International Law Advisory - White House Issues New Executive Order Blocking the Property of Persons Threatening Iraq Stabilization Efforts

On July 17, 2007, the President of the United States issued Executive Order 13438, blocking the property of those individuals and entities that threaten stabilization efforts in Iraq.  See 72 Fed. Reg. 138 at 39719-39721 (July 19, 2007).  The Executive Order was issued under the International Emergency Economic Powers Act (IEEPA), among other statutory authorities, and became effective immediately.

The new order blocks the property and interests in property of persons determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Defense, to have committed, or to pose a significant risk of committing, an act or acts of violence that have the purpose or effect of (1) threatening the peace or stability of Iraq or the Government of Iraq, or (2) undermining efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people.

In practical effect, the new order freezes the assets of any designee that are in the possession of US persons and prohibits virtually all transactions between designees and any US persons, including (i) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated entity or person; and (ii) the receipt of any contribution, funds, goods, services, etc., from designated entities or persons. Any action that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in the order is prohibited. In addition, the order indicated that the making of donations as described in section 203(b)(2) of IEEPA by or to persons subject to the sanctions imposed by the order will not be exempt from the scope of the order.

The Secretary of the Treasury, through the Office of Foreign Assets Control, is authorized to promulgate rules and regulations as necessary to carry out the purpose of this order, and is authorized to maintain and amend the list of persons and entities whose property and interests in property are blocked. To date, no designees have been listed pursuant to the Executive Order.

If you have any questions regarding the new order, please feel free to contact Ed Krauland at 202.429.8083.