US embassy cable - 03RANGOON1337

C O N F I D E N T I A L RANGOON 001337 
 
SIPDIS 
 
BEIJING PASS CHENGDU 
BANGKOK FOR US CUSTOMS SERVICE 
STATE FOR EAP/BCLTV, EB 
COMMERCE FOR ITA JEAN KELLY 
TREASURY FOR OASIA JEFF NEIL 
USPACOM FOR FPA 
 
E.O. 12958: DECL: 10/22/2013 
TAGS: ETRD, ECON, BM, Economy 
SUBJECT: BURMA SANCTIONS: IF YOU CAN'T BEAT 'EM, CHEAT 
 
REF: RANGOON 1184 (NOTAL) 
 
Classified By: CDA a.i. Ron McMullen For Reasons 1.5 (B,D) 
 
1. (C) We've been hearing tales of cheating to circumvent new 
U.S. economic sanctions, particularly the ban on importing 
Burmese products into the United States.  Though we don't 
have a sense yet of the volume of this malfeasance, it's 
becoming clearer that some exporters of garments and seafood, 
unwilling to give up easily, are relabeling their products or 
transshipping them through regional countries to the United 
States.  This is not at all surprising, as the garment 
industry in particular, which relied almost exclusively on 
the U.S. market, has been hit very hard by the new sanctions. 
Though most Burmese seafood goes to Asia and Europe, some 
exporters relied on U.S. sales.  In CY 2002, $27 million 
worth of Burmese seafood was imported into the United States. 
 In CY 2003, $19 million worth had already arrived in the 
United States when the sanctions took effect in late August. 
 
2. (C) Businesspeople with whom we spoke provided second-hand 
accounts of local garment manufacturers keeping a fraction of 
their workforce in place, sewing "Made in" China, Korea, or 
Taiwan labels on garments destined for the United States. 
Corroborating this, we've noticed that private shops around 
Rangoon selling "seconds" from local garment factories have 
started stocking a peculiar number of items labeled "Made in 
Korea."  As most garments manufactured in Burma are non-quota 
items, it seems strange to relabel locally made products 
except to evade an embargo.  U.S. Embassy officials have also 
unexpectedly been denied access to both Burmese and 
Korean-operated garment factories in recent weeks. 
 
3. (C) On the seafood side, a longtime expatriate seafood 
exporter, who sells exclusively to Europe, told us in 
confidence that many of his less scrupulous colleagues were 
sending their shrimp and fish to Malaysia or Indonesia for 
relabeling and onward shipment to the United States. 
Separately, econoff surreptitiously overheard two boozy local 
businessmen involved in seafood exporting talking about the 
extra expense and difficulties of getting their product to 
the United States using a third country. 
McMullen