PROVIDENCE, R.I. (Legal Newsline) -- Rhode Island Attorney General Peter Kilmartin announced Friday that his legislation to divest all state funds from Iran was signed into law by Gov. Lincoln Chafee.

Rhode Island's Iran Divestiture Act, which was sponsored by Sen. Joshua Miller and Rep. Mia Ackerman, both Democrats, requires the state retirement board to determine all companies in which the public fund has direct or indirect holdings in companies with business operations in Iran within 90 days.

The State Investment Commission then will send written notice of possible divestment to the identified companies with direct holdings. Within 90 days, the companies must cease scrutinized operations or convert them to inactive operations.

If the companies fail to abide by the law within the designated time frame, the public fund will be left to divest the holdings according to a statutory schedule.

"Corporations and investors that do business with Iran support and strengthen a dangerous regime that is developing nuclear weapons, brutally represses its own people and sponsors terrorism worldwide," Kilmartin said in a statement.

"Companies that wish to continue 'business as usual' in Iran should be subject to debarment from state government contracts. The prospect of debarment is one of the most effective ways to compel corporations to end their Iran business.

"I commend Gov. Chafee, and the act's sponsors, Sen. Miller and Rep. Ackerman, for standing up for what is right. As a state and a country, we cannot support companies that support terrorism."

The new law also subjects companies with state contracts providing false certification or that fail to demonstrate they ceased business with Iraq to a $1 million civil penalty or an amount equal to twice the amount of the contract.

In 2010, the U.S. Congress passed the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010. Rhode Island is authorized to pursue divestment from companies that do business with Iran under the provisions of the federal law.

"The office of attorney general is charged with protecting the state of Rhode Island and its taxpayers, and significant taxpayer money is lodged in pension funds, state investments and state contracts," Kilmartin said.

"This not only helps our nation's fight against terrorism, but also protects our taxpayer investment and pension funds. Simultaneously it also tells the investment and corporate community to put the interest of the safety of Americans above corporate profits."

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