Transcript Trade Sanctions

Trade Sanctions
(IEEPA).
Presented by
Farida Kerouani
Catalina Guaqueta
Adrian Senyszyn
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Trade Sanctions
International Emergency Economic
Power Act (Stat. 1626. 50 U.S.C. 1701-1706)
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Trade Sanctions
Trade Sanctions
1.
2.
3.
Definition
Background
Difference (IEEPA/TWEA)
International Emergency Economic Power Act
1.
2.
3.
4.
5.
6.
Definition
Dames & Moore v. Reagan, 435 U.S. 654
Extraterritorial Reach
Applications (concentration on Iran)
Current Stalemate
IEEPA and Iran
Our Proposal
1.
2.
3.
4.
Statement
Implications
Will it work
Potential Initiatives
Questions
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Trade Sanctions
DEFINITION
Sanction:
Punitive measures taken by one country or more countries
toward another to force it to comply with international law”
“
Trade Sanction:
A restriction or prohibition by one country of trade contracts with
another country of whose actions or policies it disapproves.
Sanctions can be general or applied to a particular good.
Sanctions can take the form of an embargo, or export/import
restrictions.
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IEEPA BACKGROUND
Public Law 95-223, Title II: Regulate International
transactions in times of National emergency or war.
Trading with the Enemy Act-section 5b: Prohibits
trade with any enemy or ally of an enemy during
times of war. The section 5b: authorizes the used of
the law in times of peace.
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Comparisons
IEEPA
 Emergency or peace
 Intended to limit Presidential
Powers
 Fewer and more
circumscribed actions
 Congressional Review
 Procedure for Congressional
termination of President’s
Emergency Authority
 Defined national emergency
TWEA
 Emergency or War
 Could be used domestically
 A broader scope of action.
More financial and physical
assets prohibitions and
embargos
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IEEPA
Definition:
The Act grants the President authority to regulate a
comprehensive range of financial and commercial transactions in
which foreign parties are involved but allows the President to
exercise this authority only in order “to deal with an unusual and
extraordinary threat, which has its source in whole or in part
outside the United States, to the national security, foreign policy,
or economy of the United States, if the President declares a
national emergency… with respect to such threat.”
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Dames & Moore v.
Reagan, 435 U.S. 654
Although Congress specifically tried to limit
Presidential powers in IEEPA, in 1981 the Supreme
Court interpreted IEEPA not as a restrictive statute,
but as a sign of “Congressional acceptance of broad
scope for executive action” in economic emergencies.
Thus empowering the President with greater authority
to act.
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Extraterritorial Reach
– Blocked Iranian assets not only in the U.S., but in foreign
subsidiaries of U.S. banks
– Targeted certain economic transactions. For example,
revoked licenses with IranAir, National Iranian Oil, and
National Iranian Gas.
– Targeted transactions of individual Iranian citizens as well.
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Applications
1.
Carter Administration
November 14, 1979 – Response to the seizure of the
American Embassy and hostages. The President declared a
national emergency and ordered the blocking of all property
of the government of Iran and of the Central Bank of Iran
within the jurisdiction of the United States.
2.
Reagan Administration
January 20, 1983 – Response to the bombing of the US
embassy and marine barracks in Lebanon. 1994 the
President declared Iran: a sponsor of International
terrorism”. Iran was ineligible for US Assistance. 1995, US
withheld funds from International organization directed to
Iran. 1998, US Executive Directors of International Financial
Institutions voted against issuing loans to Iran.
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Applications
3.
Clinton Administration
a) January 23, 1995
Response to the disruptions of the Middle East Peace process
by foreign terrorists. In this declaration, the President
prohibited all transactions with persons designated by the
Secretary of State, in coordination with the Secretary of the
Treasury and the Attorney General, as having committed or
posing a significant risk of committing acts of violence to
disrupt the Middle East peace process.
a) March 15, 1995
Prohibit the entry of any U.S. person or any entity controlled
by a U.S. person into a contract involving the financing or
overall supervision and management of the development of
the petroleum resources located in Iran. The President
imposed additional sanctions on May 8, 1995. The sanctions
were than amended in 1997.
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Applications
4.
Bush Administration
September 24, 2001
Response to the attacks of September 11th by Al-Qaeda.
Executive order 13224, blocks “all property and interests in
property” controlled by foreign persons or groups linked to
terrorism, and their associates. All powers delegated to the
President under IEEPA were re-delegated to the Treasury
Department. This armed the U.S. with an effective and
powerful weapon that could be used to target the financial
mechanisms of terrorist groups.
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Current Stalemate
U.S. Position
 End support for terrorist
groups
 Recognize Middle East
peace process and Israel as
a State
 End efforts to obtain
weapons of mass destruction
Iranian Position
 End economic sanctions
 End sanctions against
companies that invest in
Iranian petroleum
 End influence to limit
Iranian access to economic
resources
 Allow transfer of advance
technology for peaceful
nuclear energy purposes
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IEEPA and Iran
Benefits
 Quick, effective action
against Iran
 Created economic
bargaining tool – secured the
release of hostages
 Tool that enables continued
action against Iran
Disadvantages
 Negative long-term effects:
 U.S. businesses, particularly
petroleum and gas
 Isolated Iran and made
Central Asian countries turn to
Russia
 Alienated private citizens of
Iran
 Tool that could be abused
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Proposal
End the ability of the President to continually renew
the national emergency with respect to Iran as covered
under section 202(d) of the National Emergencies Act
(50 U.S.C. 1622(d)). The power to renew a national
emergency should be shift to Congress, while a
recommendation could be made by the President.
Additionally, U.S. sanctions should be relaxed against
the Iranian private sector, encouraging the growth of
trade relations.
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Implications
Cons
Pros
 Policy more bipartisan
 President responsible for short





term policy
Places long-term policy in the
hands of Congress
Allows U.S. business greater
access to Iran
Encourage the growth of
democratic ideals
Ends Iranian government from
accusing the U.S. of undermining
Iran’s economy
Allow Iran to be a regional
counterbalance
 No guarantees that Congress




would not continue to renew the
sanctions
Greater minutia in Congress; more
difficult to come to a general
consensus
Policy might not get the job done
when it is needed – too much a
compromise
Iranian government is still the
problem
Multitude of other measure that
are levied against Iran
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Will It Work
IEEPA is only one piece of the puzzle. We
suggest a major policy review in light of the
current sentiment in Iran. Also, there must be
greater initiative by both Congress and the
White House to engage Iran. Here are some
additional suggested changes:
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Potential Initiatives
Executive Branch
 Removal of Fingerprinting





Requirement for Visiting Iranians
Granting Permission for
“Executory Contracts”
Grant Licenses for Oil Swaps
Lift Ban on Iranian Imports
Lift Ban on U.S. trade and
investment
Achieve final settlement at the
Hague Tribunal
Congress
 Attempt to meet with Iranian
Parliamentary officials
 Hold hearings on U.S.-Iranian
Relations to educate members
 Modify existing legislation
 Halt new and renewed sanction
legislation
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Bibliography
U.S. House of Representatives – Overview of Compilations of US Trade Statutes:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_ways_and_means_committee_prints&docid=f:wm004.wais
Middle East Economic Survey: http://www.mafhoum.com/press3/108E16.htm
The Atlantic Council. Thinking Beyond the Stalemate in U.S.-Iranian Relations. July 2001. http://www.acus.org
Iranian Trade Association - American Policy on Iran: Time for a change? http://www.geocities.com/CapitolHill/Lobby/3163/
US. Department of State –International Information programs: Confronting Iran’s destructive behavior while supporting
freedom, democracy: http://usinfo.state.gov/topical/pol/terro/02080213.htm
Money Laundering Alert. “Emergency Powers” are potent tools against terrorist money. Alert Global Media, Inc. Vol. 13,
No. 1; p 15.
Dictionary of the Law by James E. Clapp
Economic dictionary by Oxford University
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