2022 Ukraine Crisis

Does American Law Currently Authorize the President to Seize Sovereign Russian Assets?

By Laurence H. Tribe
Monday, May 23, 2022, 11:55 AM

Since Russia began its horrific invasion of Ukraine, there has been a concerted global effort to identify lawful ways to freeze, and to seize and use in assisting Ukraine, assets of Vladimir Putin’s oligarchs or of Russia itself. Writing in the New York Times last month, my colleague Jeremy Lewin and I pointed to one solution: presidential use of the authority Congress granted in the International Economic Emergency Powers Act of 1977 (IEEPA) to transfer to Ukraine the tens of billions of dollars in Russian government currency reserves that have already been frozen in American banks and the Federal Reserve. The urgency of pursuing that option has grown as the war has continued to rage and, as we predicted last month, political opposition to funding additional Ukraine aid from American taxpayer coffers has started to rise. So I was heartened to see Secretary of State Antony Blinken signal a few weeks ago that the Biden administration is now considering the option that Lewin and I proposed and to see growing momentum in Europe to adopt similar measures, recognizing that a coordinated NATO-G7 effort could unlock as much as $300 billion in frozen Russian money for the defense and reconstruction of Ukraine. At the same time, the administration is actively moving forward to continue to seize certain assets of private Russian oligarchs—a move endorsed by a bipartisan congressional resolution. 

The issue has continued to gain traction among scholars and commentators. Some commentators have suggested mechanisms calling for new legislation from Congress to seize Russian sovereign currency assets. And writing in Foreign Affairs, University of Virginia historian Phillip Zelikow and MIT economist Simon Johnson have put forth a slightly different proposal to repurpose the same frozen Russian sovereign assets, relying in part on international law frameworks. That proposal has engendered a spirited exchange in Lawfare between Zelikow and University of Virginia international law expert Paul Stephan about whether Russia’s flagrant violations of international law in prosecuting its illegal invasion justify efforts by the United States and others to confiscate Russian money to aid its Ukrainian victims now. 

Those exchanges have been illuminating but are tangential to the proposal I advanced in The New York Times. In my proposal, I am chiefly concerned with confiscating Russia’s central bank assets, the currency reserves already frozen in the United States. Although I also favor seizing oligarch assets, doing so will probably take years of complex litigation and cannot alone deliver enough money to meet Ukraine’s growing needs, much less sufficiently penalize the Russian state and deter it from continuing its spree of brazen war crimes. In the Stephan-Zelikow debate over whether international legal doctrines can accommodate the seizure of Russia’s sovereign assets to remediate the harms caused by its wanton disregard of the most fundamental tenets of that body of law, I think Zelikow has the better of the argument. But even Stephan, who argues that such seizures “manifestly violate international law,” has conceded that “if Congress and the executive embrace with sufficient clarity and purpose a constitutionally sound law that breaches the United States’ international legal obligations, U.S. courts must regard that law as valid.”  

Neither Zelikow nor Stephan nor any other legal expert suggests that any non-U.S. judicial forum has the jurisdiction and capacity to enforce against the U.S.  government any potential international law claims against our seizure of billions of dollars in already frozen Russian sovereign assets. Thus the operationally crucial question is whether proposals like mine would confront any insuperable obstacles under United States law.   

Stephan, responding both to my proposal and to Zelikow’s, took issue with their legality under domestic statutory and constitutional law. Although I know of no one else who has voiced constitutional doubts, some commentators besides Stephan have expressed skepticism on statutory grounds—either doubting that the subsection of IEEPA on which I have relied confers sufficient authority, or concerning whether President Biden would need to invoke a companion provision enacted by Congress as part of the Patriot Act in the wake of 9/11 (a provision applicable only when we are “attacked by a foreign country or by foreign nationals.”) My purpose here is to respond to all of those domestic law objections. 

Stephan says that Lewin and I, and those who agree with us, “get current law wrong” and “blow by potential legal obstacles at warp speed,” but he does not discuss the words of the statutory text on which we rely. Perhaps, as an international law specialist, he imagines that we are not really relying on that domestic statute but are in fact relying, he thinks unjustifiably, on international laws and customs.  If so, he is wrong. We are relying solely on IEEPA, an Act of Congress passed in 1977 and signed into law by the president. Whatever stability it might offer in global affairs, something I fear Stephan exaggerates, the body of principles loosely known as “international law” neither delegates authority to the American president nor trumps the authority delegated to the president by our national legislature. 

The words of IEEPA are clear: 50 U.S.C. §1702(a)(1)(b) says without ambiguity that “The President may . . . direct and compel, nullify, void [or] prohibit . . . any . . . holding, use, transfer, or exercis[e]. . . of . . . any right, power, or privilege with respect to . . . any property in which any foreign country . . . has any interest”  upon declaring an emergency to trigger IEEPA, something President Biden has specifically done

Not disputing the plain meaning of that text, Stephan suggests that taking Congress at its word might entail using the legislation to reach beyond its “goal of trimming the authorities that presidents had had since World War I, including a broad confiscation power.” That kind of objection flies in the face of the current Supreme Court’s repeated insistence on reading the language Congress uses in accord with its ordinary meaning, whatever Congress might have intended or anticipated at the time. That was the clear message of the Court’s recent decision in Bostock v. Clayton County, treating discrimination against gay and trans persons as “discrimination . . . because of sex” for purposes of Title VII of the Civil Rights Act of 1964, a decision rendered by a 6-3 majority. To be sure, that strictly textual approach is one that progressively-minded scholars like me have at times criticized as unduly literal and insufficiently attentive to legislative purposes. But in a world filled with hardball players and against the backdrop of dire humanitarian and strategic need, the case for unilateral methodological disarmament isn’t particularly persuasive: the Biden administration shouldn’t tie one hand behind its back. And in pragmatic terms, should any case foregrounding this issue come before the current Supreme Court, there is little doubt that all nine Justices, who as Justice Kagan famously remarked are “all textualists now,” would start and finish their analysis with the words of the statute as enacted. 

Stephan next responds to a claim Lewin and I do not make: that “the president has implied powers under the Constitution to confiscate foreign assets even outside of war,” perhaps ancillary to “an exclusive [presidential] authority to recognize foreign states and their governments and to make other choices that flow from this power.” Although such “implied powers” are anything but imaginary, especially in light of the capacious understanding of Article II embodied in recent Supreme Court jurisprudence, nothing in our proposal depends on that kind of understanding. Being among those who worry about an over-powerful and indeed imperial presidency, I would hardly advance an argument so predicated. 

Stephan also seems to think that the examples we cite “from recent history”—of making “frozen Venezuelan central bank assets available to the exiled opposition leader Juan Guaidó” and of liquidating “around $7 billion in assets of the defunct Afghan central bank rather than hand[ing] them over to the Taliban, reserving half for Afghan humanitarian efforts and half to satisfy court judgments in suits filed by the relatives of those killed or wounded in the Sept. 11 attacks”— constitute our “proof of the validity of [our] proposal.” But we never offered those examples as “proof” of what the plain text of IEEPA makes evident; we offered them simply to rebut the suggestion that making “hostile government funds available for various humanitarian and remedial purposes” would be “radical” or “unprecedented” or “a grand expansion of presidential power at Mr. Biden’s behest.” To the degree anyone might hesitate to take Congress at its word on the basis that Congress cannot plausibly be understood to have entrusted to the president any power so novel and without precedent, we meant to offer whatever reassurance actual instances of such presidential seizure might provide. Whether a government’s confiscated sovereign assets are handed to a successor regime or to another sovereign entirely has no bearing on the magnitude of the power such confiscation represents. It would have been reckless—given the obvious dangers of advocating regime change in a nation possessing the capacity to destroy human civilization with its thermonuclear arsenal—for us to hinge our proposed repurposing of Russia’s sovereign assets on an imagined presidential power to topple the regime that today reigns supreme in Moscow. Put simply, we did no such thing.

Along similar lines, Stephan observes that, “[w]ere President Biden to recognize a new government of Russia, perhaps one led by Aleksey Navalny, and then give him the right to dispose of the frozen assets,” a 2014 Supreme Court decision,  Zivitofsky v. Kerry, “might apply.” Stephan writes: “But he hasn’t, and therefore it doesn’t.” But nothing in our argument invokes the presidential power at issue in Zivitofsky—the power to decide who legitimately governs any particular nation or ancient city—and we were not so foolhardy as to rest our pro-Ukraine proposal on any imagined Biden move to call for the toppling of the Putin regime, however much it might deserve that fate. 

Finally, Stephan argues that, although a freeze of foreign-owned assets “destroys the current economic value of assets by criminalizing any attempt to transact with them or derive any benefits from them,” what such a “freeze does not do . . . is change ownership.” But I have never suggested that the freeze itself “changes ownership”—only that IEEPA’s broad language authorizes the president, on making the requisite emergency determination, to unfreeze the frozen funds and use them to assist Ukraine rather than having them lay idle, perhaps forever.

What then of Stephan’s argument that the 2001 amendment to IEEPA, by specifically conferring such a power to “confiscate” and “vest … title” to the funds for the use in question, impliedly erases that power from the pre-Patriot Act IEEPA? That argument too is unavailing. It flies in the face of the settled constitutional principle that a grant of power by Congress – here, IEEPA’s grant to the president of power to “direct and compel” the “transfer, withdrawal” or “exportation” of frozen foreign funds – can be repealed or cut back only by an express congressional enactment, not by mere implication

The suggestion underlying Stephan’s contrary argument and that of the colleagues whose views he cites in support is that Congress would never say with greater specificity something it has already said at a higher level of generality. So, what Congress plainly said in 1977 can no longer be read according to its basic meaning, even if it could initially have been so read. But any such suggestion is inconsistent with the principle that “Congress says what it means and means what it says” and that, under Article I of the Constitution, it is what Congress enacts and the president signs–not what Congress might have intended or hoped to achieve–that counts as law. It is inconsistent as well with the lengthy history of instances in which Congress has in fact returned in an abundance of caution to ground earlier Congresses had covered with less specificity so as to make clear what might previously have been missed.

Moreover, even if one were to train one’s sights on Congress’s supposed intentions or assumptions, the focus of lawmakers on the Hill in the wake of 9/11 was on holding the perpetrators of that day’s  terror accountable, both by going after them militarily – hence the Authorization for Use of Military Force – and by taking title to whatever real or personal property they might own. That may well be what explains the Patriot Act’s addition to IEEPA of §1702(a)(1)(c) to permit the president, “when the United States is engaged in armed hostilities or has been attacked by a foreign country or foreign nationals,” to “confiscate any property . . . of any foreign person, . . . organization, or . . . country that he determines has planned, authorized, aided, or engaged in such [activities],” at which point “all right, title, and interest in any property so confiscated shall vest . . . upon such terms and conditions as the President may prescribe . . . in the interest of and for the benefit of the United States . . . .” 

To be sure, that language does grant a distinct and more narrowly focused power to “confiscate” and “vest title” in foreign “property.” But it by no means follows, as Stephan and some others have rushed to conclude, that §1702(a)(1)(b) must be read, after 2001, no longer to do just what its language says—namely, empower the president to “direct and compel” the “transfer” and “use” of frozen foreign dollars in the U.S. Beyond the general principles of statutory interpretation pointing to this conclusion, a key fact that commentators like Stephan overlook is that the power added by the Patriot Act amendment addressed “property” in a sense that may well not have included money. For this understanding of “property,” the key issue isn’t who has “title” to it but who may determine its use, something that the language of §1702(a)(1)(b) already covered. People talk of their having “title” to a particular car or rare coin, or of a bank having “title” to the house in which they live but rarely, if ever, do they speak of having “title” to the specific dollar bills they have in their wallets. With respect to real and personal property – land and tangible, physical assets, in lay terms – “vesting . . . title” is a distinct and more complex legal process, one that Congress evidently felt a need to pin down, specifying that the president could unilaterally cause title to vest in an entity other than the foreign person or organization originally holding title to the property in question. Such property, unlike currency, is not fungible and is generally subject to less inherent government control than domestic sovereign currency like U.S. dollars, which as the Supreme Court noted in the 1935 Gold Devaluation Cases is a creation of the government that, even when privately held, is subject to considerably more government control than is other property. 

Stephan also misapprehends our argument that the Supreme Court’s landmark 1981 decision about the Iran hostage crisis, Dames & Moore v. Regan, establishes that IEEPA confers upon the president “’broad authority’ to act in times of national emergency.” He supposes that we are using Dames & Moore to establish inherent presidential “capacity, in the absence of either authorization or objection from Congress, to agree with Iran to transfer some of its frozen assets to an international claims tribunal for disposition by that tribunal according to the terms of the agreement.” Not so. We rely on Dames & Moore solely for the Court’s agreement with the government and two circuits that the “plain text of the [IEEPA] specifically authorized” the president to “compel the transfer and withdrawal” of blocked assets, and to “nullify certain rights and privileges acquired in them” in order to make such transfer possible. 

Dames & Moore expressly rejected arguments that the Court “should ignore the plain language of [§1702(a)(1)(b)] because an examination of its legislative history as well as the history of” related and precursor statutory provisions “reveals that the statute was not intended to give the President such extensive power over the assets of a foreign state during times of national emergency.” Instead, the Court correctly “refuse[d] to read out of [subsection (b)] all meaning to the words ‘transfer,’ ‘compel,’ or ‘nullify.’” Stephan rightly says that Dames & Moore “was not about exclusive executive power that . . . Congress may not override or limit.” But we rely on no such power.  

Even if the enactment of the 2001 amendment to IEEPA supports reading the preexisting grant of power in §1702(a)(1)(b) more narrowly than we believe its text requires, it would not follow that the amendment, applicable whenever the “United States . . . has been attacked by a foreign country or foreign nationals . . . ,” could not be treated by the president as applicable to Russia. Stephan notes that Russia “has not ‘attacked’ the United States as a matter of international law.” But it isn’t international law that determines the scope of the power Congress entrusted to the president either in the underlying IEEPA or in the Patriot Act amendment. It is the domestic law of constitutional and statutory construction. Under that body of law, it is up to the president to decide whether Russia has “attacked” the United States within the meaning of the United States Code. And it appears that President Biden decided as much in the executive order he issued in April 2021, the order that triggered all our existing sanctions on Russia and its state-entangled oligarchs by identifying Russian territorial encroachments including the invasion of Ukraine as part and parcel of that state’s interconnected efforts to undermine the security of the United States, by means including “engag[ing] in and facilitat[ing] malicious cyber-enabled activities against the United States” and our critical infrastructure, government, and private industry.  

These cyberattacks have been foregrounded in the declaration of the preexisting emergency posed by global Russian aggression, of which the unlawful war against Ukraine is but one component. And there is nothing in the National Emergencies Act – or in the section of IEEPA providing that the authorities it delegates to the president “may be exercised to deal with any unusual and extraordinary threat” to our “national security, foreign policy, or economy” arising wholly or partly from abroad and triggering what the president declares to be a “national emergency”—that suggests any expiration date for a determination such as the one President Biden has made about past or continuing Russian cyber-assaults targeting the United States.  

Thus, if President Biden were to invoke the Patriot Act amendment to IEEPA on the basis that he has determined that Russia had “attacked” our country in cyberspace, it would be extremely unlikely for a federal judiciary that has become increasingly deferential to presidential determinations about the facts on the ground—and, presumably, in cyberspace—suddenly to adopt a skeptical posture toward any such determination, much less second-guess the very existence of an “attack by a foreign country or foreign nationals.” 

Stephan next objects that using the IEEPA in this manner under either subsection (b) or subsection (c) would violate the precept that, “[a]s a matter of constitutional law, the government’s taking of property may proceed only on the basis of due process of law.” To be sure, the Fifth Amendment does say that “private property” shall not “be taken for public use, without just compensation.” That’s private property, not the obviously public and indeed purely sovereign, governmental property about which Lewin and I wrote in The New York Times. But even if it therefore cannot claim a right to “just compensation,” isn’t the Russian Federation at least entitled to “due process of law” when its frozen sovereign property is confiscated? Well, not really. The text of the Fifth Amendment is quite specific as to who may invoke its protections: It says: “No person shall be . . . deprived of life, liberty, or property, without due process of law.” Because Russia is surely not a “person” capable, even in principle, of being “deprived of life” or of “liberty,” the principle that words gathered in sequence are likely to have parallel meanings strongly suggests that the term “property” is likewise unavailing to the Russian Government. 

This is not a technical matter of whether Republic of Argentina v. Weltover, the 1992 Supreme Court decision involving certain Argentinian debt instruments arising in a commercial context, authoritatively held that a foreign government cannot count as a “person” or merely suggested as much in passing. Rather, it’s a matter of ordinary language usage in the construction of an instrument meant, as the great Chief Justice John Marshall wrote in 1819, not as an arcane lawyer’s document “partak[ing] of the prolixity of a legal code, [which] could scarcely be embraced by the human mind” but rather as a set of foundational axioms meant to be “understood by the public.”

Thus, I need not rest my case for denying that the Russian Federation is a “person” under our Constitution on Republic of Argentina, or on the holdings of the Second and District of Columbia Circuits, the two most important in this legal realm. I could point to just about any dictionary and to the way ordinary people talk. Ordinary people would describe Vladimir Putin as a monstrous person, but no one would call the Russian Government an evil “person.” So, notwithstanding the  much-contested proclamation by the U.S. Supreme Court that privately held corporations (the manifestation of their corporeal owners) are “persons” for various constitutional purposes, I must insist that the sovereign entity of the Russian Federation is not.

In any event, even if Russia could claim to be a “person,” it wouldn’t follow that the “process” that is its “due” must, as Stephan supposes, be judicial process in the form of federal court review of a presidential repurposing of its sovereign assets. Not even ordinary, flesh and blood persons have an automatic constitutional right to have a court, especially in exigent circumstances like the spread of a raging wildfire, review the legality of a property seizure intended to mitigate a growing disaster – and the circumstances of Russia’s savage war on the civilian population of Ukraine are about as exigent as any one can imagine. An administrative process involving a neutral factfinder often suffices, and that process need not invariably precede the taking but may, again if circumstances warrant, come afterward.

I am not one to lightly deny people access to court. But I have no hesitation in arguing, at least as a matter of federal constitutional law, that Russia has no right to what Stephan calls “some sort of judicial review when the U.S. government seizes its property for disposal at the discretion of the president.” 

I have not proposed filing a lawsuit against the Russian federation, so Stephan’s extensive consideration of the Foreign Sovereign Immunities Act (FSIA) in his analysis of asset seizure does not destabilize any of the arguments I make. Stephan concedes as “obviously correct” my point that the immunity codified by that act shields foreign sovereigns only “from the jurisdiction of the courts” and not from purely executive actions that block the transfer of foreign sovereign assets or freeze them. Stephan suggests that “the assets of a sovereign central bank enjoy some kind of international legal immunity from confiscation, as opposed to freezing, by the state in which they are found” and thinks it “clear” that such “immunity does not depend on the presence or absence of judicial process and thus is independent of the kind of sovereign immunity” that I have discussed. He concedes that, even on the supposition that some such “international legal immunity” exists, its “scope . . . is unclear” because “outside of armed conflicts, states are not in the habit of doing this” and argues that “the absence of seizures during times of peace itself speaks loudly.” I am baffled by the thought that Russia’s lawless aggression wouldn’t suffice to overcome any such nebulous immunity on the ground that states aren’t “in the habit” of coming to the aid of those attacked by such aggression, virtually unknown since World War II. But even if some principle of foreign sovereign immunity beyond that codified in the FSIA could be invoked to challenge executive actions of the sort I have proposed, it is indisputable, as the Supreme Court held in Bank Markazi aka Central Bank of Iran v. Peterson, that Congress can abrogate foreign sovereign immunity at will. Here, IEEPA’s clear grant of presidential authority to transfer and nullify holdings of foreign sovereign assets displaces sovereign immunity; to find otherwise would lead to the absurd conclusion that, although Congress drafted a statute expressly granting the president power, under subsections (b) and (c), to freeze and confiscate foreign assets, it really meant that power to be nearly entirely neutered by whatever foreign sovereign immunity was partly codified by the FSIA. 

Finally, if Russia were to file suit against the United States in an American court for a return of its money, there would be time enough to consider the arguments for and against a decision by our Government to waive its own sovereign immunity to permit such a suit to go forward. Given that, as Stephan rightly says, Russia’s “invasion is an outrage, and the atrocities that have come to light disgust any sensible person,” and given the glaring substantive weakness of any claims Russia might make in such a suit, the optics might counsel in favor of waiver: Let Russia lose in bright daylight, on the merits, should it have the temerity to insist, while committing war crimes daily, that its rights have been violated by America’s decision, in Stephan’s words, to “hoist Russia on its own petard.”

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