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Policy Solution

Checking the President’s Sanctions Powers

Summary: The International Emergency Economic Powers Act, known as IEEPA, gives the president largely unchecked power to impose crippling economic sanctions. Congress must reform it.

Published: June 10, 2021
Shifting balance between Congress and the White House
Jessica Eckert/Getty/Library of Congress

There are more than 120 stat­utory powers that the pres­id­ent can invoke when declar­ing a national emer­gency, but the vast major­ity of the emer­gen­cies declared since the National Emer­gen­cies Act (NEA) was enacted in 1976 rely on just one of these. foot­note1_sdwg­fl5 1 See Bren­nan Center for Justice, “A Guide to Emer­gency Powers and Their Use,” Decem­ber 5, 2018, last updated April 24, 2020, https://www.bren­nan­cen­ter.org/our-work/research-reports/guide-emer­gency-powers-and-their-use. That power is the Inter­na­tional Emer­gency Economic Powers Act (IEEPA), which has been the sole or primary stat­utory author­ity invoked in 65 of the 71 emer­gency declar­a­tions made during this period.

IEEPA, which became law in 1977, gives the pres­id­ent sweep­ing powers to impose economic sanc­tions on persons and entit­ies upon determ­in­ing that there exists an “unusual and extraordin­ary threat, which has its source in whole or substan­tial part outside the United States, to the national secur­ity, foreign policy, or economy of the United States.” Over the years, it has been invoked to deal with the prolif­er­a­tion of chem­ical and biolo­gical weapons and weapons of mass destruc­tion, hostile foreign govern­ments, terror­ism, transna­tional crime, cyber­at­tacks, human rights abuses, corrup­tion, inter­fer­ence in U.S. elec­tions, poten­tial intru­sions into U.S. commu­nic­a­tions tech­no­logy, and perceived threats from the Inter­na­tional Crim­inal Court. foot­note2_70nfgnx 2 See Bren­nan Center for Justice, “Declared National Emer­gen­cies Under the National Emer­gen­cies Act,” last updated April 22, 2021, https://www.bren­nan­cen­ter.org/our-work/research-reports/declared-national-emer­gen­cies-under-national-emer­gen­cies-act.

IEEP­A’s use has been expans­ive geograph­ic­ally as well as them­at­ic­ally. Sanc­tions have been levied against numer­ous coun­tries, from Iran and North Korea to Belarus and Côte d’Ivoire. Indeed, IEEPA has been used against persons engaged in certain activ­it­ies no matter where they might be in the world — and also against groups and persons within the United States. The govern­ment’s compen­dium identi­fy­ing sanc­tioned persons and entit­ies, a major­ity of which are sanc­tioned under IEEPA, runs to more than 1,400 three-column pages. foot­note3_9c5b4w6 3 Office of Foreign Assets Control, “Specially Desig­nated Nation­als and Blocked Persons List,” March 10, 2021, https://www.treas­ury.gov/ofac/down­loads/sdnlist.pdf.

The impos­i­tion of sanc­tions under IEEPA has been called a “finan­cial death sentence.” foot­note4_lxxm­pqr 4 Spen­cer S. Hsu, “Chinese Bank Involved in Probe on North Korean Sanc­tions and Money Laun­der­ing Faces Finan­cial ‘Death Penalty,’” Wash­ing­ton Post, June 24, 2019, https://www.wash­ing­ton­post.com/local/legal-issues/chinese-bank-involved-in-probe-on-north-korean-sanc­tions-and-money-laun­der­ing-faces-finan­cial-death-penalty/2019/06/2 In most cases, anyone who falls within the legal juris­dic­tion of the United States is barred from trans­act­ing with persons or entit­ies desig­nated as targets of sanc­tions, and any prop­erty of a target that comes within U.S. juris­dic­tion must be frozen. Put simply, with the stroke of a pen, the pres­id­ent can freeze all of a person’s U.S.-based assets and make it illegal for anyone in the United States (and many outside the coun­try) to conduct any finan­cial trans­ac­tion with them. If the target is an Amer­ican citizen or resid­ent, the prac­tical effect is that no one can give them a job, rent them an apart­ment, or even sell them grocer­ies without the govern­ment’s permis­sion.

Amer­ic­ans caught up in IEEPA sanc­tions have found them­selves trapped in a Kafkaesque night­mare that bears little resemb­lance to the due process that the Consti­tu­tion supposedly guar­an­tees them. By its own rules, the govern­ment is not required to give the target any inform­a­tion about its decision, let alone access to the under­ly­ing evid­ence. Targets may chal­lenge the desig­na­tion, but the govern­ment does not have to provide a hear­ing, and there is no dead­line for resolv­ing a chal­lenge. When targets are able to bring litig­a­tion (the sanc­tions can complic­ate paying attor­neys), courts base their decision solely on the record the govern­ment has assembled which may include almost any kind of mater­ial, includ­ing hearsay — and they must give “extreme defer­ence” to the govern­ment’s decision to desig­nate.

As with other powers that pres­id­ents can invoke under the NEA, Congress inten­ded for IEEPA to be used spar­ingly and in extraordin­ary circum­stances. However, national emer­gen­cies of all kinds are easy for pres­id­ents to declare — and, because of a ruling by the U.S. Supreme Court a few years after the NEA’s passage, they are extremely diffi­cult for Congress to termin­ate. The result is that pres­id­ents’ use of IEEPA is virtu­ally unchecked except in the rare instance of a success­ful court chal­lenge.

Despite IEEP­A’s require­ment that a pres­id­ent must declare a national emer­gency that presents an “unusual and extraordin­ary threat” before impos­ing sanc­tions, the law is used today as a routine foreign policy tool. There has been an aver­age of 1.5 IEEPA emer­gen­cies declared each year, with 11 such emer­gen­cies declared during the Trump admin­is­tra­tion alone. Each order may result in the target­ing of tens, hundreds, or even thou­sands of persons or entit­ies. Moreover, IEEPA sanc­tions often stay in place for years or even decades, with little congres­sional over­sight and no clear metrics to assess their success or fail­ure.

Concerns about IEEP­A’s broad powers and the lack of substan­tial checks on pres­id­ents’ use of them are not new. In 1987 a comment­ator wrote about IEEP­A’s flaws: “The criteria for invok­ing it are vague, Congress has very little to say about its use, and there is no effect­ive way to termin­ate a use that becomes inap­pro­pri­ate as time passes.” foot­note5_yotsea0 5 Barry E. Carter, “Inter­na­tional Economic Sanc­tions: Improv­ing the Haphaz­ard U.S. Legal Regime,” Cali­for­nia Law Review 75, no. 4 (July 1987): 1234, https://schol­ar­ship.law.geor­getown.edu/cgi/view­con­tent.cgi?article=2598&context=facpub. But a combin­a­tion of factors has given a new urgency to the need to reex­am­ine and reform IEEPA. Prom­in­ent among them is that Pres­id­ent Donald Trump used, and threatened to use, IEEP­A’s powers in unpre­ced­en­ted and troub­ling ways, under­scor­ing the dangers of deleg­at­ing such potent powers with so few limits on discre­tion or insti­tu­tional checks.

This report proceeds as follows. Part I provides back­ground on how IEEPA came into law. Part II describes how vari­ous aspects of sanc­tions under IEEPA work in prac­tice. Part III lays out some concerns regard­ing how the govern­ment has used, does use, and could use IEEPA. Part IV provides an over­view of some of the proposed legis­lat­ive reforms to IEEPA to date, and in Part V we propose a slate of reforms that would limit IEEP­A’s poten­tial for abuse while giving the govern­ment suffi­cient latit­ude to sanc­tion those who threaten U.S. interests.

End Notes