JASTA and the Arab Wealth
The US Congress issued JASTA, a law that allows individuals to sue foreign sovereign states in American courts for assisting and abetting terror activities on American soil. President Obama vetoed this law, but Congress re-passed it with an overwhelming majority, thus overriding the veto and confirming it as law.
This law appeared to be directed in particular against Saudi Arabia, because of its alleged involvement in the 9/11 New York tragedy, despite the absence of evidence. However, it also impacted the whole world, by revoking well established ancient norms related to the immunity of sovereign nations. Naturally, it was condemned by Saudi and the rest of the Arab countries, but also, Holland, who considered it a disaster, and France who threatened to reciprocate with a similar law. More international condemnations are expected in the coming days.
A HARSH AND DANGEROUS LAW
The farcical part of this matter, is that Congress, suddenly realized the reciprocal danger of this law. Now the US can be sued for all of its actions throughout the past century – and in the courts of Third World countries! It appears that this law has backfired, as the US cannot wage war on all the countries of the world for exercising their lawful right to sue it, and confiscate its assets, and those of its companies, as compensation payments. Accordingly, a few confused congressmen promised to relook at the law and try to soften its edges, once they return from their vacations! We do not believe that this will change anything, and the situation remains dire.
Some have naively opined that this law has no teeth. They base this on the need of evidence of guilt to proceed to trial. Also, they claim that the Attorney General can postpone the trial by certifying to the court that the US government is in discussions with the defendant. In reality nothing has changed. All accusations, normally have to be supported with initial evidence, and postponement is just that, a “Postponement”, not a cancellation. Nevertheless, regardless of how solid or weak it is, or whether it will be amended or not, JASTA is a loud and clear bell toll, warning of what is to come.
JASTA IS NOT AN ACCIDENT
The passing of this law was neither an accident nor a mistake. It was not a reflex response to releasing the 9/11 report, nor just a coincidence with the general elections, which induced congressmen to exhibit to their constituents how much they care for them. We think that the ground was already prepared for such a law.
For congress to dare and promulgate a law directed against one of the oldest and staunchest allies of the US, reflects a new and dangerous state of affairs. This seems to have begun with the Administration’s “pivot to Asia” strategy, which invariably meant a partial downgrade of the importance of the Middle East. This thinking filtered down through institutional America, until it reached Congress and ergo, the law is “debated” and passed with minimum considerations to its fallout effects. Add to that, persistent mass-media painting of Arabs and Muslims as evil, and presto, you have a public opinion that is calling for blood.
WHAT DOES JASTA MEAN FOR THE ARABS?
Is there a hidden message for us in this? Possibly, and we may attempt to decipher its content as follows:
1) It seems that the Arab Gulf states are no longer as strategically important as they previously were. They certainly remain important as producers and suppliers of oil and purchasers of arms, but they now have to become more disciplined, so as not cause any new headaches for the US, especially the type that require costly defense, or distracts it from concentrating on Asia and Russia.
2) The new, or amended, law will be used as a stick to threaten anyone who deviates from the prescribed route, and crosses red lines.
3) The word “Terrorism” is elastic and is defined by the powerful, on a case by case basis. Therefore, it is not only Saudi that is being threatened, but also Kuwait and the other Gulf States who, from time to time, are admonished by the US of not doing enough to control public donations’ collections, that end up in terrorists’ coffers.
4) The wealth and assets of the Gulf countries have become more susceptible to confiscation. Probably, because they are too big and need to be trimmed.
WHAT CAN WE DO?
So what can we do to mitigate this threat? Wise options are limited, but the most important may be:
a. The gradual but consistent withdrawal of a part of our deposits in US banks and other banks that can be affected by US laws or pressure. This may not totally protect those deposits, but is a good delaying tactic.
b. The liquidation of Treasury Bills. However, this has to be done gradually in order to avoid fire-sale losses.
c. Reduce deposits in general and replace them with assets, such as real estate or majority shareholding positions in successful companies all over the world – not just in the West.
d. Buy gold every time its price dips. Build as large a stock of gold as is possible.
e. We do not recommend presently to toy with the idea of switching oils sales currency away from the US Dollar. That would be playing with fire, and would trigger such US ire that would be, by far, nastier than JASTA.
a. Consider joining international groupings and/or treaties, such as “BRICS” for example. Such groupings would extend our strategic investment horizon and scope, which we sourly lack.
b. Direct the investment of our repatriated funds towards investments in the Arab World. After new sets of mutually acceptable objectives, terms, conditions and guarantees are negotiated.
c. Direct part of the repatriated funds towards investment in the new Silk Road project.
d. Reconsider regional relations and reduce tensions. This would deliver great benefits such as avoiding costly wars, as well as, open up investment opportunities for the repatriated monies.
e. Reduce spending on military arms and equipment, especially western sourced. Despite that, we shall remain for many years at the mercy of expensive maintenance and spare parts contracts for the existing equipment, or that which we have promised to purchase.
f. Of course, and this is the most important of all, quickly embark on rebuilding our societies and economies to withstand the next phase, when we find ourselves all alone, in the jungle.
Dark clouds are forming on the horizon. Only the blind cannot see them.