The Executive Order issued yesterday authorizing U.S. Treasury to impose sanctions against socalled “Sanctions Evaders” is enough to sound a call for help. It would qualify for what former Senator Proxmire might have called the Golden Fleece award if awards were given for the most confusing executive order ever.  

Yesterday’s Executive Order authorizes the Secretary of the Treasury to prohibit “all transactions or dealings … in or related to (i) any goods, services, or technology in or intended for the United States[] or (ii) … provided by or to United States persons, wherever located” if the transaction or dealing involves a designated foreign person. (Emphasis supplied.)  

A designated foreign person is someone the Secretary of the Treasury determines:  

  1. (i) “has violated,” (ii) “attempted to violate,” (iii) “conspired to violate,” or (iv) “caused a violation of” any regulation or prohibition “contained in, or issued pursuant to
  1. “any Executive Order relating to the national emergencies declared in [a 1995 executive order “Prohibiting Certain Transactions with Respect to the Development of Iranian Petroleum Resources” or a 2004 executive order “Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria]” as modified in scope in subsequent Executive Orders;” or 
  1. “to the extent such conduct relates to property and interests in property of any person subject to United States sanctions concerning Iran or Syria, (i) [a 2005 executive order “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters”], (ii) any Executive Order subsequent to [that] Executive Order [] that relates to the national emergency declared in [a 1994 executive order entitled “Proliferation of Weapons of Mass Destruction”] or (iii) any Executive Order relating to the national emergency declared in [a 2001 executive order “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”];”
  1. “has facilitated deceptive transactions for or on behalf of any person subject to United States sanctions concerning Iran or Syria;” or
  1. “is owned or controlled by, or is acting or purporting to act for or on behalf of … any person determined to [have done any of the above].”

(Emphasis supplied.)

The term “deceptive transaction” is defined as meaning “any transaction where the identity of any person subject to United States sanctions concerning Iran or Syria is withheld or obscured from other participants in the transaction or any relevant regulatory authorities.”

The term “person subject to United States sanctions concerning Iran or Syria” is defined as meaning “(i) any person … with whom transactions are restricted pursuant to any Executive Order relating to the national emergencies declared in [the 1995 executive order “Prohibiting Certain Transactions with Respect to the Development of Iranian Petroleum Resources”] or [the 2004 executive order “Blocking Property of Certain Persons Prohibiting the Export of Certain Goods to Syria”] [] as modified in scope in subsequent Executive Orders, or (ii) any person whose property and interests in property are blocked pursuant to [the International Emergency Economic Powers Act] in connection with Iran’s or Syria’s proliferation of weapons of mass destruction or delivery systems for weapons of mass destruction, or Iran’s or Syria’s support for international terrorism.” (Emphasis supplied.)

The Executive Order also bars entry into the United States of any alien who Treasury identifies as having violated any of the prohibitions set forth in 1 or 2 above or meeting any of the criteria specified in 3 above.

Figuring out exactly what a foreign person is prohibited from doing under this Executive Order is not easy because its scope is dependent on regulations issued pursuant to or prohibitions contained in any executive order “relating to” national emergencies declared in other specified executive orders “as modified in scope in subsequent Executive Orders,” any executive order subsequent to a specified executive order “relating to” the national emergency declared in yet another specified executive order or any executive order “relating to” the national emergency declared in still another specified executive order. That’s a whole lot of relating tos.

In addition to its ambiguity, the Executive Order is striking in exposing to sanctions foreign persons who have “caused” a violation of regulations or executive orders even if they are not themselves subject to such regulations or executive orders. Included are those who are owned or controlled by such persons even they themselves did nothing wrong. Striking, too, is the scope of the sanctions that can be imposed, including as they do, a prohibition on any transaction “in or related to” goods, services or technology “in [sic]” or intended for the United States or provided by or to U.S. persons wherever located if the transaction involves a designated foreign person. Treasury can designate a foreign person, moreover, without prior notice.