US fines santion-busting companies

[iain]

The BBC is reporting here (http://news.bbc.co.uk/1/hi/business/2948553.stm) that the US Treasury quietly released details of settlements with sanction-busting US companies on 4th April.

Some of America's best known corporations have been fined by the US Treasury for busting sanction laws to trade with countries such as Iraq and North Korea.

Among the 59 companies fined a total of about $1.1m were Amazon, Bank of New York, Caterpillar, ChevronTexaco, Citibank, ExxonMobil and WalMart.

The fines range from $500 to $250,000 against Zim American Israeli Shipping, which is nearly half-owned by the state of Israel and is one of the world's largest container shipping companies. This sounds good to me. It pours some cold water on the folks complaining that the French, Russians and Germans were bad for breaking santions : obviously a large number of US companies were doing it too.

However, credit to the US for enforcing the rules and fining companies. I guess one question is, given the Treasury isn't giving out too many details, we don't know if these fines are a real deterrent or just a drop in the ocean of the profits made by breaking sanctions.

[Rusty_the_boy_robot]

Originally posted by iain
The BBC is reporting here (http://news.bbc.co.uk/1/hi/business/2948553.stm) that the US Treasury quietly released details of settlements with sanction-busting US companies on 4th April.

This sounds good to me. It pours some cold water on the folks complaining that the French, Russians and Germans were bad for breaking santions : obviously a large number of US companies were doing it too.

However, credit to the US for enforcing the rules and fining companies. I guess one question is, given the Treasury isn't giving out too many details, we don't know if these fines are a real deterrent or just a drop in the ocean of the profits made by breaking sanctions.

Total fines of $1.1 million? That isn't even a blip on these companies. If it was 100 times as much and only against Wal-Mart or Chevron it would barely register. This is not even a slap on the wrist, more like the threat of threatening a possible touching of their collective wrists.

[iain]

Originally posted by Rusty_the_boy_robot


Total fines of $1.1 million? That isn't even a blip on these companies. If it was 100 times as much and only against Wal-Mart or Chevron it would barely register. This is not even a slap on the wrist, more like the threat of threatening a possible touching of their collective wrists. You could be right there. I have to say, it would be pretty funny to have been at the board meetings of whichever companies were fined $500. Probably after they'd finished laughing, someone offered to put it on their credit card.

[Rusty_the_boy_robot]

Originally posted by iain
You could be right there. I have to say, it would be pretty funny to have been at the board meetings of whichever companies were fined $500. Probably after they'd finished laughing, someone offered to put it on their credit card.

:D

I'd love to see these government watch dog agencies actually granted the authority they need to do their jobs. Ha, like that's going to happen.

Wal-Mart made a like five-thousand times more money last year then the entire fine against every company. That's like me paying an $8 fine. And that was if Wal-Mart had to pay the entire fine. Whoopity-****. It probably cost the government ten times that much money just to run the damned investigation.

[pgwenthold]

Originally posted by Rusty_the_boy_robot


:D

I'd love to see these government watch dog agencies actually granted the authority they need to do their jobs. Ha, like that's going to happen.

Wal-Mart made a like five-thousand times more money last year then the entire fine against every company. That's like me paying an $8 fine. And that was if Wal-Mart had to pay the entire fine. Whoopity-****. It probably cost the government ten times that much money just to run the damned investigation.

The New York Yankees were fined more than Wal-mart.

[Smalso]

Those companies weren't actually fined anything. It matters not if the fine was one dollar or several million dollars. The cost will simply be passed on the the consumers of the companies' products.

[iain]

Originally posted by Smalso
Those companies weren't actually fined anything. It matters not if the fine was one dollar or several million dollars. The cost will simply be passed on the the consumers of the companies' products. If that is the case, wouldn't a company (unless it was a monopoly) drive customers away to its competitors by raising its prices?

[pgwenthold]

Originally posted by iain
If that is the case, wouldn't a company (unless it was a monopoly) drive customers away to its competitors by raising its prices?

Yes.

[aerocontrols]

Does Wal-Mart need to be punished? What did they do? If a glitch in walmart.com's ordering system led them to ship 200 office chairs to some businessman in Zimbabwe, what is innappropriate about an official reprimand and a $500 fine?

I guess what I'm asking is, must the fine be punitive? What if Walmart came forward before Treasury got involved?

To: US Treasury Dept.

This note is to inform you that due to a programming error in our online ordering system, it has been possible for people in Zimbabwe to order Wal Mart products from us during the entire year. We regret the error, and have already corrected it, as well as cancelling all as-yet incomplete orders. Attached is a list of all Wal Mart products sold to Zimbabwe citizens.

Would the correct response be maximum fines, or a slap on the wrist? Does it matter what was sold? Does it matter if Wal-mart changed their ordering system in March and caught the error after the first order (a copy of the latest Harry Potter book?) was shipped in June?

My point is, we don't know what Walmart sold, nor who bought the products, nor what they were, nor under what circumstances they were sold.

Perhaps our outrage should await further information?

MattJ

[shanek]

Originally posted by iain
This sounds good to me. It pours some cold water on the folks complaining that the French, Russians and Germans were bad for breaking santions : obviously a large number of US companies were doing it too.

Isn't this supposed to be a free country with a free market? I guess we see here yet another limitation the supposed "free market" Republicans put on their own principles. Where does the Constitution give the government the power to restrict whom American companies can do business with?

[heath]

Larger fines might actually reduce the amount of export these companies do and thus impact the US ecomony. Can't have that. Best to just be seen to tell them off and let them go about their business.

Win-win really.

Win for the US because the lucrative trade continues. And win for, um, the US because they are seen to enforce, in theory, trade embargos based on moral rather than financial criteria.

[iain]

Originally posted by shanek


Isn't this supposed to be a free country with a free market? I guess we see here yet another limitation the supposed "free market" Republicans put on their own principles. Where does the Constitution give the government the power to restrict whom American companies can do business with? Does the constitution prevent government from doing this? If not, I thought the government is free to pass laws. Surely there is no "free market" requirement in the constitution, bill of rights etc.

(also apologies for spelling sanction incorrectly twice in my original post, including the thread title. I can only plead incompetence).

[aerocontrols]

Originally posted by shanek


Isn't this supposed to be a free country with a free market? I guess we see here yet another limitation the supposed "free market" Republicans put on their own principles. Where does the Constitution give the government the power to restrict whom American companies can do business with?

Section 8 - Powers of Congress

...

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;


I'm surprised you didn't know this.

[c0rbin]

When I worked at Halliburton, "Export Compliance" as it was called was very seriously-taken subject. All employees from top to bottom were requried to demonstrate that they had recieved training in the basic concepts and teams and projects and folks who actually dealt with contingencies from foriegn (to the US) countries went through more rigorous training.

The potential was heavy fines and restrictions on business--something Halliburton wished to avoid.

[corplinx]

Originally posted by c0rbin
.

The potential was heavy fines and restrictions on business--something Halliburton wished to avoid.

Impossible, according to the meme-trolls on this board Haliburton would simply use their swing with politicians to get out of any trouble and are probably selling to cuba, north korea, and via time machine to nazi germany.

[Jedi Knight]

Edited for spam

[WildCat]

One problem w/ the gov't fining companies for regulatory violations is that the laws were passed many years ago, w/ maximum amounts of the fines stipulated in the laws. But the companies have grown larger, and inflation has shrunk the dollar amounts to near-meaninglessness over the years. I don't know this is the case here, but the fines do seem very small.

[shanek]

Originally posted by iain
Does the constitution prevent government from doing this? If not, I thought the government is free to pass laws.

No. the Constitution must specifically grant a power to government, or else, it doesn't have it.

[shanek]

Originally posted by aerocontrols
I'm surprised you didn't know this.

Yet another misreading of the Commerce Clause...I'm actually not surprised at that.

The commerce clause was never intended to say who private citizens and governments could or couldn't do business with. It only affects the government, and the state governments. It may affect consumers in the US if the Federal government levies duties or restrictions on imported goods, but that isn't what we're talking about here. The US Government has absolutely no say over where American citizens and business can go overseas to conduct commerce.

[Advocate]

Originally posted by shanek


Yet another misreading of the Commerce Clause...I'm actually not surprised at that.

To me the language seems clear:

"The Congress shall have power... To regulate commerce with foreign nations, and among the several states, and with the Indian tribes"

How can Congress have the power to regulate this commerce but not be able to restrict it? Since you see things differently than I do, please explain how this does not give Congress the ability to restrict what foreign nations Americans may trade with.

[aerocontrols]

Originally posted by shanek


Yet another misreading of the Commerce Clause...I'm actually not surprised at that.

And what an interesting reading you have. The Commerce Clause gives the govt. the authority to determine with whom it will trade?

[shanek]

Originally posted by Advocate
How can Congress have the power to regulate this commerce but not be able to restrict it?

They can restrict goods coming into the country, but they can't stop someone from going overseas and selling something. There's all the difference in the world there.

[shanek]

Originally posted by aerocontrols
And what an interesting reading you have. The Commerce Clause gives the govt. the authority to determine with whom it will trade?

Yes, but yet again, that isn't what's going on here! How many times do I have to explain it?

[Advocate]

Originally posted by shanek


They can restrict goods coming into the country, but they can't stop someone from going overseas and selling something. There's all the difference in the world there.

Doesn't this also allow them to restrict goods (not people) going out of the country as well? I know that taxing exports is forbidden under the next section, but banning a type of export entirely does not seem to be.

[shanek]

Originally posted by Advocate
I know that taxing exports is forbidden under the next section, but banning a type of export entirely does not seem to be.

Why would they be able to ban something but not put a duty on it? That makes no sense...

[aerocontrols]

Originally posted by shanek


Why would they be able to ban something but not put a duty on it? That makes no sense...

As someone who works with technology that I definitely would not like our enemies abroad to get their hands on, I'm glad it makes sense to the people writing the laws.

[iain]

Shane,

As someone with a very limited knowledge of the US constitution, there's something I don't understand in this debate.

You are giving a certain interpretation of the constitution and you are confident that your interpretation is correct. And yet, the US Government clearly does not share your interpretation and, perhaps, neither does the Supreme Court.

Surely the "correct" interpretation of the constitution is what the Supreme Court says it is, by definition. This isn't a holy document, it is a legal document and the Supreme Court has ultimate authority to intepret it.

I can understand how you have a view which is at odds with the Government. What I have trouble with is how you can be so confident that you are right and the Government are wrong, without Supreme Court backing for your interpretation.

[shanek]

Originally posted by iain
Surely the "correct" interpretation of the constitution is what the Supreme Court says it is, by definition.

Given the number of times the Supreme Court has overturned its prior Constitutional decisions?

Sorry, but I prefer to go with the way the Founders originally intended it. Just because the Democrats and Republicans have managed to fill the courts up with activist judges doesn't change the intentions behind the document.

[iain]

Originally posted by shanek


Given the number of times the Supreme Court has overturned its prior Constitutional decisions?

Sorry, but I prefer to go with the way the Founders originally intended it. Just because the Democrats and Republicans have managed to fill the courts up with activist judges doesn't change the intentions behind the document. But surely the great strength of the US Constitution is that it can be interpreted, and reinterpreted, to meet the needs of different times. The founding fathers could never have anticipated what the world would be like today and I'm sure would not have claimed such anticipation.

Why is their original intention, which applied to a relatively small 18th century ex-colony, superior to the interpretation of the Supreme Court in the 21st century? Why do you think the Founders must have been right and the Supreme Court must be wrong?

[heath]

Originally posted by iain
But surely the great strength of the US Constitution is that it can be interpreted, and reinterpreted, to meet the needs of different times. The founding fathers could never have anticipated what the world would be like today and I'm sure would not have claimed such anticipation.

Why is their original intention, which applied to a relatively small 18th century ex-colony, superior to the interpretation of the Supreme Court in the 21st century? Why do you think the Founders must have been right and the Supreme Court must be wrong?

Or more importantly, what makes you so sure you know what was intended by the authors?

I would have thought that if they'd had such ecplicit ideas about how it should be interpreted they'd have written the constituion in such a way that interpretation wasn't required, or wouldn't vary.

Is it possible the supreme court have it right and your interpretation might be at fault?

[shanek]

Originally posted by iain
But surely the great strength of the US Constitution is that it can be interpreted, and reinterpreted, to meet the needs of different times.

No, it isn't. Quite the opposite.

The founding fathers could never have anticipated what the world would be like today and I'm sure would not have claimed such anticipation.

That's why they included a method of amending the Constitution. But you'll notice, politicians are not willing to go through the process; they just take the extra power.

[shanek]

Originally posted by heath
Or more importantly, what makes you so sure you know what was intended by the authors?

From their writings, their correspondence, the Federalist papers, the anti-Federalist papers...

I would have thought that if they'd had such ecplicit ideas about how it should be interpreted they'd have written the constituion in such a way that interpretation wasn't required, or wouldn't vary.

They did. It's just not being treated that way.

Is it possible the supreme court have it right and your interpretation might be at fault?

Where are all of the exceptions in the First Amendment that the SC has put there? Where does the Constitution say "Congress shall make no law...unless there is a profound national interest?"

[c0rbin]

One problem w/ the gov't fining companies for regulatory violations is that the laws were passed many years ago, w/ maximum amounts of the fines stipulated in the laws. But the companies have grown larger, and inflation has shrunk the dollar amounts to near-meaninglessness over the years. I don't know this is the case here, but the fines do seem very small.

I must say that for Halliburton to be worried enough about it to both to comply that the fines must have been signifigant

Also, it goes beyond the fine itself, as the government would impose curtailment of future business in an area.

Cutting off potential profits to a company is big punishment as well.