Archive for the ‘Sanctions’ Category

Jul

25

Cancel That Safari!

Posted by Clif Burns at 3:05 pm on July 25, 2008
Category: Sanctions • Zimbabwe Sanctions

Dead Hippo and Live HunterIn addition to the general stupidity of killing animals that you don’t even eat, there may be another reason to cancel any upcoming safaris in Zimbabwe that you may have planned. President Bush today signed new sanctions against 1 individual and seventeen companies with connections to the discredited Mugabe regime in Zimbabwe, including a company called Famba Safaris.

According to a press release from the Office of Foreign Assets Control, Famba Safaris is a “registered Zimbabwean safari operator, whose Director and major shareholder is SDN Webster Shamu, Mugabe’s Minister of State for Policy Implementation.” Webster Shamu was put on the Specially Designated Nationals List on November 23, 2005.

The reason for adding Famba Safaris now to the SDN goes back to a brouhaha that erupted when Shamu was first placed on the SDN list. You see, HHK Safaris, one of the largest operators of safaris in Zimbabwe, has a somewhat ambiguous relationship with Famba Safaris, claiming that it “incorporates” Famba Safaris. After the initial designation of Shamu, the influential newsletter The Hunting Report raised questions as to whether this would make it impossible for Americans to do business with HHK due to its affiliation with Shamu. A spokesperson for HHK subsequently told Hunting Report that Shamu had no further affiliation with Famba and that Americans could feel free to come on down to Zimbabwe and kill a few hippos.

Well, not anymore, at least until HHK explains away its affiliation with Famba Safaris.

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Mar

3

Penn Law’s Journal of International Law Holds Symposium on Economic Sanctions.

Posted by Clif Burns at 5:53 pm on March 3, 2008
Category: Sanctions

University of Pennsylvania Law SchoolPosting was light last week because I was speaking at a symposium at the University of Pennsylvania Law School being conducted by the law schools Journal of International Law. The symposium was titled “Trade Sanctions in a 21st Century Economy: Are They An Appropriate Or Effective Means Of Altering State Behavior?” and had as featured speakers, among others, Gary Hufbauer, who has done more research on the impact of economic sanctions, both unilateral and multilateral, than almost anyone else. He is the lead author of Economic Sanctions Reconsidered which analyzes most modern cases of economic sanctions and provides factual support for some important, if not surprising, conclusions, namely that sanctions sometimes work, but more often than not they do not achieve their desired results and that multilateral sanctions are more likely to be successful than unilateral sanctions.

Also speaking was Professor Orde Félix Kittrie, currently a visiting associate professor of law at the University of Maryland who was on a panel discussing the humanitarian impact of economic sanctions. He unashamedly advanced the argument that the humanitarian impact of economic sanctions imposed on Iran and North Korea didn’t matter. In Professor’s Kittrie’s view, it might be necessary to starve a few North Korean and Iranian civilians to prevent their governments from killing a bunch of Americans with a nuclear device.

My presentation, which you can download here, was not quite as controversial. I looked at two methods used by the United States to bootstrap the effectiveness of unilateral sanctions — namely, secondary sanctions and prosecution of foreign nationals for extraterritorial violation of U.S. sanctions — and discussed whether they were consistent with our WTO obligations and with basic principles of international law regarding prescriptive jurisdiction.

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Feb

21

OFAC: Just One Letter Short of FCPA

Posted by Clif Burns at 5:46 pm on February 21, 2008
Category: Sanctions • Syria
Rami Makhtuf
ABOVE: Rami Makhluf

Today the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) designated as an SDN Rami Makhluf, the maternal cousin of Syria’s President Bashar al-Assad and owner of Syriatel, Syria’s largest mobile phone provider. The basis for the designation was novel. It was not because of any allegation that Makhluf was involved in destabilizing the peace process in the Middle East or destabilizing Lebanon. Rather, it was because he is alleged to be a corrupt guy who exploits his close family ties to the Syrian government to further his business interests in Syria.

Come again? Hear for yourself, straight from the lips of Stuart Levey, the Department of Treasury’s Under Secretary for Terrorism and Financial Intelligence:

Rami Makhluf has used intimidation and his close ties to the Asad regime to obtain improper business advantages at the expense of ordinary Syrians,” said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence. The Asad regime’s cronyism and corruption has a corrosive effect, disadvantaging innocent Syrian businessmen and entrenching a regime that pursues oppressive and destabilizing policies, including beyond Syria’s borders, in Iraq, Lebanon, and the Palestinian territories.

This novel theory of designation was set up by Executive Order 13460, signed by President Bush last week on February 15 and which found that

the conduct of certain members of the Government of Syria and other persons contributing to public corruption related to Syria, including by misusing Syrian public assets or by misusing public authority, entrenches and enriches the Government of Syria and its supporters and thereby enables the Government of Syria to continue to engage in certain conduct that formed the basis for the national emergency declared in Executive Order 13338.

Executive Order 13338 was based on Syria’s occupation of Lebanon, it’s pursuit of WMD, and its interference with the stabilization and reconstruction of Iraq.

Executive Order 13460 and the designation of Rami Makhluf, both promulgated under the International Economic Emergency Powers Act (“IEEPA”) must meet the standards set forth therein. That statute permits such designations if the President finds that it is necessary to meet an extraordinary threat to the national security, foreign policy or economy of the United States. Such a finding is clearly a leap when applied to foreign government “cronyism” with foreign companies and their executives. Exploiting family ties to the Syrian government officials doesn’t entrench the government; rather it entrenches the people exploiting those ties.

Another problem with this designation was pointed out by commenter Ex-OFAC in his comment on yesterday’s post on OFAC’s 50 percent rule. The designation prohibits U.S. persons from doing business with Makhluf, and by extension of the 50 percent rule, with any business in which Makhluf owns a 50 percent interest or greater. If Makhluf in fact owns a majority-stake in Syriatel, are American telephone companies violating the law when they connect U.S. outbound calls to that network and pay the connection fee? Makhluf’s other business holdings are alleged to be enormous and so any company doing business with Syria does so at the peril of finding out that Rami is a controlling shareholder.

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Jan

10

Treasury Sanctions Syrian Television Station

Posted by Clif Burns at 5:16 pm on January 10, 2008
Category: OFAC • Sanctions
Al-Zawraa
Screen clip from Al-Zawraa

On January 9, the Department of Treasury designated Syrian television station Al-Zawraa under Executive Order 13438. That executive order targets parties that threaten Iraqi stabilization, including insurgent and militia groups and their support. Among the reasons cited for sanctioning Al-Zawraa were its broadcast of insurgent videos showing attacks on U.S. troops in Iraq.

According to a State Department authored article disseminated by the Voice of America:

Administration officials concede Wednesday’s order will likely have little practical impact. But Treasury Undersecretary for Terrorism Stuart Levey said the move brings to light “the lethal actions” of the sanction targets, and he urged the international community to join the United States in isolating them from the global economy.

One reason that this order “will likely have little practical impact” is that Al-Zawraa has been off the air since July 2007 and no longer appears to exist.

This is also the first time, at least that I am aware of, that Treasury has based a designation, at least in part, on the content of a broadcast or a publication. There is no reason to doubt Treasury’s claim that the station, while it was in existence, broadcast videos of insurgent attacks on U.S. troops. But so did major U.S. networks, including CNN.

The Treasury release also stated as a ground for the designation of Al-Zawraa that the station agreed “to broadcast open-coded messages through patriotic songs to [a] Sunni terrorist group.” Of course, coded messages are quite a different story from broadcast of insurgent videos and should have been sufficient, in and of itself, to designate that station. At least assuming that there is any point in blocking the assets of defunct entities.

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Oct

18

Bush Threatens More Burma Sanctions

Posted by Clif Burns at 2:08 pm on October 18, 2007
Category: Sanctions

Demonstrating Burmese MonkDuring President Bush’s trip to Arkansas on Monday, he was asked about the situation in Burma:

So, along the lines in Burma, we have sanctioned individuals within Burma and are considering additional sanctions.

Bush was referring to the recent addition of more Burmese officials to the Specially Designated Nationals list. But he didn’t reveal what additional sanctions might be under consideration. No clue was given as to whether the Administration is simply contemplating a second round of additions to the SDN list or is instead considering more comprehensive sanctions, such as broadening the ban on exports to Burma or restricting dealings in Burmese-origin goods. Leaders of the U.S. House of Representatives yesterday proposed restrictions on the import of “blood rubies” from Burma.

But then President Bush appeared to veer off script:

But sanctions don’t mean anything if we’re the only sanctioner

Does this signal a change in Administration attitude on the Cuba sanctions or was it just a slip of the tongue? My guess is the later, so don’t start ordering any Cohibas on the Internet just yet folks.

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