The United States Extends Sanctions against Burma

August 2, 2006

On August 1, 2006, President Bush signed a bill renewing the Burmese Freedom and Democracy Act of 2003 (BFDA). This bill renews sanctions against Burma under the BFDA for an additional year and amends the BFDA to allow annual renewal of this law for up to six more years. 

The BFDA imposes a general import ban on products from Burma and bars investment in Burma. The law also prohibits the export of financial services to Burma, which includes among other things the transfer of funds by U.S. persons to Burma. The law aims to pressure the Burmese government to improve human rights and workers rights, to implement democratic reforms, and to improve counter-narcotics efforts. 

This renewal and extension of the BFDA is part of a broad range of sanctions the United States has implemented against Burma over the past decade. In May 1997, President Clinton issued Executive Order 13047 prohibiting new investment by U.S. persons in Burma and facilitation of investment in Burma by non-U.S. persons. President Bush signed Executive Order 13310 in July 2003, implementing the BFDA. This order blocks property and interests in property of persons related to the Burmese regime, imposes a ban on all imports from Burma, and bans the export of financial services to Burma from the United States or by U.S. persons. 

Exports of goods and non-financial services to Burma are permitted, but the broadly defined ban on the export of financial services may make lawfully engaging in such transactions difficult. The Burmese Sanctions Regulations (BSR) implement the BFDA and Executive Orders 13047 and 13310. A willful violation of the BSR or related rules can be punished by a fine of up to $50,000 for a corporation or an individual, up to 20 years in prison for an individual, or both. Penalties for criminal violations of the regulations can reach $500,000 for a corporation and $250,000 for an individual, or twice the gain or loss from the violation. Civil fines of up to $50,000 per violation are possible.   

Gibson, Dunn & Crutcher’s International Trade Regulation and Compliance Practice Group is monitoring the development of sanctions regulations for Burma and is prepared to address any questions regarding these rules or regarding sanctions or export control rules for other countries. For further information, please contact Judith A. Lee (202-887-3591), Jim Slear (202-955-8578) or Dave Wharwood (202-887-3579) in the firm’s Washington, D.C. office.

© 2006 Gibson, Dunn & Crutcher LLP

The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.