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AUTHORITIES RELATING TO POLITICAL AND ECONOMIC SECURITY
International Emergency Economic Powers Act
The International Emergency Economic Powers Act (IEEPA), passed in 1977,
gives the president of the United States the power to freeze foreign assets in
the United States, to impose trade embargoes, and to take other measures judged
necessary to deal with an unusual and extraordinary threat to U.S. national
security, foreign policy, or economic interests.
Under the act the president, after consulting with Congress, can declare that
a national emergency exists because of a threat from a source outside the United
States. After the declaration of emergency, the president has the power to
"investigate, regulate, compel, or prohibit" virtually any economic transaction
by a foreign entity in the United States.
Once the national emergency has gone into effect, the president must submit
to Congress a detailed report explaining and justifying his actions.
IEEPA can be used with other laws in the imposition of the emergency economic
sanctions.
Some of the uses of the IEEPA include the following:
-- President Jimmy Carter, in November 1979, froze Iranian assets in the United
States in response to the seizure of hostages at the U.S. embassy in Teheran.
-- President Ronald Reagan, in May 1985, imposed a trade embargo on Nicaragua,
embargoed certain trade and financial transactions with the government of South
Africa in October 1985, and embargoed trade, transportation links, extension of
credit, and travel to Libya in January 1986.
-- President George Bush, in August 1990, blocked Iraqi and Kuwaiti assets and
property and imposed a trade embargo on Iraq and, in September 1990, extended
the export control system of the expired Export Administration Act of 1979.
-- President Bill Clinton, in August 1994, continued the extension of the export
control system of the expired Export Administration Act of 1979 and, in March
1996, blocked dealings with the management or development of the Iranian
petroleum industry.
Trading With the Enemy Act
The Trading With the Enemy Act (TWTEA), originally passed in 1917, prohibits
trade by the United States with any enemy or ally of an enemy during time of
war. In 1977, the presidential authority provided in TWTEA to control economic
transactions during peacetime were transferred to the International Emergency
Economic Powers Act (IEEPA). Since then, IEEPA has been the principal vehicle
for imposing economic measures on foreign adversaries when there has not been an
official declaration of war.
Narcotics Control Trade Act
This law, which is part of the Drug Enforcement, Education, and Control Act
of 1986, establishes a process whereby the president can impose a level of trade
sanctions deemed appropriate against "uncooperative" major drug-producing or
drug-transit countries.
Under the law, if a country is found not to be cooperating fully with U.S.
anti-drug efforts, the president can revoke all preferential duty treatments,
such as GSP, CBI, and ATPA, impose duties of up to 50 percent of the value of
products, suspend commercial air services, and take other measures.
International Security and Development Cooperation Act of 1985
Section 505 of this law gives the president discretionary authority to
restrict or ban imports from any country that the United States has determined
supports terrorism or terrorist organizations or harbors terrorists or terrorist
organizations. The president must consult with Congress in advance of invoking
this authority and must make semi-annual reports to Congress.
Embargo on Transactions with Cuba
A trade embargo was imposed against Cuba in 1960 under the general authority
of the Export Control Act of 1949. The embargo's continuation was contained in
the Foreign Assistance Act of 1961 and in subsequent legislation.
As the law regarding trade with Cuba now stands, no U.S. product or service
may be exported to that country directly or through third countries except for
publications and informational material and certain humanitarian goods licensed
for export by the U.S. Department of Commerce, such as medicine and medical
supplies. U.S. persons may not deal in or assist with the sale of goods or
commodities to or from Cuba from offshore locations. Goods and services of Cuban
origin may not be imported into the United States through third countries. No
vessel carrying goods or passengers to or from Cuba or carrying goods in which
Cuba or a Cuban national has any interest may enter a U.S. port. Vessels engaged
in trade with Cuba are prohibited from loading or unloading freight at any place
in the United States for 180 days after departing a Cuban port.
U.S. economic sanctions against Cuba were increased through passage of the
1996 Libertad Act, known as the "Helms-Burton Act" after its sponsors, Senator
Jesse Helms and Congressman Dan Burton. This act does not contain new
restrictions on trade; its principle thrust is against foreign firms that are
investing in Cuba.
Iraq Sanctions Act of 1990
The Iraq Sanctions Act enacted into law the trade embargo and other economic
sanctions imposed on Iraq by presidential order shortly after Iraq's invasion of
Kuwait.
The act imposes sanctions that go beyond the presidential order. It contains
provisions aimed at increasing compliance by third countries with United Nations
Security Council sanctions against Iraq.
Iran and Libya Sanctions Act of 1996
President Clinton signed the Iran and Libya Sanctions Act on August 5, 1996.
The act tightens existing sanctions against the two countries. It provides for
penalties against any U.S. individual or company, including a U.S. or foreign
parent or subsidiary, that directly and significantly contributes to the
development of the petroleum resources of either country. The law applies to any
investment of $40 million or more, or any combination of investments of at least
$10 million that add up to $40 million, made during any 12-month period. U.S.
persons or companies also face sanctions for providing certain goods and
services to Libya that significantly contribute to Libya's ability to acquire
chemical, biological, and nuclear weapons or significant amounts and types of
conventional weapons, or that contribute to Libya's ability maintain its
aviation capabilities. The law also provides for other sanctions.
Antiterrorism and Effective Death Penalty Act of 1996
This law makes it a criminal offense for a U.S. citizen or resident to engage
in certain financial transactions with the governments of Cuba, Iran, Iraq,
Libya, North Korea, Sudan, and Syria, except as provided for in regulations
issued by the Secretary of the Treasury in consultation with the Secretary of
State. These countries are on the U.S. government list of governments found to
be supporting international terrorism.
Other Unilateral Economic Sanctions
Laws that call on the president to impose unilateral economic sanctions
against a certain country for non-economic reasons are frequently provisions of
much larger pieces of legislation, such as the foreign aid bill.
Disapproving Foreign Investment in Defense-related Industries
Following the proposed purchase in 1988 of an 80 percent share of a major
U.S. semiconductor manufacturer by Fujitsu Ltd. of Japan, Congress passed an
amendment to the Defense Production Act allowing the president to block foreign
takeovers of firms found to be important to U.S. national security.
This provision is known as Exon-Florio, after its two sponsors, Senator James
Exon and Representative Jim Florio. Under the law, the president can act to
suspend or prohibit any acquisition, merger, or takeover of a U.S. firm by
foreign persons if the president determines that the foreign purchaser might
take actions that would threaten national security.
In making the decision to exercise this authority, the president may consider
factors such as the domestic production needed for projected national defense
requirements, the capacity of domestic industries to meet national defense
requirements, and how the control of domestic industries and commercial
activities by foreign citizens would affect the capacity of the United States to
meet national defense requirements.
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