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) 2
Trade Sanctions
Trade Sanctions 1.
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Definition Background Difference (IEEPA/TWEA) International Emergency Economic Power Act 1.
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Definition Dames & Moore v. Reagan, 435 U.S. 654 Extraterritorial Reach Applications (concentration on Iran) Current Stalemate IEEPA and Iran Our Proposal 1.
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Statement Implications Will it work Potential Initiatives Questions 3
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 6
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.” 7
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
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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.
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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. 10
Applications
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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
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Bush Administration September 24, 2001 Response to the attacks of September 11 th 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. 12
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 13
IEEPA and Iran
Benefits Disadvantages Quick, effective action against Iran Created economic bargaining tool – secured the release of hostages Tool that enables continued action against Iran 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 14
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
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 Cons 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 16
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: 17
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 18
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 19