The European Communities(1) and their Member States (together better known and hereinafter referred to as the "EU" or "European Union"), by undersigned counsel, hereby submits this amicus curiae brief in support of the National Foreign Trade Council's ("NFTC") action for declaratory, injunctive, and other relief requesting that the Court enjoin enforcement of and declare unlawful the Act of June 25, 1996, chapter 130, ( 1, 1996 Mass. Acts 210, codified at Mass. Gen. Laws, ch. 7, (( 22G-22M ("Massachusetts Burma Law").

The purpose of this brief is not to expand on the U.S. constitutional arguments that have been articulated by the NFTC. Rather, the European Union seeks to assist this Court in understanding the concrete and negative ramifications that the Massachusetts Burma Law is having on the EUs dealings with the United States, in terms of both foreign policy and commercial relations.

The EU respectfully calls to the Court's attention the following points: (i) the Massachusetts Burma Law interferes with the normal conduct of EU-U.S. relations; (ii) the Massachusetts Burma Law has created a significant issue in EU- relations, including raising questions about the ability of the U.S. to honor international commitments it has entered into in the framework of the World Trade Organization ("WTO"); and (iii) failure to invalidate the Massachusetts Burma Law risks a proliferation of similar non-federal sanctions laws, aggravating these effects. In addition, the Court may wish to note that the EU's position on the Massachusetts Burma Law does not reflect indifference to the situation in Burma or support for its present leadership ( Appendix 1 sets out the policies of the EU towards Burma.

I. The Massachusetts Burma Law Interferes With The Normal Conduct of EU-U.S. Relations

The European Union and its Member States have always conducted foreign relations with the Government of the United States. The EU notes that the individual American states neither send ambassadors to nor receive ambassadors from any foreign country and that the individual states do not make treaties or international trade agreements. As a matter of international comity, moreover, no national government can engage directly with an individual U.S. state in a matter of foreign affairs. To do so would create insurmountable obstacles to effective diplomacy by creating confusion about what entity speaks for and acts on behalf of American interests.

Foreign affairs are conducted among governments and international organizations with legal competence to take international action, such as the recognition of governments, the regulation of trade, or the provision of foreign assistance. Foreign policy is made by governments or international organizations with such authority, and effective foreign relations are undertaken only by governments and international organizations that can make and keep commitments in these areas. Accordingly, all foreign policy activities of the European Union and of its individual Member States have traditionally involved the Government of the United States and not the governments of the individual U.S. states.

The Massachusetts Burma Law constitutes a direct interference with the ability of the EU to cooperate and carry out foreign policy with the United States. Contrary to the centuries-old recognition that diplomatic communications with the United States are conducted through its national government, under the Massachusetts Burma Law, Massachusetts has purported to conduct foreign policy on a state level by seeking to force the EU and its Member States to impose sanctions on Burma and EU companies to abandon activities in Burma. The EU and its Member States had specifically chosen not to ban such activities in favor of other policy measures toward Burma. The Massachusetts Burma Law is thus aimed at influencing the foreign policy choices of the EU and its Member States. and at sanctioning the activities of EU companies which are not only taking place in a third country but which are also lawful under EU and Member States' laws. In this context, one may also refer to a letter from a Massachusetts State representative to the European Commission President, stating that the "one reason" for the Massachusetts Burma Law is "to pressure that country's illegal government to end its violations of the most basic democratic rights of its citizens." See Letter dated February 10, 1998 from Representative Byron Rushing to European Commission President Jacques Santer.

Appendix 2.

Massachusetts officials have sought to engage the EU in direct discussions of Burma policy. While the EU has been willing to explain its Burma policy in writing to a Massachusetts representative, see Letter dated March 30, 1998 from Ambassador Hugo Paemen to Representative Byron Rushing (Appendix 3), it has engaged in direct discussions only with the participation of U.S. State Department officials, because it regards actions of this kind as an interference with normal diplomatic relations and channels. Under settled authority, the EU simply cannot deal with the Commonwealth of Massachusetts on matters of Burma policy. The effects of the Massachusetts Burma Law are not limited to requests for communications outside the normal diplomatic channels, for the settled lines of authority serve fundamental purposes related to the content of foreign policy and permit the United States to speak clearly and with one voice in its relations with other nations. From the perspective of the EU, the Massachusetts Burma Law weakens the ability of the United States Government to conduct foreign policy in this manner with respect to Burma.

The enactment of the Massachusetts Burma Law has undercut the ability of the EU to make foreign policy with the U.S. While the U.S. Government has rejected the use of an extraterritorial secondary boycott, an individual state has imposed just such a boycott to the detrimental effect of EU interests. As a secondary boycott, targeted not at the regime in Burma, but at nationals of third countries that may do business in Burma, the Massachusetts Burma Law is particularly disruptive to cooperation on policies among governments, because such boycotts injure the interests of the countries with which policies might be coordinated. As we explain next, this indeed has been the Massachusetts Burma Law.

II. The Massachusetts Burma Law Has Created an Issue of Serious Concern in EU-U.S. Relations

At the outset, it must be noted that the EU's position on the Massachusetts Burma Law does not reflect indifference to the situation in Burma or support for its present leadership.(2) Both the European Union and the United States have taken significant diplomatic action with respect to developments in Burma. However, the Massachusetts Burma Law charts a very different course. It is a secondary boycott ( an extraterritorial economic sanction that is targeted not at the regime in Burma, but at nationals of third countries that may do business in Burma.

The adverse effect of Massachusetts' action on EU interests has become one of the leading issues in EU-U.S. discussions on Burma, focusing the governments on an area of conflict and away from opportunities for cooperation on supporting human rights and political reform in Burma. Moreover, the irritation caused by this legislation in the EU and its Member States has strained the political and economic climate between the EU and the U.S. In fact, the EU has felt obliged as a result of the Massachusetts Burma Law to lodge formal protests with the Government of the United States rather than focusing its efforts on working cooperatively to achieve shared foreign policy objectives. On January 22, 1997, the European Union delivered an official Note Verbale to the United States Department of State protesting the Massachusetts Burma Law, stating that it violates U.S. international obligations under the agreements of the World Trade Organization. Appendix 4. On July 30, 1997, the European Union formally requested consultations because of concern that the Massachusetts Burma Law conflicts with the U.S. international obligations under the agreements of the World Trade Organization. See United States ( Measure Affecting Government Procurement: Request to Join Consultations, Communication from the European Communities, WTO WT/DS96/2 (July 30, 1997). In addition, the Massachusetts Burma Law has been the topic of intensive discussions between the European Union and the United States at the highest levels, including at the bi-annual EU-U.S. Summit.

Furthermore, as far as the EU is concerned, the Massachusetts Burma Law raises questions about the ability of the U.S. to honor commitments which it has entered into within the framework of the WTO, commitments which are fully binding on the Government of the United States. Moreover, the Massachusetts Burma Law is having a direct effect on the commercial interests of the European Union.(3) EU companies ( including those with no commercial presence with the Commonwealth ( now receive unsolicited requests from the Commonwealth of Massachusetts for detailed information on possible business activities in Burma. The information is intended for use in drafting Massachusetts' restricted purchase list. This list is not only used by the Commonwealth of Massachusetts, but the EU understands it is distributed by Massachusetts for use by other state and local governments and private parties that may wish to target companies with activities in Burma. The European Union is concerned that these activities inevitably have a chilling effect on companies' business activities in the United States.

III. Failure to Enjoin Massachusetts Burma Law Rim a Proliferation of Similar Sanctions Laws

The EU respectfully expresses its concern that failure to enjoin the Massachusetts Burma Law will lead to the proliferation of other U.S. state and local sanctions laws. Former Governor William Weld, on signing the law, specifically expressed the hope that other U.S. states would follow Massachusetts' example. At present there are 20 municipalities, including New York City and San Francisco, that have passed laws effectively prohibiting their public agencies from contracting with companies that do business in Burma. An additional nine states and municipalities have considered or are now considering such proscriptions.

State and local sanctions laws are not limited to Burma. At least six U.S. municipalities have enacted measures purporting to regulate business activities in Nigeria, Tibet, or Cuba, and 18 state and local governments have considered or are considering similar measures restricting business ties to Switzerland, Egypt, Saudi Arabia, Sudan, Pakistan, Turkey, Iran, North Korea, Iraq, Morocco, Laos, Vietnam, Indonesia, or China.

The potential proliferation of state and local efforts to conduct foreign policy would greatly increase the difficulties that the EU has encountered in dealing with the United States on policies towards third countries. Beyond that, the United States and the European Union have expended considerable effort in recent months seeking to resolving their differences over U.S. extraterritorial economic sanctions. This effort has not yielded progress on the issue of extraterritorial sanctions imposed by state and local governments, a shortcoming that is of considerable concern to the EU. In recognition of this danger of proliferation of sanctions measures, the EU and the U.S. agreed at the EU-U.S. Summit on May 18 on a set of principles covering the future use of sanctions in the context of the Transatlantic Partnership on Political Co-operation. This included agreeing that the EU and the U.S. "will not seek or propose, and will resist, the passage of new economic sanctions legislation based on foreign policy grounds which is designed to make economic operators of the other behave in a manner similar to that required of its own economic operators" and that such sanctions will be targeted "directly and specifically against those responsible for the problem." Crucially, it was also agreed that it is in the interests of both the EU and the U.S. "that the policies of governmental bodies at other levels should be consonant with these principles and avoid sending conflicting messages to countries engaged in unacceptable behavior." The EU believes that the enactment of more state or local sanctions laws will contradict the above-mentioned engagements and would thus undermine the joint efforts of the EU and the U.S. Government in this respect.

For the foregoing reasons, the European Union supports the NFTC's action for declaratory, injunctive, and other relief requesting the Court to bar enforcement of and declare unlawful the Massachusetts Burma Law.

Dated: August 13, 1998

¹The EC consists of the following Member States: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom. The EC enjoys legal personality both internally and internationally under the applicable provisions of the EC Treaty. _ For information, examples of EU and U.S. policies towards Burma are set out in Appendix 1. _ EU-U.S. commerce is substantial, amounting to approximately $372 billion in direct investment by EU companies in the United States and approximately $8 billion in direct investment by EU companies in the Commonwealth of Massachusetts. By best estimate, the restricted purchasing list includes 53 foreign companies with subsidiaries, affiliates, or branches in Massachusetts and 228 foreign companies not established in Massachusetts. See Appendix

²For information, examples of EU and U.S. policies toward Burma are set out in Appendix 1.

³EU - U.S. commerce is substantial, amounting to approximately $372 billion in direct investment by EU companies in the United States and approximately $8 billion in direct investment by EU companies in the Commonwealth  - now receive unsolicited requests from the Commonwealth of Massachusetts. By best estimate, the restricted purchasing list includes 53 foreign companies with subsidiaries, affiliates, or branches in Massachusetts and 228 foreign companies not established in Massachusetts. See Appendix 5.

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