President Donald Trump’s proclamation declaring an emergency at the U.S.-Mexico border guarantees one result: an onslaught of lawsuits.
These legal challenges will question the “emergency” that authorizes the president’s circumvention of Congress’s constitutional authority over appropriations. Judges will then decide as a factual matter whether there is truly an emergency on the southern border.
The reasoning and analysis of these decisions will extend far beyond the relatively narrow issues of this so-called emergency. In fact, judicial review of the border declaration will likely diminish the president’s authority to impose economic sanctions and may even threaten the legal foundations of those measures.
U.S. economic sanctions range from broad embargoes to limited restrictions on specific companies and individuals. Each sanctions program has its own set of regulations with unique prohibitions and exceptions. The United States currently maintains 30 separate sanctions programs.
Some well-known examples include the comprehensive sanctions against Iran and North Korea, and the list-based sanctions against alleged terrorists and narcotics traffickers.
Sanctions are increasingly the favored governmental response to most perceived threats to the national security or foreign policy of the United States. From the U.S. government’s perspective, sanctions are a cost-effective way to address threats that may not be solved through diplomacy or military force alone.
While the specific application of some of these measures may be hotly debated, sanctions are one of the few remaining foreign policy matters that receive bipartisan support.
Treasury’s Office of Foreign Assets Control
The president’s National Security Council staff makes broad, strategic decisions on sanctions issues. Experts at the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) implement and enforce sanctions to further the White House’s policy goals.
OFAC’s decisions, including sanctions targeting or the imposition of civil monetary penalties for violations, have significant consequences.
As a general matter, a sanctioned entity is excluded from accessing goods or services from the United States, and their money or other property in the United States becomes blocked and subject to forfeiture. This means that sanctioned parties may not transact in U.S. dollars or otherwise access the U.S. financial system. U.S. and foreign companies have paid billions of dollars in civil and criminal penalties for violating these prohibitions.
Certain parties may sue OFAC over its actions, but litigants are unlikely to succeed. In large part, this is because the parties are not on equal footing. Courts have established that judicial review of OFAC determinations must be “extremely deferential” because of its unique role “in an area at the intersection of national security, foreign policy, and administrative law.”
The National Emergencies Act
With the notable exception of the Cuban embargo, sanctions authorities are based on the interplay between the National Emergencies Act and the International Emergency Economic Powers Act (IEEPA).
Congress intended these two 1970’s era acts to restrict the president’s emergency powers, in part by terminating each emergency declaration that is not renewed annually. Congress’s intention was never met, as the acts created a formalistic procedure for declarations and renewals that has not restricted the president’s emergency powers.
Once the president declares an emergency from a foreign threat pursuant to the National Emergencies Act, IEEPA authorizes broad powers to impose sanctions to address that threat to the national security, foreign policy, or economy of the United States. The president makes these emergency declarations through executive orders, which are the foundation of sanctions programs.
The justification of these declarations is usually limited to a single cursory paragraph composed of a single run-on sentence at the top of these orders.
Like sanctions-related executive orders, President Trump’s Proclamation Declaring a National Emergency Concerning the Southern Border of the United States cites the National Emergencies Act as providing the necessary delegated authority for the emergency declaration. The National Emergencies Act does not provide a definition or criteria for situations that may qualify as an “emergency” and leaves that determination solely with the president.
Impact of Judicial Review of the Border Emergency Declaration
The courts with jurisdiction over the border declaration litigation will ultimately decide whether Trump exceeded his authority in declaring an emergency at the border. In doing so, they will provide factors or criteria for that decision. This in turn will directly affect emergency declarations that authorize sanctions, and executive orders that are not based on qualifying emergencies will fall.
In short, judicial review of the border emergency is likely to diminish the broad presidential power to impose sanctions, and some of OFAC’s authorities may not survive judicial scrutiny of the underlying emergency declarations.
Jeremy P. Paner is of counsel in Holland & Hart’s Washington, D.C, office, where he specializes in legal issues involving economic sanctions. He previously worked in the U.S. Department of the Treasury’s Office of Foreign Assets Control.