U.S. Economic Sanctions Hurt U.S. Businesses by Creating Uncertainty, Varying Rules, Says NFTC Head
U.S. policy on economic sanctions against countries like Iran "has created enormous uncertainty in the exporting community and among banks," said Bill Reinsch, president of the National Foreign Trade Council, in a speech at the Georgetown University Law Center Feb. 14. He said companies with export licenses to such countries "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."
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On the Iran sanctions, U.S. law and policy permit humanitarian trade such as agricultural and medical items under licenses granted by the Treasury Department's Office of Foreign Assets Control, he said, but Iran's largest banks are sanctioned by executive order without including a humanitarian exception.
Reinsch said "state and local sanctions are particularly pernicious for legal, foreign policy, and practical reasons." He said courts have "generally found them unconstitutional," and there are practical issues such as 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. In such cases "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 potential new costs for business because of the need to deal with "potentially 50 different laws and standards," Reinsch said.