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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: JGR/South African Sanctions
(2 of 6)
Box: 50
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
THE WHITE HOUSE
WASHINGTON
September 6, 1985
TO:
John G. Roberts
FROM: Richard A. Hauser
Deputy Counsel to the President
X
FYI:
COMMENT:
ACTION:
EXECUTIVE ORDER
PROHIBITING TRADE AND CERTAIN OTHER
TRANSACTIONS INVOLVING SOUTH AFRICA
By virtue of the authority vested in me as President by the
Constitution and laws of the United States of America,
including the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.), the National Emergency Act (50 U.S.C.
1601 et seq.), the U.N. Participation Act (22 U.S.C. 287), the
Arms Export Control Act (22 U.S.C. 2778), the Export
Administration Act (50 U.S.C. App. 2401 et seq.), the Atomic
Energy Act (42 U.S.C. 2011 et seq.), the Foreign Service Act
(22 U.S. 3901, et seq.), the Federal Advisory Committee Act (5
U.S.C. App. I), Section 301 of Title 3 of the United States
Code, and considering the measures which the Security Council
has decided on or recommended in Security Council Resolutions
No. 418 of November 4, 1977, No. 558 of December 14, 1984, and
No. 569 of July 26, 1985.
I, RONALD REAGAN, President of the United States of
America, find that the policies and actions of the Government
of South Africa constitute an unusual and extraordinary threat
to the foreign policy and economy of the United States and
hereby declare a national emergency to deal with that threat.
- 2 -
Section 1. The following transactions are prohibited
effective October 11, 1985:
(a) The making of any loans by persons in the United States
or U.S. nationals abroad to the Government of South Africa or
to entities owned or controlled by that Government. This-
prohibition shall not apply to (i) any loan or extension of
credit for any educational, housing, or health facility which
is available to all persons on a nondiscriminatory basis and
which is located in a geographic area accessible to all
population groups without any legal or administrative
restriction; or (ii) any loan or extension of credit for which
an agreement is entered into before the date of the enactment
of this Order.
The Secretary of the Treasury shall promulgate regulations
for this purpose. The Secretary of the Treasury may, with the
concurrence of the Secretary of State, permit exceptions to
this prohibition only if the Secretary of the Treasury
determines that the loan or extension of credit will improve
the welfare or expand the economic opportunities of persons in
South Africa disadvantaged by the apartheid system, provided
that no exception may be made for any apartheid enforcing
entity.
- 3 -
(b) All exports of computers, computer software, or goods
or technology intended to service computers to or for use by
any of the following entities of the Government of South Africa:
(1) The military
(2) The police
(3) The prison system
(4) The national security agencies
(5) ARMSCOR and its subsidiaries or the weapons research
activities of the Council for Scientific and Industrial
Research
(6) The administering authorities for the black passbook
and similar controls
(7) Any apartheid enforcing agency
(8) Any local, regional, or homelands government entity
which performs any function of any entity described in
paragraphs (1) through (7).
The Secretary of Commerce shall implement a system of end
use verification to ensure that any computers exported to South
Africa will not be used by any entity set forth in this
subsection.
- 4 -
(c) (1) Granting any license for the export to South Africa
of goods or technology which are to be used in a nuclear
production or utilization facility, or which, in the judgment
of the Secretary of State, are likely to be diverted for use in
such a facility; any authorization to engage, directly or
indirectly, in the production of any special nuclear material
in South Africa; any license for the export to South Africa of
component parts or other items or substances especially
relevant from the standpoint of export control because of their
significance for nuclear explosive purposes; and any approval
of retransfers to South Africa of any goods, technology,
special nuclear material, components, items or substances
described in this section. The Secretaries of State, Energy,
and Commerce shall take action under appropriate legal
authority to carry out these prohibitions.
(2) Nothing in this section shall preclude assistance for
International Atomic Energy Agency safeguards or IAEA programs
generally available to its member states, or for technical
programs for the purpose of reducing proliferation risks, such
as for reducing the use of highly enriched uranium and
activities envisaged by section 223 of the Nuclear Waste Policy
Act of 1982 or for exports which the Secretary of State
determines are necessary for humanitarian reasons to protect
the public health and safety.
- 5 -
(d) The import into the U.S. of any arms, ammunition, and
military vehicles produced in South Arica or of any
manufacturing data for such articles. The Secretaries of
State, Treasury, and Defense shall take any measures necessary
for this purpose.
Sec. 2 (a) The great majority of U.S. firms in South
Africa have voluntarily adhered to fair labor standards which
have benefitted those in South Africa who have been
disadvantaged by the apartheid system. It is the policy of the
U.S. to strongly encourage all U.S. firms in South Africa to
follow this commendable example.
(b) Accordingly, no department or agency of the United
States may intercede after December 31, 1985, with any foreign
government regarding the export marketing activity in any
country of any national of the United States who employes more
than 25 persons in South Africa who does not adhere to the
principles stated in subsection (c). The Secretary of State
shall promulgate procedures to ensure that such nationals may
register that they have adhered to the principles.
(c) The principles referred to in subsection (b) are as
follows:
(1) Desegregating the races in each employment facility;
- 6 -
(3) Assuring that the pay system is equitably applied to
all employees without regard to race or ethnic origin;
(4) Establishing a minimum wage and salary structure based
on the appropriate local minimum economic level which takes
into account the needs of employees and their families;
(5) Increasing by appropiate means, the number of persons
in managerial, supervisory, administrative, clerical, and
technical jobs who are disadvantaged by the apartheid
system for the purpose of significantly increasing their
representation in such jobs;
(6) Taking reasonable steps to improve the quality of
employees' lives outside the work environment with respect
to housing, transportation, schooling, recreation, and
health;
(7) Implementing fair labor practices by recognizing the
right of all employees, regardless of racial or other
distinctions to self-organization and to form, join, or
assist labor organizations, freely and without penalty or
reprisal, and recognizing the right to refrain from any
such activity.
(d) U.S. nationals referred to in subsection (b) are
encouraged to take reasonable measures to extend the scope of
their influence on activities outside the workplace, by
measures such as supporting the right of all businesses,
regardless of the racial character of their owners or
- 7 -
-
employees, to locate in urban areas, by influencing other
companies in South Africa to follow the standards specified in
subsection (c) and by supporting the freedom of mobility of all
workers, regardless of race, to seek employment opportunities
wherever they exist, and by making provision for adequate
housing for families of employees within the proximity of the
employee's place of work.
Sec. 3. The Secretary of State and any other head of a
department or agency of the United States carrying out
activities in South Africa shall promptly take the necessary
steps to ensure that the labor practices described in section
(2) (c) are applied to their South African employees.
Sec. 4. The Secretary of State and any other head of a
department or agency of the United States carrying out
activities in South Africa shall, to the maximum extent
practicable, in procuring goods or services, make affirmative
efforts to assist business enterprises having more than 50
percent beneficial ownership by persons in South Africa
disadvantaged by the apartheid system.
- 8 -
Sec. 5. The Secretary of State and the U.S. Trade. -
Representative are directed to consult with other parties to
the General Agreement on Tariffs and Trade to consider a
prohibition on the import of Krugerrands.
Sec. 6. The Secretary of the Treasury is directed to
conduct a study to be completed within sixty days regarding the
feasibility of minting and issuing gold coins.
Sec. 7. In carrying out their respective functions and
responsibilities under this Order, the Secretary of the
Treasury and the Secretary of Commerce shall consult with the
Secretary of State. Each such Secretary shall consult, as
appropriate, with other government agencies and private
persons. Each such Secretary shall issue such regulations,
licenses, or other authorizations, and is authorized to enter
into such contracts, as the Secretary considers necessary to
carry out the purposes of this Order.
Sec. 8. The Secretary of State shall establish, under his
chairmanship and pursuant to appropriate legal authority, an
Advisory Commission on South Africa to provide recommendations
on measures to encourage peaceful change in South Africa. The
Advisory Commission shall provide its initial report no later
than January 1, 1987.
- 9 -
Sec. 9. The Secretary of State is directed to take the
steps necessary pursuant to the Foreign Assistance Act of 1961,
as amended (22 U.S.C. 2151 et seq.), and related legislation to
(a) increase the amount of scholarships provided to South
Africans disadvantaged by the apartheid system up to $8 million
in Fiscal Year 1986 and (b) increase the amount allocated for
South Africa in the Human Rights Fund to $1.5 million in FY
1986. Appropriate increases will be considered in future
fiscal years. At least one third of the latter amount shall be
used for legal assistance for South Africans.
This order shall be effective immediately and shall be
transmitted to the Congress and published in the Federal
Register.
The White House
September , 1985
TO THE CONGRESS OF THE UNITED STATES:
Pursuant to section 204 (b) of the International Emergency
Economic Powers Act, 50 U.S.C. 1703, I hereby report to the
Congress that I have exercised my statutory authority to
declare that the policies and actions of the Government of
South Africa constitute an unusual and extraordinary threat to
the foreign policy and economy of the United States and to
declare a national emergency to deal with that threat.
Pursuant to this and other legal authorities, I have
prohibited certain transactions, including the following:
(1) the making or approval of bank loans to the South African
Government, with certain narrow exceptions; (2) the export of
all computers and related goods and technology to certain
government agencies and any apartheid enforcing entity of the
South African Government; (3) all nuclear exports to South
Africa and related transactions, with certain narrow
exceptions; (4) the import into the United States of arms,
ammunition, or military vehicles produced in South Africa; and
(5) the extension of export marketing support to U.S. firms
employing at least twenty-five persons in South Africa which do
not adhere to certain fair labor standards.
In addition, I have directed (6) the Secretary of State and
the United States Trade Representative to consult with other
parties to the General Agreement on Tariffs and Trade with a
view toward adopting a prohibition on the import of
Krugerrands; (7) the Secretary of the Treasury to complete a
-2-
study within 60 days regarding the feasibility of minting U.S.
gold coins; and (8) the Secretary of State to take the steps
necessary to increase the amounts provided for scholarships in
South Africa for those disadvantaged by the system of apartheid
and to increase the amounts allocated for South Africa in the
Human Rights Fund; and (9) the Secretary of State to establish
an Advisory Committee to provide recommendations on measures to
encourage peaceful change in South Africa.
Finally, this Order (10) commends the efforts of U.S. firms
in South Africa that have voluntarily adhered to the Sullivan
principles and encourages all U.S. firms to do likewise.
I am enclosing a copy of the executive order that I have
issued making this declaration and exercising this authority.
1. I have authorized these steps in response to the
current situation in South Africa. It is foreign policy of the
United States to seek peaceful change in South Africa, and in
particular an end to the repugnant practice and policy of
apartheid and the establishment of a government based on the
consent of the governed. Recent developments in South Africa
have serious implications for the prospects for peaceful change
and the stability of the region as a whole, a region of
strategic importance to the United States. The recent
declaration of a state of emergency in 36 magisterial districts
by the Government of South Africa, the mass arrests and
detentions, and the ensuing financial crisis are of direct
concern to the foreign policy and economy of the United
-3-
States. The pace of reform in South Africa has not fulfilled
the expectations of the world community nor the people of South
Africa. Recent government actions regarding negotiations on
the participation of all South Africans in the government of
that country have not sufficiently diffused tensions and may
have indeed exacerbated the situation.
Under these circumstances, I believe that it is necessary
for this nation to recognize that our foreign policy of seeking
change through peaceful means is seriously threatened. In
order for this nation successfully to influence events in that
country, it is necessary for the United States to speak with
one voice and to demonstrate our opposition to apartheid by
taking certain actions directed specifically at key apartheid
policies and agencies.
2. The above-described measures, many of which reflect
congressional concerns, will immediately demonstrate to the
South African Government the seriousness of our concern with
the situation in that country. Furthermore, this declaration
mobilizes the influence of the private sector to promote an
improvement in the economic prosperity, freedom and political
influence of blacks and other nonwhites in South Africa.
TO THE CONGRESS OF THE UNITED STATES:
Pursuant to section 204 (b) of the International Emergency
(b)
Economic Powers Act, 50 U.S.C. 1703/ I hereby report to the
Congress that I have exercised my statutory authority to
declare that the policies and actions of the Government of
South Africa constitute an unusual and extraordinary threat to
the foreign policy and economy of the United States and to
declare a national emergency to deal with that threat.
Pursuant to this and other legal authorities, I have
prohibited certain transactions, including the following:
(1) the making or approval of bank loans to the South African
Government, with certain narrow exceptions; (2) the export of
computers and related goods and technology to certain
government agencies and any apartheid enforcing entity of the
South African Government; (3) all nuclear exports to South
Africa and related transactions, with certain narrow
exceptions; (4) the import into the United States of arms,
ammunition, or military vehicles produced in South Africa; and
(5) the extension of export marketing support to U.S. firms
employing at least twenty-five persons in South Africa which do
not adhere to certain fair labor standards.
In addition, I have directed (6) the Secretary of State and
the United States Trade Representative to consult with other
parties to the General Agreement on Tariffs and Trade with a
view toward adopting a prohibition on the import of
Krugerrands; (7) the Secretary of the Treasury to complete a
-2-
study within 60 days regarding the feasibility of minting U.S.
gold coins; and (8) the Secretary of State to take the steps
necessary to increase the amounts provided for scholarships in
South Africa for those disadvantaged by the system of apartheid
and to increase the amounts allocated for South Africa in the
Human Rights Fund; and (9) the Secretary of State to establish
an Advisory Committee to provide recommendations on measures to
encourage peaceful change in South Africa.
Finally, this Order (10) commends the efforts of U.S. firms
in South Africa that have voluntarily adhered to the (Sullivan)
?
principles and encourages all U.S. firms to do likewise.
I am enclosing a copy of the executive order that I have
issued making this declaration and exercising this authority.
1. I have authorized these steps in response to the
the
the
\
current situation in South Africa. It is foreign policy of the
United States to seek peaceful change in South Africa, and in
particular an end to the repugnant practice and policy of
apartheid and the establishment of a government based on the
consent of the governed. Recent developments in South Africa
have serious implications for the prospects for peaceful change
and the stability of the region as a whole, a region of
strategic importance to the United States. The recent
declaration of a state of emergency in 36 magisterial districts
by the Government of South Africa, the mass arrests and
detentions, and the ensuing financial crisis are of direct
concern to the foreign policy and economy of the United
EXECUTIVE ORDER
PROHIBITING TRADE AND CERTAIN OTHER
TRANSACTIONS INVOLVING SOUTH AFRICA
By the authority vested in me as President by the
Constitution and laws of the United States of America,
including the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C.
1601 et seq.), the Foreign Assistance Act (22 U.S.C. 2151 et
seq.), the United Nations Participation Act (22 U.S.C. 287),
the Arms Export Control Act (22 U.S.C. 2751 et. seq.), the
Export Administration Act (50 U.S.C. App. 2401 et seq.), the
Atomic Energy Act (42 U.S.C. 2011 et seq.), the Foreign Service
Act (22 U.S.C. 3901 et seq.), the Federal Advisory Committee
Act (5 U.S.C. App. I), Section 301 of Title 3 of the United
States Code, and considering the measures which the United
Nations Security Council has decided on or recommended in
Security Council Resolutions No. 418 of November 4, 1977, No.
558 of December 13, 1984, and No. 569 of July 26, 1985, and
considering that the policy and practice of apartheid are
repugnant to the moral and political values of democratic and
free societies and run counter to United States policies to
promote democratic governments throughout the world and respect
for human rights, and the policy of the United States to
influence peaceful change in South Africa, as well as the
threat posed to United States interests by recent events in
that country,
I, RONALD REAGAN, President of the United States of
America, find that the policies and actions of the Government
of South Africa constitute an unusual and extraordinary threat
to the foreign policy and economy of the United States and
hereby declare a national emergency to deal with that threat.
Section 1. Except as otherwise provided in this section,
the following transactions are prohibited effective October 11,
1985:
(a) The making or approval of any loans by financial
institutions in the United States to the Government of South
Africa or to entities owned or controlled by that Government.
This prohibition shall enter into force on November 11, 1985.
It shall not apply to (i) any loan or extension of credit for
any educational, housing, or health facility which is available
to all persons on a nondiscriminatory basis and which is
located in a geographic area accessible to all population
groups without any legal or administrative restriction; or (ii)
any loan or extension of credit for which an agreement is
entered into before the date of this Order.
The Secretary of the Treasury is hereby authorized to
promulgate such rules and regulations as may be necessary to
carry out this subsection. The initial rules and regulations
shall be issued within sixty days. The Secretary of the
Treasury may, in consultation with the Secretary of State,
permit exceptions to this prohibition only if the Secretary of
the Treasury determines that the loan or extension of credit
will improve the welfare or expand the economic opportunities
of persons in South Africa disadvantaged by the apartheid
system, provided that no exception may be made for any
apartheid enforcing entity.
(b) All exports of computers, computer software, or goods
or technology intended to service computers to or for use by
any of the following entities of the Government of South Africa:
(1) The military;
(2) The police;
(3) The prison system;
(4) The national security agencies;
(5) ARMSCOR and its subsidiaries or the weapons research
activities of the Council for Scientific and Industrial
Research;
(6) The administering authorities for the black passbook
and similar controls;
(7) Any apartheid enforcing agency;
(8) Any local or regional government or "homeland" entity
which performs any function of any entity described in
paragraphs (1) through (7).
The Secretary of Commerce is hereby authorized to
promulgate such rules and regulations as may be necessary to
carry out this subsection and to implement a system of end use
verification to ensure that any computers exported directly or
indirectly to South Africa will not be used by any entity set
forth in this subsection.
(c) (1) Issuance of any license for the export to South
Africa of goods or technology which are to be used in a nuclear
production or utilization facility, or which, in the judgment
of the Secretary of State, are likely to be diverted for use in
such a facility; any authorization to engage, directly or
indirectly, in the production of any special nuclear material
in South Africa; any license for the export to South Africa of
component parts or other items or substances especially
relevant from the standpoint of export control because of their
significance for nuclear explosive purposes; and any approval
of retransfers to South Africa of any goods, technology,
special nuclear material, components, items or substances
described in this section. The Secretaries of State, Energy,
Commerce, and Treasury are hereby authorized to take such
actions as may be necessary to carry out this subsection.
(2) Nothing in this section shall preclude assistance for
International Atomic Energy Agency safeguards or IAEA programs
generally available to its member states, or for technical
programs for the purpose of reducing proliferation risks, such
as for reducing the use of highly enriched uranium and
activities envisaged by section 223 of the Nuclear Waste Policy
Act (42 U.S.C. 10203) or for exports which the Secretary of
State determines are necessary for humanitarian reasons to
protect the public health and safety.
(d) The import into the United States of any arms,
ammunition, or military vehicles produced in South Africa or of
any manufacturing data for such articles. The Secretaries of
State, Treasury, and Defense are hereby authorized to take such
actions as may be necessary to carry out this subsection.
Sec. 2. (a) The majority of United States firms in South
Africa have voluntarily adhered to fair labor principles which
have benefitted those in South Africa who have been
disadvantaged by the apartheid system. It is the policy of the
United States to encourage strongly all United States firms in
South Africa to follow this commendable example.
(b) Accordingly, no department or agency of the United
States may intercede after December 31, 1985, with any foreign
government regarding the export marketing activity in any
country of any national of the United States employing more
than 25 individuals in South Africa who does not adhere to the
principles stated in subsection (c) with respect to that
national's operations in South Africa. The Secretary of State
shall promulgate regulations to further define the employers
that will be subject to the requirements of this subsection and
procedures to ensure that such nationals may register that they
have adhered to the principles.
(c) The principles referred to in subsection (b) are as
follows:
(1) Desegregating the races in each employment facility;
(2) Providing equal employment opportunity for all
employees without regard to race or ethnic origin;
(3) Assuring that the pay system is applied to all
employees without regard to race or ethnic origin;
(4) Establishing a minimum wage and salary structure based
on the appropriate local minimum economic level which takes
into account the needs of employees and their families;
(5) Increasing by appropriate means, the number of persons
in managerial, supervisory, administrative, clerical, and
technical jobs who are disadvantaged by the apartheid
system for the purpose of significantly increasing their
representation in such jobs;
(6) Taking reasonable steps to improve the quality of
employees' lives outside the work environment with respect
to housing, transportation, schooling, recreation, and
health;
(7) Implementing fair labor practices by recognizing the
right of all employees, regardless of racial or other
distinctions, to self-organization and to form, join, or
assist labor organizations, freely and without penalty or
reprisal, and recognizing the right to refrain from any
such activity.
(d) United States nationals referred to in subsection (b)
are encouraged to take reasonable measures to extend the scope
of their influence on activities outside the workplace, by
measures such as supporting the right of all businesses,
regardless of the racial character of their owners or
employees, to locate in urban areas, by influencing other
companies in South Africa to follow the standards specified in
subsection (c) and by supporting the freedom of mobility of all
workers, regardless of race, to seek employment opportunities
wherever they exist, and by making provision for adequate
housing for families of employees within the proximity of the
employee's place of work.
Sec. 3. The Secretary of State and the head of any other
department or agency of the United States carrying out
activities in South Africa shall promptly take, to the extent
permitted by law, the necessary steps to ensure that the labor
practices described in section (2) (c) are applied to their
South African employees.
Sec. 4. The Secretary of State and the head of any other
department or agency of the United States carrying out
activities in South Africa shall, to the maximum extent
practicable and to the extent permitted by law, in procuring
goods or services in South Africa, make affirmative efforts to
assist business enterprises having more than 50 percent
beneficial ownership by persons in South Africa disadvantaged
by the apartheid system.
Sec. 5. (a) The Secretary of State and the United States
Trade Representative are directed to consult with other parties
to the General Agreement on Tariffs and Trade with a view
toward adopting a prohibition on the import of Krugerrands.
(b) The Secretary of the Treasury is directed to conduct a
study to be completed within sixty days regarding the
feasibility of minting and issuing gold coins with a view
toward expeditiously seeking legislative authority to
accomplish the goal of issuing such coins.
Sec. 6. In carrying out their respective functions and
responsibilities under this Order, the Secretary of the
Treasury and the Secretary of Commerce shall consult with the
Secretary of State. Each such Secretary shall consult, as
appropriate, with other government agencies and private persons.
Sec. 7. The Secretary of State shall establish, pursuant
to appropriate legal authority, an Advisory Committee on South
Africa to provide recommendations on measures to encourage
peaceful change in South Africa. The Advisory Committee shall
provide its initial report within twelve months.
Sec. 8. The Secretary of State is directed to take the
steps necessary pursuant to the Foreign Assistance Act and
related legislation to (a) increase the amount of internal
scholarships provided to South Africans disadvantaged by the
apartheid system up to $8 million from funds made available for
Fiscal Year 1986, and (b) increase the amount allocated for
South Africa from funds made available for Fiscal Year 1986 in
the Human Rights Fund up to $1.5 million. At least one-third
of the latter amount shall be used for legal assistance for
South Africans. Appropriate increases in the amounts made
available for these purposes will be considered in future
fiscal years.
Sec. 9. This Order is intended to express and implement
the foreign policy of the United States. It is not intended to
create any right or benefit, substantive or procedural,
enforceable at law by a party against the United States, its
agencies, its officers, or any person.
THE WHITE HOUSE,
THE WHITE HOUSE
WASHINGTON
September 6, 1985
MEMORANDUM FOR FRED F. FIELDING
FROM:
JOHN G. ROBERTS grop
SUBJECT:
Reaction to Preemption of State and
Local Laws by Federal Legislation
Respecting South Africa
Tom Dawson has sent you excerpts from the Congressional
Record discussing whether enactment of legislation by
Congress on investment by United States companies in South
Africa would preempt the wide variety of state and local
laws and ordinances that have been enacted on the same
subject. Dawson has asked for your reaction.
A colloquy between Senators McConnell and Lugar on July 15,
1985, indicates that Federal legislation in the area would
preempt state and local laws on South Africa. This position
is supported by a legal analysis by the Library of Congress,
made part of the Congressional Record.
A rival colloquy took place four days earlier, on July 11,
involving Senators Proxmire, Cranston, and Kennedy. Those
Senators clearly stated their view that the proposed Federal
legislation would not preempt state and local laws and
ordinances. The July 11 colloquy noted that Senator Roth
and McConnell proposed an amendment to the pending bill to
provide explicitly that the bill would preempt state law.
McConnell stated on July 15 that he withdrew the amendment
with the understanding that it was not necessary to achieve
preemption; Kennedy said it was withdrawn because it would
not have passed.
Given the foregoing it is my view that the courts would rule
that the pending Federal legislation was not intended to
preempt state and local laws and ordinances on South Africa.
Certainly any such laws and ordinances that conflicted with
the Federal law would be invalid under the Supremacy Clause.
The issue, however, concerns state and local laws that do
not conflict with the proposed Federal restrictions but
simply go further. To take a typical example, a state law
prohibiting state funds to be invested in companies doing
business in South Africa does not conflict with a provision
in Federal law requiring such companies to abide by the
so-called Sullivan principles. The question is whether such
a state law would nonetheless be preempted by the Federal
law.
- 2 -
The question is purely one of Congressional intent. If
Congress desires to preempt state and local laws in this
area, it possesses the power to do SO. A basic respect for
Federalism, however, has led courts to require clear mani-
festation of Congressional intent before finding an intent
to preempt state law. As the Supreme Court has noted: "We
start with the assumption that the historic police powers of
the States were not to be superseded by the Federal Act
unless that was the clear and manifest purpose of Congress."
Rice V. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)
(frequently quoted in subsequent opinioms). Because of the
violence preemption does to Federalism walues, courts are
reluctant to find preemption in the absence of a clear
directive from Congress. This bill will contain no clear
directive in the statutory language itself. Nor will the
required clear directive be found in the legislative history:
Lugar and McConnell have done their best to create a record
supporting preemption, but the contrary views of Cranston,
Kennedy, and Proxmire are also clearly on record. In other
words, a court considering the question could only conclude
that it was raised and unresolved. That is hardly evidence
of "clear and manifest purpose" to preempt.
The attached memorandum for Dawson embodies the foregoing,
appropriately couched with cautionary Language to the effect
that a definitive opinion must await (1)) the final language
in the bill, and (2) any additional discassion of the issue
in debate or committee reports.
Attachment
THE WHITE HOUSE
WASHINGTON
September 6, 1985
MEMORANDUM FOR THOMAS DAWSON
DEPUTY ASSISTANT TO THE PRESIDENT
EXECUTIVE ASSISTANT TO THE CHIEF OF STAFF
FROM:
FRED F. FIELDING
COUNSEL TO THE PRESIDENT
SUBJECT:
Reaction to Preemption of State and
Local Laws by Federal Legislation
Respecting South Africa
You have asked for my views on whether the proposed bill on
South Africa pending in Congress would, if enacted, operate
to preempt state and local laws and ordinances on South
Africa. The question was addressed by Senators Proxmire,
Cranston, and Kennedy on July 11, and by Senators McConnell
and Lugar on July 15. The former group concluded that the
proposed Federal legislation would not preempt state and
local law; the latter that it would. Each side introduced
in the Congressional Record supportive legal opinions.
Senators Roth and McConnell proposed but later withdrew a
provision explicitly providing for preemption. The group
arguing in favor of preemption contended the provision was
withdrawn as unnecessary; the group opposed to preemption
contended it was withdrawn because it would not have passed.
In light of the foregoing, and my independent review of the
law on preemption, it is my view that courts, if presented
with the question, would rule that the Federal legislation
does not preempt state and local laws and ordinances dealing
with South Africa. Congress certainly possesses the power
to preempt state and local laws in this area, but courts
will insist that Congress evince a "clear and manifest
purpose" to do SO. Rice V. Sante Fe Elevator Corp., 331
U.S. 218, 230 (1947). Out of respect for basic principles
of Federalism, courts will not find that Congress intended
to displace state law unless Congress unambiguously intended
that result. The easiest way for Congress to evince such an
intent is to state it in the statute. That will not be done
in this case. When a court turns to the legislative history,
it will find that the preemption question was raised and
that contrary views were expressed, each with supporting
legal analysis. That is hardly the requisite "clear and
manifest purpose" to preempt that is required.
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Of course, any state or local laws in direct conflict with
the Federal legislation will be invalid, to the extent of
the conflict, under the Supremacy Clause. State laws that
simply go further than the Federal law -- for example, a
state law forbidding investment of state funds in companies
doing business in South Africa, while the Federal law simply
requires such companies to meet certain standards -- would
not, in my view, be preempted. This view is a preliminary
one. Definitive guidance must await (1) the precise
language of the Federal statute, and (2) any additional
discussion of the preemption issue in debate or committee
reports.
FFF:JGR:aea 9/6/85
CC: FFFielding
JGRoberts
Subj
Chron
Draft as of
4:00 P.M. Saturday
EXECUTIVE ORDER
PROHIBITING TRADE AND CERTAIN OTHER
TRANSACTIONS INVOLVING SOUTH AFRICA
By virtue of the authority vested in me as President by the
Constitution and laws of the United States of America,
som
including the International Emergency Economic Powers Act (50
ies
U.S.C. 1701 et seq.), the National Emergency Act (50 U.S.C.
1461
?
1601 et seq.), the (Foreign Assistance Act (22 U.S.C. 2151 et
MYS
4
1945
!
seq.), the (U.N.) Participation Act (22 U.S.C. 287), the Arms
\
Export Control Act (22 U.S.C. 2778), the Export Administration
Act (50 U.S.C. App. 2401 et seq.), the Atomic Energy Act (42
?
U.S.C. 2011 et seq.), the Foreign Service Act (22 U.S. 3901, et
seq.), the Federal Advisory Committee Act (5 U.S.C. App. I),
Section 301 of Title 3 of the United States Code, and
considering the measures which the Security Council has decided
on or recommended in Security Council Resolutions No. 418 of
November 4, 1977, No. 558 of December 14, 1984, and No. 569 of
July 26, 1985, and considering the repugnance of the policy and
practice of apartheid and its inconsistency with the values of
the United States and basic human rights, and the threat posed
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to United States interests by recent events in South Africa, and
the policy of the United States to secure peaceful change in
South Africa,
I, RONALD REAGAN, President of the United States of
America, find that the policies and actions of the Government
of South Africa constitute an unusual and extraordinary threat
to the foreign policy and economy of the United States and
hereby declare a national emergency to deal with that threat.
Section 1. Except as otherwise provided in this section,
the following transactions are prohibited effective October 11,
1985:
(a) The making or approval of any loans by financial
insitutions in the United States to the Government of South
Africa or to entities owned or controlled by that Government.
This prohibition shall enter into force on November 11, 1985.
It shall not apply to (i) any loan or extension of credit for
any educational, housing, or health facility which is available
to all persons on a nondiscriminatory basis and which is
located in a geographic area accessible to all population
groups without any legal or administrative restriction; or (ii)
any loan or extension of credit for which an agreement is
entered into before the date of this Order.
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The Secretary of the Treasury is hereby authorized to
promulgate such rules and regulations as may be necessary to
carry out this subsection. The initial rules and regulations
shall be issued within sixty days. The Secretary of the
Treasury may, in consultation with the Secretary of State,
permit exceptions to this prohibition only if the Secretary of
the Treasury determines that the loan or extension of credit
will improve the welfare or expand the economic opportunities
of persons in South Africa disadvantaged by the apartheid
system, provided that no exception may be made for any
apartheid enforcing entity.
(b) All exports of computers, computer software, or goods
or technology intended to service computers to or for use by
any of the following entities of the Government of South Africa:
(1) The military
(2) The police
(3) The prison system
(4) The national security agencies
(5) ARMSCOR and its subsidiaries or the weapons research
activities of the Council for Scientific and Industrial
Research
(6) The administering authorities for the black passbook
and similar controls
(7) Any apartheid enforcing agency
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(8) Any local, regional, or "homeland" government entity
which performs any function of any entity described in
paragraphs (1) through (7).
The Secretary of Commerce is hereby authorized to
promulgate rules and regulations as may be necessary to carry
out this subsection and to implement a system of end use
verification to ensure that any computers exported to South
Africa will not be used by any entity set forth in this
subsection.
(c) (1) Issuing any license for the export to South Africa
of goods or technology which are to be used in a nuclear
production or utilization facility, or which, in the judgment
of the Secretary of State, are likely to be diverted for use in
such a facility; any authorization to engage, directly or
indirectly, in the production of any special nuclear material
in South Africa; any license for the export to South Africa of
component parts or other items or substances especially
relevant from the standpoint of export control because of their
significance for nuclear explosive purposes; and any approval
of retransfers to South Africa of any goods, technology,
special nuclear material, components, items or substances
described in this section. The Secretaries of State, Energy,
Commerce, and Treasury are hereby authorized to take such
actions as may be necessary to carry out this subsection.
- 5 -
(2) Nothing in this section shall preclude assistance for
International Atomic Energy Agency safeguards or IAEA programs
generally available to its member states, or for technical
programs for the purpose of reducing proliferation risks, such
as for reducing the use of highly enriched uranium and
activities envisaged by section 223 of the Nuclear Waste Policy
?
Act of 1982 or for exports which the Secretary of State
( te)
determines are necessary for humanitarian reasons to protect
the public health and safety.
(d) The import into the U.S. of any arms, ammunition, and
military vehicles produced in South Africa or of any
manufacturing data for such articles. The Secretaries of
State, Treasury, and Defense are hereby authorized to take such
actions as may be necessary to carry out this subsection.
Sec. 2 (a) The great majority of U.S. firms in South
Africa have voluntarily adhered to fair labor principles which
have benefitted those in South Africa who have been
disadvantaged by the apartheid system. It is the policy of the
U.S. to strongly encourage all U.S. firms in South Africa to
follow this commendable example.
(b) Accordingly, no department or agency of the United
States may intercede after December 31, 1985, with any foreign
government regarding the export marketing activity in any
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country of any national of the United States employing more
than 25 individuals in South Africa who does not adhere to the
principles stated in subsection (c) with respect to that
national's operations in South Africa. The Secretary of State
shall promulgate procedures to further define the employers
that will be subject to the requirements of this subsection and
to ensure that such nationals may register that they have
adhered to the principles.
(c) The principles referred to in subsection (b) are as
follows:
(1) Desegregating the races in each employment facility;
(2) Providing equal employment opportunity for all
employees without regard to race or ethnic origin;
(3) Assuring that the pay system is equitably applied to
all employees without regard to race or ethnic origin;
(4) Establishing a minimum wage and salary structure based
on the appropriate local minimum economic level which takes
into account the needs of employees and their families;
(5) Increasing by appropiate means, the number of persons
in managerial, supervisory, administrative, clerical, and
technical jobs who are disadvantaged by the apartheid
system for the purpose of significantly increasing their
representation in such jobs;
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(6) Taking reasonable steps to improve the quality of
employees' lives outside the work environment with respect
to housing, transportation, schooling, recreation, and
health;
(7) Implementing fair labor practices by recognizing the
right of all employees, regardless of racial or other
distinctions to self-organization and to form, join, or
assist labor organizations, freely and without penalty or
reprisal, and recognizing the right to refrain from any
such activity.
(d) U.S. nationals referred to in subsection (b) are
encouraged to take reasonable measures to extend the scope of
their influence on activities outside the workplace, by
measures such as supporting the right of all businesses,
regardless of the racial character of their owners or
employees, to locate in urban areas, by influencing other
companies in South Africa to follow the standards specified in
subsection (c) and by supporting the freedom of mobility of all
workers, regardless of race, to seek employment opportunities
wherever they exist, and by making provision for adequate
housing for families of employees within the proximity of the
employee's place of work.
Sec. 3. The Secretary of State and any other head of a
department or agency of the United States carrying out
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activities in South Africa shall promptly take the necessary
steps to ensure to the extent permitted by law that the labor
practices described in section (2) (c) are applied to their
South African employees.
Sec. 4. The Secretary of State and any other head of a
department or agency of the United States carrying out
activities in South Africa shall, to the maximum extent
practicable and to the extent permitted by law, in procuring
goods or services in South Africa, make affirmative efforts to
assist business enterprises having more than 50 percent
beneficial ownership by persons in South Africa disadvantaged
by the apartheid system.
Sec. 5 (a). The Secretary of State and the U.S. Trade
Representative are directed to consult with other parties to
the General Agreement on Tariffs and Trade to consider a
157
prohibition on the import of Krugerrands.
(b) The Secretary of the Treasury is directed to conduct a
study to be completed within sixty days regarding the
feasibility of minting and issuing gold coins.
and
limith
Sec. 6. In carrying out their respective functions and
with
responsibilities under this Order, the Secretary of the
Treasury and the Secretary of Commerce shall consult with the
good
- 9 -
Secretary of State. Each such Secretary shall consult, as
appropriate, with other government agencies and private persons.
Sec. 7. The Secretary of State shall establish, pursuant
to appropriate legal authority, an Advisory Commission on South
Africa to provide recommendations on measures to encourage
peaceful change in South Africa. The Advisory Commission shall
provide its initial report within twelve months.
Sec. 8. The Secretary of State is directed to take the
steps necessary pursuant to the Foreign Assistance Act of 1961,
as amended (22 U.S.C. 2151 et seq.), and related legislation to
(a) increase the amount of scholarships provided to South
Africans disadvantaged by the apartheid system up to $8 million
from funds made available for Fiscal Year 1986 and (b) increase
the amount allocated for South Africa from funds made available
for Fiscal Year 1986 in the Human Rights Fund up to $1.5
million. At least one third of the latter amount shall be used
for legal assistance for South Africans. Appropriate increases
in the amounts made available for these purposes will be
considered in future fiscal years.
Sec. 9. This order is intended to express and implement
the foreign policy of the United States. It is not intended to
create any right or benefit, substantive or procedural,
enforceable at law by a party against the United States, its
agencies, its officers, or any person.
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The White House
September , 1985