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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.