Wednesday, May 9, 2018

Many individual US States have their own Iran sanctions programs including North Carolina, California, and others. North Carolina divestment list as of 8/30/2017

The State Treasurer of North Carolina and North Carolina Retirement Systems may not invest funds with entities engaged in "investment activities in Iran." Divestment list as of 8/30/2017 follows:

August 30, 2017, "Iran Final Divestment List," North Carolina Dept. of State Treasurer,

"Exercising the duties required under N.C.G.S. 143C-6A-4, the State Treasurer has determined that the following persons appear to be engaged in “investment activities in Iran,” as that term is defined in the North Carolina Iran Divestment Act of 2015, based on federal sanctions lists and other publicly available credible information. The State Treasurer and North Carolina Retirement Systems may not invest funds with, and must divest any existing investment with, the persons listed below....The Department of State Treasurer is not responsible for compliance with the Iran Divestment Act by other agencies or political subdivisions of the State of North Carolina."...


Following are excerpts from two articles (2015 and 2016) about Iran sanctions held by individual states:

1. 2015 Reuters article

4/13/15, "Deal or not, many U.S. states will keep sanctions grip on Iran," Reuters, by Yeganeh Torbati


As the United States and Iran come closer to a...nuclear deal, many U.S. states are likely to stick with their own sanctions on Iran that could complicate any warming of relations between the long-time foes.

In a little known aspect of Iran's international isolation, around two dozen states have enacted measures punishing companies operating in certain sectors of its economy, directing public pension funds with billions of dollars in assets to divest from the firms and sometimes barring them from public contracts.

In more than half those states, the restrictions expire only if Iran is no longer designated to be supporting terrorism or if all U.S. federal sanctions against Iran are lifted - unlikely outcomes even in the case of a final nuclear accord. Two states, Kansas and Mississippi, are even considering new sanctions targeting the country.

The prospect of unwavering sanctions at the state level, or new ones, just as the federal government reaches a landmark agreement with Iran risks widening a divide between states and the federal government on a crucial foreign policy issue.

Though U.S. states have often coordinated their measures with federal sanctions on Iran, their divestment actions sometimes take a tougher line on foreign firms with Iran links than is the case under federal policy.

"Our investment sanctions are not tied in any way to President Obama's negotiations with the Iranians," said Don Gaetz, a Republican Florida state senator who sponsored legislation in 2007 punishing companies with investments in Iran's energy sector.

"They would have to change their behavior dramatically and we would not be necessarily guided by President Obama or any other president's opinion about the Iranians," Gaetz said.

(Map of U.S. states with sanctions against Iran: here)

A final accord, which is still being negotiated ahead of a June 30 deadline, would likely lift U.S. sanctions on Iran's crude oil sales to other countries and loosen restrictions on Iran's financial system. Federal sanctions on Iran tied to issues such as human rights and terrorism would remain in place.

Among around a dozen states contacted directly by Reuters, legislators in Georgia, Florida, and Michigan said they had no intention of changing their Iran policies even in light of a federal deal. State officials in Connecticut and Illinois said new local legislation would be needed to change their divestment policies, even if a deal were signed.

Officials in New York and Oregon told Reuters they would look to changes in law at the federal level in the case of a nuclear deal to determine how it would affect their policies.

Officials at Iran's mission to the United Nations did not immediately respond to a request for comment from Reuters on the state policies. White House spokeswoman Bernadette Meehan did not respond directly to a Reuters query about states' sanctions policies, but stressed that only sanctions related to Iran's nuclear program would be affected by a deal.

The first divestment campaigns gathered steam in 2008 and 2009, and received a federal stamp of approval in 2010 with passage of the Comprehensive Iran Sanctions, Accountability, and Divestment Act, which encouraged states to pass such measures.


The divestment measures typically enjoy broad bipartisan support within the legislatures, and have been signed into law by Republican and Democratic governors alike. Critics of the laws say they are an unnecessary interference in a crucial area of U.S. policy by states that usually have little expertise in foreign affairs.

"Foreign policy is uniquely a case where the government needs to act with one voice," said William Reinsch, president of the National Foreign Trade Council, which represents major U.S. companies and advocates against unilateral sanctions.

Foreign companies are the main target of the rules since U.S. firms are largely barred from working in Iran by federal law.

Florida's law led to the State Board of Administration (SBA), which oversees Florida public investments, pulling more than $1.3 billion out of companies such as PetroChina and Russia's Gazprom for their involvement in either Sudan or Iran. As of 2014, the SBA had $177 billion in assets.

Like Florida, Michigan was an early adopter of divestment policies targeting Iran. It has divested $185 million of its pension funds from companies including Royal Dutch Shell , Vodafone, HSBC, and Nokia for their activities in Iran.

In 2013 and 2014 Michigan divested $45 million from Becton Dickinson and Co., a U.S. medical supplies company that sells to Iran legally under federal regulations.
A Becton Dickinson spokesman said the firm was unaware it was a target of divestment by Michigan until contacted by Reuters. It said in a statement that its trade with Iran is authorized by the U.S. Treasury Department's Office of Foreign Assets Control, which oversees federal sanctions.

Marty Knollenberg, a Michigan state senator who sponsored a divestment bill in 2008, said the legislation was based in part on model legislation provided by the American Israel Public Affairs Committee (AIPAC), a lobbying group that advocates for further sanctions on Iran.

"Many other states followed suit, and I think with that pressure the federal government finally acted," said Knollenberg, a Republican. "We're all affected by this, not just the federal government."

Richard Nephew, the former principal deputy coordinator for sanctions policy at the U.S. State Department, said the main losers in divestment actions are the companies and local governments, rather than Iran or other target countries.

"The degree to which such decisions can be made at lower government levels than the federal government generally makes the United States a more complicated, unattractive place to do business," said Nephew, now with the Columbia University Center on Global Energy Policy in New York.

"This is a feel-good measure that, in the end, probably doesn't feel all that great given the costs it imposes at home." (Reporting By Yeganeh Torbati; editing by Bruce Wallace and Stuart Grudgings)
  Image caption: State by state sanctions on Iran, Reuters map

2. June 1, 2016 Washington Post article mentions California, Florida, and North Carolina:

6/1/2016,  "Most U.S. states have sanctions against Iran. Here’s why that’s a problem," Washington Post, Jo-Anne Hart, Sue Eckert (Jo-Anne Hart and Sue Eckert at the Watson Institute are faculty collaborators in the research project"...)

(subhead): "State-level obstacles to implementing the Iran nuclear agreement"

"California law prohibits state pension funds from investing in companies that do energy or defense business in Iran. The practical significance of this is considerable: California’s Public Employees’ Retirement System and its State Teachers Retirement System are among the largest such funds in the country and both are barred from holding investments in any company, anywhere, that does at least $20 million in Iran’s energy business. Research indicates that California’s public trust divestment of Iran may be as high as $3.5 billion. Its domestic insurance divestment regulation may be responsible for $6 billion more.

Likewise, Florida’s Investment Act requires withdrawal by retirement funds from companies who do oil-related business in Iran, which has resulted in well over $1 billion in divestment. 

While some states allow their public trusts to refuse to divest if doing so would violate their fiduciary liability, Florida’s legislation does not permit such a conditionality. Furthermore, banking sanctions adopted in 2012 prevent any Florida-chartered financial institution from maintaining correspondent accounts with international financial institutions tied to Iran’s Central Bank or involved in defense and nuclear industries.

Our research tracks these state-level statutes to see if, when and how these sanctions may end. A number of states have sunset provisions for the expiration of sanctions pegged to federal government action (e.g. Iran’s removal from the list of state sponsors of terrorism, lifting of all U.S. sanctions) but several permit the discretion of states, with the criteria for vacating sanctions varying widely....

The Iran deal requires the United States to “actively encourage officials at the state or local level to take into account the changes in the U.S. policy … and to refrain from actions inconsistent with this change in policy.” Last month [May 2016], the State Department sent letters to each U.S. governor urging states to review and revise their sanctions accordingly.  

Recognizing that state sanctions are attempting to “incentivize Iran to change its behavior in certain ways,” the letter argues that since the JCPOA agreement is addressing the same concerns, state level divestment and contracting bans on Iran are not needed.

So far North Carolina’s governor [NC has a different governor since this article was written] has strongly rejected this request from the Obama administration. Several other states will probably refuse to lift their own sanctions with the ultimate outcome possibly dependent on legal challenges. In the past, the U.S. Supreme Court has upheld the executive branch’s constitutional role in implementing foreign policy by compelling preemption of state sanctions. If the current court takes on this question, perhaps the answer will change. Our research project will continue to track changes, including judicial-level challenges."...


No comments: