You may never have heard of the SEC’s Office of Global Security Risk and probably have no idea what they do. Well, although I know what they are supposed to do, I have always wondered what the people at that office do during the work day.

Now we know. They surf websites looking for sanctioned countries, like Syria and Sudan, in drop down address lists on the websites of U.S. companies. Allegedly this is to advise U.S. investors about publicly-traded companies that supposedly jeopardize their stockholders’ investments by dealing with sanctioned countries.

After a heavy day of web surfing the Office of Global Security Risk fired off this missive to UPS in respect to a price table it found on the UPS site.

We also note an Air Freight peak season surcharge table on your website which lists surcharge amounts for regions including Latin America and Europe, Middle East, Africa in the Destination section. According to the notes section, the destinations listed include Cuba under “Latin America (All Other Countries)” and Iran, Sudan and Syria under “Europe, Middle East, Africa.” Iran, Sudan and Cuba are identified by the U.S. State Department as state sponsors of terrorism and are subject to U.S. economic sanctions and export controls.

Apparently the SEC thinks that all exports to these countries are banned. The time that the OGS staff spent surfing the web apparently did not extend to researching economic sanctions laws and discovering, say, TSRA, which permits exports of agricultural products, medicine and medical devices to sanctioned countries. Or the Berman amendment which permits export of informational materials. Never mind any of the other exceptions.

UPS replied by saying this:

The appearance of any country on the sanctions list on a UPS listing of surcharge amounts, explained [UPS Vice-President Norman] Brothers, applies only to lawful deliveries. “During the period July 10, 2006 through December 31, 2010, UPS rejected at least 55 shipments destined for Syria because they were determined to be impermissible under U.S. export controls.”

The SEC was reportedly unembarrassed its crude understanding of U.S. export laws and immediately returned to more web surfing. You can start humming that Gershwin tune: “Nice work if you can get it.”

A new link has appeared on the home page of the Securities and Exchange Commission’s website. Under “Investor Information” there is a link called “State Sponsors of Terrorism” Hmmm, you wonder, the SEC now thinks that investors need to know which countries are state sponsors of terrorism? Perhaps, because when you click the link, there’s a list itemizing Cuba, Iran, North Korea, Sudan and Syria.

But wait, there’s more. Each country on the list is linked to a list of companies that mentioned that particular country in its 2006 annual report. This list is clearly an outgrowth of the SEC’s Office of Global Security Risk, on which we’ve reported here before and which is tasked with reviewing securities filings of publicly-traded companies to determine whether, among other things, companies should disclose dealings with sanctioned countries.

Being on that list is probably not a good thing. So you might think that the SEC might exercise some discretion about who belongs on the list and who does not. But you would be wrong. Take for example, candy and soft drink giant Cadbury Schweppes, which is on the Syria list. But if you click the link on that page you will discover that Cadbury sold its operations in Syria. Yes, it’s on the list because the annual report mentioned Syria, but only in the context that it divested its operations in Syria. If the purpose of the list is to disclose to investors companies that are running a risk by having operations in sanctioned countries, that is hardly served by listing companies that have divested their operations in those countries.

Needless to say, the list is starting to draw fire from business interests. The Institute of International Banks, for example, charged that the blacklist could discourage banks from listing on U.S. securities exchanges, even though that might arguably be the goal of such a list.

(FULL DISCLOSURE: If it’s hot over the July 4th holiday, a certain Cadbury Schweppes product will, at my house, be liberally mixed with gin and a squeeze of fresh lime, so we may not be completely impartial in our reporting on Cadbury Schweppes.)