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| Prepared by: | Lee Hudson Teslik |
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Afghanstan's Taliban-led government was never listed by the U.S. State Department as a "state sponsor" of terrorism. (AP Images/John Moore)
Terror lists are very much in vogue. Long the province of the U.S. State Department, which annually releases its Country Reports on Terrorism, the business of indexing terror organizations and “sponsor” states has diversified, with assorted think tanks and for-profit firms releasing their own, sometimes politically-colored rosters (WSJ.com). Now the U.S. Securities and Exchange Commission (SEC) adds its brush to this canvas, crafting a blacklist of companies that report dealings with “state sponsors” of terrorism in their annual filings to the commission. SEC Chairman Christopher Cox says the project aims to protect investors from “indirectly subsidizing a terrorist state” (AP). But the list prompts outrage from companies and stirs debate more generally on the wisdom of releasing terror lists, given the potentially radioactive diplomatic consequences they tend to provoke.
The SEC list spotlights a number of major multinational corporations, mostly non-American, including HSBC, Unilever, Cadbury, Nokia, Siemens, and Total. Representatives from the listed companies levy a number of complaints (FT). First, they say, the list makes no effort to specify the extent of a company’s ties to a given country. Nor does it indicate whether ties still exist—only whether a state-sponsor country is listed in the company’s 2006 annual report, which might now be out of date and which would not specify if a company were in the process of divesting from a country.
Companies and experts alike say the State Department’s list of state sponsors, which the SEC used to craft its blacklist, represents an arbitrary judgment. The State Department currently lists five countries as “state sponsors of terrorism”: Cuba, Iran, North Korea, Sudan, and Syria. Cuba’s listing, which is over twenty-five years old, provokes the most pointed criticisms, with a number of experts saying it is far-fetched and political to call the country a sponsor of terrorism. Moreover, the State Department’s list has curious omissions. Neither Afghanistan nor its formerly Taliban-led government, for instance, has ever been listed as a state sponsor of terrorism.
Even supposing a more defined metric were available, questions remain about the practical value of terror lists, which experts say often alienate other countries. In the world of finance, some fear the SEC’s new sideline could drive companies away from listing on U.S. stock exchanges, potentially weakening American financial clout, a trend already underway according to a recent McKinsey report (PDF). Todd Malan, the president of an organization representing 1,200 foreign firms with U.S. stock listings, told the Financial Times that the SEC’s filing has infuriated his member companies by “mak[ing] it look like they are sitting around drinking tea in Tehran and writing big checks.”
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