South Africa faces cheap punishment from the United States
The United States Congressional Budget Office has estimated the financial impact of passing a bill to review relations with South Africa and sanction government and ANC officials.
It concluded that doing so would be quite cheap for the United States, costing it less than R9 million over 10 years.
The office reviewed the impact of the US-South Africa Bilateral Relations Review Act of 2025 (H.R. 2633), which was passed by the US Committee on Foreign Affairs in July, with amendments.
The bill was introduced into Congress on April 3, 2025, by Republican Representative Ronny Jackson, marking the first stage of the legislative process toward becoming law.
As part of the process, the Budget Office is tasked with determining the impact of the laws on the budget if they are passed by the House and Senate and signed by US President Donald Trump.
In this case, the overall cost would be negligible.
The bill would require the Trump administration to determine whether South Africa has undermined US national security or foreign policy interests and to comprehensively review the bilateral relationship between the countries.
It would further require the administration to report to Congress on its findings, including a list of government officials and political leaders in South Africa who could be sanctioned for corruption and human rights abuses under existing authorities.
“If the enactment of the bill leads the Administration to broaden existing sanctions for corruption or violations of human rights, more people would be denied visas by the Department of State, resulting in an insignificant decrease in revenues from fees,” it said.
“Although most visa fees are retained by the Department of State and spent, some collections are deposited into the Treasury as revenues.”
It added that denying sanctioned foreign nationals entry into the United States also would reduce direct spending on federal benefits for which those people might otherwise be eligible.
“Imposing sanctions could block transactions involving certain assets either in the United States or under the control of people or entities in the United States,” the office said.
“Any person or entity violating those prohibitions would be subject to civil or criminal monetary penalties. Such penalties are recorded as revenues, and a portion can be spent without further appropriation.”
In general, the office said that the bill would affect only a small number of people, thus the impact on US revenues and spending would be insignificant, coming to less than $500,000 (R9 million) over the 2025-2035 period.
Sanctions have costly consequences for South Africa
After being debated by committees, a bill must be passed by both the House and Senate in identical form and then be signed by the President to become law.
A similar bill, H.R.7256, was previously introduced by Jackson on many of the same grounds. That bill passed the House in the previous Congress but failed in the Senate due to a lack of bipartisan support.
The Trump administration of 2025 is a very different mix, however, with the Republican Party controlling both the House and the Senate. This increases the chance of the bill making it through to the end.
While academics and other legal experts doubt the bill’s chances of success, some have flagged the laws’ sanction aspect as a point of concern.
Edward James, partner at multinational law firm Pinsent Masons, said even though there is no certainty that the bill will actually become law, the ease with which is passed through the Foreign Affairs committee should alarm those at risk of falling foul of the laws.
“Whilst there is no guarantee the bill will become law, or that any officials will get sanctioned, we are now at a point where the possibility has become more of a reality,” he said.
If the bill becomes law, individuals targeted by the sanctions face serious consequences.
These include potentially having bank accounts closed, challenges in international travel, and businesses being unwilling or unable to engage with them.
The ANC has already expressed contempt for the bill and the potential sanctions, daring the United States to follow through.
However, James alluded to not only named politicians or government officials being impacted by sanctions, but also any companies tied to or engaging with them.
“In practice, we are one step closer to seeing the US sanction senior ANC and government officials in South Africa, and it marks a startling turn of events given the historical context,” James said.
The prudent thing for South African companies to do is to make sure they know if they are or are not at risk of being subject to US sanctions, he said.
“If so, they should get their house in order now and make sure their compliance screening processes are up to scratch.”
“This will be a key compliance measure to timeously identify counterparties that they can no longer do business with, if the bill becomes law and Trump decides to sanction key officials.”
“In the meantime, we can only hope that common sense and diplomacy prevail, and that the bill does not actually become law.”
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