USA*Engage Hails Administration's Opposition to Section 9 of Sudan Peace Act

Thursday, 6 June 2002

"Sections 8 and 9 set extraordinarily dangerous precedents and will have very negative long-term repercussions that will negatively impact the U.S. economy," said Bill Reinsch, President of the National Foreign Trade Council and Vice-Chairman of USA*Engage.

In testimony before the Senate Banking Committee on the U.S. economy, Federal Reserve Chairman Alan Greenspan said of Sections 8 & 9 of the Sudan Peace Act: “the clear outcome of such a law would effectively be to move financing from New York to London. I’m most concerned that if we move in directions that undermine our financial capacity, we are undermining the potential for long-term growth in the American economy.”

In the case of Sudan, American firms are currently banned by executive order from trade and investment in Sudan. Foreign firms listed on U.S. stock exchanges currently disclose investment information “material to the reasonable investor” as prescribed by the S.E.C. The materiality standard has evolved over decades. Section 8 of the act, however, would create confusion and uncertainty regarding the current standard. In addition, it is not merely a new disclosure provision, but utilizes delistment as the remedy. Furthermore, Section 9 delists all firms with any current investment in the Sudanese oil and gas sector.

"Sections 8 and 9 would jeopardize the health of our financial markets and given the decline in U.S. equity markets, this is the last thing we should be doing," said Reinsch. "The international business community, U.S. financial institutions, and American investors have grave concerns about this dangerous trend. Engaging Sudan holds far greater promise, both at home and abroad, than imposing sanctions such as those proposed in the Sudan Peace Act."

USA*ENGAGE is a coalition of over 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.

###