US SEC moves to enforce Sudan divestment law
By Wasil Ali
April 29, 2008 (WASHINGTON) — The US Securities and Exchange Commission (SEC) issued a new regulation that outlined new disclosure requirements to investment firms that divests securities from companies doing business in Sudan.
Sudan divestment Act requires that the SEC puts in place new rules that require disclosures by investors who shed their holdings in companies with ties to Sudan.
“We proposed amendments to Form N-CSR and Form N-SAR that would require disclosure by a registered investment company that divests…..from securities of issuers that the investment company determines conduct or directly invest in certain business operations in Sudan” the SEC said in its final rule published today.
The Sudan divestment bill endorsed unanimously by the Congress last year aims at providing protection from lawsuits to State and local divestment efforts in Sudan to sanction it over the Darfur crisis labeled genocide by the US administration.
The bill also allows asset managers to divest from foreign companies operating in Sudan without being deemed in violation of their fiduciary duty. Also no government agency shall grant federal contracts to companies believed to be conducting business in Sudan unless they certify otherwise.
The Sudan Accountability and Divestment Act of 2007 specifically targets the main sources of revenue of Khartoum; oil, power production, mining and military equipment. It will only impact foreign companies since most American businesses are prohibited from dealing with Sudan under executive order issued in 1997 by former president Bill Clinton.
However Bush said in a statement after signing the bill that his administration will “enforce this legislation in a manner that does not conflict with that [presidential foreign policy] authority”.
The SEC said the amendments to the forms are “effective immediately”. The agency, responsible for administering federal securities laws in the US, also gave investment companies that divested between December 31, 2007 and April 30, 2008 until mid-May to file a disclosure.
The commission said that the amendments “may promote competition because they may make it easier for registered investment companies to choose whether or not to offer portfolios that include holdings in companies that conduct or directly invest in certain business operations in Sudan”.
International experts also say more than 300,000 were killed and 2 million have been driven from their homes by the conflict in Darfur, a region that is roughly the size of France.
(ST)