As a party to UNCLOS, U.S. would be able to prevent revenues from being redistributed to non-desirable actors
The U.S. safeguard against such transfers becomes operative through the interaction of the convention and the 1994 agreement. Convention Article 161, paragraph 8(d) requires consensus of the ISA council to distribute economic benefits, pursuant to Article 162. Section 3, paragraph 15(a) of the annex to the 1994 agreement provides the United States a permanent seat on the council by virtue of being the largest economy on the date of entry into force of the convention. Together these sections effectively give the United States a “permanent veto” over distribution of economic benefits, hence preventing funds from being channeled to potential terrorist groups or other organizations likely to act counter to U.S. national security interests.
One of the ISA’s key functions is to redistribute royalties generated from resource production on the outer continental shelf to other countries. Treaty opponents have suggested the ISA could agree to a distribution formula that would pay out royalties to U.S. enemies.
True, the treaty does contain revenue-sharing provisions. Companies are allowed to operate royalty free for the first five years of production, then are subject to payments to the ISA of 1 percent of production value beginning in year six and increasing 1 percent per year after that, maxing out at 7 percent in year 12. But this is where opponents’ trumped-up fears about paying terrorists parts ways with reality.
As Secretary Clinton pointed out at the Foreign Relations Committee hearing, the treaty specifically provides the United States with a permanent seat on the ISA council, a key decision-making body, effectively giving us veto power over how distribution would occur.
Yes, as the Heritage Foundation reports, final decisions would be made by the ISA’s general assembly. But the assembly would only be voting on policies the council recommended unanimously, meaning we could block any proposal from even getting to a vote at the general assembly. This de facto veto power means the United States would always be able to prevent royalties from being distributed to countries we have designated as state sponsors of terrorism.
To put this in terms treaty opponents can better understand, it would be as if every senator on the Foreign Relations Committee had to approve the Law of the Sea treaty before it could be considered by the full Senate for ratification. Under those circumstances, would the treaty ever see a ratification vote?
Ask Sen. Risch. Then think about how likely it would be for the United States to approve a payment formula that would send cash to Somalia or the Palestine Liberation Organization. It’s just not going to happen.
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A less prevalent but important minority opinion related to national security holds that the convention was developed with the participation of national liberation movements and these movements are allowed to participate as observers in the International Seabed Authority. Additionally, provisions of the convention that allow the distribution of ISA revenue to “peoples who have not attained full independence or other self-governing status” could be used to fund national liberation movements. President Reagan cited such provisions as a specific reason for rejecting the convention, since they allowed the possibility of channeling funds to groups the United States identified as terrorist organizations. While it is true that Article 156 of the convention allowed national liberation movements to sign the Final Act of the Third Conference on the Law of Sea and to participate as observers at the ISA, this observer status conveys no authority or voting rights and is equivalent to the status such movements are already granted in the UN General Assembly. It is also true that the ISA could possibly decide to distribute economic benefits to such movements if revenue becomes available in the future. The U.S. safeguard against such transfers becomes operative through the interaction of the convention and the 1994 agreement. Convention Article 161, paragraph 8(d) requires consensus of the ISA council to distribute economic benefits, pursuant to Article 162. Section 3, paragraph 15(a) of the annex to the 1994 agreement provides the United States a permanent seat on the council by virtue of being the largest economy on the date of entry into force of the convention. Together these sections effectively give the United States a “permanent veto” over distribution of economic benefits, hence preventing funds from being channeled to potential terrorist groups or other organizations likely to act counter to U.S. national security interests. Notably, the United States is the only nation with access to such a “permanent veto,” which is only available upon joining the convention. Accordingly, President Reagan’s concern regarding potential distribution of funds contrary to national security interests remains valid until the United States joins the convention.
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In addition, critics of the Convention argue that by ratifying the Convention, the United States would set the wrong precedent by subjecting itself to the authority of international organizations created by the Convention, i.e., the ISA and the Commission.105 Because the decision- making process in these organizations usually requires a majority vote, the United States would have to face “regional, economic, or political blocs that coordinate their votes to support outcomes counter to U.S. interests.”106 However, if the United States ratifies the Convention, it would permit the United States to nominate members for such bodies. As a result, the United States would either have veto power or would have to get concurring votes to prevent an adverse decision.107 Moreover, having American representation in the bodies created by the Convention would ensure that the Convention is interpreted and applied in a manner consistent with United States’ interests.