Sanctioning Apartheid - KORA

Implementation of the Anti-Apartheid Act of 1986 23
In short, the current sanctions are indeed inadequate for two
reasom. First, the sanctions are too limited in their scope and
application to be effectively implemented. Second, the Reagan
Administration has created glaring Ioopholes through regulations
promulgated to implement the law by Executive branch agencies.
An examination of impFernentation of several provisions of the
Act will support these conclusions.
Prohibition on New Investments by US. Entities
in South H c a
Potentially the most far-reaching of the provisions of the Act
is Won 310 which states:
In10 national of the United States may, directly, or
through mother person, make any new investment in
South Africa."
"New investment? is dehed as:
(i) a codtermt, or contribution of funds or other
assets, and a loan or other extension of credit.z1
"New inveshent" does not include:
(i) the reinvestment of profits generated by a controlled
South African entiv into h t same controlled South
African entity or the investment of such profit in a
South African entity? (ii) contributions of money or
other assets when? such contributions are necessary to
enable a controlled Sauth African entity to operate in
an econo-y saund manner without expanding its
operations; or liii) the ownership or control of a share
or interst in a South African entity or a contmlld
South African entity or a debt or equity security issued
by the Government of South Africa or a South African
entity More Ocbober 2, f 9 6 or the transfer or aqukition
of such a shim, interest or equity senuity if any
such kinder or acquisition does not result in a payment,
contrihtion of funds or assets, or credit to a