There is growing discussion in Washington about potential reforms to presidential emergency powers, a debate that will only intensify as a result of the coronavirus pandemic. While the scale and rapidity of the crisis reminds Americans of why the U.S. government needs broad legal authorities to respond to genuine national emergencies, the potential for presidential abuse is high. Yet for most of the past year, key legislative proposals to reform presidential emergency powers have excluded one of the most important and most frequently invoked authorities: the International Emergency Economic Powers Act, or IEEPA, a broad statute that allows the president to impose a range of financial and trade restrictions, including sanctions, in response to national emergencies arising outside the United States.
IEEPA’s exclusion from reform efforts is odd. IEEPA has been used far more frequently than most presidential emergency powers–some 58 times between the 1970s and 2020. This means that IEEPA has been invoked in approximately 90 percent of the 64 instances in which a president has declared a national emergency under the National Emergencies Act, according to a study by New York University’s Brennan Center. But while IEEPA generally has been applied for entirely appropriate purposes such as imposing sanctions on Iran, terrorists, and Russia, the breadth of the statute means it is ripe for potential abuse.
President Donald Trump, for example, last year cited IEEPA as the basis for potential tariffs on Mexico and for his threat to “order” U.S. companies to leave China. In the midst of the current coronavirus crisis, Trump could turn to IEEPA to enact broad bans on U.S. imports and exports that would advance his longstanding protectionist trade agenda. Democratic presidential candidate Bernie Sanders, meanwhile has said that, if elected, he would use executive authorities to “impose sanctions” on companies “that threaten national and global [greenhouse gas] emissions reductions goals, penalties that he would almost certainly impose pursuant to IEEPA. Regardless of whether one agrees or disagrees with these policies, they are the type of far-reaching actions that should be subject to strong checks and balances, not executive fiat.
IEEPA’s regular use for entirely appropriate policy goals, however, does mean that reforms must be carefully tailored. Congress needs to limit potential abuse and increase oversight, while still providing presidents appropriate discretion to respond to genuine crises and foreign policy threats.
Potential reforms to IEEPA can be broadly divided into three categories. The first is reforms to the circumstances in which a president can invoke IEEPA. The second category is reforms to the powers that are available to the president pursuant to the act. And the third category is procedural reforms that would require greater congressional and/or public oversight of presidential actions taken pursuant to IEEPA. This last category is the one that requires the most significant reforms, to increase procedural checks and balances. The substance of the IEEPA requires more limited upgrades.
Circumstances for Invoking the Statute
Currently, the president is authorized to invoke IEEPA in response to any “unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States,” as long as the president declares a national emergency with respect to the threat under the National Emergencies Act.
All seven presidents since IEEPA was passed have declared a range of circumstances as meeting this threshold, from “the situation in Iran” in 1979 to the conflict-diamond-fueled West African civil wars of the late 1990s in 2001 to the “the activities of significant transnational criminal organizations” in 2011. Last year, driven by concern that China could exploit Chinese-made telecommunications equipment such as 5G technology from Huawei to facilitate espionage and economic disruptions in the United States, Trump found that “the unrestricted acquisition or use in the United States of information and communications technology or services” produced by “foreign adversaries” met IEEPA’s threshold. As a result, he directed the U.S. Commerce Department to develop regulations to limit certain imports.
Whether all presidential uses of IEEPA count as “national emergencies” in the common-sense understanding of phrase is debatable. But the overwhelming majority of instances of IEEPA use have addressed situations where there was broad bipartisan consensus for action. For example, in relation to the above-mentioned 2011 measure on transnational criminal organizations, there was no sudden surge in transnational organized crime that amounted to an “emergency” in a common-sense understanding of the phrase, but transnational organized crime is undeniably a major global challenge, with a value of at least $1.6 trillion and responsibility for countless murders and other crimes. Russia’s invasion of Ukraine in 2014 and its intervention in the 2016 U.S. election certainly merited rapid, forceful American responses. The threat of Chinese espionage is real, and the U.S. does need to take steps to limit the use of technology that could facilitate that threat.
The diversity of instances of IEEPA’s use illustrates the impossibility of knowing in advance the specific circumstances during which a president should be able to deploy America’s economic tools to address a foreign policy challenge. So lawmakers should not seek to limit the substantive circumstances in which a president can invoke IEEPA.
Types of Powers
The second category of potential IEEPA reforms would limit the types of powers available to the president. IEEPA authorizes the president to regulate or prohibit foreign-exchange transactions, to block property, to prohibit business relationships, and to prohibit imports and exports. Presidents have used these authorities to freeze foreign government assets in the United States, to ban some or all trade with sanctioned countries, and freeze assets and ban business with specific individuals, groups, and companies.
This flexibility has enabled presidents to deploy a wide range of tools tailored to different specific circumstances. In many cases, presidents have used IEEPA to impose broad restrictions, such as President Barack Obama’s use of the law in 2011 to impose broad sanctions on the Syrian government of Bashar al-Assad. In other cases, such as sanctions on Russia following its 2014 invasion of Ukraine, the U.S. government deployed more narrowly targeted measures out of concern that overly-aggressive sanctions could have unintended financial and economic costs on the United States and European allies.
This flexibility has served U.S. interests well by ensuring that presidents can appropriately tailor IEEPA measures to a vast range of individual cases. Limiting the types of actions that a president can take, such as limiting the application of the act to freezing assets while prohibiting IEEPA from being used to regulate imports and exports, or legislative proposals to prevent IEEPA from being used to impose tariffs, would undercut a president’s ability to respond to a new foreign policy issue with an appropriately tailored response.
There are, however, at two substantive limits Congress should consider placing on IEEPA’s use.
The first is to improve opportunities for judicial due process in cases of sanctions against U.S. citizens. Although the vast majority of IEEPA actions are directed at foreigners, the U.S. has occasionally used IEEPA to impose sanctions Americans: in the mid-2000s, for example, the U.S. sanctioned an Ohio charity for alleged ties to Hamas and the Oregon-based U.S. branch of a Saudi charity. The U.S. has also sanctioned U.S. companies that are owned by foreigners, such as an action last year sanctioning several Florida companies owned by a crony of Venezuelan strongman Nicholas Maduro. Two of the charities that were sanctioned, the Al Haramain foundation in Oregon and the KindHearts charity in Ohio, ultimately challenged their designations, and courts found that the Treasury Department had violated both charities’ due process rights in imposing the sanctions.
However, the judicial opinions in these cases were limited to the relevant courts, and there is no nationwide standard for judicial due process before IEEPA is used to sanction Americans. Congress should consider amending IEEPA to require U.S. authorities to obtain a warrant before, or at the very least immediately after, freezing the assets of Americans, as a way of protecting Americans’ constitutional rights.
Guarding Against Overkill
The second set of substantive reforms Congress should consider is to broaden the scope of the exceptions that currently exist in IEEPA to ensure that sanctions and other measures do not impede the free flow of people, information, and humanitarian goods.
In the 1980s, concerned that U.S. sanctions were impeding the flow of ideas and information between the United States and sanctioned countries, then-U.S. Rep. Howard Berman (D-Calif.) led a successful effort to enact the “Berman Amendments” to IEEPA. The amendments prevent a president from using IEEPA to limit several specific types of activities, including mail and telephone connections, other personal communications, and the import and export of “information or informational materials.” This effectively means that a president cannot use IEEPA powers to prohibit the flow of information such as books and news, and individual communications, between the U.S. and countries like Iran. The Berman Amendments also prevent a president from using IEEPA authorities to prohibit Americans from engaging in private travel to sanctioned countries. In 2000, Congress enacted the Trade Sanctions Reform and Export Enhancement Act (TSRA), which directed the president to terminate unilateral U.S. sanctions on the sale of most food, medicine, and medical devices.
Both the Berman Amendments and TSRA reflected congressional judgments about core American values. Americans should be free to send information even to people in countries considered U.S. adversaries, and to hear perspectives from the citizens of countries under sanction. Similarly, food and medicine should be exempt from U.S. sanctions.
But both the Berman Amendments and TSRA have become dated by the passing of time and by the evolution of U.S. regulations. For example, the explosive growth of U.S. financial sanctions following the 9/11 terrorist attacks can limit the ability of countries under sanction to pay for food and medical imports, even if the provision of the underlying products is allowed. The Berman Amendments predated the development of the internet and the explosion of information online, and do not cover a wide range of devices and services that people use today to communicate freely. Congress should update both TSRA and the Berman Amendments to ensure that they fully serve their intended purposes in today’s environment.
Overhaul Procedural Checks
It is the third category of reforms — procedural checks on IEEPA’s use — where Congress should enact the most significant reforms.
Congress sought to include multiple oversight provisions in IEEPA. The act includes requirements that the executive branch consult with Congress and that the president provide Congress with periodic reports on the exercise of these authorities. Congress expected that most uses of IEEPA would be limited in duration, requiring annual renewal of emergencies declared under the National Emergencies Act. Finally, Congress intended to give itself the authority to terminate IEEPA actions with a simple majority vote in each chamber to enact a concurrent resolution of disapproval that terminates the underlying national emergency that serves as the basis for an IEEPA action.
Each of these oversight provisions has been eroded by time and intervening events. The average length of declared emergencies has grown — a Congressional Research Service report released last year shows the average emergency declared in the 2000s has run 11 years. In November 2019, Trump signed the 40th annual renewal of the national emergency with respect to Iran that President Jimmy Carter first signed in 1979; the renewal was a pro-forma document of 200 words.
Renewals have become a pro-forma exercise. In January 2017, Obama signed numerous renewals that were set to expire during Trump’s first months in office, just to ensure that the national emergencies—and thus U.S. sanctions pursuant to IEEPA–did not accidentally lapse due to bureaucratic oversight during the transition.
Periodic reports required by the act also have become pro-forma. They now offer no substantive analysis, and rather contain only short, factual recitations of actions taken during the reporting period and the Treasury Department’s estimated salaries and expenses associated with each action.
Finally, the U.S. Supreme Court effectively gutted Congress’s ability to terminate national emergencies with its 1983 decision in INS v. Chadha, which ruled concurrent resolutions unconstitutional unless presented to the president for signature or veto. In today’s polarized political system, it is extremely unlikely that two thirds of both houses of Congress will vote to override the almost certain presidential veto of legislation terminating a national emergency.
Congress should enact two basic procedural reforms to restore congressional and public oversight of the statute. First, Congress should put teeth into the reporting obligation, requiring that the periodic reports provide a detailed explanation of the justification for the action, of specific benefits to U.S. policy interests during the reporting period, and an estimate of costs to U.S. companies and the U.S. economy during the period. Fulsome reporting would assist in congressional oversight and public accountability. Second, Congress should amend IEEPA to require an affirmative congressional vote to continue IEEPA actions beyond an initial period of time, such as six months or a year, with actions automatically lapsing if Congress fails to act.
A requirement of affirmative congressional approval would ensure presidents use IEEPA only when they know that an action would be short-lived or when they were confident that the action would attract sufficiently broad political support to win congressional approval.
For example, in the context of the current coronavirus crisis, Trump could use IEEPA to restrict the export of certain medical supplies needed domestically for several months. But the president would be constrained in enacting sweeping changes to U.S. trade policy, knowing that Congress would be unlikely to sustain them. If Congress was concerned about the number of votes it had to take given the frequency of IEEPA use, Congress could exempt from the congressional approval requirement IEEPA actions that have only de minimis economic impacts on the U.S., such as annual economic impacts below several billion dollars.
Taken together, these two sets of reforms — comparatively modest substantive reforms to protect Americans’ rights and to ensure that IEEPA actions to not impede the free flow of information or humanitarian goods, combined with rigorous new procedural checks on its use — would restore the basic structure that Congress intended. At the same time, the president would retain broad authorities to act aggressively against myriad international challenges, the nature and scope of which cannot be predicted in advance. The tools at his or her disposal would remain broad enough to enable a tailored response to different circumstances, even as expanded exemptions for the free flow of information and of humanitarian goods would be consistent with American values.
Most importantly, strong procedural checks and balances would improve oversight and limit the scope for abuse.