Copyright 2001 Journal of Commerce, Inc.
Journal of
Commerce - JoC Online
May 31, 2001
SECTION: EDITORIAL; Pg.WP
LENGTH: 533 words
HEADLINE:
Trade Scene: Trade
sanction decisions at hand
BYLINE: JOC ONLINE
BODY:
In 1996, Congress seemingly cleared the way for significant new trade
sanctions against
Cuba, Iran and Libya. In
nearly one fell swoop, it enacted the Cuban Liberty and Democratic Solidarity
Act and the Iran-Libya
Sanctions Act.Five years later, the
sanctions authorized under those two laws remain largely
unimplemented, thanks to the Clinton administration's reluctance to put them
into play. Now it's President Bush's turn to decide whether the
sanctions are really in the United States' best interests. By
July, he has to decide whether to take potentially drastic action against
Cuba under the 1996 Liberty Act. The 1996 Iran-Libya
Sanctions Act expires in early August unless he and Congress
renew it by then.
The Cuban Act authorizes the president to clear the
way for treble damage lawsuits by U.S. firms and individuals against foreigners
"trafficking" in their property illegally expropriated by
Cuba,
claims potentially totaling in the billions of dollars. What's more, the State
Department was told to deny U.S. visas to executives of the foreign firms doing
the trafficking.
The aim: to discourage foreign investment in
Cuba, thereby tightening the U.S. economic squeeze on the
Castro government. But President Clinton repeatedly opted against facilitating
the lawsuits. The State Department denied visas to executives from only three
firms - Mexico's Grupo Domos, Canada's Sherritt International and Israel's BM
Group. It is still delaying a decision on denying visas to the executives of Sol
Melia, a major Spanish hotel chain, despite having indicated nearly two years
ago that the firm was profiting from illegally expropriated U.S. property.
The Clinton administration's lack of follow-through on the 1996
Iran-Libya
Sanctions Act was at least as striking. Under this
statute, the president is to penalize foreign firms investing more than
$
40 million during any 12-month period in either Iranian or
Libyan oil and gas projects. The penalties range from U.S. import restrictions
to a cut-off of U.S. Export-Import Bank financing.
Since 1996, European
and other oil and gas firms have reportedly invested billions of dollars in
Iran, but the Clinton administration assessed not a single penalty.
Behind the Clinton hands-off approach: the risk of alienating foreign
allies, most notably the 15-nation European Union, which has threatened
reprisals if its companies are hit by U.S.
sanctions under
either the
Cuba or Iran-Libya statute.
Will Bush now
set a new course?
So far, he appears to be taking a somewhat harder line
against Castro's
Cuba, not unexpectedly, given his links with
Florida's Cuban-American community. He has pledged not to soften the U.S.
embargo against
Cuba, at least not until the Cuban government
releases political prisoners and holds free elections. Still, this leaves open
whether he will move to actually tighten economic pressures on
Cuba. The answer may soon be at hand. One test is
whether the State Department will finally announce a denial of visas to Sol
Melia executives. Ralph Galliano, editor of the Institute for U.S.
Cuba Relations Policy Report, expects it will do so, and soon.
See Richard Lawrence, page 2
LOAD-DATE: June 1,
2001