Law for Business 12th Edition by James Barnes,Terry Dworkin,Eric Richards

Exercise 4

In response to numerous human rights violations perpetrated by the government of Burma (Myanmar), Massachusetts adopted a statute generally barring state entities from buying goods or services from any person (defined to include a business organization) identified on a restricted purchase list of those doing business with that country. The restricted list includes any business (domestic or foreign) that either is currently doing business in Burma or transacts such business at some future date. Three months later, Congress passed a statute (Burma Act) imposing a set of mandatory and conditional sanctions on Burma. This federal law has five basic parts. First, it imposes sanctions directly on Burma. Second, it authorizes the president to impose further sanctions subject to certain conditions. This second section makes clear that the sanctions apply only to U.S. persons or businesses and to new investment in Burma; foreign businesses or U.S. companies already doing business there are exempt from its coverage. Third, the statute directs the president to work to develop a comprehensive, multilateral strategy to bring democracy to and improve human rights practices and quality of life in Burma. Fourth, it requires to the president to periodically report to Congress any progress toward democratization and better living conditions in Burma. And fifth, the president is authorized to waive, temporarily or permanently, any sanctions under the law if he determines and certifies to Congress that the application of such sanction would be contrary to the national security interests of the United States. The National Foreign Trade Council, a nonprofit corporation representing many companies doing business in Burma, argued that the Massachusetts statue was preempted by the federal Burma Act. Is the Massachusetts statute preempted by the federal Burma Act? Explain.