	Background

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." Having declared a national emergency, the President invoked authority available under the International Emergency Economic Powers Act of 1977 (IEEPA) and ordered the blocking of financial transactions and the institution of property controls with respect to any property or interests in property of persons determined to fall within three categories of individuals or entities threatening the stabilization efforts in Iraq. On September 23, 2008, the names of five newly designated individuals and two newly designated entities were added to the list of blocked persons and entities under the authority of Executive Order 13438. These individuals are to fall into three categories provided in the executive order:
(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 or the Government of Iraq ... or ... undermining the efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people...."
(2) Persons 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...."
(3) Persons 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...."
The executive order, moreover, provides that these prohibitions include "the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order, and ... the receipt of any contribution or provision of funds, goods, or services from any such person." The executive order authorizes the Secretary of the Treasury, in consultation with the Secretaries of State and Defense, to issue regulations. Regulations were issued on September 2, 2010. The reach of Executive Order 13438 is not unprecedented.
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.
Since December 2009, there have been no additions to the list of blocked persons and several OFAC announcements removing designated individuals and entities from the List of Designated Nationals and Blocked Persons.