Emergency Committee For American Trade - Publications

Sanctions Reform

Unilateral Economic Sanctions

The end of the Cold War and increasing global economic integration pose great challenges and opportunities for U.S. trade and foreign policy. Engagement continues to be America’s best tool to meet these challenges and to promote freedom, human rights, and security, as well as continued economic growth. The dramatic increase in the imposition of U.S. unilateral sanctions, however, has undermined U.S. engagement in the global economy and poses a serious threat to U.S. commercial and foreign policy interests.

As important as the various foreign policy and humanitarian goals that are being pursued through unilateral sanctions may be, without multilateral support the sanctions infrequently achieve their objectives. A study by the Institute for International Economics found that the effectiveness of unilateral sanctions has declined significantly over the last 20 years and that only one-fifth of the sanctions imposed in the 1970s and 1980s had any positive outcome. The U.S. State Department’s Advisory Committee on International Economic Policy also concluded that unilateral sanctions usually fail to change the behavior of target countries. For example, in the case of the Soviet grain embargo, it is estimated that the embargo cost the United States $2.3 billion as the result of lost farm exports and the cost of compensation to U.S. farmers. It is estimated that the increased cost to the Soviet Union of buying embargoed commodities from alternative suppliers was only $225 million, and the embargo did not achieve its objective of compelling Russia to withdraw from Afghanistan.

The increasing ineffectiveness of unilateral sanctions is due largely to the declining economic leverage of the United States and the growing ability of targeted countries to secure critical imports, market access, and financing from countries other than the United States. Targeted countries can almost always find a European, Japanese, or other supplier or investor to provide the restricted goods, services, or investment. Unilateral sanctions are particularly likely to fail to change the behavior of countries with authoritarian regimes that are relatively more isolated from world opinion. Moreover, unilateral sanctions can have the counterproductive effect of strengthening the control of despotic regimes and ruling elites, while inflicting great pain on innocent citizens.

Unilateral sanctions are bad economic policy because they impose significant costs on U.S. firms and workers. The Institute for International Economics concluded that U.S. sanctions cost between $15 and $20 billion in lost exports in 1995, translating into a loss of support for 200,000 American jobs. While this damage estimate is large, it does not reflect collateral costs arising from sanctions, including sales lost due to concerns about the United States as an unreliable supplier and the costs associated with re-entering a market after sanctions are lifted.

When the United States acts alone, it creates market opportunities for foreign suppliers to demonstrate their products and increase their market share. For example, when the United States banned exports of U.S. equipment for use in the construction of the Siberian pipeline, it opened up a previously U.S.-dominated market niche for Arctic drilling equipment to European and Japanese suppliers. Similarly, when the United States cut off sales of American wheat to protest the Soviet invasion of Afghanistan, it created the opportunity for France, Canada, Australia, and Argentina to increase their wheat sales to Russia. Russia and other foreign buyers continue to this day to restrict purchases of American wheat, based on their concerns that the United States may impose a new embargo.

Moreover, the frequent use of unilateral sanctions is having a cumulatively adverse impact on U.S. suppliers in markets throughout the world. It has encouraged the "de-Americanization" of overseas production, particularly in the high technology sector, with foreign firms deliberately designing their products without U.S. parts and know-how in order to ensure that they would not be subject to U.S. unilateral sanctions. Reliability issues are also severely handicapping U.S. companies bidding for infrastructure projects in the developing world.

The negative impact of unilateral sanctions imposed at the U.S. federal level is being compounded by the proliferation of state and local unilateral sanctions laws. For example, many states and localities have enacted bans on procurement from firms engaged in trade with Myanmar or Indonesia. The state and local sanctions laws are subjecting the United States to WTO challenges and putting U.S. exports at the risk of retaliation. Local sanctions legislation is also risking the loss of employment and exports at the U.S. subsidiaries of foreign firms that are an important source of U.S. exports. Unilateral sanctions also jeopardize U.S. foreign policy interests. Unilateral sanctions undermine relations with major U.S. allies, as exemplified by the increased tensions with Canada and the EU over the Helms-Burton Cuba and the Iran-Libya sanctions. These measures have prompted WTO challenges and led to intensive consultations to resolve the disputes.

Unilateral sanctions undercut the United States’ ability to promote national security and foreign policy interests through greater engagement. In the post-Cold War era, trade and investment have become the most effective means to promote economic reform and democracy throughout the world. As U.S. policy in China and elsewhere demonstrates, engagement is far more effective in promoting civic and market reforms than punitive economic measures. Similarly, economic disengagement can undermine the efforts of humanitarian and religious groups that are working to assist those living under repressive governments.

In 2000, Congress and the Clinton Administration reached agreement on the Trade Sanctions Reform and Export Enhancement Act of 2000, enacted as part of the FY 2001 Agriculture Appropriations Act, which eased some sanctions. Unilateral sanctions will remain a significant issue this year. The following paragraphs discuss last year’s efforts to reform sanctions and the prospect for sanctions reform legislation in 2001, as well as key issue-specific and country-specific sanctions issues.

Trade Sanctions Reform and Export Enhancement Act

In October 1999, Congressman Nethercutt (R-WA 5th) and others introduced H.R. 3140, the Food and Medicine in the World Act, which sought to require Congressional approval before the imposition of any unilateral agricultural or medical sanction against a foreign country or foreign entity. After negotiations between interested House and Senate members, a revised version of this provision was included in the FY 2001 Agriculture Appropriations Act, enacted on October 28, 2000. The final legislation, the Trade Sanctions Reform and Export Enhancement Act of 2000, represents significant compromises from the original bill, but moves forward substantially the effort to reform trade sanctions. This law:

Restricts the President from imposing unilateral agricultural or medical sanctions, unless the President submits a report to Congress, not later than 60 days before the sanction is to be imposed and a joint resolution is enacted reflecting Congress’ approval of the sanction.

This restriction does not apply in cases where there is a declaration of war or the authorization or imminent involvement of the Armed Forces of the United States. This restriction does not apply to provisions on the U.S. Munitions List, controlled under the Export Administration Act, used in the development of chemical or biological weapons.

Requires the President to terminate any unilateral agricultural or medical sanction in effect on October 28, 2000.
Requires the termination of any unilateral agricultural or medical sanctions imposed pursuant to these procedures two years after their imposition unless the President reports to Congress on the need to extend the sanctions and Congress passes a joint resolution approving the President’s report.
Requires that exports of agricultural commodities, medicine, or medical devices to Cuba or any country found to have repeatedly provided support for international terrorism be made pursuant to one-year licenses (except for exports to Syria or North Korea). The Administration is required to report to Congress on such licenses.
Prohibits U.S. assistance, including financing, for exports to Cuba, or for commercial exports to Iran, Libya, North Korea, or Sudan. The President may waive application of this provision with respect to Iran, Libya, North Korea, and Sudan for national security or humanitarian reasons.
Prohibits financing of agricultural sales to Cuba, except by payment of cash or financing by third-country financial institutions.
Codifies in statute the existing travel ban on Cuba.

The Bush Administration is in the process of preparing draft regulations to implement these provisions. Several significant issues are being debated, including the restrictiveness of the export control requirements, whether the same licensing rules cover all countries and the availability of commercial financing for sales to Iran and Libya. The interim regulations were due on February 25, 2001, but will not be released until March 2001 at the earliest.

Sanctions Reform Legislation

This year, there will be a renewed effort to seek enactment of the sanctions process reform proposals that were contained in S. 757 and H.R. 1244, the "Enhancement of Trade, Security, and Human Rights through Sanctions Reform Act," proposed last year by Senators Lugar (R-IN) and Hagel (R-NE) and then-Senator Kerrey (D-NE) and 35 additional cosponsors in the Senate and Congressmen Crane (R-IL 8th) and Dooley (D-CA 20th) and 110 additional cosponsors in the House. The legislation does not prevent the imposition of sanctions, but seeks to establish a more deliberative and disciplined approach to U.S. sanctions policy by creating a common sense procedural framework for considering unilateral sanctions. It would:

Require -- before a unilateral sanction is imposed -- that the Congress and the President request information and report on the effectiveness of the proposed sanction; the economic costs to U.S. agriculture and industry; whether it would create a backlash against U.S. security, humanitarian, or foreign policy objectives, including undermining multilateral cooperation on the objectives; and whether other policy alternatives have been tried;
Set out guidelines for future sanctions initiatives, including providing adequate presidential waiver authority, contract sanctity, and compensation for the agricultural sector when U.S. sanctions hit a major agricultural export market;
Authorize the Department of Agriculture to boost export promotion programs whenever the United States sanctions a major foreign agricultural market to offset losses by American farmers;
Establish the general principle that food exports, including financing of such exports, should be excluded from future U.S. sanctions and that humanitarian factors should be taken into account so that sanctions target only those engaged in improper behavior and not the innocent;
Specify that Congressional and Executive branch sanctions should sunset after two years, but may be reauthorized or intensified if appropriate;
Provide general waiver authority from mandatory sanctions imposed under the Glenn amendment regarding nuclear proliferation; and
Require a report from the Congressional Budget Office on the costs and benefits of the proposed sanctions (else the legislation would be subject to a point of order).

On March 23, 2000, the Senate Foreign Relations Committee narrowly rejected the Senate version of this legislation in a 10-to-8 vote. It is expected that this legislation will be reintroduced and that efforts will continue in 2001 to seek comprehensive sanctions reform.

In February 2001, Senator Lugar, along with Senators Burns (R-MT), McConnell (R-KY) and Roberts (R-KS), introduced the "Agricultural Trade Freedom Act" (S. 333) to exempt agricultural commodities from all unilateral sanctions legislation, unless there is a declaration of war or the President declares agricultural commodity sanctions to be in the U.S. national interest and Congress does not pass a disapproval resolution.

Issue-Specific Sanctions Legislation

Religious Persecution

The International Religious Freedom Act of 1998 created a Special Representative of the Secretary of State for International Religious Freedom who is charged with the responsibility of opposing overseas violations of religious freedom and recommending policies to promote religious freedom abroad. The 1998 Act also created a bipartisan commission to make recommendations and issue a report to the President in May of each year on violations of religious freedom abroad. The Act requires the Administration to prepare an annual report by September 1 of each year on countries engaged in violations of religious freedom and the actions the United States is taking in each country to promote religious freedom. The Administration is required to impose sanctions against countries identified in the annual report as violators of international religious freedom. Sanctions under the Act include limiting U.S. development assistance, restricting export licenses, prohibiting loans by U.S. financial institutions, and requiring U.S. votes against loans from international financial institutions to countries violating religious freedom. The Act also provides the President with authority to waive sanctions in the national interest and to use existing human rights sanctions against a country to satisfy the requirements of the Act.

In May 2000, the Commission on International Religious Freedom released its first report, calling for additional sanctions on China, Russia and Sudan, including the denial of Permanent Normal Trade Relations with China.

On September 5, 2000, the State Department issued its second annual report on religious freedom and expressed concerns with respect to numerous countries, including Afghanistan, China, Iran, Iraq, Myanmar and Sudan. Unlike the first report in 1999, the Executive Summary to the 2000 report also catalogues improvements that countries have made in protecting religious freedom.

Narcotics Enforcement

The Foreign Assistance Act of 1961 requires the President to certify by March 1 of each year whether countries that are major drug producers or drug transshipment areas are fully cooperating with U.S. narcotics enforcement activities. If a country is found not to be cooperating, it is subject to a range of sanctions, including the loss of foreign assistance. The President’s certification decisions may be overturned if Congress passes a joint disapproval resolution within 30 days of the President’s certification announcement. If a country does not meet the certification criteria, the President can waive the criteria if he determines a waiver is in the national interest.

In March 2001, the President certified that Mexico, Colombia, Nigeria, and Paraguay were cooperating fully with the U.S. battle against illicit drugs. The United States announced that Afghanistan and Myanmar would continue to be subject to U.S. sanctions for their continued failure to cooperate with U.S. anti-drug efforts. Cambodia and Haiti were also found not to be cooperating with U.S. anti-drug efforts, but the United States has waived sanctions against these countries on national interest grounds.

Prior to the release of the annual report, six Senators -- Senators Hutchison (R-TX), Feinstein (D-CA), Domenici (R-NM), Bingaman (D-NM), Gramm (R-TX), Kyl (R-AZ), and Sessions (R-AL) -- introduced legislation to waive the annual certification process with respect to Mexico in 2001. This legislation is currently before the Senate Foreign Relations Committee.

Country-Specific Sanctions

Helms-Burton Cuba Sanctions Legislation

The Cuban Liberty and Democratic Solidarity Act of 1996 reaffirmed the existing embargo against Cuba and created a private right of action for U.S. nationals to sue persons who traffic in property expropriated from those U.S. nationals by the Castro regime. The act also requires the Administration to deny visas to foreign nationals who are corporate officers, principals, or controlling shareholders of companies that have been involved in the confiscation of, or trafficking in, expropriated property. The President has the authority to waive the private-right-of-action provisions under Title III of the act for six-month periods, if he determines it is in the national interest and would expedite the transition to democracy in Cuba. The President has no authority to waive the immigration restrictions imposed by the act.

Former President Clinton waived the private right of action provisions under Title III since they were enacted, citing increased efforts by the EU and other allies to encourage democracy in Cuba. The most recent six-month waiver was announced on January 17, 2001 and applies to the period from February 1 to July 31, 2001.

In May 1998, the United States and the EU reached an agreement to resolve the EU’s WTO challenge to the Helms-Burton legislation; under this agreement, the EU agreed to acknowledge the U.S. claims of seized property in Cuba certified by the Foreign Claims Settlement Commission based on certain conditions, to accept a set of Disciplines for Strengthening of Investment Protection, and not to challenge the Cuba or Iran-Libya sanctions laws in the WTO. The set of disciplines agreed to would prohibit governments from providing loans, subsidies, risk insurance, or other support to firms that invest in expropriated property in Cuba and elsewhere. It also would establish a new international registry where individuals or firms could list their expropriation claims, and have governments require companies to check the registry before making foreign investments.

Under the agreement reached with the EU, the United States is required to keep the Title III waiver in effect, seek permanent waiver authority for the immigration sanctions under Title IV, and take no action against EU companies or individuals under the Iran-Libya Sanctions Act. Despite the Clinton Administration’s support for Title IV waiver authority, there has been insufficient congressional support to date to pass the necessary legislation. Senator Helms (R-NC), in particular, urged the Clinton Administration to enforce better the Title IV sanctions and requested in November 2000 that the Administration bar entry to certain executives of a Spanish hotel chain that are allegedly involved in trafficking in property under the terms of the act.

Easing of Cuba Embargo

As described above, U.S. restrictions on trade with Cuba were eased somewhat in 2000 by permitting exports of agricultural goods, medicines, and medical devices under 12-month licenses. This legislation built upon the 1999 Clinton Administration decision to allow the sale of food and agricultural products on a case-by-case basis to non-governmental organizations, re-establish direct mail service, authorize charter flights to Cuban cities other than Havana, and license U.S. citizens and non-governmental organization to send up to $300 per quarter to non-governmental entities. The Treasury Department also simplified somewhat the regulations regarding travel to Cuba. These travel regulations were codified as part of the Trade Sanctions Reform and Export Enhancement Act, which prevents the President from easing these travel restrictions without Congressional approval.

Farm-state and other members of Congress continue to be increasingly interested in easing restrictions on trade with Cuba. In 2001, Senator Baucus (D-MT) and Representative Rangel (D-NY 15th), along with several other members of Congress, introduced a series of bills to end the United States’ embargo with Cuba and to normalize relations. The first (S. 400/H.R. 798) would lift the embargo; the second (S. 401/H.R. 796) would grant Cuba Permanent Normal Trade Relations; and the third (S. 402/H.R. 797) would remove the restrictions on food and medicine exports and repeal the codification of travel restrictions imposed in the 106th Congress, as well as remove limitations on remittances to Cuban citizens. In 2001, Senator Dorgan (D-ND) also introduced legislation (S. 171) to repeal the travel restrictions enacted in 2000 with respect to Cuba and to repeal certain trade sanctions with Cuba, Iran, Libya, North Korea, and Sudan. In the House, Congressman Serrano (D-NY 16th) introduced several bills to allow financing of agricultural sales to Cuba (H.R. 173) and to lift the trade embargo with Cuba (H.R. 174).

On February 21, 2001, the U.S. International Trade Commission released its report, The Economic Impact of U.S. Sanctions with Respect to Cuba (Inv. No. 332-413, USITC Publication No. 3398) that was prepared at the request of the House Ways and Means Committee. The principal findings of the report were that:

U.S. economic sanctions on Cuba had a "minimal overall historical impact" on the U.S. economy, as the United States found alternative suppliers and markets to replace Cuba. Some U.S. industries, including the rice and wheat industries, would likely benefit from the removal of sanctions.
U.S. economic sanctions had a "minimal overall historical impact on the Cuban economy," as Cuba quickly turned to support from the Soviet Union. The loss of Soviet assistance in 1990 had significant adverse effects on the Cuban economy, forcing Cuba to adopt some economic reforms to attract foreign investment. Cuba’s restrictions on investment and economic activity are likely to limit somewhat bilateral U.S.-Cuba economic relations if sanctions are lifted.
In the absence of sanctions, U.S. exports to Cuba would have been approximately $658 million to $1 billion annually, equal to 17 to 27 percent of Cuba’s total imports. In the absence of sanctions, U.S. imports from Cuba would have been (excluding sugar) approximately $69 to $146 million annually.

Iran-Libya Sanctions

In 1995, the United States imposed sanctions against Iran, prohibiting U.S. persons from engaging in trade and investment with Iran. The 1996 Iran-Libya Sanctions Act (ILSA) broadened the existing Iran sanctions by imposing mandatory sanctions against companies that invest in the Iranian or Libyan oil and gas sectors. The Act requires the President to impose two or more of the following sanctions on companies which make investments over a certain dollar threshold in Iran or Libya that contribute to the development of their petroleum sectors: (1) denial of Ex-Im Bank credits; (2) denial of U.S. export licenses; (3) denial of certain loans from U.S. financial institutions; (4) restrictions on financial institutions, including denial of designation as a primary dealer and repository of government funds; (5) a government procurement ban; and (6) import restrictions. The sanctions must remain in effect for two years and can be waived by the President if he determines a waiver is in the national interest.

The Act also imposes sanctions on companies that engage in trade with Iran in goods, services, or technology listed in the applicable UN resolutions, if the trade significantly and materially contributes to Iran’s ability to develop its petroleum or aviation sectors or acquire chemical, biological, or nuclear weapons. The President is required to impose two or more of the sanctions previously listed on companies that engage in prohibited trade with Iran. The Iran-Libya Sanctions Act is scheduled to expire in August 2001.

As part of the agreement reached between the United States and the EU in May of 1998 to resolve the dispute over the Iran-Libya and Helms-Burton sanctions provisions, the United States agreed to waive the imposition of sanctions against the European firms investing in the Persian Gulf South Pars gas field development. The United States also waived sanctions against Malaysian and Russian firms investing in South Pars. The Clinton Administration said that it would not grant automatic waivers to EU firms investing in pipelines that run through Iran to the Caspian Sea. It also declined to give any automatic future waivers to Russia, due to ongoing concerns about the weakness of its export controls. The waivers for the EU, Russian, and Malaysian firms put American companies at a disadvantage, since under a 1995 executive order U.S. firms are prohibited from investing in Iran.

As a result of the Administration’s decision to ease restrictions on commercial sales of food, medicine, and medical equipment under U.S. sanctions, the United States has begun to allow such sales to Iran, Libya and Sudan. In August 1999, the U.S. Department of Agriculture approved a sale of 50,000 metric tons of corn to Iran. The new policy will open the door to a combined agricultural market in Iran, Libya, and Sudan worth nearly $1.7 billion per year.

The Administration’s efforts to ease restrictions continued in 2000, following the February 18, 2000 victory of Iran’s reform party in parliamentary elections. In March 2000, the Administration announced that it would ease some trade sanctions against Iran, lifting, in particular, restrictions on imports of carpets and food products, including dried fruit, nuts, and caviar. The Administration left in place restrictions against U.S. investment in Iran’s energy sector because of continuing concerns over Iran’s efforts to acquire nuclear weapons. As discussed above, Congress agreed to a further easing of sanctions as part of the Trade Sanctions Reform and Export Enhancement Act enacted as part of the FY 2001 Agriculture Appropriations Act.

Given the expiration of the Iran-Libya Sanctions Act in August 2001, ECAT supports efforts to try to normalize trade relations with Iran, while efforts continue to address important national security concerns.

Iran Nonproliferation Act

While the United States has made overtures to Iran, it also has demanded that Iran disavow terrorism and cease its efforts to develop weapons of mass destruction. The United States has been constrained in these efforts by Congressional concerns over Iran’s support of terrorism and efforts to develop missile technology, and chemical, biological, and nuclear weapons. In 2000, the House and Senate unanimously approved and the President signed H.R. 1883, the Iran Nonproliferation Act. This Act authorizes the President to impose sanctions against any entities that help Iran develop missile and weapons technology. Sanctions include prohibitions of (1) sales of defense items on the U.S. Munitions list and defense articles and defense services controlled under the Arms Export Control Act; (2) export of controlled goods and technology under the Export Administration Act; and (3) U.S. agency payments to the Russian Space Agency in connection with the International Space Station or any other Russian government organization without Presidential authorization. The legislation is aimed primarily at Russian companies.

India-Pakistan Nuclear Proliferation Sanctions

In 1998, the Administration announced that it would impose sanctions under the Nuclear Proliferation Prevention Act of 1994 against India and Pakistan for conducting nuclear weapons tests. The 1994 Act, the so-called Glenn amendment, contains no waiver authority and requires the imposition of sanctions against previously non-nuclear countries that test nuclear weapons. The sanctions imposed against India and Pakistan included termination of economic development assistance; prohibition of TDA assistance; termination of military sales; revocation of export licenses for any items on the U.S. Munitions List; suspension of any U.S. government credits or credit guarantees through the Ex-Im Bank and OPIC; prohibition of U.S. exports of dual-use items controlled for nuclear or missile reasons; and prohibition on U.S. banks extending loans or credits to the governments of India and Pakistan.

Concerns about the adverse impact of the India-Pakistan sanctions on U.S. agricultural exports prompted the enactment in 1998 of an amendment allowing the President to exempt agricultural products from the sanctions for one year. The President exercised this authority and exempted food and other agricultural commodities from the India-Pakistan sanctions. President Clinton also waived some other aspects of the sanctions, including the ban on Ex-Im Bank financing, OPIC insurance and assistance from the U.S. Trade and Development Agency (TDA), based on India’s agreement to enter into a moratorium on nuclear testing and commitment to adhere to the Comprehensive Test Ban Treaty.

In 1999, the International Trade Commission released a study on the impact of the India-Pakistan sanctions in 1998 that found that the sanctions had little effect on India and Pakistan, but had detrimental effects on U.S. agricultural exports. The ITC study found that the sanctions imposed a total cost of $161 million on the United States.

In October 1999, the President indefinitely extended the waivers for Ex-Im, OPIC and TDA assistance. In March 2000, the Commerce Department removed 51 Indian entities from the list of those subject to export sanctions under the Glenn amendment.

Myanmar

In 1996, Congress enacted legislation authorizing the President to bar U.S. persons from making investments in Myanmar (formerly Burma), upon certification to Congress that its government engaged in large-scale repression of its democratic opposition. Pursuant to that law and the International Emergency Economic Powers Act (IEEPA), the President issued an Executive Order in 1997 certifying that the Government of Myanmar had committed large-scale repression against its democratic opposition. The order bars any U.S. person from making new investments in Myanmar.

In the summer of 1997, both the EU and Japan requested consultations with the United States regarding Massachusetts' state procurement law. That law, adopted in 1996, prohibited state agencies from procuring goods or services from companies that do business in Myanmar. In consultations with the United States, the EU and Japan argued that Massachusetts' procurement law violates provisions of the WTO Agreement on Government Procurement (requiring that governments award contracts based on commercial factors). The panel formed in this case was suspended (and its authority has lapsed) while the EU and Japan awaited the outcome of the court challenge to this provision under U.S. law. On Monday, June 19, 2000, the Supreme Court struck down Massachusetts’ law in a unanimous decision, finding that the law was preempted by the Federal government=s own sanctions against Myanmar.

As discussed in Section 2, in November 2000, the ILO Governing Body directed ILO Member States to reconsider their relationships with Myanmar and "take appropriate measures to ensure that such relations do not perpetuate or extend the system of forced or compulsory labor in that country."

Sanctions on China

On June 6, 2000, Senators Thompson (R-TN) and Torricelli (D-NJ) introduced S. 2645, the China Nonproliferation Act. This provision was revised on several occasions and offered as an amendment to H.R. 4444, the China Relations Act, which authorized the extension of Permanent Normal Trade Relations with China. As modified, this provision would have required the mandatory imposition of sanctions on persons (which includes, by the amendment’s definition, government entities) where the President determines that a foreign person has engaged or contributed (whether knowingly or not) to certain proliferation activities with China, Russia or North Korea. It also would have required an annual report on all credible evidence of such activity. As drafted, the amendment would likely have targeted U.S. allies, undermined U.S. defense alliances, and limited the President’s flexibility to determine how to address non-proliferation concerns.

ECAT strongly opposed this amendment as unnecessary (since U.S. law already provides the President ample authority to address these issues), counterproductive to U.S. foreign policy objectives, and ineffective (since, as with most sanctions, other countries will easily move in to supply the targeted country). This amendment was defeated in the Senate by a vote of 65-to-32.

ECAT POSITION: ECAT believes that almost all unilateral sanctions that do not have multilateral support are ineffective and counterproductive. ECAT supports the deliberative and disciplined framework for consideration of sanctions set out in the sanctions process reform legislation sponsored by Senator Lugar and Congressmen Crane and Dooley in 2000 and urges the Congress to take action early this year to enact such legislation. ECAT also supports further efforts to exempt agricultural, medical and other products from unilateral sanctions. ECAT supports the expiration of the Iran-Libya Sanctions Act and efforts to review and terminate existing unilateral sanctions, particularly those with respect to Cuba.