Sanctioning the ICC: A Guide to US Law (Part II)

The first part of this two-part post reviewed the law that President Trump invoked in his executive order announcing a sanctions program regarding the International Criminal Court, and went through the different provisions of the order. This part will discuss some relevant issues not directly addressed in the order, and provide some views on what to expect going forward.

A Modicum of Protection

Some have questioned to what extent sanctions and prohibitions could reach outside groups that collaborate with the work of the ICC, such as non-governmental organizations. That is a valid concern, as the work they do could fall within the parameters of the order. However, there is a sliver of shelter within IEEPA itself.

IEEPA protects free speech-related activity through a provision that prohibits sanctions on the import or export “commercial or otherwise, regardless of format or medium of transmission, of any information or informational materials.” In other sanctions programs, implementing regulations have sought to narrow this protection by claiming it does not extend to materials “not fully created and in existence at the time of the or to the substantive or artistic alteration or enhancement of informational materials, or to the provision of marketing and business consulting services.” Such language in regulations has sought to excluded collaborative or iterative efforts. At a minimum, this provision should protect actions such as persons in the U.S. sending a written report to the ICC in regards to some investigation underway. Another provisions IEEPA also protects from sanction “transactions normally incident to travel.”

Effect on U.S. Persons

Although U.S. persons are exempt from direct sanction under the order, they are by no means insulated from the effects of such sanctions. As explained, once a target is sanctioned, U.S. persons are then prohibited from interacting financially with them. If U.S. persons violate this requirement, they could be subject to steep fines, and if they do so willfully they could also be prosecuted.

These prohibitions are driven home by two other provisions of the order. Section 3 makes explicit that the prohibitions include the making or receiving of funds, goods, or services to a designated target, or for the benefit of that target. Section 5 prohibits attempts or agreements to work around the restrictions. Thus, as a U.S. person you cannot transfer money to a French friend who is not blocked with the understanding that that friend will then give the money to a sanctioned ICC employee.

Chilling Effect

The vagueness regarding how the US government might enforce sanctions programs as well as the discretion they have to do so often creates a chilling effect. For instance, if it is difficult to be sure the U.S. won’t sanction a given company for providing computers to the ICC, when some of those computers might be used by sanctioned persons, that company might decide it is safer just not to provide computers to the ICC at all. Persons and entities can ask for interpretative guidance from OFAC, and sometimes OFAC will post such guidance on their website, but even when this guidance is provided it is no shield to civil or legal liability.

What to Expect Next

Eventually, the government will probably issue regulations implementing this order, although unlike some other executive orders establishing sanctions programs this order does not provide a timeline for doing so. These implementing regulations are what Section 9 of the order refers to when it permits the Secretary of the Treasury to adopt “rules and regulations…as may be necessary to implement this order.” These regulations will likely have much more detailed information about how the sanctions will be administered, for example providing additional definitions of terms, specifying that blocked funds must be held in interest-bearing accounts, or delineating activities that are encompassed by the sanctions program and those that are not.

OFAC may also issue “General Licenses” exempting categories of conduct or actors from sanctions that otherwise would be covered by the sanctions program. Hypothetical examples of general licenses OFAC might issue in order to achieve various policy or diplomatic goals could be for: any governmental officials of NATO member states to engage in the prohibited conduct; businesses that provide services to the ICC as a whole; or, non-profit organizations that provide services for victims of human rights abuses and atrocity crimes. Even so, there may well continue to be ambiguity regarding what is covered by a particular general license, and whether particular individuals and organizations fall within its ambit.

Individuals and entities can also seek “specific licenses” from OFAC to engage in otherwise sanctionable conduct, which only apply to that person or entity granted the license. For example, a U.S. bank might apply for a specific license to be able to continue provide financial services to the ICC even though some of those services might run afoul of the executive order, in order to be assured that they will not be violating the law. OFAC is under no obligation to grant such licenses, and they can be revoked or altered at any time once they are granted.

If and when Secretary Pompeo—or any future Secretary of State while this order is in place—decides to designate people or entities under this order, they will be announced publicly and listed in the Federal Register. Their names will be added to the running on-line list of sanction targets maintained by OFAC) called the Specially Designated Nationals and Blocked Persons List. Under what is known as the 50% rule, any entities owned 50% or greater by a sanctioned person (or collectively by more than one sanctioned person) are automatically sanctioned as well, even if they are not listed on the SDN list.

Let’s say you wake up one morning to discover that you have been sanctioned. What immediate impact this has on you will depend on how connected you are personally and financially to the United States. If you or your family members have no great interest in travelling to the United States, and have no property held in the United States or by U.S. companies, you may not suffer any immediate impacts. But ensuring your property stays clear of the US financial system as it travels electronically, and avoiding all U.S. companies and their foreign subsidiaries could be cumbersome. You might also find that non-American companies won’t do business with you, out of concern that doing so will subject them to sanctions.

You might, therefore, want to be removed as a sanctions target. To achieve that, your first stop would be to write to OFAC requesting to be removed. You might explain why you think you have been erroneously targeted and do not fall within the parameters of the order, or you might explain what has changed since you were sanctioned such that you should no longer be sanctioned. OFAC is under no obligation to respond to your request or remove you from the sanctions list, but they may send you written inquiries for further information, or ask to speak with you in regards to your petition for removal.

If you are unsuccessful in petitioning OFAC, you could bring your request to U.S. federal court, but you will be unlikely to find success in all but the most egregious cases. That is because the standard of review of the government’s actions in such cases will be a highly deferential one, which overturns sanctions designations only if they are “arbitrary and capricious.” In addition, under IEEPA the government can provide secret evidence to the judge to substantiate their claims (i.e., ex parte and in camera evidence). This might, for example, consist of evidence obtained from secret surveillance tactics or sources that the government does not want to reveal publicly. Any U.S. attorney you want to hire to help you argue your case will need to obtain a license from OFAC to do so, and any funds used to pay that attorney will have to come from sources that are not blocked unless OFAC permits otherwise. Non-U.S. persons will likely not be able to raise constitutional claims.

Will this ever end?

There are two ways that the national emergency Trump has declared to impose these sanctions can be terminated. First, Congress can terminate the national emergency by passing a bill to do so and, assuming the President vetoes it, overriding that veto. Mustering sufficient support in Congress to override such a veto is an unlikely proposition, however. In addition, it’s far from clear that Congress would want to try. Congress has never held a vote to attempt to terminate a national emergency invoking IEEPA.

The second method is for the president him or herself to terminate the national emergency, or decide not to renew it on its anniversary, at which point it would automatically expire. A president can terminate the national emergency simply by issuing a new executive order.

At the end of the day, the U.S. government has broad discretion in how it chooses to implement this executive order. Perhaps the best that can be hoped for at this point is that the Trump Administration is satisfied with the message sent just by setting up the sanctions program. Choosing to actually sanction anyone under this program would only compound the folly of establishing it in the first place.