24 October 1997
The Financial Times
Nancy Dunne

US industry tries to curb sanctions

Legislation backed by the US industry coalition USA Engage was introduced in Congress yesterday as part of a campaign to curb the soaring use of economic sanctions by the US administration.

The bill would set a time limit on sanctions and require consideration of alternatives before they were imposed.

At the trade sub-committee hearing where the bill was introduced, Stuart Eizenstat, undersecretary of state, warned he would have to act against European companies investing in Iranian energy projects unless the European Union takes steps to deter Iran's support for terrorism and its efforts to obtain weapons of mass destruction.

Clayton Yeutter, the former US trade representative who is leading the fight for the legislation, said the use of sanctions had become "a fad". The US has imposed unilateral sanctions 61 times in about a fifth of its export markets, and 27 more sanctions proposals are under consideration.

The bill, introduced by Congressmen Lee Hamilton and Phil Crane and Senator Richard Lugar, would set a time limit on sanctions and require them to be terminated within a time span unless they were justified. It would ensure that the Congress and administration have complete information about the likely impact and economic and humanitarian costs of proposed sanctions and require an analysis of all options.

The legislation would not affect existing sanctions but establish a "more disciplined and deliberative process" for new ones. Mr Yeutter said in the majority of cases, US sanctions have failed to impose a significant burden on their intended targets.

"This reflects the tremendous expansion of global trade and the intense competition among exporters that exists today in virtually every industry," he said. "There are few goods, services or technologies that cannot be acquired from a wide variety of sources."

In his testimony Mr Eizenstat said the US should only resort to unilateral sanctions after diplomatic options have been pursued and failed.

He is under pressure by some in Congress to impose sanctions against companies investing in Iran.

The US and EU have been at loggerheads for years over US use of extraterritorial sanctions against foreign companies. Recent clashes have centred on the Helms-Burton anti-Cuba legislation and the Iran Libya Sanctions Act.

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