Senate Defeats Lautenberg Amendment and Votes to Increase Penalties for Evading Sanctions
Today the U.S. Senate held two important sanctions-related votes on amendments offered during consideration of S.1042, the National Defense Authorization Act for Fiscal Year 2006.
Senator Frank Lautenberg (D-N J) reintroduced his amendment (SA 1351) to apply U.S. sanctions to foreign subsidiaries of U.S. companies, a provision that was twice defeated by narrow margins in the last session of Congress. Because the State Department had expressed strong concerns about the effect such an extraterritorial extension of U.S. law, Senator Susan Collins (R-ME) offered an alternative to the Lautenberg amendment (SA 1377) that would penalize individuals or entities that "avoid or evade" U.S. sanctions "if they are "subject to the jurisdiction of the United States."
The Collins Amendment would prohibit any action by a U.S. firm that would avoid or evade U.S. sanctions. Second, the Collins Amendment would prohibit U.S. companies from "approving, facilitating or financing" actions that would violate U.S. sanctions laws if undertaken by a U.S. firm. This would prohibit any involvement by a U.S. parent firm with an existing subsidiary that was engaged in a transaction that violated the International Emergency Economic Powers Act. In order to comply with the law, the U.S. parent firm would need to be totally passive in any transaction. Third, the Collins Amendment would increase the maximum civil penalties for violating sanctions from $10,000 to $250,000 per violation and increase the criminal penalties to $500,000 for "willful" violations. Finally, the Collins Amendment would provide explicit subpoena authority to the government to obtain records related to the prohibited transactions.
Upon consideration of the two amendments, the Senate passed the Collins Amendment by a by a vote of 98-0. Shortly thereafter, the Senate rejected the Lautenberg Amendment by a vote of 47-51.
After the vote, Senator Lautenberg issued a strongly worded press release denouncing the defeat of his amendment.
|posted by Douglas N. Jacobson| Permalink 
