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The President’s Extraordinary Sanctions Powers

A new report explains the International Emergency Economic Powers Act and proposes legislative reforms to prevent abuse and reduce harms.

Published: July 20, 2021

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 in recent decades rely on just one of these: the International Emergency Economic Powers Act (IEEPA).

The obscure law has been the sole or primary statutory authority invoked in 65 of the 71 emergency declarations made since the National Emergencies Act was enacted in 1976. In a new report, Checking the President’s Sanctions Powers, the Brennan Center’s Andrew Boyle analyzes IEEPA’s use and proposes legislative reforms to prevent abuse and reduce harms. 

Why is it so easy for presidents to declare national emergencies, and why is it so hard for Congress to prevent abuses of power?

IEEPA is just one of more than 120 emergency powers that presidents can invoke when they declare a national emergency. A national emergency is easy to declare because all it requires, writ large, is for a president to issue an executive order stating what that national emergency consists of and to identify which powers he or she is going to use to deal with that national emergency.

After the Nixon presidency prompted greater scrutiny of executive power, Congress attempted to restrict the use of emergency powers by introducing some new requirements through a statute called the National Emergencies Act. In many ways, the most significant check on emergency powers that was included in the National Emergencies Act was Congress’ ability to terminate an emergency by what’s known as a legislative veto. This meant that Congress could, with a simple majority in each chamber, vote to terminate a national emergency, and that would be the end of it. It wouldn’t go to the president’s desk for signature.

However, in 1983 the Supreme Court held that process of using a legislative veto unconstitutional in a case called INS v. Chadha. Consequently, the National Emergencies Act was changed so that now, in order to terminate an emergency, Congress has to essentially not only pass a bill to terminate this emergency, but also send that bill to the president for signature. You can imagine that a president who has declared the emergency will most likely not sign that. They will veto that type of bill. And then you need a supermajority in Congress to override that veto.

So, in effect, it’s just as easy today for presidents to invoke national emergencies as it was at the start, but it’s much, much harder for Congress to terminate them. The most salient recent example of why this is problematic was President Trump’s declaration of a national emergency in order to invoke certain powers to fund the construction of the border wall. Twice, bipartisan majorities in Congress voted to terminate that emergency, and twice he vetoed that bill to terminate the emergency, and Congress wasn’t able to muster a veto-proof majority. As a result, that emergency did not terminate until President Biden entered office.

What happens when someone is sanctioned under IEEPA? What makes it so powerful?

IEEPA is by far the most frequently used emergency power. However, Congress put additional requirements into the IEEPA statute, over and above the requirements that they put into the National Emergencies Act. To use IEEPA, there not only had to be a national emergency, but it had to emanate at least substantially from abroad; and the situation had to present an unusual and extraordinary threat to the national security, foreign policy, or economy of the United States. It is clear from this, from other provisions in the National Emergencies Act and IEEPA, and from the legislative history that Congress expected IEEPA to be used rarely and then only for short periods of time. Unfortunately, that’s not how it has worked out.

IEEPA gives the president an extremely broad array of powers to control financial transactions in all sorts of ways. Among other things, the president can block any transaction or freeze any asset. The typical way a sanctions program happens is the president says: I identify this event, usually abroad, as an unusual and extraordinary threat to the United States. The president then invokes IEEPA and describes in the executive order who can be sanctioned under that program. The task of actually identifying who should be sanctioned under that program is then delegated, usually to the Treasury Department, which then uses IEEPA’s powers to block and freeze targets’ assets.

What being designated under a sanctions program means in practice is that U.S. persons, which includes not only people in the United States — citizens, green card holders, foreign citizens that happen to be within the country — but also, and most significantly, corporate persons, cannot do business with people who are on this sanctions list. And if they possess any property of these sanctioned people or entities, they have to freeze it, meaning that those sanctioned people cannot access their property.

For example, let’s say I’m a military general in a country and I’m responsible for a coup. The president issues an executive order declaring a national emergency and invokes IEEPA. The Treasury Department then sanctions me for those actions. If I have bank accounts that are held at U.S. banks — maybe at a Chase branch in New York or in Myanmar — I automatically cannot access those bank accounts. Those accounts are frozen. But in addition, my Visa card won’t work, because Visa is an American company, and it won’t process my transactions. And even if it was some other type of credit card that isn’t an American company, so many transactions are cleared in dollars or through New York that many of those will block the accounts as well. So, I may be transferring money from Italy to India, but the transactions are transferred through a bank in New York, and that bank in New York is going to freeze that transaction because I am on the sanctions list. That is typically how a sanctions program will operate.

How did IEEPA evolve during the Trump administration?

As with many other areas, the Trump administration served to highlight the potential abuses in this area of the law. Yes, prior presidents have also used this law in ways that it shouldn’t be used or that should be corrected. However, during the last administration, we saw a huge increase in the number of people that were being designated under different sanctions programs, and a growing awareness of the sometimes-deleterious humanitarian impacts that broad-based sanctions programs can have. We saw Trump both threaten to use and actually use this power in ways that prior presidents simply wouldn’t have considered.

For example, Trump threatened to use IEEPA’s powers so expansively that he would block all American companies from doing any business in China. He also threatened to use IEEPA to place tariffs on all goods being imported from Mexico until he was satisfied that Mexico was doing enough to stop the flow of persons across the southern border. Those were two areas where he used threats, but ultimately didn’t impose sanctions.

In other ways, Trump did actually use IEEPA in ways that were very troubling. For example, he used it to sanction members of the prosecution office at the International Criminal Court that were investigating potential war crimes in Afghanistan and in the Israel-Palestine context. (That action has since been reversed by the Biden administration.) Trump also used IEEPA to sanction Chinese mobile communication applications in ways that ran against the free speech protections built into IEEPA.

In short, there’s a growing awareness of how frequently and broadly administrations are using sanctions with little oversight, little control, and few clear goals. Under Trump, there were specific uses of IEEPA that really raise some of the concerns that need to be addressed so that a future president can’t abuse those powers in that way.

What are the factors for achieving substantive reform?

We’re asking Congress to enact statutory changes to IEEPA that would achieve the reforms that we explain are desirable in the report. For example, we want to make it easier for Congress to terminate sanctions programs with which they disagree. We’ve suggested that after a president declares a national emergency invoking IEEPA, Congress would have to vote to approve that declaration of national emergency within 90 days, or it automatically would sunset. Congress would then have to vote to approve all sanctions programs as a package annually.

We also have a proposal that would expand access to humanitarian goods under sanctions. Unfortunately, broad-based sanctions often harm innocent civilians in the targeted country, even though those civilians are powerless to effect the desired change.

In our report, we also highlight the need for reforms to protect constitutional due process rights. Although most sanctions targets are foreign, IEEPA can be used to sanction people and organizations in the United States as well. In fact, after the 9/11 attacks, President Bush used IEEPA to sanction a number of people and primarily Muslim charities in the United States — a move that raised serious constitutional issues. So, we’ve proposed a number of reforms that would improve Fourth and Fifth Amendment protections for persons and organizations located within the United States.