8 May 1997
European-American Business Council

European-American Business Council Criticizes Proposed Actions Against Switzerland

Press Release
May 8, 1997		For More Information
Willard Berry: (202) 347-9292
Chris Mustain: (202) 347-9292
Jeffrey Werner: (202) 347-9292

Washington, DC The European-American Business Council (EABC) today urged New Jersey lawmakers and Governor Christine Todd Whitman to oppose a proposal in the state legislature that would discriminate against companies doing business in Switzerland. The Council acknowledging fully the gravity of the issue of assets confiscated by the Nazis during World War II. However, using economic sanctions to address this problem would be ineffective and seriously misguided, and would inflict severe hardships on New Jersey companies and citizens at a time when diplomatic efforts are spurring constructive responses to this matter.

"Given the depth of the US-Swiss trade and investment relationship, the approach used by [these measures] would sanction virtually every major multinational company in New Jersey, as well as many small exporters," said Council President Willard M. Berry. "Hundreds of US-based companies that have no direct relation to stolen World War II assets would be forced to bear the cost of examining and/or restructuring their operations in response to such a measure."

The Council is deeply concerned about the proliferating use of economic sanctions by US federal, state and local governments. Over the past four years, the federal government has imposed unilateral economic sanctions 62 times on 36 different countries. Numerous state and municipal authorities have also begun to enact similar measures against US companies that invest in certain countries. Governments that impose these measures make their jurisdictions less attractive for investment and hurt the overall competitiveness of US-based companies.

The Council today also submitted a letter opposing a similar measure being considered by the Chicago City Council. Additional measures have been proposed in New York State and New York City.

The Council is a business association of 80 multinational companies of both European and American parentage that promotes open and nondiscriminatory markets worldwide.

May 7, 1997

The Honorable Christine Todd Whitman
Governor of New Jersey
125 West State Street, CN 001
Trenton, NJ 08625

Dear Governor Whitman,

The European-American Business Council strongly urges you to oppose proposals in the New Jersey legislature to sanction companies involved with Switzerland over assets confiscated from Nazi victims. As an alliance of 80 multinational companies of European and American parentage, the Council is deeply concerned by these measures and the increasing use of economic sanctions at the federal, state, and municipal level. US and European-owned firms are united in opposing these harmful measures that have unintended consequences.

Assembly Deputy Minority Leader Neil Cohen and Senate Assistant Majority Leader Robert Singer have introduced bills, SB 1966 and AB 2822, that would deny state procurement contracts and state pension fund investment for companies doing business with Switzerland. Both measures call for divestiture of state pension funds in Swiss companies and encourage a boycott of Swiss products.

Although the Council appreciates fully the gravity of the issues that drive the New Jersey measures, embracing economic sanctions would be misguided. Both SB 1966 and AB 2822 would inflict severe hardships on New Jersey companies and citizens at a time when diplomatic efforts and investigative work are spurring constructive responses to this very serious issue. It should be acknowledged that actions have already been taken in Switzerland in conjunction with major international Jewish organizations. We also respectfully submit that your decision to exclude a Swiss bank from any future state insurance privatization program is premature and inappropriate.

Given the depth of the US-Swiss trade and Investment relationship, the approach used by SB 1966 and AB 2822 would sanction virtually every major multinational company in New Jersey as well as many small exporters. Not only could these companies be forced to cut New Jersey workers, but their many supplier companies could face the same prospect. Swiss-owned companies have long been good US corporate citizens and employ thousands of New Jersey workers. In addition, over 575 US-owned companies are established in Switzerland. Hundreds of US- based companies that have no direct relation to stolen World War II assets would be forced to bear the cost of examining and/or restructuring their operations in response to such a measure. If this legislation were enacted, New Jersey workers and consumers could suffer, needlessly and severely.

Sanctions measures have additional negative implications. Governments that impose them make their jurisdictions less attractive for investment. Each new measure cedes marketshare to overseas competitors and adds to a growing view around the world that US-based companies are unreliable partners and suppliers in long term ventures. Economic sanctions have proven to be one of the most costly, yet least effective tools to address international policy concerns. The issue is best addressed through continuing dialogue between the US ans Swiss governments, Swiss banks, and international Jewish organizations.


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