```

[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).

                                  

```