The U.S. Securities and Exchange Commission has published on its Web site a list of European firms, as well as American companies, which have dealings with five countries 's Iran, North Korea, Cuba, Sudan and Syria 's that, according to the U.S. State Department, are "sponsors of terrorism." The list is based on the latest annual reports of the companies that have reported this information to shareholders in their regulatory filings.
By clicking on each country, investors see a "blacklist" of companies, which for the most part are European. They include Nokia, Total, Syngenta, HSBC, Cadbury, Siemens and ABB, as well as the second biggest Swiss bank, Credit Suisse and Deutsche Bank. The companies are accused of doing business with so-called "rogue states" and are thus "indirectly subsidizing a terrorist state."
Siemens and Credit Suisse features on the list of all five "rogue states," while Syngenta is active in four of the five countries, and Deutsche Bank has connections with Iran and Sudan.
Reacting to the "blacklist," Syngenta spokesman Medard Schoenmaeckers said the company was disappointed that it has been punished for transparency in its international dealings. According to a Credit Suisse spokesman, the company withdrew from Cuba and Iran at the beginning of 2006, contrary to ABB, which will continue business with Iran on condition that it accounts for less than 1 percent of the company's sales. The engineering group said an "information offensive" was needed to explain its position to investors.
Many of the companies listed are objecting to the SEC list, claiming that the list does not make clear the extent of a company's business in such states or whether they still have ties.
Christopher Cox, chairman of SEC, stated the position that an investor should have no doubt whether his or her investments 's directly or indirectly 's support a terrorist or genocidal state.
He also states that appearing on the "blacklist" does not itself mean that the company directly or indirectly supports terrorism, because the list is linked to annual reports that could be out of date, and it does not show which companies have started to divest from these states.
On the contrary, the Organization for International Investment says that the "blacklist" has no threshold for judging whether a company was doing "a material level of business in a country."
The information companies have reported to shareholders helps investors to assess the situation, and therefore companies feel an injustice from SEC about the lack of clarity reflected in the latter's list.
The U.S. is trying to put "blacklisted" countries under pressure by imposing economic sanctions. The restrictions can also be applied to companies doing business with these countries. Within the European Union, which, after incorporating the U.N. sanctions into European law, introduced its own "blacklist," the basic document is the EU Regulation 881/2002 of the Council dated May 27, 2002, imposing certain specific restrictive measures directed against persons and entities associated with certain terrorist groups.
This regulation is being continuously updated. The EU regulation is based on the United Nations Security Council Resolution No. 1390 (2002), where the Security Council provides a "terrorist" list that is updated regularly on the basis of relevant information provided by member states and regional organizations.
Moreover, it is very difficult for those included on the "terrorist lists" to have their names removed or contest their inclusion, because U.N. and EU lists contain no mechanism of appeal to the courts whatsoever: groups and individuals can only request individual member state governments to make diplomatic representations on their behalf.
Loreta Papreckyte is a lawyer at Jurevicius Balciunas & Bartkus, a member of Baltic Legal Solutions, a pan-Baltic integrated legal network of law firms including Teder Glikman & Partnerid in Estonia and Kronbergs & Cukste in Latvia, dedicated to providing a quality "one-stop shop" approach to clients' needs in the Baltics.