Introduction and Summary: "The overall situation in Burma has changed little over the past six months. The Burmese government released most persons arrested during the government?s May 2003 attack on Aung San Suu Kyi and her convoy. However, many pro-democracy supporters rounded up in the aftermath of the attack remain in detention; National League for Democracy (NLD) offices remain closed; senior opposition party leaders, including Aung San Suu Kyi and U Tin Oo, remain largely incommunicado under house arrest; and the government refuses to investigate the May attack. The Government of Burma (GOB) also has arrested more people for their peaceful political activities over the past six months, while over a thousand persons remain jailed for their political beliefs. The ruling State Peace and Development Council (SPDC) has focused efforts on promoting its own seven-step ?road map” to a "genuine and disciplined democratic system." Although the SPDC unveiled the plan in August 2003 following the announcement of new U.S. sanctions, the junta has yet to set a timetable for the transition or give assurances that all political parties and ethnic groups will be included in a transparent and democratic process. In recent months, the SPDC and the Karen National Union (KNU) entered into serious cease-fire negotiations, which could bring an end to decades of conflict. The U.S. consults with the European Union and others to maintain pressure on the Burmese junta to make progress toward a political transition. Following the events of May 30, the EU expanded the scope of its asset freeze and visa restrictions; Canada imposed visa restrictions; and Japan froze new development assistance to the junta. The UK has frozen over 3500 pounds of assets while other countries have blocked only minimal amounts; Japan is now providing assistance to some projects. No other country has adopted the economic sanctions imposed by the U.S. The SPDC?s dismal economic policies have led to widespread poverty and the flight of most foreign investors. New U.S. economic sanctions have also had an impact on at least one sector of the economy; dozens of garment factories that had relied on exports to the United States have now closed. In addition, sanctions have caused the Burmese to rely more on euros than on dollars for trade. We have no statistics on the impact of sanctions on tourism. The Burmese government abruptly reversed its ten-month old rice liberalization policy in January 2004, banning all exports of rice and other staple commodities. The 31-country member Financial Action Task Force (FATF), recommended countermeasures on the GOB, since the GOB had not implemented money-laundering legislation. Most countries imposed additional reporting requirements, and the U.S. banned correspondent relations with Burmese financial institutions. The SPDC continued to abuse severely the human rights of its citizens. Freedom of speech, press, religion, assembly, and association remain greatly restricted. Burmese citizens are not free to criticize their government. Egregious abuses of ethnic minority civilians by the Burmese military including rape, torture, execution and forced dislocation continue. Forced labor, trafficking in persons, and religious discrimination remain serious problems. Immediate U.S. policy objectives in Burma are the release of Aung San Suu Kyi, other NLD officials, and all political prisoners, as well as the start of genuine dialogue on democracy and political reform, including the re-opening of NLD party headquarters and all NLD regional offices. Overall U.S. policy goals include establishment of constitutional democracy, respect for human rights, cooperation in fighting terrorism, regional stability, a full accounting of missing U.S. servicemen from World War II, combating HIV/AIDS, combating trafficking in persons and increased cooperation in eradicating the production and trafficking of illicit narcotics. The U.S. will continue to urge other nations to use sanctions and diplomacy to press the junta to release Aung San Suu Kyi and all political prisoners and to allow all political parties to operate. The U.S. also encourages all countries with a major interest in Burma, particularly Burma?s immediate neighbors, ASEAN, and Japan, to use their influence to convince the government to undertake immediate steps on political reform and human rights. We will continue to urge the international community to support the UN Secretary General in his efforts to start genuine talks on a political transition in Burma..."