Do they know what they are
doing? When the U.S. Congress adopts draconian sanctions aimed mainly at
disempowering President Trump and ruling out any move to improve relations with
Russia, do they realize that the measures amount to a declaration of economic
war against their dear European “friends”?
Whether they know or not, they
obviously don’t care. U.S. politicians view the rest of the world as
America’s hinterland, to be exploited, abused and ignored with impunity.
The Bill H.R. 3364 “Countering
America’s Adversaries Through Sanctions Act” was adopted on July 25 by all but
three members of the House of Representatives. An earlier version was
adopted by all but two Senators. Final passage at veto-overturning proportions
is a certainty.
This congressional temper
tantrum flails in all directions. The main casualties are likely to be
America’s dear beloved European allies, notably Germany and France. Who
also sometimes happen to be competitors, but such crass considerations don’t
matter in the sacred halls of the U.S. Congress, totally devoted to upholding
universal morality.
Economic “Soft Power” Hits
Hard
Under U.S. sanctions, any EU
nation doing business with Russia may find itself in deep trouble. In
particular, the latest bill targets companies involved in financing Nord Stream
2, a pipeline designed to provide Germany with much needed natural gas from
Russia.
By the way, just to help out,
American companies will gladly sell their own fracked natural gas to their
German friends, at much higher prices.
That is only one way in which
the bill would subject European banks and enterprises to crippling restrictions,
lawsuits and gigantic fines.
While the U.S. preaches “free
competition”, it constantly takes measures to prevent free competition at the
international level.
Following the July 2015 deal
ensuring that Iran could not develop nuclear weapons, international sanctions
were lifted, but the United States retained its own previous ones. Since then,
any foreign bank or enterprise contemplating trade with Iran is apt to receive
a letter from a New York group calling itself “United Against Nuclear Iran” which
warns that “there remain serious legal, political, financial and reputational
risks associated with doing business in Iran, particularly in sectors of the
Iranian economy such as oil and gas”. The risks cited include billions of
dollars of (U.S.) fines, surveillance by “a myriad of regulatory agencies”,
personal danger, deficiency of insurance coverage, cyber insecurity, loss of
more lucrative business, harm to corporate reputation and a drop in shareholder
value.
The United States gets away
with this gangster behavior because over the years it has developed a vast,
obscure legalistic maze, able to impose its will on the “free world” economy
thanks to the omnipresence of the dollar, unrivaled intelligence gathering and
just plain intimidation.
European leaders reacted
indignantly to the latest sanctions. The German foreign ministry said it
was “unacceptable for the United States to use possible sanctions as an
instrument to serve the interest of U.S. industry”. The French foreign
ministry denounced the “extraterritoriality” of the U.S. legislation as
unlawful, and announced that “To protect ourselves against the extraterritorial
effects of US legislation, we will have to work on adjusting our French and
European laws”.
In fact, bitter resentment of
arrogant U.S. imposition of its own laws on others has been growing in France,
and was the object of a serious parliamentary report delivered to the French
National Assembly foreign affairs and finance committees last October 5, on the
subject of “the extraterritoriality of American legislation”.
Extraterritoriality
The chairman of the commission
of enquiry, long-time Paris representative Pierre Lellouche, summed up the
situation as follows:
“The facts are very
simple. We are confronted with an extremely dense wall of American
legislation whose precise intention is to use the law to serve the purposes of
the economic and political imperium with the idea of gaining economic and
strategic advantages. As always in the United States, that imperium, that
normative bulldozer operates in the name of the best intentions in the world
since the United States considers itself a ‘benevolent power’, that is a
country that can only do good.”
Always in the name of “the
fight against corruption” or “the fight against terrorism”, the United States
righteously pursues anything legally called a “U.S. person”, which under
strange American law can refer to any entity doing business in the land of the
free, whether by having an American subsidiary, or being listed on the New York
stock exchange, or using a U.S.-based server, or even by simply trading in
dollars, which is something that no large international enterprise can avoid.
In 2014, France’s leading
bank, BNP-Paribas, agreed to pay a whopping fine of nearly nine billion
dollars, basically for having used dollar transfers in deals with countries
under U.S. sanctions. The transactions were perfectly legal under French
law. But because they dealt in dollars, payments transited by way of the
United States, where diligent computer experts could find the needle in the
haystack. European banks are faced with the choice between prosecution,
which entails all sorts of restrictions and punishments before a verdict is
reached, or else, counseled by expensive U.S. corporate lawyers, and entering
into the obscure “plea bargain” culture of the U.S. judicial system, unfamiliar
to Europeans. Just like the poor wretch accused of robbing a convenience
store, the lawyers urge the huge European enterprises to plea guilty in order
to escape much worse consequences.
Alstom, a major multinational
corporation whose railroad section produces France’s high speed trains, is a
jewel of French industry. In 2014, under pressure from U.S. accusations
of corruption (probably bribes to officials in a few developing countries),
Alstom sold off its electricity branch to General Electric.
The underlying accusation is
that such alleged “corruption” by foreign firms causes U.S. firms to lose
markets. That is possible, but there is no practical reciprocity
here. A whole range of U.S. intelligence agencies, able to spy on
everyone’s private communications, are engaged in commercial espionage around
the world. As an example, the Office of Foreign Assets Control, devoted
to this task, operates with 200 employees on an annual budget of over $30
million. The comparable office in Paris employs five people.
This was the situation as of
last October. The latest round of sanctions can only expose European
banks and enterprises to even more severe consequences, especially concerning
investments in the vital Nord Stream natural gas pipeline.
This bill is just the latest
in a series of U.S. legislative measures tending to break down national legal
sovereignty and create a globalized jurisdiction in which anyone can sue anyone
else for anything, with ultimate investigative capacity and enforcement power
held by the United States.
Wrecking the European Economy
Over a dozen European Banks
(British, German, French, Dutch, Swiss) have run afoul of U.S. judicial
moralizing, compared to only one U.S. bank: JP Morgan Chase.
The U.S. targets the European
core countries, while its overwhelming influence in the northern rim – Poland,
the Baltic States and Sweden – prevents the European Union from taking any
measures (necessarily unanimous) contrary to U.S. interests.
By far the biggest catch in
Uncle Sam’s financial fishing expedition is Deutsche Bank. As Pierre
Lellouche warned during the final hearing of the extraterritorial hearings last
October, U.S. pursuits against Deutsche Bank risk bringing down the whole
European banking system. Although it had already paid hundreds of
millions of dollars to the State of New York, Deutsche Bank was faced with a
“fine of 14 billion dollars whereas it is worth only five and a half. … In
other words, if this is carried out, we risk a domino effect, a major financial
crisis in Europe.”
In short, U.S. sanctions
amount to a sword of Damocles threatening the economies of the country’s main
trading partners. This could be a Pyrrhic victory, or more simply, the
blow that kills the goose that lays the golden eggs. But hurrah, America
would be the winner in a field of ruins.
Former justice minister
Elisabeth Guigou called the situation shocking, and noted that France had told
the U.S. Embassy that the situation is “insupportable” and insisted that “we
must be firm”.
Jacques Myard said that
“American law is being used to gain markets and eliminate competitors. We
should not be naïve and wake up to what is happening.”
This enquiry marked a step ahead
in French awareness and resistance to a new form of “taxation without
representation” exercised by the United States against its European satellites.
They committee members all agreed that something must be done.
That was last October.
In June, France held parliamentary elections. The commission chairman,
Pierre Lellouche (Republican), the rapporteur Karine Berger (Socialist),
Elisabeth Guigou (a leading Socialist) and Jacques Myard (Republican) all lost
their seats to inexperienced newcomers recruited into President Emmanuel
Macron’s République en marche party. The newcomers are having a hard time
finding their way in parliamentary life and have no political memory, for
instance of the Rapport on Extraterritoriality.
As for Macron, as minister of
economics, in 2014 he went against earlier government rulings by approving the
GE purchase of Alstom. He does not appear eager to do anything to anger
the United States.
However, there are some things
that are so blatantly unfair that they cannot go on forever.
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