Terrorism’s business partners
July 25, 2005
By Frank Gaffney, Jr.
In the wake of recent bombings in London and Egypt confirming the vulnerability of even relatively vigilant societies to Islamofascist terrorism, the question occurs: Are we serious about fighting this menace with every instrument at our disposal?
A Loopy Loophole
A test of the seriousness of the U.S. Senate will be offered as soon as tomorrow. Senators will be asked to choose between two amendments to the defense authorization bill (S.1042) bearing on one of this country’s most powerful and yet largely unutilized tools: Denying U.S. investment capital, technology and other commercial benefits to state-sponsors of terror.
To be sure, successive administrations have imposed economic and trade sanctions on terrorist-sponsoring states like Iran, Libya, Sudan, Cuba, Syria and North Korea. Existing law – notably, the International Emergency Economic Powers Act (IEEPA) – grants the President the authority to bar U.S. companies from doing business with nations that do business with terrorists.
Unfortunately, there is a loophole in the law, a loophole some American firms have used to circumvent and undermine U.S. sanctions. By establishing an offshore subsidiary, these companies have proceeded to engage in commerce with sanctioned states even though the parent is prohibited from doing so.
In some cases, the affront to the letter and spirit of the law has been egregious. Front companies amounting to little more than an offshore post office box have been created to perform end-runs around official efforts to stem the money flowing to those who are trying to kill us.
