Disclosure Requirements 'Extremely Harmful,' Reinsch Warns

Tuesday, 21 August 2001

 

"The House's effort to exclude from U.S. capital markets foreign companies that either invest in Sudan or fail to meet the disclosure requirements of the bill are extremely harmful," Reinsch said in the letter.

The NFTC and USAHEngage oppose Sections 8 and 9 of H.R. 2052 for the following reasons:

·         The provisions can provide a serious disincentive for foreign firms to list on the U.S. securities exchanges. The consequences were cited by Federal Reserve Board Chairman Greenspan in a July 24 Senate Banking Committee hearing on this bill: "the effect of that would be essentially to move considerable amount of financing out of the United States to London, Frankfurt, and Tokyo;"

·         They would apply a different standard to foreign registrants than to U.S. companies, thus departing from the principle of national treatment;

·         The House bill sets a precedent that could result in similar capital market exclusions being used as punitive measures aimed at other countries or to achieve other social or political objectives immaterial to the conventional investor assessment of the profitability and financial outlook of companies.

H.R. 2052 has been referred to the Senate Committee on Foreign Relations. S. 180 has been referred to the House Committee on International Relations.

USA*ENGAGE is a coalition of 670 small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. For more information on USA*ENGAGE and the harmful effects of unilateral trade sanctions, visit the USA*ENGAGE web site at www.USAENGAGE.org