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.
“… 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.”