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Monday, January 24, 2011

Executive Order 13438: Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq

M. Maureen Murphy
Legislative Attorney

On July 17, 2007, President Bush issued Executive Order 13438, Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq. It is the latest in a series of executive orders based on the national emergency declared by President Bush with respect to “the unusual and extraordinary threat to the national security and foreign policy of the United States posed by obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in that country, and the development of political, administrative and economic institutions in Iraq.” Regulations implementing this Executive Order were issued on September 13, 2010.

The President’s authority to issue the executive order stems from the International Emergency Economic Powers Act of 1977 (IEEPA). The executive order covers financial transactions and authorizes property controls with respect to three categories of persons: (1) individuals or entities determined “to have committed, or to pose a significant risk, of committing an act or acts of violence that have the purpose or effect of ... threatening the peace or stability of Iraq ...”; (2) individuals or entities determined “to have materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, such an act or acts of violence or any person whose property and interests in property are blocked pursuant to this order ...”; and (3) individuals and entities determined “to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order....”

This report provides a brief history of the development of presidential powers in peacetime. It discusses some of the issues that might be raised in light of the contrast between the executive order’s broad language and its narrow aim—supplementation of sanctions applicable to Al Qaeda and former Iraqi regime officials to cover terrorists operating in Iraq. It examines the reach of the executive order and provides legal analyses of some of the constitutional questions raised in the courts by similar sanctions programs, noting that the broad language of the executive order is not unprecedented. The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has published names of persons designated under the executive order and issued regulations further refining its terms and applicability. The report examines some of the procedures available to challenge OFAC sanction regulations and briefly discusses OFAC’s rules, which may be of concern to attorneys representing individuals and entities subjected to sanctions or involved in transactions with sanctioned persons.

Date of Report: January 14, 2011
Number of Pages: 26
Order Number: RL34254
Price: $29.95

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