Push UN to Align With US Sanctions Lists, House Subcommittee Hears

The U.S. should convince the U.N. to harmonize its sanctions lists with U.S. trade blacklists, a House Financial Services subcommittee heard during a hearing last week. Aligning the lists could require the World Bank and other international organizations to adhere to U.S. sanctions, one witness said, and help the U.S. extend the reach of its restrictions against China.

The hearing was held the same month the GAO said World Bank borrower countries routinely award contracts to entities on U.S. sanctions or export control lists (see 2305120020). Rep. Blaine Luetkemeyer, R-Mo., chair of the Subcommittee on National Security, Illicit Finance and International Financial Institutions, called the report “very disconcerting.”

“This money is going to Chinese companies that are on our U.S. Entity List and sanctions lists,” he said. “It poses a significant risk to our national security.”

Rep. Zach Nunn, R-Iowa, criticized some of the bank’s contracts that have gone to Chinese projects, such as the Three Gorges Dam in the Hubei province. Rep. French Hill, R-Ariz., noted the World Bank said it doesn’t follow U.S. sanctions lists, only U.N. lists, which “seems just incongruent and insane to me,” he said.

The U.S. needs to “figure out” how it can align the bodies’ restrictions with those it imposes, said Daniel Runde, a senior vice president at the Center for Strategic and International Studies. “We need to encourage getting Chinese firms onto U.N. blacklists” so the World Bank can also bar those entities from bidding on borrower contracts, he said.

The U.S. also should be “encouraging” the bank to “revisit its policy about what kind of blacklist that it's using,” Runde said. “It just seems to me that it's deeply offensive that companies that are on our Entity List are somehow benefiting from World Bank contracts.”

He also said the private sector has a role to play. American companies should “do more and engage with the World Bank Group,” Runde said. “We should be encouraging American businesses, but we should absolutely be discouraging and preventing companies on the Entities List from getting contracts.”