FRENCH SUPPORT CONSOLIDATED EU AND MULTILATERAL

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 000630 SIPDIS SIPDIS STATE FOR IO/HOOK TREASURY FOR OFAC/SZUBIN E.O. 12958: DECL: 03/28/2018 TAGS: EFIN ETTC PHUM MY FR SUBJECT: FRENCH SUPPORT CONSOLIDATED EU AND MULTILATERAL ACTIONS ON BURMA Classified By: ECON COUNSELOR STUART DWYER FOR REASONS 2.1 B AND D ¶1. (SBU) Summary: The GOF supports the P-3,s ongoing efforts to have a PRST issued on Burma to bring more universal pressure to bear on the regime. It presumes the EU will renew its current bilateral sanctions measures at the upcoming GAERC, and will subsequently consider further measures and/or technical improvements in existing ones. The GOF would welcome U.S. suggestions on how to more effectively target EU sanctions. End Summary. ¶2. (U) On March 26, IO DAS Brian Hook and Treasury OFAC Director Adam Szubin met with MFA DAS-equivalent for Southeast Asia Fabrice Mauries, MFA DAS-equivalent for International Financial Affairs, Cyrille Pierre, and Ministry of Economy Director for Investment and Services, Anne-Helene Roignan, and their staff for an exchange on Burma sanctions. Supporting UN Process ¶3. (C) Mauries said France is working with the UK and once an agreement is reached, France will seek P3 agreement for UN PRST on Burma. However, Mauries is not optimistic these actions will be fruitful since the existing text is not far-reaching. Given Chinese and ASEAN countries' insistence that it not be "intrusive" France remains hesitant to take aggressive steps. The GOF sees UN Envoy Gambari,s efforts as yielding "diminishing returns" but it continues to support him as one of the few channels of direct contact with the regime. If the Security Council effort fails, Mauries opined, then the only option is to consider new "bilateral" actions by the EU. Considering Further EU Measures ¶4. (C) The debate is about what the EU should do next, e.g., if the upcoming referendum goes badly. Mauries asserted that, within the EU, there are two schools of thought on Burma. The first, shared by northern Europeans and exemplified by Denmark, is that the EU should escalate sanctions every time there is a failure or "disappointment." Adherents view this approach as necessary to maintain EU credibility, including in their home countries. The other school, to which the GOF belongs, advocates a more cautious approach, particularly following the substantial EU sanctions just implemented by regulations issued on March 10. The GOF believes that the impact of the current measures should first be studied before additional measures are considered. It continues to support targeted measures but is worried about a possible dilution effect as well as unintended consequences on the people of Burma if ever broader sanctions are adopted. ¶5. (SBU) Although the EU circulated a paper on potential additional Burma sanctions options, including sanctions on three Burmese foreign trade banks and an investment ban, some states are reluctant to go down this road for the time being. Instead, member states are looking towards an impact and feasibility study on the current and additional financial measures, with results expected at the end of April 2008. The GOF is concerned as to how measures against three banks closely involved in the regime's transactions might negatively impact Total,s business dealings in Burma. The GOF is also concerned about adverse effects on the general population, how sanctions might drive even more business to tolerant neighboring countries away from Europe and/or insulate the regime against any threat of additional actions. In short, the targeting and exceptions measures would need to be finely tuned. Implementation Needs Refinement, U.S. Suggestions Welcome ¶6. (C) Mauries stressed that, while EU partners had reached political agreement on several sanctions measures in the fall of 2007, working out the technical definitions and application of that agreement took nearly five months. Roignan confirmed that despite this extensive detail work, difficulties remain, such as insufficient identifiers (dates PARIS 00000630 002 OF 002 of birth; addresses etc.) for listed individuals and entities. The recent increase to 900 names on the EU list is generating a cumbersome 40,000 hits per day in France, almost all of which are spurious. She stressed, however, that when there is any doubt (e.g., corporate entity not on the list but corporate board members appear to be listed individuals) then transactions are held in suspension until negative presumption is overcome. She admitted that good implementation depended upon cooperation of banks and other entities, but stressed that criminal as well as reputational liabilities ultimately awaited those who did not apply the measures. They said they would welcome a USG paper on potential technical improvements to targeted sanctions. ¶7. (U) DAS Hook and Director Szubin have cleared this telegram. Please visit Paris' Classified Website at: http://www.state.sgov.gov/p/eur/paris/index.c fm PEKALA