WASHINGTON (AFP) — Proposed sanctions introduced in the US House of Representatives would pressure US energy giant Chevron to pull its investment from Myanmar, which rights activists say is helping prop up the ruling military junta.
Under the strategy, similar to one used against US companies during the anti-apartheid campaign in South Africa, the legislation introduced Thursday would end tax write-offs enjoyed by Chevron on revenues earned from its natural gas project in Myanmar.
Chevron will also be barred from making any payments to the junta from its joint venture with French oil giant Total, Thailand's PTT Exploration and Production, and Myanmar?s Myanma Oil and Gas Enterprise operating the lucrative Yadana gas fields, congressional aides said.
The sanctions were introduced as part of a package of new US measures aimed at punishing the military regime for its recent crackdown on pro-democracy protests led by Buddhist monks that left at least 13 people dead and 3,000 detained.
Under US law, "no deduction or credit against tax shall be allowed ... with respect to amounts paid or incurred with respect to" the junta or joint production agreement of the Yadana gas project, a copy of the proposed legislation reads.
Neither US citizens or US institutions can make any "direct or indirect payments of any tax, cancellation penalty, or any other amount" to the junta, according to the measure, known as the Block Burmese JADE (Junta?s Anti-Democratic Efforts) Act of 2007.
The proposal was introduced by Tom Lantos, chairman of the House Foreign Affairs Committee.
"It is not mandating Chevron to pull out of Burma, but the provisions are tough enough to make them rethink their operations in that country," a congressional aide told AFP, referring to Myanmar by its former name.
Chevron is one of biggest Western companies in Myanmar, holding a 28 percent minority share in the Yadana natural gas project following its acquisition of another US energy giant, Unocal, in 2005.
The United States has already imposed substantial trade, investment and diplomatic sanctions on Myanmar, but Chevron's operations predate an enhanced 2003 US trade embargo.
Under Myanmar law, if Chevron sold its stake, it might have to pay the military junta much of the company's capital gains on the project -- estimated to be around 500 million dollars. The proposed sanctions would bar Chevron from making such a payment.
Legislative aides said the proposal was similar to legislation approved in the late 1980s when the US Congress, in a bid to fight apartheid in South Africa, stopped US corporations based in the country from deducting taxes imposed by authorities in Pretoria. It led to a higher tax burden, and several US companies chose to withdraw.
Other measures unveiled in the sanctions package were aimed at stopping the US import of gemstones from Myanmar through third countries, and tightening a freeze on the assets of the country's political and military leaders.
In addition, steps would be taken to prevent visits to the United States by military junta officials directly linked to the recent bloody crackdown.
The UN Security Council last week criticised the junta for its brutal crackdown on protests, and urged the regime to heed the UN's calls for talks with pro-democracy groups and called for the release of political prisoners.
Copyright © 2013 AFP. All rights reserved. More »