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Material Support to … Transnational Criminal Organizations?

Tuesday, July 26, 2011 at 5:28 PM

I’ve written a lot over the years about the way law responds to changing practical phenomena such as the emergence of non-state actors as a strategic threat, ala al Qaeda, as have many others.  This vein of scholarship often emphasizes themes of globalization and the decline of the Westphalian model in which sovereign states are the only serious players in the international order.  One strand of that scholarship has repeatedly emphasized how similar transnational criminal organizations can be to terrorist groups, even if the nature of the threat they pose is distinguishable and (at least usually) less strategically significant.  No surprise at all, then, that we would begin to see some of the legal tools associated with the response to terrorism be deployed in response to the perception that transnational crime is growing more significant as a national security problem (a perception that I think is driven largely by belatedly growing American appreciation of the drug cartel phenomenon in Mexico).

All of which is just a fancy way of introducing the fact that President Obama last week used his IEEPA authority to go after Los Zetas to some extent.  Specifically, he issued a new Executive Order under the International Emergency Economic Powers Act, sanctioning a fascinating quartet of transnational criminal organizations and creating a mechanism for further designations of similar groups–and their supporters. 

The EO is titled “Blocking Property of Transnational Criminal Organizations”.  That is, this is about “TCOs”, which is an acronym that obviously follows the style of the more familiar FTOs, or Foreign Terrorist Organization.  That is a very relevant parallel, in fact, for the model in both instances is to use economic sanctions to effectively embargo non-state actors that pose a serious threat to US foreign policy or national security (think of IEEPA as a generic delegation of authority by Congress to the President to declare an embargo on a foreign person or organization posing such a threat, upon declaration of a national emergency).  In this instance, the President determined that:

the activities of significant transnational criminal organizations, such as those listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems.  Such organizations are becoming increasingly sophisticated and dangerous to the United States; they are increasingly entrenched in the operations of foreign governments and the international financial system, thereby weakening democratic institutions, degrading the rule of law, and undermining economic markets.  These organizations facilitate and aggravate violent civil conflicts and increasingly facilitate the activities of other dangerous persons.  I therefore determine that significant transnational criminal organizations constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, and hereby declare a national emergency to deal with that threat.

Based on that predicate, the EO directs:

Section 1.  (a)  All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i)   the persons listed in the Annex to this order and

(ii)  any person determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State:

(A)  to be a foreign person that constitutes a significant transnational criminal organization;

(B)  to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order; or

(C)  to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.

(b)  I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by subsection (a) of this section.

(c)  The prohibitions in subsection (a) of this section include, but are not limited to:

(i)   the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(ii)  the receipt of any contribution or provision of funds, goods, or services from any such person.

(d)  The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

Sec. 2.  (a)  Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b)  Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Yes, this is enforceable criminally.  IEEPA contains felony provisions to enforce IEEPA-sanction orders like this.  They have been used frequently over the years as to the Taliban, for example, in conjunction with material support charges.  So you might think of this as creating an asset/finance/property-oriented material support system for certain foreign TCOs.   As an aside, note that the max sentence under 50 USC 1705 is now 20 years…I think it used to be just 5, but was ramped up in light of IEEPAs application in the terrorism context (and now applies across the board).

So who is sanctioned?  The Annex names four groups (more on this in a moment), but also delegates to the Secretary of the Treasury (in consultation with the AG and SecState) the power to name additional persons or groups that also constitute TCOs or who provide material support to TCOs.  As for which groups actually are named: Los Zetas (Mexico; query why not also any of the other major Mexican cartels such as Sinaloa or Gulf…probably because of the attacks on federal agents last spring); the Yakuza (Japan), Camorra (Italy), and the Brothers Circle (Eastern Europe).  Fascinating, to say the least.  [Note: I recognize that we have long had in place somewhat comparable Drug Kingpin designation-and-sanction schemes. My sense is that this is something potentially far more sweeping, however].  Stay tuned, in short.

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