Watching Government - Updating sanctions

Aug. 18, 2003
Updating sanctions An economic sanctions policy bill may reappear on the US congressional agenda this fall, with competing voices jockeying for the White House's attention.

An economic sanctions policy bill may reappear on the US congressional agenda this fall, with competing voices jockeying for the White House's attention.

In the Senate, Foreign Relations Committee Chairman Richard Lugar (R-Ind.) is expected to reintroduce legislation seeking a more deliberative, business-friendly approach to US sanctions policy. Meanwhile in the House, a group of lawmakers led by International Relations Middle East Subcommittee chair Rep. Ileana Ros-Lehtinen (R-Fla.) will urge tightening of the Iran-Libya Sanctions Act (ILSA). The law, initiated in 1996, is designed to punish non-US oil companies that invest $20 million in either country. It gives President George W. Bush the authority to waive or exempt countries or companies from various financial sanctions (OGJ, July 7, 2003, p28). Ros-Lehtinen's push to strengthen the law comes as the Department of State readies a report due before Congress next February detailing how effective ILSA sanctions have been since lawmakers updated the legislation in 2001.

Sanction fever cooling

The US government imposed 59 new unilateral sanctions during 1997-2001. That represents a significant drop in frequency from 1996, when 26 such sanctions were codified in one year, according to the Washington, DC-based USA-Engage. Oil companies and other multinational concerns started USA-Engage in 1997 after Congress and the White House installed tough trade restrictions against several resource-rich countries including Iran, Libya, Myanmar, and Sudan. The new chairman of the group, which represents 670 small and large businesses, agriculture groups and trade associations, is ExxonMobil Corp. veteran executive Robert Haines.

Many of the 1996 sanctions were later repealed or updated, often because key allies said they would ignore the new rules. Oil executives say they are encouraged by recent administration and congressional efforts to be more selective regarding sanctions. New "smart" sanctions often freeze the assets of people and groups believed to be involved in terrorism, drug production, or proliferation of weapons of mass destruction and less often apply to entire nations. But business leaders fret that policymakers still tend to overuse trade restrictions.

Looking ahead

Industry groups hope Congress, starting with the Senate, will take a serious look at reforming the way sanctions now go on the books.

Lugar's bill will seek to establish guidelines, procedures, and informational requirements on all future sanctions before unilateral economic sanctions are considered or imposed by the Congress or the president. It is expected to call on policymakers to demonstrate the economic costs and benefits of issuing a sanction before it is implemented. The legislation also is likely to direct the White House and Congress to consider all available policy options before imposing a sanction that does not have the support of the international community.

The bill likely will address only future unilateral economic sanctions and will not seek to repeal existing laws, such as ILSA. It also will demand that policymakers establish regular reporting and sunset requirements, so that sanctions are terminated unless a continuing justification exists.