BURMA: SANCTIONS IDEAS WELL RECEIVED; WILL DECIDE

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 001884

SIPDIS

STATE FOR EUR/ERA AND EAP/MLS
TREASURY FOR OFAC

E.O. 12958: DECL: 12/13/2018
TAGS: ECON ETTC EAID EFIN PREL PGOV BM EUN
SUBJECT: BURMA: SANCTIONS IDEAS WELL RECEIVED; WILL DECIDE
BY APRIL

REF: A. A) STATE 125635

B. B) BRUSSELS 1873

Classified By: USEU Political M-C Chris Davis for reasons 1.4 (b) and (
d)


1. (C) Summary: USEU Mission officers delivered points and
non-paper on Burma sanctions (REF A)to Commission and Council
interlocutors, as well as French, Czech, and UK External
Relations (RELEX) experts. EUR PDAS Ries flagged the issue
separately at the U.S.-EU Task Force meeting on December 8
(REF B). The U.S. ideas were well-received and well-timed,
as RELEX has just begun preliminary discussions on options.
The EU will consult the private sector through February and
discuss final options in March for the Council's April
renewal of the overall sanctions. The Commission took the
opportunity to invite the USG to participate as a donor in a
coming initiative called the "Livelihood Fund." End Summary.


--------------
Commission Views
--------------


2. (C) Seamus Gillespie, Head of Unit for South-East Asia at
DG RELEX in the European Commission, said that he appreciated
the report's recommendations. Although Member States are
divided on the efficacy of sanctions, all agreed that the
current sanctions regime was "a mess." Gillespie thought
that Member States would be amenable to our suggested changes
and said he would push for a sanctions package based on our
recommendations to be ready for action by the April 2009
meeting of EU Foreign Ministers Council (GAERC). Gillespie
believed that enhanced EU sanctions could be adopted in the
course of the GAERC's renewal of the Common Position on
Burma, which is set to expire on April 30. Stephane Chardon,
Commission RELEX sanctions office, also appreciated the
additional details on the U.S. sanctions program for
comparison purposes. (Note: Chardon will be responsible for
drafting the initial text for the Council's consideration in
April. End Note.)

--------------
Council Secretariat Insights on Next Steps
--------------


3. (C) Leo Schulte Nordholt, Burma Desk Officer at the
European Council General Secretariat, provided a similar
response, although he noted that Council sanctions
specialists questioned the utility of including
narco-traffickers such as the Wa Army, as this could induce
the regime to become even more rigid in its policy. As the
coordinator for most EU sanctions legislation, Francesco
Fini, Council Secretariat Coordination Unit, was especially
grateful to have received the paper and studied it in great
detail. He drew from the material to successfully persuade
the Council RELEX (sanctions) working group to refrain from
jumping prematurely to drop Annex I before the end of the
French Presidency. Instead, the question of what to do with
Annex I will be considered, as the Commission hopes, among
numerous options in the course of renewing the Common
Position by April under the Czech Presidency. Fini pushed
RELEX to adopt a parallel process of reviewing both technical
changes to the sanctions regime and more policy / scope
questions. The EU plans to consult the financial sector on
how best to implement measures over the next two months, at
which point he expects the additional identifiers may prove
essential to improve the list's quality. RELEX will review
the Burma sanctions options in detail in March and prepare a
decision for the April GAERC rubberstamp.


4. (C) Fini considers that the U.S. proposal to freeze the
assets of Regulation Annex VII would require more than a
purely "technical fix." He personally favors this approach,
but confirmed Gillespie's assessment that Member States are
split. Some MS are adamant against increasing pressure on
Burma; others want to reinforce measures; still others reject
the effectiveness of sanctions altogether. Fini counters the
naysayers by pointing out that things could be even worse if
it weren't for sanctions, but agrees that whatever the U.S.
and EU do, it would take regional action by ASEAN to maximize
the outcome. He will work toward an April GAERC decision

BRUSSELS 00001884 002 OF 002


that is "more than technical, less than revolutionary."

--------------
Influence and Aid
--------------


5. (C) Gillespie and his team are eager for new ideas on how
to handle the Burmese regime, with one senior EU official
telling us that the EU has "zero influence" on the regime at
present. In coming weeks, the Commission plans to announce
the "Livelihood Fund" for Burma with an EUR 25 million
donation. The UK, Australia, Germany, and Sweden have all
expressed interest in participating, and Gillespie said that
the United States would be welcome to participate as well.
Gillespie said that the fund will initially focus on the
Delta region for 1-2 years, and then move on to other areas.
He expects the fund to be administered by the EMO UN agency
that already handles the Three Diseases Fund in Burma. He
said the fund would engage in rehabilitation, microfinance,
and other small projects, and seemed optimistic that it would
provide a new entry point for dialogue with Burma.

--------------
Comment
--------------


6. (C) USEU is working to coordinate a potential follow-up
meeting for OFAC experts with key EU interlocutors through
the Czech Presidency in Brussels in early February, before
the March RELEX decision-making is fully cemented.
Continuing to engage the Czechs, who noted the priority USG
places on this issue through the December 8 Task Force
meeting, will be critical to achieving a U.S.-preferred
outcome. End Comment.

MURRAY
.