Fines threatened for advertising travel to Cuba

Yoshie Furuhashi furuhashi.1 at osu.edu
Mon Dec 9 08:58:02 PST 2002



>On Mon, 9 Dec 2002, Yoshie Furuhashi wrote:
>
>> ***** The travel ban on Cuba is authorized by the Trading with the
>> Enemy Act of 1917, granting the President the power to prohibit
>> financial transactions in time of war....
>
>Thanks very much, Yoshie. This is exactly what I wanted to know. One
>last question: since when did we declare war on Cuba? I mean in the
>constitutional sense. Can there legally be a time of war without a
>declaration of war?
>
>Michael

***** Requirements For Lifting the U.S. Trade Embargo Against Cuba

Matias F. Travieso-Díaz, Esq., Shaw Pittman, Potts & Trowbridge

...1. The Trading with the Enemy Act

The Trading With The Enemy Act of 1917 (the "TWEA"), 50 U.S.C. App. [[section]] 1 et seq., was enacted as the U.S. entered World War I. It was intended to give the President authority to prohibit, limit or regulate trade with hostile countries in times of war.[2]

Section 5(b) of the TWEA was amended in 1933 to grant the President authority to exercise the powers of the Act during periods of national emergency. Section 2, Emergency Banking Relief Act of March 9, 1933, 48 Stat. 1, 50 U.S.C. App. [[section]] 5, also codified at 12 U.S.C. [[section]]95a. As amended, Section 5(b) of the TWEA read:

During time of war or any other period of national emergency declared by the President, the President may, through any agency that he may designate, or otherwise, investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President, and export, hoarding, melting, or earmarking of gold or silver coin or bullion or currency, by any person within the United States or any place subject to the jurisdiction thereof; and the President may require any person engaged in any transaction referred to in this subdivision to furnish under oath, complete information relative thereto, including the production of any books of account, contracts, letters or other papers, in connection therewith in the custody or control of such person, either before or after such transaction is completed. Whoever willfully violates any of the provisions of this subdivision or of any license, order, rule or regulation issued thereunder, shall, upon conviction, be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both. As used in this subdivision the term "person" means an individual, partnership, association, or corporation.

The legislative history is again vague about the purposes behind the 1933 amendment to Section 5(b) of the TWEA.[3] Interpretations of the intent of the legislation have been provided after the fact by the courts and legal scholars. In 1971, for example, the Second Circuit noted:

That policy [behind the TWEA] is to deny hard currency to blocked countries and their nationals. However, as the Secretary points out, the purpose behind the Act is not only that but also to preserve the assets of such countries and their nationals for possible vesting and use in the future settlement of American claims against those governments and their citizens.

Cheng Yih-Chun v. Federal Reserve Bank of New York, 442 F.2d 460, 465 (2d Cir. 1971). In a later case, the Ninth Circuit articulated the purpose behind Section 5(b) as follows:

The governmental interests which arguably justify the blocking provisions of the TWEA and the Regulations are threefold: (1) to prevent designated countries from acquiring dollars; (2) to provide a fund from which United States citizens could be compensated for injury occasioned them by designated countries; (3) and to use the blocked funds as a negotiating tool with the designated country.

Tran Qui Than v. Regan, 658 F.2d 1296, 1305 (9th Cir. 1981), cert. denied, 459 U.S. 1069 (1982). The statements by the courts in these two cases (and a number of others) reflect the historical fact that the TWEA has been used as a political, as well as an economic, tool to further the U.S. government's positions in its dealings with unfriendly nations.

The 1933 amendment to Section 5(b) was enacted in response to an economic emergency, but its authority was later invoked in connection with a military emergency, the Korean War. On December 16, 1950, President Truman issued Proclamation No. 2914, 15 Fed. Reg. 9029, reprinted in 1950 U.S. Code Cong. Service, Vol. 1 at 1557-58. The Proclamation took note of "recent events in Korea and elsewhere" and referred to "the increasing menace of the forces of communist aggression" as requiring the declaration of a state of national emergency.[4] At the time, Section 5(b) of the TWEA read in relevant part as follows:

(1) During the time of war or during any other period of national emergency declared by the President, the President may, through any agency that he may designate, or otherwise, and under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise --

(A) investigate, regulate, or prohibit, any transactions in foreign exchange, transfers of credit or payments between, by, through or to any banking institution and the importing, exporting, hoarding, melting, or earmarking of gold or silver coin or bullion, currency or securities, and

(B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest,

by any person, or with respect to any property, subject to the jurisdiction of the United States.

Immediately following President Truman's proclamation, the Secretary of the Treasury issued a set of regulations imposing a total embargo on unlicensed financial and commercial transactions between U.S. nationals and Communist China and North Korea.[5] These regulations, known as the Foreign Assets Control Regulations ("FACR") were published on December 17, 1950 and codified at 31 C.F.R. Part 500.

The FACR were the first detailed regulations promulgated to impose a trade embargo on a foreign country under Section 5(b) of the TWEA. The FACR later served as the model for similar regulations issued in 1963 imposing a trade embargo on Cuba. When Treasury issued the Cuban embargo regulations (further described below), it invoked Section 5(b) of the TWEA as a basis for imposing the trade embargo.[6]

U.S. courts have upheld the President's exercise of the powers granted by the TWEA and the promulgation of regulations by Treasury under the President's delegation of those powers. The U.S. Supreme Court has recognized that Section 5(b) of the TWEA gave the President broad authority to impose comprehensive embargoes on foreign countries, such as Cuba, both during peacetime emergencies and in time of war. Regan v. Wald, 468 U.S. 222, 225-26, 104 S.Ct. 3026, 3029-30 (1984).

This broad presidential authority was limited in 1977 by Congress, which amended Section 5(b) of the TWEA by striking out "during any other period of national emergency declared by the President" in the text preceding subparagraph (A). Pub. L. 95-223, 91 Stat. 1625. By doing so, Congress removed the President's ability to invoke the existence of a national emergency and impose a trade embargo against a foreign country pursuant to the TWEA.[7] However, instead of requiring the President to declare a new national emergency in order to continue embargoes such as that in place against Cuba, Congress grandfathered existing exercises of the President's "national emergency" authority. Pub. L. 95-223, Section 101(b), 91 Stat. 1625, note following 50 U.S.C. App. [[section]] 5.[8] Continued applicability of this "grandfathering" provision requires annual determinations by the President that the exercise of such authority with respect to each affected country is in the national interest of the United States.

Thus, the authority under the TWEA to maintain a trade embargo on Cuba is predicated on the annual determination by the President that continued exercise of TWEA authority with respect to Cuba is in the national interest. Presidents Carter, Reagan and Bush issued annual Determinations that extended the state of emergency with respect to Cuba since the imposition of this requirement. 50 U.S.C. [[section]] 5 App., notes (1993). The most recent Presidential Determination extends the state of emergency until September 14, 1993. Presidential Determination No. 92-45, Aug. 28, 1992, 57 Fed. Reg. 43125, reprinted in 50 U.S.C. [[section]] 5 App., notes (1993). Therefore, President Clinton must issue a Determination by that date that continued exercise of his authority under Section 5(b) of the TWEA with respect to Cuba is in the national interest if the TWEA is to continue to provide authority for the Cuban embargo....

<http://lanic.utexas.edu/la/cb/cuba/asce/cuba3/travieso1.html> *****

***** THE TRAVEL BAN TO CUBA By Wayne S. Smith

...In imposing these measures, the Reagan administration claimed they were not travel controls per se; rather, they were currency controls authorized by the 1917 Trading With the Enemy Act (Yes! An act dating back to World War I.) Technically that was true, they were currency controls. The result, however, was the same, for if citizens could not pay for their travel, they could not undertake it. Further, one provision of the act of 1917 specifies that it can be applied only in times of war or national emergency. Clearly, we were not at war. What then was the national emergency? Again, the Reagan administration reached back into the past, citing, under a grandfather clause, the national emergency declared in response to the Korean War of 1950 as the legal underpinning for the currency-cum-travel controls imposed against Cuba in 1982! Yet the Reagan administration did not invent the situation.

Although the Korean War ended in 1953, no administration had declared the national emergency to be over. In several cases, it had even been argued that the Cold war was an ongoing national emergency, of which the Korean War had been but the opening chapter. When the Reagan administration's 1982 currency controls were taken to the Supreme Court in 1984, the majority of justices upheld their constitutionality, arguing that the grandfather clause had been correctly applied. Justices Blackmun, Brennan, Marshall and Powell argued strongly to the contrary, saying the currency controls represented an improper extension of presidential power. They, however, were in the minority. Given the Cold War and what were called new tensions with Cuba, the majority were prepared to give the Executive a wide latitude in the area of foreign policy and argued that the rights of citizens were overcome by the security needs of the nation.

Most students of law, reading the arguments ten years later, would probably side with Justice Blackmun and his colleagues who took the minority view. What is obvious, however, is that even if the majority was correct in 1984, all the grounds on which their decision was based have changed. The Cold War is over. No argument could now be made that there is an ongoing emergency occasioned by our rivalry with the Soviet Union. The Soviet Union no longer exists. Gone too is the alliance that once existed between Moscow and Havana. And Cuba has long since ceased any support for or involvement in revolutionary situations anywhere in the world. Yet, the rights of American citizens to travel continue to be curtailed....

<http://www.us.net/cip/ban.htm> *****

Cf. <http://usinfo.state.gov/regional/ar/us-cuba/clin25.htm>, <http://usinfo.state.gov/regional/ar/us-cuba/emergency27.htm>, & <http://www.whitehouse.gov/news/releases/2002/02/20020227-8.html> -- Yoshie

* Calendar of Events in Columbus: <http://www.osu.edu/students/sif/calendar.html> * Anti-War Activist Resources: <http://www.osu.edu/students/sif/activist.html> * Student International Forum: <http://www.osu.edu/students/sif/> * Committee for Justice in Palestine: <http://www.osu.edu/students/CJP/>



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