States and Trade Sanctions — New Role of States Under Federal Legislation — Historical Development.

Trade Sanctions

    Recent federal law   (Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010) authorizes states to impose trade sanctions on Iran.  (This legislation was amended by the National Defense Authorization Act for Fiscal Year 2012.)

    The 2010 statute specifically cites and encourages divestment sanctions by state pension funds. (Title III). Some  argue that under this statute U.S. ports and states housing them would have authority to deny foreign shippers access to the ports if their ships call on Iranian ports.

    This newer legislation is clearly a historical development concerning the role of states in global trade sanctions.

     States have long taken action impacting foreign trade which is a federal power exclusively exercised by the Congress. But courts have not been too friendly. In 2000 the Supreme Court struck down state law concerning Burma trade sanctions as being in violation of  the principle of federalism (relying upon the concept of “implied preemption”). Ten years later the Congress has now decided to enlist the support of states.

     To me this new legislation is long-overdue.  It calls for greater state action.  In order to be really effective state action should be coordinated among the states. This would significantly broaden and reinforce the actions of the federal government and multilateral sanctions.

…. “Uniting States Against Iran.” Wall Street Journal (March 9, 2013).

…. “Closing U.S. Ports.” Wall Street Journal (March 14, 2013).

….  U.S. Treasury Dept. Resource Center for Iranian Sanctions.

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (School of Public Policy).
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