details of this program to the
financial, securities, and international trade communities by both
electronic and conventional media. This included posting notices on the
Internet, on ten computer bulletin boards, and two fax-on-demand services,
and providing the material to the US Embassy in Rangoon for distribution to
US companies operating in Burma. 

In addition, in early July, OFAC sent notification letters to approximately
50 US firms with operations in or ties to Burma informing them of the
restrictions on new investment. The letters included copies of Executive
Order 13047, provided clarification of several technical issues, and urged
firms to contact OFAC if they had specific questions on the application of
the Executive order to their particular circumstances. 

The expenses incurred by the Federal Government in the 6-month period from
November 20, 1997, through May 19, 1998, that are directly attributable to
the exercise of powers and authorities conferred by the declaration of a
national emergency with respect to Burma are estimated at approximately
$370,000, most of which represent wage and salary costs for Federal
personnel. Personnel costs were largely centered in the Department of the
Treasury (particularly in the Office of Foreign Assets Control, the Office
of the Under Secretary for Enforcement, and the Office of the General
Counsel), and the Department of State (particularly the Bureau of Economic
and Business Affairs, the Bureau of East Asian and Pacific Affairs, and the
Office of the Legal Adviser). 

The situation reviewed above continues to present an extraordinary and
unusual threat to the national security and foreign policy of the United
States. The declaration of the national emergency with respect to Burma
contained in Executive Order 13047 in response to the large-scale
repression of the democratic opposition by the Government of Burma since
September 30, 1996, reflected the belief that it is in the national
security and foreign policy interests of the United States to seek an end
to abuses of human rights in Burma, to support efforts to achieve
democratic reform that would promote regional peace and stability, and to
urge effective counter-narcotics policies. 

In the past 6 months, the State Law and Order Restoration Council, recently
renamed the State Peace and Development Council (SPDC), has shown no sign
of willingness to cede its hold on absolute power. Since refusing to
recognize the results of the free and fair 1990 elections in which the
National League for Democracy won a vast majority of both the popular vote
and the parliamentary seats, the ruling junta has continued to refuse to
negotiate with pro-democracy forces and ethnic groups for a genuine
political settlement to allow a return to the rule of law and respect for
basic human rights. Burma has taken limited but insufficient steps to
counter narcotics production and trafficking. 

The net effect of US and international measures to pressure the SPDC to end
its repression and move toward democratic government has been a further
decline in investor confidence in Burma and deeper stagnation of the
Burmese economy. Observers agree that the Burmese economy appears to be
further weakening and that the government has a serious shortage of foreign
exchange reserves with which to pay for imports. While Burma's economic
crisis is largely a result of the SPDC's own heavy-handed mismanagement,
the SPDC is unlikely to find a way out of the crisis unless political
developments permit an easing of international pressure. I shall continue
to exercise the powers at my disposal to deal with these problems and will
report periodically to the Congress on significant developments. 

Sincerely, 

(/signed/ 

WILLIAM J. CLINTON 

(end text)