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To: Ernest_at_the_Beach
Thanks for the ping. This powderkeg is gonna blow, sooner or later.
21 posted on 07/26/2003 10:38:51 AM PDT by BOBTHENAILER (Somehat)
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To: All
Traders with 'Rogue' States May Face Sanctions

July 25, 2003
The Financial Times
Guy Dinmore

US and foreign companies are coming under scrutiny for their dealings with states deemed by Washington to be sponsors of terrorism, particularly Iran and Syria, but officials say the Bush administration is hesitating before tightening economic sanctions.

Pressure for action is mounting from various quarters, including pension funds and some US state treasuries, as well as pro-Israeli lobby groups and a vocal contingent in Congress.

Brad Sherman, a California Democrat and member of the committee on international relations, asked at one recent hearing why the US was prepared to go to war with Iraq but was not more active in applying economic tools to Iran.

"It's as if we are more willing to risk the lives of our servicemen and women than we are to inconvenience the corporate sector," he said of what he called the Bush administration's "don't ask, don't tell" policy towards US firms trading with rogue states.

Ileana Ros-Lehtinen, a Florida Republican and chair of the House sub-committee on the Middle East and Central Asia, is leading efforts to pass legislation that would tighten existing sanctions against Iran and Libya, and close loopholes that allow the foreign subsidiaries of US companies to do business with Iran.

The legislation would amend the 1996 Iran-Libya Sanctions Act (Ilsa) which empowers the president to punish non-US companies investing more than $20m in the energy sectors of the two countries. The European Union strongly opposed Ilsa and neither President George W. Bush nor his predecessor, Bill Clinton, has applied it.

The separate Syrian Accountability Act, also under consideration, would seek to check the growing business links between the US and Syria. Colin Powell, the secretary of state, used the act as a lever in his talks with Bashir Assad, the Syrian president, in May.

"Diplomacy has run its course with the Syrians and Iran," commented Yleem Poblete, staff director of the House sub-committee. "The sanctions regime will give our European allies a chance to join forces with the US short of military action."

More radically, Congressional staffers say there is also discussion of blacklisting foreign and US businesses involved with Iran with the intention of preventing them from securing US-funded contracts in Iraq.

Such a list was drawn up in the Pentagon this year but not implemented. US officials pointed out that Halliburton, headed by Dick Cheney before he became vice-president, has contracts with Iran through its foreign subsidiaries but was also awarded the main contract to run Iraq's oil fields.

As CEO of Halliburton, Mr Cheney lobbied the Clinton administration to ease sanctions on Libya and Iran. As vice-president, he led the National Energy Review which concluded in 2001 that the US should "level the playing field for US companies overseas" and recommended a comprehensive review of sanctions with consideration given to US "energy security".

The Bush administration is also resisting pressure to use Ilsa to punish foreign companies. Officials say they are comfortable at present with the co-operation of the European Union and Japan in applying joint pressure on Iran to open its nuclear programme to full international scrutiny.

Enforcing Ilsa, officials say, would lead to a damaging trade dispute over the legality of extra-territorial sanctions. Companies in the UK, Italy, Spain, Australia and Japan, all US allies in the war on Iraq, have interests in Iran's energy sector.

This week Mr Bush warned both Iran and Syria they would be held accountable for what he called their support of terrorists they harboured. Diplomatic relations and contacts with Syria continue, but the White House is still reviewing its policy towards Iran after breaking off direct talks in Geneva in May on the subject of Iraq.

"Will they enforce Ilsa? The answer is we don't know," said one executive of a European company with offices in Iran. "Things are racheting up, but it's difficult to know where they are going."

Roger Robinson, a former National Security Council official who heads Conflict Securities Advisory Group dealing with global risk assessment, says the worsening US-Iran relationship has heightened the perceived risk of doing business with states designated as sponsors of terrorism.

"We take note of a new security-minded consciousness among companies planning to enter Iran," he told the FT. "Relatively small amounts of equipment, technology and revenue flows can have an inordinately significant impact on share value and corporate reputation."

His company's database lists 400 publicly traded companies worldwide, including 35 major US corporations, that deal with "terrorist-sponsoring" countries, excluding Cuba. The US Treasury is one of his new clients.

Mr Robinson told the House subcommittee that it was primarily the "largest and most well-known companies in the world that have the risk appetite to conduct business with government sponsors of terrorism". Many of those firms are found in the retirement portfolios and mutual funds of millions of Americans, he added.
22 posted on 07/26/2003 11:01:18 AM PDT by DoctorZIn (IranAzad... Until they are free, we shall all be Iranians!)
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