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New York City Comptroller William C. Thompson, Jr. today issued the following statement on a Senate bill to close a loophole in the law that allows U.S. companies to perform business with nations that sponsor terrorism.

"This critical amendment would extend and apply to any sanctions or prohibitions imposed by the Federal Government on individuals, companies or organizations for engaging in transactions with foreign persons or organizations that are known to have provided support for acts of terrorism to a subsidiary, affiliate or any entity under the control of such individuals, companies or organizations," Thompson said in a letter of "strong" support for the measure.

"Prudent regulations on American business investments overseas are an important tool in the fight against international terrorism," Thompson wrote.

Thompson serves as custodian of New York City 's $88 billion pension funds.

The amendment by Sen. Frank Lautenberg (D-N.J.) redefines corporate entities subject to U.S. sanction law to include not only U.S. companies and all foreign branches, but also foreign subsidiaries owned or controlled by their parent American company. Under this amendment, when the President invokes U.S. sanctions, foreign subsidiaries will be barred from commercial transactions with terrorist sponsoring states under the same standards as their parent companies.

Currently, U.S. sanctions provisions in the International Emergency Economic Powers Act (IEEPA) prohibit U.S. companies from conducting business with nations that sponsor terrorism. However, several U.S. companies have exploited a loophole in the law by creating foreign subsidiaries of U.S. companies to do business with rogue nations, including Iran .

Since 2002, Comptroller Thompson, on behalf of the New York City Pension Funds, has spearheaded the City's efforts to stop U.S. companies from conducting business with terrorist-sponsoring nations. Since then, the following companies have taken steps to sever current or future ties with terrorist-sponsoring nations: ConocoPhillips, General Electric, Cooper Cameron, Halliburton, and the Aon Corporation.

"We must do everything necessary to stop the reach of terrorism, and this measure would ensure that U.S. corporations cannot exploit a loophole to conduct business with nations that support terrorism," Comptroller Thompson said. "From both a moral perspective and an investor's viewpoint, this cynical exploitation of the law must stop.

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