Regulation of Economic Transactions and Confiscation of Property

U.S. Presidents may identify any unusual and extraordinary threat that originates outside the United States and confiscate property and prohibit economic transactions by way of the International Emergency Economic Powers Act (IEEPA).  Congress passed the IEEPA in 1977 as a refinement of the Trading with the Enemy Act (TWEA), which at the time provided a source of presidential emergency authority, as well as wartime authority.

Pursuant to 50 USCS § 1701, any authority granted to the President by 50 USCS § 1702 may be exercised to deal with any unusual and extraordinary threat to the national security, foreign policy, or economy of the United States , whose source in whole or substantial part is outside the United States, if the President declares a national emergency with respect to such threat.  The authorities so granted to the President shall only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared and shall not be exercised for any other purpose.  Any exercise of such authority to deal with any new threat shall be based on a new declaration of national emergency which must be related to the threat[i].

Nothing on the face of IEEPA implicates first amendment rights, but simply allows the President during peacetime national emergencies to block transactions with respect to any property in which any foreign country or national thereof has any interest[ii].

At the times and to the extent specified in 50 USCS § 1701, the President shall, under such regulations as he may prescribe, by means of instructions or licenses, investigate, regulate, or prohibit any transactions in foreign exchange, transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof, the importing or exporting of currency or securities, by any person, or with respect to any property, subject to the jurisdiction of the United States[iii].

The President shall investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or exercising any right, with respect to transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States[iv].  When the United States is engaged in armed hostilities or has been attacked by a foreign country or foreign nationals, the President shall confiscate any property, subject to the jurisdiction of the United States, of any foreign person, foreign organization, or foreign country that he determines has planned, authorized, aided, or engaged in such hostilities or attacks against the United States; and all right, title, and interest in any property so confiscated shall vest upon the terms directed by the President and such interest or property shall be held, sold, or otherwise dealt with in the interest of and for the benefit of the United States, and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes[v].

The IEEPA places five limitations on the President’s power to block pending investigation and these limit the Office of Foreign Assets Control’s power.  Before, acting under the IEEPA, the President must find and declare a national emergency based on an unusual and extraordinary threat, which has its source in whole or in substantial part outside the United States, to the national security, foreign policy, or economy of the United States[vi].  The authority granted to the President by the Act does not include the authority to regulate or prohibit, directly or indirectly:

  • any postal, telegraphic, telephonic, or other personal communication, which does not involve a transfer of anything of value;
  • donations, by persons subject to the jurisdiction of the United States, of articles, such as food, clothing, and medicine, intended to be used to relieve human suffering, except to the extent that the President determines that such donations would seriously impair his ability to deal with any national emergency declared under the Act, are in response to coercion against the proposed recipient or donor, or would endanger Armed Forces of the United States which are engaged in hostilities or are in a situation where imminent involvement in hostilities is clearly indicated by the circumstances; or
  • the importation from any country, or the exportation to any country, whether commercial or otherwise, regardless of format or medium of transmission, of any information or informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds; or
  • any transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation of such travel including nonscheduled air, sea, or land voyages[vii].

 

[i] 50 USCS § 1701.

[ii] Humanitarian Law Project v. United States Treasury Dep’t, 578 F.3d 1133 (9th Cir. Cal. 2009).

[iii] 50 USCS § 1702(a)(1)(A).

[iv] 50 USCS § 1702(a)(1)(B).

[v] 50 USCS § 1702(a)(1)(C).

[vi] KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner, 647 F. Supp. 2d 857 (N.D. Ohio 2009).

[vii] 50 USCS § 1702(b).


Inside Regulation of Economic Transactions and Confiscation of Property