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Week Ending October 5, 2007

S.1612 An original bill to amend the penalty provisions in the International Emergency Economic Powers Act, and for other purposes.

The International Emergency Economic Powers Act (IEEPA) gives presidents great power to, among other things, impose controls on international transactions such as imposing sanctions, banning trade or freezing assets that come under the jurisdiction of the US, is amended to increase penalties against those who violate sanctions imposed by the president through this Act. Historically, the violators have been foreign businesses with a presence in the US and some US firms. The Department of Treasury would be given a greater ability to deter wrongful investment and hold violators accountable.

This bill was agreed to by the Senate prior to a HR 1400, a bill passed by the House that would impose more sanctions on Iran in an attempt to leverage the US position in talks with that country about nuclear enrichment and involvement in Iraq.

Under the Act, presidents may see the actions of other countries as an unusual and extraordinary threat to national and economic security of the US and its allies thereby justifying the sanctions. Private firms are often the vehicle through which sanctions are to be imposed by restricting or prohibiting trade with the subject country. Those firms, however, do not always adhere to the invoking of the Act’s sanction provisions. Other government agencies use the Act to carry out their missions of the same nature but governing the actions of private firms is made complicated by the export of dual-use products--Products that can be used for peaceful or military purposes.

Under this bill fines for violating the Act that began at $10,000 and were raised to $50,000 under the PATRIOT Act would be raised to $250,000 or twice the amount of the transaction rather than the single $50,000 fine for any size transaction. Criminal penalties to $1 million with a maximum of 20 years in prison are included.

The bill calls for the president to consult with Congress prior to imposing sanctions and to continue to update Congress on the matters at hand.

This bill is to be followed by another bill that would make necessary changes to the IEEPA.

Sponsor:  Senator Christopher Dodd (D-CT)

Vote: Agreed to in the Senate by Unanimous Consent June 25, 2007. Passed House by voice vote September 2, 2007

Cost to the taxpayers: “CBO expects that the increases proposed by this legislation would affect relatively few cases per year. As such, we estimate that enacting this bill would probably have an insignificant effect on the federal budget over the next 10 years.”

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