REPORT ON SOUTH AFRICA SANCTIONS BILL, H.R. 1580

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T00234R000200310021-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 27, 2016
• Document Release Date: September 9, 2013
• Sequence Number: 21
• Publication Date: June 22, 1988
• Content Type: MEMO

I) 4/1.e.o. /47.1 A to- ./e0_
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22 June 1988
OCA 2093-88
MEMORANDUM FOR: Chief, Africa Division/DO
Chief, Legislation Division/EPS/DO
Associate General Counsel for the DO
Chief, Africa & Latin America Division/DI
FROM:
SUBJECT:
Office of
Legislation Division STAT
Congressional Affairs
Report on South Africa Sanctions Bill,
H.R. 1580
1. Attached for your information is a copy of relevant
portions of the report on the South Africa sanctions bill,
H.R. 1580. Included are sections dealing with intelligence
cooperation with the government of South Africa as explained by
both the Foreign Affairs and Intelligence Committees. I wish
to point out in particular a section of the Intelligence
Committee report which reads as follows:
HPSCI Report at 3 (emphasis added). The Armed Services
Committee expects to publish its r,eport later this week or
early next week.
2. If you have any questions, please telephone me on
Attachment
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STAT
STAT
STAT
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22 June 1988
OCA 2093-88
SUBJECT:
Report on South Africa
Sanctions Bill,
H.R. 1580
STAT
OCA/LEG
(21 June 1988)
Distribution:
Original - Addressees
1 - D/OCA
1 - DDL/OCA
1 - DD/HA/OCA
1 - OCA Registry
af,7070CA7Leg/Subje File: South Afric'al
Signer
STAT
1- A Read
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100TH CONGRESS REPT. 100-642
HOUSE OF REPRESENTATIVES
2d Session Part 1
THE ANTI-APARTHEID ACT
AMENDMENTS
OF 1988
REPORT
OF THE
COMMITTEE ON FOREIGN AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
[Including cost estimate of the Congressional Budget Office]
ON
H.R. 1580
together with
MINORITY, DISSENTING, AND ADDITIONAL VIEWS
MAY 20, 1988.?Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
ALS. GOVERNMENT PRINTING OFFICE
19-006 WASHINGTON: 1988
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?The South African Council of Churches (the largest religious
organization in South Africa);
?Archbishop Desmond Tutu; and
?Reverend Alan Boesak.
These leading individuals and organizations agree that the costs
of comprehensive economic sanctions would be far less than the
costs?in terms not only of economic hardship but also of loss of
lives?of failing to effectively pressure the South African Govern-
ment for an end to apartheid and the avoidance of a tragic blood-
bath. Regional leaders, including most recently the Presidents of
Zambia and Mozambique and the Foreign Minister of Botswana,
also favor comprehensive sanctions.
SPECIFIC IMPACT OF PROVISIONS
The proposed sanctions will impose economic costs on the South
African Government in addition to serving as a catalyst for new
Western economic restrictions and signaling a diminution of out-
side political support for the Government.
The ban on making or holding of any investment in South Africa
will cut off the small amount of new direct and indirect U.S. in-
vestment (including short-term and rescheduled loans) that have
continued under exemptions pursuant to the Comprehensive Anti-
Apartheid Act. It will also deprive South Africa of important tech-
nological and managerial assistance flowing from the U.S. corpo-
rate presence, and act as a depressant on South African business
confidence and its own willingness to invest. Furthermore, the pro-
hibition will be a major symbol to South African blacks and whites
of U.S. disassociation from apartheid. Currently, US. companies
provide the South African Government with approximately $200
million annually in corporate taxes alone (15 times estimated ex-
penditures of these companies on black advancement). U.S. direct
investment in South Africa was $1.4 billion in 1986; U.S. indirect
investment, mainly holdings in South Africa gold mining compa-
nies, was estimated at $2.5-3 billion in 1986. U.$. bank loans were
$2.95 billion as of September 1987.
The new comprehensive trade ban will end virtually all U.S. ex-
ports to South Africa ($1.25 billion in 1987) except for agricultural
products ($55 million in 1987). These exports mainly consist of com-
puter and electronics products, other capital goods, chemicals, and
aircraft. They contribute to South Africa's industrial and military
strength. There will be a lesser impact on imports ($1.25 billion in
1987) because these are already heavily sanctioned by the Compre-
hensive Anti-Apartheid Act and about 80 percent of the remaining
imports are anticipated to be exempted in the immediate future as
strategic minerals. Previous selective bans on South African im-
ports and exports have not been fully effective, partly due to ad-
ministrative problems in enforcing restrictions against limited sec-
tors of a country dedicated to "sanctions busting". For example,
the current selectiye ban on computers going to the security forces
is impossible to enforce fully considering the Government arms
parastatal's 930 contractors and subcontractors and opportunities
for access to "time sharing" on nonmilitary computers by the secu-
rity forces.
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While any economic sanctions and significant foreign policy ac-
tions impose certain economic costs on U.S. companies, it is not an-
ticipated that these measures will result in any noticeable decline
in the overall U.S. economy. South Africa makes up only 0.4 per-
cent of U.S. direct investment abroad, 0.3 percent of imports, and
0.5 percent of exports. There has been little domestic economic
effect of the approximately 50 percent reduction in direct invest-
ment and trade since 1984.
The ban on new Federal, coal, gas, and oil leases for the
U.S.subsidiaries or U.S. affiliates under common control of a for-
eign company which directly, or through subsidiaries or affiliates,
invest in or export oil to South Africa's oil industry will increase
the incentive of non-U.S. oil firms to leave South Africa along with
their American colleagues. Currently, the U.S. subsidiaries or affili-
ates under common control of two major non-U.S. firms in the
South African oil industry hold 2,297 U.S. oil, gas, and coal leases.
They are also active in seeking new leases during 1986 and 1987.
The ban on U.S. ships' transporting oil to South Africa elimi-
nates a loophole in current U.S. oil sanctions. In the past, there
have been reports of American ships' involvement in the clandes-
tine oil trade which supplies South Africa with two-thirds of its oil.
The ban on intelligence and military cooperation will prohibit in-
telligence sharing relationships that could imply to the South Afri-
can Government and people qualifications of our opposition to
apartheid, regional aggression, and possible state terrorism. (Under
the Comprehensive Anti-Apartheid Act and the Intelligence Au-
thorization Act of 1987, military and intelligence cooperation are
banned except "to facilitate the collection of necessary intelli-
gence".)
The Iran-Contra hearings disclosed a number of intelligence con-
tacts between the United States and South Africa in 1984 regard-
ing South African aid for the Nicaraguan Contras. According to
available information this would have been in exchange for certain
benefits. According to press reports, the United' 4tates provided
South Africa with political and military intelligence about the
banned and exiled African National Congress during the 1980's in
exchange for information on Soviet and Cuban activities in the
region. The proposed total prohibition would have a significant, ad-
verse political impact on the South African Government and would
also avoid potential negative reactions to the United States from
black leaders in South and Southern Africa. These political gains
would outweigh any possible losses to U.S. intelligence or military
interests, which could be minimized, as they are elsewhere, by re-
sorting to other intelligence sources. The policy expression in favor
of ending the exchange of defense attaches with South Africa sup-
ports further disassociation of the United States from South Afri-
ca's militaristic policies, and would bring our country into line with
the policy adopted by the European Community in 1985.
The provisions mandating that the President: confer with other
industrialized nations to reach cooperative sanctions agreements,
cast U.S. votes in the U.N. Security Council for similar sanctions,
and retaliate with import or government contracting sanctions
against foreign businesses that take significant commercial advan-
tage of U.S. and comparable sanctions, are designed to enhance the
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ricans to notify employees and employee organizations of the termi-
nation of investment not less than 90 days prior to such termina-
tion. Such entities shall enter into good faith negotiations with rep-
resentative trade unions, or worker organizations if there are no
such unions, regarding the terms of termination. The subsection
sets forth a representative list of topics to be included in such nego-
tiations. During negotiation on the terms of termination particular
attention is to be given to negotiations with organizations repre-
senting those disadvantaged by the system of apartheid.
Section 8?Prohibition regarding involvement in the South African
energy sector
This section adds a new section 304 to the Comprehensive Anti-
Apartheid Act of 1986 to prohibit involvement by a U.S. person in
the South African energy sector. New subsection 304(a) states that
a U.S. person may not provide transport to South Africa of crude
oil or refined petroleum products. The prohibition includes trans-
port on a vessel of U.S. registry or on a vessel owned by a U.S.
person. New subsection 304(bX1) states that the Secretary of the In-
terior may not issue any mineral lease to any national of the
United States which is controlled by, or under common control
with, any foreign person who purchases, acquires, owns, or holds
any investment in South Africa; or who exports crude oil or refined
petroleum products to South Africa. The term "may not issue any
lease" refers to new leases and does not include existing or re-
newed leases. Subsection 304(bX2) states that prior to issuing a
lease, the Secretary of the Interior shall require the applicant for a
lease to certify that the applicant is not subject to the provisions of
subsection 304(bX1).
Section 4?Prohibition on nuclear assistance to South Africa
Section 4 amends section 307 of the Comprehensive Anti-Apart-
heid Act of 1986, which prohibits nuclear trade with South Africa,
to reflect the fact that all nuclear exports to South Africa would be
banned under the trade embargo provisions in the bill. The amend-
ed section 307 retains, however, the existing prohibition on the Sec-
retary of Energy authorizing persons to product"special nuclear
material in South Africa. The amendment eliminates the waiver of
the nuclear trade ban for South Africa's adherence to the Nuclear
Non-Proliferation Treaty or adoption of full scope International
Atomic Energy Agency safeguards as being inconsistent with com-
prehensive sanctions. The amendment also eliminates the excep-
tion for nuclear assistance for humanitarian reasons to protect
public health and safety as also being inconsistent with comprehen-
sive sanctions.
Section 5?Prohibition on U.S. intelligence and military cooperation
with South Africa
This section repeals section 322 of the Comprehensive Anti-
Apartheid Act of 1986 which prohibits cooperation with the armed
forces of South Africa except for activities designed to facilitate the
collection of necessty intelligence. It adds a new section 309 man-
dating a broader prohibition on intelligence and military coopera-
tion.
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New subsection 309(aX1) provides that no U.S. agency or entity
involved in intelligence activities may engage in any cooperation
with the Government of South Africa.
New subsection 309(b) provides that no U.S. agency or entity of
the United States may engage in any cooperation with the armed
forces of South Africa.
In light of important U.S. foreign policy 'interest, it is intended to
prohibit all forms of intelligence-sharing between the United States
and South African governments, including any joint activities that
contribute directly and substantially to such sharing.
New subsection 309(c) provides that no funds made available by
the Congress may be obligated or expended for any expense related
to cooperation prohibited by this section.
New subsection 309(d) provides that the President should not
assign members of the U.S. armed forces to serve as defense or
military attaches in South Africa or accredit any individual to
serve as a military attache at a South African diplomatic mission
in the United States. The policy expressions in this subsection are
consistent with the prohibition on intelligence and military coop-
eration.
Section 6?Multilateral measures to undermine apartheid
This section amends title IV of the Comprehensive Anti-Apart-
heid Act of 1986 which is concerned with multilateral measures to
undermine apartheid. The title, as amended, retains the policy
statement in section 401(a) that it is U.S. policy to seek internation-
al agreements to bring about the dismantling of apartheid.
Subsection 6(a)(1) amends section 401(bX1) to make mandatory
the language in current law which encourages the President to
seek such international agreements and to provide the President
with flexibility in this regard. Testimony was received by the com-
mittee from executive branch witnesses that little effort had been
expended in negotiating such agreements since current law is not
mandatory. Strengthening of this provision will better achieve the
objectives of the Comprehensive Anti-Apartheid Act.
Subsection 6(aX2) is a technical amendment conforming .t ticrent
law to the provisions of this bill.
Subsection 6(b) amends section 401(e) of the Comprehensive Anti-
Apartheid Act to make mandatory the language in current law
which encourages the President to seek U.N. Security Council
adoption of sanctions against South Africa of the same type as im-
posed by U.S. law. Because current law is not mandatory, the exec-
utive branch has not supported such sanctions in the United Na-
tions.
Subsection 6(c) amends section 402 of the Comprehensive Anti-
Apartheid Act to make both mandatory and more precise language
which authorizes the President to economically retaliate against
foreign companies taking significant commercial advantage of U.S.
sanctions and comparable sanctions of other industrialized democ-
racies. Despite authorization jn current law to retaliate against
those taking advantage of current U.S. sanctions the executive
:branch has taken no action to confront entities taking such advan-
tage. Under the bill, the President shall impose a penalty or per-
sons taking significant commercial advantage of U.S. sanctions or
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100TH CONGRESS I REPT. 100-642
2d Session j HOUSE OF REPRESENTATIVES Part 2
ANTI-APARTHEID ACT AMENDMENTS OF 1988
JUNE 15, 1988.?Ordered to be printed
Mr. Swims, from the Permanent Select Committee on Intelligence,
submitted the following
REPORT
together with
DISSENTING VIEWS
[To accompany H.R. 1580 which on March 12, 1987, was referred jointly to the Com-
mittee on Foreign Affairs, the Committee on Ways and Means, the Committee on
Armed Services, the Committee on Banking, Finance and Urban Affairs, the Com-
mittee on Public Works and Transportation, and the Permanent Select Committee
on Intelligence]
The Permanent Select Committee on Intelligence, to whom was
referred the bill (H.R. 1580) to prohibit investments in, and certain
other activities with respect to, South Africa, and for other pur-
poses, having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
The amendments (stated in terms of the page and line numbers
of the introduced bill) are as follows:
On page 4, after line 24, add the following:
(c) The prohibitions of this section shall not apply to the
conduct of diplomatic activities or to intelligence informa-
tion concerning the military activities or equipment in
southern Africa of Cuban military forces or of another
communist country acting in concert with Cuban military
forces.
On page 13, after line 7, add the following:
(d) Section 107 of the Intelligence Authorization Act for
Fiscal Year 1987 (Public Law 99-569) is hereby repealed.
86-128
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PURPOSE
H.R. 1580 would repeal the Comprehensive Anti-Apartheid Act of
1986 (Public Law 99-440) and impose a total ban on investment in,
as well as a trade embargo against, South Africa. The bill would
also prohibit any United States military or intelligence cooperation
with the government of South Africa.
COMMITTEE CONSIDERATION
The Permanent Select Committee on Intelligence considered only
that section (section 6) of the bill dealing with military or intelli-
gence cooperation with the government of South Africa. The Sub-
committee on Legislation held two executive session hearings on
H.R. 1580 on May 19, and May 24, 1988. Witnesses appearing
before the Committee included William H. Webster, Director of
Central Intelligence, Charles Freeman, Deputy Assistant Secretary
of State for African Affairs, Donald H. McHenry, former United
States Ambassador to the United Nations, Representative Ronald
V. Dellunis, the sponsor of the legislation, and Representative Wil-
liam H. Gray, III, sponsor of a similar bill, H.R. 2443.
During these hearings, the Committee explored the possible
impact of a total prohibition on intelligence sharing with the Gov-
ernment of South Africa, as well as the United States experience
under current law restricting United States intelligence relation-
ships with that country, specifically, section 332 of the Comprehen-
sive Anti-Apartheid Act and section 107 of the Intelligence Author-
ization Act for Fis -al Year 1987. Both prohibit "any form of coop-
eration, direct or indirect, with the Government of South Africa"
in the realm of intelligence except for activities which are "reason-
ably designed to facilitate the collection of necessary intelligence."
Taken together, they make it the policy of the United States not to
provide information to the Government of South Africa pertaining
to a "South African internal opposition group, movement, organiza-
tion or individual" and require that any change An this policy, the
provision of intelligence information contrary to that policy, or any
activity undertaken to collect intelligence through intelligence
sharing must be the subject of prior notification to the intelligence
committees of the House and Senate.
Committee review of the implementation of these laws has been
regular and thorough. The Committee has conducted periodic brief-
ings and hearings and exchanged correspondence with intelligence
officials to ensure a very thorough knowledge of the nature of
United States intelligence activities in southern Africa. Based on
these reviews and on the hearings which it conducted on H.R. 1580,
the Committee met on June 9, 1988 and by a vote of 10 to 5 adopt-
ed an amendment to H.R. 1580.
PURPOSE OF THE AMENDMENT
The purpose of the amendment adopted by the Committee was to
remove to the fullest extent possible the appearance of cooperative
and friendly relations with the Government of South Africa in the
intelligence field. This is of critical importance in the context of a
strong United States anti-apartheid policy because the intelligence
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services of the Government of South Africa are deeply involved in
activities to maintain the iron grip of the white minority over the
black majority population of South Africa inside that country and
in launching paramilitary raids into neighboring countries to assas-
sinate South African opposition members.
The amendment does make one exception to a total prohibition
on intelligence sharing with South Africa. It permits the exchange
of information concerning Cuban, Soviet and Angolan military
forces and equipment in Angola. This is to ensure that, for the
time at least, the United States may continue to follow military de-
velopments in that country in support of U.S. policy. The amend-
ment is intended to permit intelligence activities under the current
conditions and limitations.
The Committee weighed carefully in the balance the disadvan-
tages that self-imposed restrictions on intelligence collection in this
important region might have on the national security of the United
States. The Committee determined that the possible harm to na-
tional security interests as a result of the adoption of H.R. 1580
was largely speculative, particularly in light of the Committee's de-
cision to continue to permit the exchange of information concern-
ing the military conflict in Angola.
The Committee will continue to review the possible impact of
H.R. 1580, as amended, after it is enacted. However, the Commit-
tee's present judgment is that no critical element of national secu-
rity information will be lost as a result of the adoption of the Com-
mittee's amendment.
SECTION-By-SECTION ANALYSIS
Section 6(a) of the bill prohibits any agency or entity of the
United States from engaging in "any form of cooperation, direct or
indirect, with the armed forces of the Government of South
Africa." Cooperation, in this conext, means the sharing of informa-
tion or the conduct of joint operations.
Section 6(b) provides that no agency or entity of the United
States involved in intelligence activities may engage in any form of
cooperation, direct or indirect, with the Government of South
Africa. The word "cooperation," in this context, has the same
meaning as above.
The Committee amendment would add a new subsection (c) that
would exempt from the prohibitions of subsections (a) and (b) "the
conduct of diplomatic activities" or "intelligence information con-
cerning the military activities or equipment in southern Africa of
Cuban military forces or of another communist country acting in
concert with Cuban military forces."
The reference to diplomatic activities is necessitated by the
nature of the prohibition in subsection 6(b), which covers agencies
or entities of the United States "involved in intelligence activities."
The Department of State' Bureau of Intelligence and Research is a
part of the United States intelligence community and engages in
intelligence analysis and coordination. Therefore, the Department
of State is an agency involved in intelligence activities. The first
exemption in subsection (c) makes clear that the application of sub-
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section 6(b) is not intended to limit the conduct of the diplomatic
activities of the United States.
The reference to intelligence information concerning military ac-
tivities or equipment in southern Africa of Cuban military forces or
of another communist country acting in concert with Cuban mili-
tary forces refers to information about the military conflict in
Angola, which is the only country in southern Africa where Cuban
troops are deployed. It would permit the exchange of information
concerning the military forces, capabilities, and equipment of
Cuban, Soviet and Angolan military forces in Angola.
The term "Cuban military forces" used in the subsection refers
to actual military combat units.
The Committee amendment would also add a new subsection
12(d) that would repeal section 107 of the Intelligence Authoriza-
tion Act for Fiscal Year 1987. Section 12(a) repeals the Comprehen-
sive Anti-Apartheid Act but does not affect section 107. The Com-
mittee believes that all previous provisions of law concerning intel-
ligence activities in southern Africa should be repealed so as to
remove any ambiguity about United States policy in this area.
COMMrITEE PosmON
On June 9, 1988, the Permanent Select Committee on Intelli-
gence, a quorum being present, approved the bill by a vote of 10-5
and ordered it favorably reported.
OVERSIGHT FINDINGS
With respect to clause 2(1X3XA) of rule XI of the House of Repre-
sentatives, the Committee has held comprehensive hearings and
briefings regarding the nature and conduct of the intelligence ac-
tivities of the U.S. Government affected by this legislation. This
review is outlined under the section of this report, describing the
Committee's consideration of the bill.
FLSCAL YEAR COST PROJECTIONS
With respect to clause 2(1X3)(B) of rule XI of the House of Repre-
sentatives and section 308(a) of the Congressional Budget Act of
1974, this legislation does not provide new budget authority or tax
expenditures.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
With respect to clause 2(1X3XC) of rule Xi of the House of Repre-
sentatives, the Committee has received no report from the Congres-
sional Budget Office.
RECOMMENDATIONS OF THE COMMITTEE ON GOVERNMENT OPERATIONS
With respect to clause 2(1X3)(D) of rule XI of the House of Repre-
sentatives, the Committee has not received a report from the Com-
mittee on Government Operations pertaining to the subject of this
bill.
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DISSENTING VIEWS OF CONGRESSMEN HYDE, CHENEY,
LIVINGSTON, McEWEN, LUNGREN AND SHUSTER
After extensive debate and thoughtful consideration, we must
dissent from the majority views and oppose the Committee's action
on H.R. 1580 as inconsistent with the testimony provided to this
Committee during four subcommittee hearings and briefings,
countless staff discussions, and during the markup itself. This Com-
mittee heard from respected witnesses who argued forcefully for
the prohibition on United States military or intelligence coopera-
tion with the Government of South Africa. Unfortunately, these
gentlemen did not have the benefit of hearing compelling testimo-
ny from senior officials of the Department of State, the Central In-
telligence Agency, and the Defense Intelligence Agency concerning
the immediate, negative impact that passage of this legislation
would have on the U.S. foreign policy interests in the region and
important intelligence community equities.
We are mindful of the concerns vioced by the majority and de-
plore the racist, apartheid system practiced in South Africa. None-
theless, we have an important duty to insure that critical informa-
tion necessary to protect American lives reaches interested agen-
cies in the U.S. Government. We heard much about how coopera-
tion with South Africa should be diminished wherever possible to
send a strong signal to Botha. We agree in principle, but not at the
price of hurting important national security interests of the United
States and other allied and friendly countries as well. We acknowl-
edge that the majority tried to address some of our concerns in an
amendment which it adopted, but this amendment does not go far
enough and in essence is only a stopgap measure necessary to mol-
lify the membership. ,
Finally, we object to the majority view because onc4 again this
Congress is trying to constrain the Chief Executive's hand in for-
eign affairs, an area that is reserved principally to him under the
Constitution of the United States. In addition, it is the President
who is the Commander-in-Chief of our armed forces. Yet, the ma-
jority would deny him the intelligence he needs to discharge effec-
tively these constitutional responsibilities.
(41)
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