Press Releases
NFTC in the News
Publications
Blog



Press Releases



NFTC President Delivers Remarks on the Costs of Sanctions, U.S. Humanitarian Trade Policy
Date: 2/14/2013
Written By: Jennifer Cummings, The Fratelli Group for NFTC, (202) 822-9491

Washington, DC –National Foreign Trade Council (NFTC) President Bill Reinsch delivered remarks yesterday on the costs of sanctions at a Georgetown University Law Center event themed, “The Evolution of Economic Sanctions: Increasingly Financial, Multilateral, and Robust.” During a panel discussion on “The Legal and Economic Impacts of Financial Sanctions on Targeted Activities and Affected Institutions,” Reinsch shared his views on the ineffectiveness of national, state and local sanctions and U.S. humanitarian trade policy.

Reinsch stated:

“In the case of Iran sanctions, for example, U.S. law and policy permit humanitarian trade – largely agricultural and medical items – pursuant to licenses granted by the Office of Foreign Assets Control (OFAC) at the Treasury Department. However, Iran’s largest banks are sanctioned by executive order without including a humanitarian exception. In turn, OFAC licenses expressly prohibit direct or indirect involvement of these banks. This has created enormous uncertainty in the exporting community and among banks. Companies that have those licenses find it difficult to obtain financing for their exports because banks find it easier to avoid all transactions with Iran rather than trying to distinguish between the ‘good’ ones and the ‘bad’ ones, even though the former are documented with a government license. The result is that it is virtually impossible to find a bank willing to finance a humanitarian transaction.

“… In our view, state and local sanctions are particularly pernicious for legal, foreign policy, and practical reasons.

“First, courts have generally found them unconstitutional. … There are also practical issues. When sanctions move into new areas, such as requiring state pension funds to divest themselves of stock in companies that do business with sanctioned countries, they create a new category of victims besides companies – retirees – who have generally been slow to identify their stake in these measures.

“State sanctions also create significant new compliance costs for business because of the need to deal with potentially 50 different laws and standards. With divestment sanctions, for example, a company could be in compliance with California law and in violation of New Jersey law at the same time. If it divested to comply with New Jersey law, it could be sued in California.”

About the NFTC
Advancing Global Commerce for Nearly A Century- The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
Follow us on: