Edited by Stephen Tully
Chapter 10: USA: Massachusetts State Act Regulating State Contracts with Companies doing Business with or in Burma (Myanmar), 1996
Commentary: The Massachusetts Act (Massachusetts General Laws Chapter 7, s22G-22M) illustrates the leverage exerted by government procurement over commercial behaviour. The technique was also used against US corporations to address South African apartheid. The Act contemplated a restricted purchase list (section 22J) and annual reporting (22M). Under section 22L, contracts violating these provisions would become void. However, the Act only applied to those entered into after its entry into force, thereby leaving existing contracts unaffected until renewal. The National Foreign Trade Council successfully challenged the constitutionality of this Act for infringing the federal foreign affairs power, violating the foreign commerce clause and subverting federal legislation: National Foreign Trade Council v Baker 26 F. Supp 2d 287 (D Mass 1998); National Foreign Trade Council v Natsios 181 F.3d 38 (1st Cir 1999); Crosby v National Foreign Trade Council 2000 US LEXIS 4153 (US Sup Ct). Additionally noteworthy is that this Act was challenged by the EC and Japan in 1997 as inconsistent with the WTO’s Agreement on Government Procurement. Although the WTO’s dispute settlement mechanism was invoked during 1998, the panel was suspended in 1999 on account of the Supreme Court’s decision. Section 1 Section 22G For the purposes of sections twenty-two H to twenty-two M, inclusive, the following words shall, unless the context indicates otherwise, have the following meanings: ‘Comparable low bid or offer’: a responsive and responsible bid or offer which is no more than ten percent greater than the lowest bid or offer submitted for goods or a...
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