{"id":3721,"date":"2009-09-15T07:31:41","date_gmt":"2009-09-15T11:31:41","guid":{"rendered":"https:\/\/charityandsecurity.org\/?p=3721"},"modified":"2019-10-17T13:23:05","modified_gmt":"2019-10-17T17:23:05","slug":"designate_and_freeze_authority","status":"publish","type":"post","link":"https:\/\/charityandsecurity.org\/congress\/designate_and_freeze_authority\/","title":{"rendered":"Summary of Economic Sanctions Laws and Regulations Authorizing Treasury to Shut Down Charities"},"content":{"rendered":"

The legal authority for the Department of Treasury to designate a person or organization as a Specially Designated Global Terrorist (SDGT) or freeze assets “pending investigation” is based on laws providing for economic sanctions against foreign nations, going back to the Trading With the Enemy Act in 1917 and ending with the Patriot Act.<\/p>\n

Note:\u00a0<\/i>Page numbers cited refer to text of the court’s Aug. 18, 2009\u00a0opinion<\/a>\u00a0in\u00a0KindHearts for Charitable and Humanitarian Development, Inc. v. Timothy Geithner, et al,<\/i>\u00a0Case No. 3:08CV2400 in the United States District Court for the Northern District of Ohio Western Division.<\/p>\n

In 1977 Congress amended the Trading With the Enemy Act by passing the International Emergency Economic Powers Act (IEEPA, at\u00a050 USC 1701-06<\/a>) which authorizes the President to declare an emergency relating to “any 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.”\u00a0In 1995 President Clinton issued\u00a0Executive Order 12947<\/a>\u00a0which expanded IEEPA beyond sanctions against nation states to include “specially designated terrorists” that threaten to undermine the Middle East peace process.<\/p>\n

Section 1701(b) of IEEPA says its powers may only be invoked “to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter\u00a0and may not be exercised for any other purpose.”<\/i>\u00a0(emphasis added)<\/p>\n

Section 1702(a) authorizes the President to “investigate, regulate, or prohibit” a host of financial transactions with “any foreign country or national thereof” by means of regulations, licenses, instructions or other means.\u00a0Section 1702(b) allows for “investigation, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit” any transactions relating to property held by the designated foreign country or national.” Note that these powers do not require freezing assets, and would allow for alternative approaches that correct improper transactions or procedures in otherwise law-abiding organizations.<\/p>\n

IEEPA is the legal authority for\u00a0Executive Order (EO) 13224,<\/a>\u00a0issued by President George W. Bush on Sept. 24, 2001.\u00a0EO 13224 declared a national emergency based on the 9\/11 attacks and directed Treasury, in consultation with the Attorney General and Secretary of State, to designated SDGTs and take action to freeze all assets subject to U.S. jurisdiction.\u00a0Designation may be of a terrorist organization, or if Treasury finds a group has:<\/p>\n<\/div>