[Congressional Record Volume 143, Number 145 (Friday, October 24, 1997)]
[Extensions of Remarks]
[Pages E2080-E2081]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF THE SANCTIONS REFORM ACT, H.R. 2708

                                 ______
                                 

                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                       Thursday, October 23, 1997

  Mr. HAMILTON. Mr. Speaker, today Congressman Philip Crane and I 
introduced H.R. 2708, the Enhancement of Trade, Security, and Human 
Rights through Sanctions Reform Act. This bill would reform the process 
by which both the Congress and the executive branch consider unilateral 
sanctions proposals. I would like to share with my colleagues the 
rationale for this bill and describe its key provisions.
  The United States needs economic sanctions in its foreign policy 
toolkit. We need to respond to many international problems. Economic 
sanctions can be an attractive policy option when military action is 
not warranted, and diplomacy seems to have failed. In some 
circumstances, the conduct of a particular country may be sufficiently 
abhorrent or dangerous that we will feel compelled to respond, 
regardless of whether other countries join us.
  Prior to 1980, several major laws authorized the imposition of 
economic sanctions for foreign policy purposes. Those laws tended to 
give the President considerable flexibility to decide when and how to 
impose sanctions. They also tended to target foreign conduct, rather 
than specific countries.
  During the past two decades, however, and especially since 1990, U.S. 
sanctions policies have evolved substantially.
  First, we impose unilateral sanctions more frequently. In a report 
prepared earlier this year, the President's Export Council noted that 
more than 75 countries are now subject to, or threatened by, one of 
more unilateral U.S. sanctions.
  Second, we use a wider variety of unilateral measures to target a 
wider range of foreign conduct. The Export Council counted 21 specific 
sanctions covering 27 different target behaviors. We have also given 
the President less latitude in implementing sanctions.
  Third, during the past 2 years we have adopted unilateral sanctions 
that are extraterritorial in scope. In 1996, we departed from our 
longstanding policy of opposing secondary boycotts by enacting two laws 
that penalize foreign firms for activities for activities in Cuba, 
Iran, and Libya. Meanwhile, roughly 20 States and localities have 
adopted laws prohibiting government commercial dealings with United 
States or foreign companies that do business with countries that have 
poor human rights records.

  Fourth, over the past year, several of our colleagues have introduced 
measures that seek to narrow the presidential waiver or lower the 
decision threshold in existing sanction statutes. None of these 
measures has made it to the President's desk. If any do, however, they 
will raise difficult questions about the roles of Congress and the 
President in the conduct of foreign policy.


                    Concerns on Unilateral Sanctions

  I have several concerns about the increasing frequency and scope of 
unilateral sanctions.
  First, unilateral measures often cost U.S. exports. The private 
Institute for International Economics estimated earlier this year that 
restrictions imposed for foreign policy purposes are costing $15-19 
billion in export sales annually.
  An extraordinary example of the cost of unilateral sanctions recently 
came to my attention. According to the U.S. Department of Agriculture, 
the five countries currently under total U.S. trade embargoes--Iran, 
Iraq, Libya, Cuba, and North Korea--will together account for roughly 
11 percent of the world's wheat export market this year. This means 
that 11 percent of the world wheat market is off-limits to U.S. 
farmers. But it doesn't mean those countries can't get wheat. If they 
have the cash, there are plenty of other countires willing to do 
business with them.
  My second concern is that our reputation for unilateral sanctions is 
costing potential export sales and foreign investment opportunities. 
Many executives I have spoken with over the past couple of years have 
told me that foreign firms and governments are increasingly steering 
clear of U.S. companies when making procurement decisions. They are 
concerned that deals with U.S. firms could be jeopardized by subsequent 
sanctions. I also understand that some European companies have begun to 
tell prospective customers that U.S. competitors can't be counted on 
because of U.S. sanctions policies.
  Third, exports lost to unilateral sanctions mean lost jobs. Fifteen 
to twenty billion dollars in export sales would support tens of 
thousands of American jobs.
  Fourth, third-party unilateral sanction measures like the Helms-
Burton and Iran-Libya statutes put us at odds with many of our closest 
friends. That can undermine both our trade leadership and the 
effectiveness of our foreign policy.
  Fifth, in addition to antagonizing foreign governments, some of our 
State and local sanctions raise difficult questions concerning the 
constitutional authority to conduct U.S. trade and foreign policy.


                Ineffectiveness of Unilateral Sanctions

  Unilateral sanctions might be worth their price in exports, jobs, and 
foreign policy interests if they succeeded in achieving their aims. 
They rarely do. In fact, they are sometimes counterproductive and 
harmful to the very people we are trying to help.
  A number of studies have concluded that sanctions, both unilateral 
and multilateral, have worked less than half the time since the early 
1970's. One of the most thorough and credible of these studies, from 
the Institute for International Economics, found that unilateral and 
multilateral sanctions together have succeeded less than 20 percent of 
the time since 1990. Unilateral sanctions rarely work because the world 
economy has become too interdependent. When we deny a country access to 
our products or our markets, it has plenty of alternatives.


                         Weak Information Base

  One of the most alarming aspects of U.S. sanctions policy, in my 
view, is the weak information base upon which most unilateral sanction 
decisions are typically made.
  Congress does not usually have before it a detailed assessment of new 
sanctions bills when it takes them up. We hold hearings and we debate 
proposals in mark-ups. But our review of sanctions is rarely systematic 
or comprehensive.
  We need to improve our decisionmaking on sanctions. Before they act, 
Congress and the

[[Page E2081]]

President should both have in hand better information on the potential 
costs and benefits of unilateral sanctions proposals. And they should 
both proceed in a more deliberative and disciplined manner.


                          Sanctions Reform Act

  The bill Congressman Crane and I will introduce is a bill that seeks 
to accomplish these objectives. H.R. 2708 would reform the process by 
which both Congress and the executive branch consider unilateral 
sanctions proposals.
  The bill defines a unilateral sanction as any restriction or 
condition on foreign economic activity that is imposed solely by the 
United States for reasons of foreign policy or national security.
  For both Congress and the executive branch, the bill sets out 
guidelines for future sanctions proposals and procedures for their 
consideration and implementation.
  The guidelines would be largely similar for both branches. We propose 
that sanctions bills approved by Congress and sanctions measures 
imposed by the President:
  Contain a 2-year sunset;
  Provide waiver authority for the President;
  Protect the sanctity of existing contracts;
  Be targeted as narrowly as possible on those responsible for 
sanctionable conduct;
  Minimize any interference with humanitarian work performed by 
nongovernmental organizations; and
  Include measures to address any costs incurred by U.S. agricultural 
interests, which are especially vulnerable to foreign retaliation.
  With the exception of this agriculture provision, all of the 
guidelines would be mandatory for the executive branch. But the 
President could waive several of them in the event of a national 
emergency.
  The bill's procedural reforms for Congress would require a committee 
of primary jurisdiction to include in its report on a sanctions bill an 
analysis by the President of the bill's likely impact on a range of 
U.S. foreign policy, economic, and humanitarian interests. The 
committee would also need to explain in its report why it did not 
adhere to any of the sanctions guidelines.
  By invoking the Unfunded Federal Mandates Act of 1995, the bill would 
also require a report by the Congressional Budget Office on a sanctions 
bill's likely economic impact on the U.S. private sector. Under the 
terms of the Unfunded Mandates Act, the bill could not be considered on 
the House or Senate floor until the CBO analysis was completed and made 
public.
  With respect to the Executive Branch, the bill would require the 
President to report to Congress prior to implementation on the likely 
impact of a proposed measure on U.S. foreign policy, economic, and 
humanitarian interests. The President would also be required to 
consult with Congress and to provide opportunities for public comment. 
To provide time for this consultation, public comment, and reporting, a 
sanction could not be imposed--except in the event of a national 
emergency--until 60 days after the President has announced his 
intention to do so.

  It is also important to understand what our bill would not do:
  The bill would not prevent Congress or the President from imposing 
unilateral sanctions.
  The bill would not impact any sanctions currently in effect. The 
bill's executive branch guidelines and procedural requirements would 
apply, however, to future sanctions imposed by the President pursuant 
to existing laws.
  The bill would impose no limitations on the foreign countries or 
conduct that could be targeted by sanctions.
  The bill would have no impact on any of the following kinds of 
measures--now or in the future:
  Sanctions imposed under any multilateral agreement to address a 
foreign policy or national security matter--including proliferation, 
human rights, and terrorism.
  Restrictions or controls on the export of munitions.
  Resolutions disapproving a Presidential decision to maintain MFN 
trade privileges for China or any other country.
  Measures imposed under U.S. laws and regulations implementing trade 
agreements, combating unfair foreign trade practices, and safeguarding 
the domestic market.
  Import restrictions designed to protect food safety or to prevent 
disruption of domestic agricultural markets.
  Measures to implement international environmental agreements.
  Import restrictions designed to protect public health and safety.
  This bill is not a red light for sanctions. It is a flashing yellow 
light. Its message is to take a careful look around and proceed with 
caution.
  I hope that Members who have supported sanctions in the past--as I 
have--would be able to support this bill. To oppose a measure like this 
is to say that Congress and the President can't use and shouldn't have 
better information about sanctions. That is a position neither we nor 
the President should take. We need not fear information.
  This bill would require those who propose sanctions to work harder to 
justify their proposals. It would ensure that elected officials and the 
public are better informed about the potential consequences of a 
proposed measure. Sanctions that receive the kind of careful scrutiny 
this bill will require are bound to be more effective in achieving 
their aims and to cause less collateral damage to humanitarian and 
economic interests. Better-designed sanctions will also be more likely 
to retain public support.

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