Florida lawmakers introduced a bill on Thursday aimed at discouraging business dealings with Iran in light of Hamas’ recent attack on Israel. The proposed legislation includes a comprehensive blacklist of companies that have ties to Iran and would prohibit public entities from making large contracts and prevent state pension funds from investing in blacklisted companies.
Gov. has actively supported the drafting of this bill, which aligns with his presidential campaign’s emphasis on leadership. However, some experts caution that the broad language of the legislation may have unintended negative consequences for Florida businesses, as banks and shipping companies could refuse to work with them due to the risk of being associated with the blacklist.
The proposed measure requires the creation of a new list, called the “Scrutinized Companies with Activities in Iran Terrorism Sectors List,” by January. This list would identify Florida companies with business dealings that meet the expanded criteria for Iran. The legislation aims to prevent public entities from entering contracts worth $1 million or more with blacklisted companies and restrict state pension funds from investing in companies linked to Iran.
However, the potential ripple effect of this legislation may extend beyond the intended targets. Banking and shipping institutions could refuse to work with companies, such as travel agents, booksellers, pharmaceutical companies, and food wholesalers, who have legitimate business ties to Iran or Sudan, even if these activities are permissible under U.S. law. Patrick Clawson, director of the Viterbi Program on Iran and U.S. Policy at the Washington Institute for Near East Policy, highlights the reputational damage that could arise from such a blacklist policy.
The exact impact on Florida businesses remains uncertain at this time. Republican state Rep. John Snyder, the sponsor of the House bill, acknowledges that the scope of the proposal is still being assessed.
Overall, the goal of the legislation is to prevent state funds from being invested in companies associated with various sectors of the Iranian economy. Private businesses, however, would still have the freedom to engage in business with Iran as long as they comply with federal statutes. The bill aims to establish consequences for those businesses by prohibiting them from contracting with the state of Florida or being included in the state’s investment portfolio.
The proposed sanctions against Iran emerged in response to Hamas’ attack on Israel, which resulted in significant loss of life. While the direct involvement of Iran in the attack has not been confirmed, the country has a history of supporting Hamas. Governor DeSantis sees this legislation as a way to demonstrate support for Israel and combat terrorism funding in the region.
Specific details about the sanctions plan have not been disclosed by the governor. The level of involvement of Governor DeSantis’ office in drafting the proposed measures also remains unknown.
The Senate bill sponsor, Sen. Bryan Avila, a Miami Springs Republican, views the legislation as a strong message against countries that finance terrorism.
In order to be listed as a “company with activities in Iran,” a business must have more than 10% of its revenue or assets linked to Iran or have made an investment of $20 million or more in oil-related or mineral-extraction activities in the country. The bill includes various industries, such as rug and clothing businesses, jewel and precious metal dealers, financial entities based in Iran, and shipping businesses operated indirectly by the government of Iran, that would be affected by these requirements.
The publication of lists that identify entities supporting terrorism can be an effective way to discourage business dealings with those entities. However, this approach might create a cautious environment where companies avoid any association that could potentially tarnish their reputation. Patrick Clawson emphasizes the collateral impact of such lists on educational, religious, and commercial activities with Iran and Sudan.
The proposed legislation allows public entities to consider bids from companies on the Iran Terrorism List if the required goods or services cannot be obtained elsewhere, providing some flexibility in the implementation. Constitutional questions may arise due to the jurisdiction of foreign affairs falling under the federal government, not individual states. The staff analysis of the bill raises concerns that state laws related to foreign affairs may potentially disturb foreign relations and may be deemed unconstitutional.
