The Export Law Blog has a good post on state sanctions that reminds folks that Crosby vs. National Foreign Trade Council looms in the shadows unless Congress chimes to clear up what states can and cannot do with regards to how taxpayer monies are invested. Read the post, here.
No matter what the anti-sanctions crowd may have to say when they lobby Congress or the Executive, divestment initiatives are here to stay for the foreseeable future. Starting mainly with South Africa, a free-market approach to punishing bad state actors makes sense and investors demand it. Consider the FTSE CSAG Terror-Free Index Series tool that was designed to “help create and manage portfolios that are free of business ties to countries” deemed by the government to posing global security risks.
As investors become more educated about investment tools and the world becomes “smaller” with regards to access and availability of information, some people are going to want to know if their money – no matter how indirectly – is invested in countries that sponsor terrorism, engage in human rights abuses, and other illegal activities. The same holds for public accounts held by State governments.
Congress may move slow, but the markets do not. At some point in the near future, expect the two roads to connect and a workable set of rules for viable state sanctions regimes to become the norm. The Crosby preemption arguments will be laid to a proper rest because “[t]he only reliable indication of that intent–the only thing we know for sure can be attributed to all of them–is the words of the bill that they voted to make law.” And there is plenty of action in that direction with various Members of Congress pressing a bill to that effect.