b'Eligibility of a Noncitizen Dual National for a Paid Position\nWithin the Department of Justice\nThe D epartm ent o f Justice must determine the \xe2\x80\x9c dominant, effective" nationality o f a noncitizen with\ndual nationality to determine that person\xe2\x80\x99s eligibility for a paid position in the Department under\nsection 606 o f the Treasury, Postal Service, and General Government Appropriations Act, 1997.\nO c to b e r 11, 1996\nM e m o r a n d u m O p in io n\nO f f ic e\n\nof\n\nfor t h e\n\nA s s is t a n t D ir e c t o r\n\nAtto r n ey Perso nn el M anagem ent\n\nYou have sought our views on the question whether, in light of section 606\nof the Treasury, Postal Service, and General Government Appropriations Act,\n1997, Pub. L. No. 104-208, 110 Stat. 3009-314, -354 (1996) (\xe2\x80\x9c section 606\xe2\x80\x9d ),\nthe Department of Justice may offer a paid position to a noncitizen who is a\nnational of two foreign States.1 Section 606 prohibits, with various exceptions,\nthe use of appropriated funds to employ noncitizens whose post of duty is in\nthe continental United States; the prohibition is, however, inapplicable to \xe2\x80\x9c nation\xc2\xad\nals of those countries allied with the United States in the current defense effort.\xe2\x80\x9d\nIn the case you have described, a noncitizen law student, who is a dual national\nof Canada and Bangladesh, is an applicant for the Department\xe2\x80\x99s Summer Law\nIntern Program. That program involves employment at the GS-7 level solely with\xc2\xad\nin the continental United States.\nThe State Department maintains a list of countries \xe2\x80\x9c allied with the United States\nin the current defense effort.\xe2\x80\x9d 2 You have advised us that Canada is included\non this list, but that Bangladesh is not.\nAlthough Congress has repeatedly enacted appropriations laws that restrict the\nemployment of noncitizens, it has also significantly modified those restrictions\nthrough a series of exceptions. See Hampton v. M ow Sun Wong, 426 U.S. 88,\n108-09 (1976). Specifically, in 1943, it created an exception for \xe2\x80\x9c \xe2\x80\x98nationals of\nthose countries allied with the United States in the prosecution of the war\xe2\x80\x99 \xe2\x80\x9d Id.\nat 109 (quoting Act of June 26, 1943, ch. 146, 57 Stat. 196, 196). That exception,\nxSee M emorandum for Richard L. Shiffrin, Deputy Assistant Attorney General, Office o f Legal Counsel, from\nM arc R. Salans, Assistant Director, Office o f Attorney Personnel Management, Re: Eligibility o f Dual Citizen for\nPaid Position (Oct. 7, 1996).\n2 W e have review ed the basis of the S tate Department\xe2\x80\x99s determinations in Memorandum to Files, from Todd\nD. Peterson, A ttorney Advisor, Office o f L egal Counsel, Re: Request for Advice from Administrative Office o f United\nStates Courts Concerning the Interpretation o f 31 U.S.C. \xc2\xa7699(b) (Dec. 20, 1982) (the \xe2\x80\x9c Peterson M emo\xe2\x80\x9d ).\nW e note that the Comptroller General\'s O ffice has stated that the decision concerning what countries should be\nconsidered \xe2\x80\x9c allied\'* is a political one, w hich it will not challenge in an audit. In particular, it has stated that \xe2\x80\x9c a\ndeterm ination that Canada is allied with th e United States in the current defense effort is a political judgm ent not\nsubject to the decision o f this Office. However, we believe it to be a commonly accepted fact that C anada is so\nallied, and we would not question an affirm ative administrative determination to that effect.\xe2\x80\x9d Matter of: Clarence\nD. Swanson, U npublished Opinion B-188852, 1977 W L 12358 at *3 (C.G.).\n\n366\n\n\x0cEligibility o f a Noncitizen Dual National fo r a P aid Position Within the Department o f Justice\n\nthe substance of which has often been re-enacted, is the basis of the present section\n606. See Peterson Memo at 1.\nAnalysis\n\nThe plain language of section 606 does not decide the question presented. It\nis true that the applicant is a national of an \xe2\x80\x9c allied\xe2\x80\x9d country, and so would seem\neligible for hire. But it is also true that the applicant is a national of a nonallied\nState, and thus would remain subject to the general ban on noncitizens. Moreover,\nCongress has crafted careful, narrowly drawn exceptions in section 606 for the\nnationals of particular nonallied countries (e.g., for aliens from Cuba, provided\nthey are lawfully admitted permanent residents, or for nationals of the People\xe2\x80\x99s\nRepublic of China, if they qualify for adjustment of status under the Chinese Stu\xc2\xad\ndent Protection Act). It would seem, therefore, that nationals of other nonallied\ncountries should remain ineligible, notwithstanding that they may also happen to\nhave the nationality of an \xe2\x80\x9c allied\xe2\x80\x9d State. Thus, the language of the statute does\nnot resolve the issue.\nSimilarly, examination of the policies behind section 606 does not yield a\nstraightforward answer. The general exclusion of noncitizens from federal employ\xc2\xad\nment in the United States seems to be aimed chiefly at protecting national security\nby ensuring the loyalty of federal employees, encouraging noncitizens who seek\nfederal employment to become naturalized, and shielding United States nationals\nfrom competition in a substantial sector of the labor market. See Hampton v. M ow\nSun Wong, 426 U.S. at 94, 104 (reviewing arguments of executive branch). The\nexception for nationals of \xe2\x80\x9c allied\xe2\x80\x9d foreign States, on the other hand, serves dis\xc2\xad\ntinct, indeed often contrary, interests: it allows federal employers greater flexibility\nin meeting their personnel needs; it expresses this Nation\xe2\x80\x99s solidarity with its al\xc2\xad\nlies; and it signifies confidence that the nationals of such allies are unlikely to\nbetray the trust that the United States Government has reposed in them. Any sim\xc2\xad\nple, \xe2\x80\x9c bright line\xe2\x80\x9d rule that treated dual nationals in the applicant\xe2\x80\x99s position as\neligible\xe2\x80\x94 or as ineligible \xe2\x80\x94 would promote some of these policies only at the\nexpense of others.\nWe think that the statute is best read, and the policies behind it most satisfyingly\naccommodated, by applying the concept of \xe2\x80\x9c effective, dominant nationality.\xe2\x80\x9d\nThat concept, which derives from international law ,3 has also been invoked by\n3 See Nottebohm (Liechtenstein v. Guatemala), 1955 I.C J. 4, 22 (Apr. 6) ( \xe2\x80\x9c International arbitrators . . . have\ngiven their preference to the real and effective nationality, that which accorded with the facts, that based on stronger\nfactual ties between the person concerned and one o f the States whose nationality is involved . . . . Similarly,\nthe courts o f third States, w hen they have before them an individual whom tw o other States hold to be their national,\nseek to resolve the conflict by having recourse to international criteria and their prevailing tendency is to prefer\nthe real and effective nationality."); see also 8 Marjorie M. Whiteman, Digest o f International Law 1252-55 (1967)\n(quoting decision o f Italian-United States Conciliation Commission in Merge Claim, see United States ex rel. Merge\nv. Italy, 22 I.L.R. 443 (Italian-U.S. Conciliation C om m \xe2\x80\x99n, 1955) discussing international law origins and applications\no f concept o f effective, dominant nationality).\nContinued\n\n367\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nthe federal courts to resolve disputes under domestic law that involve dual nation\xc2\xad\nals. For example, the court in Sadat v. M ertes, 615 F.2d 1176 (7th Cir. 1980),\nmade use of the concept in analyzing whether the \xe2\x80\x9c alienage jurisdiction\xe2\x80\x9d statute,\n28 U.S.C. \xc2\xa7 1332(a)(2), which vests the district courts with jurisdiction over civil\nactions between citizens of States of the United States and citizens of foreign\nStates, gave rise to jurisdiction in a case involving a naturalized citizen who was\nalso an Egyptian national under that country\xe2\x80\x99s law s.4 The court explained the\nconcept as follows:\nUnder international law, a country is responsible for official con\xc2\xad\nduct harming aliens, for example, the expropriation of property\nwithout compensation. It is often said, however, that a state is not\nresponsible for conduct which would otherwise be regarded as\nwrongful if the injured person, although a citizen of a foreign state,\nis also a national of the state taking the questioned action . . . .\nDespite the general rule of nonresponsibility under international\nlaw for conduct affecting dual nationals, there are recognized ex\xc2\xad\nceptions. One is the concept of effective or dominant nationality\n. . . . [T]his exception provides that a country (respondent state)\nwill be responsible for wrongful conduct against one of its citizens\nwhose dominant nationality is that of a foreign state, that is,\n(i) his dominant nationality, by reason of residence or other\nassociation subject to his control . . . is that of the other\nstate and (ii) he . . . has manifested an intention to be a\nnational of the other state and has taken all reasonably prac\xc2\xad\nticable steps to avoid or terminate his status as a national\nof the respondent state.\nR estatem ent (Second) o f the Foreign Relations Law o f the United\nStates \xc2\xa7 171(c) (1965).\n\n615 F.2d at 1187 (citation omitted).\nApplying the Restatement\' s tests, the Sadat court found that the plaintiff was\nnot a \xe2\x80\x9c citizen[] or subject[] of a foreign state\xe2\x80\x9d under 28 U.S.C. \xc2\xa7 1332(a)(2),\nThe doctrine o f dominant and effective nationality rests on tw o fundamental principles that reflect a\ncontem porary view o f the link of nationality. First, the concept o f nationality embodies more than a tenuous\nlegal bond asserted by municipal law . . . . Second, nationality is a product o f personal choice and action.\nThe conduct o f the individual furnishes the only sound juridical foundation for recognition of a single\nnationality.\nNote. Claims o f Dual Nationals in the M odem Era: The Iran-United States Claims Tribunal, 83 Mich. L. Rev.\n597, 613 (1984) (footnote omitted).\n4 Later decisions have followed Sadat. See, e.g., Soghanalian v. Soghanalian , 693 F. Supp. 1091 (S.D. Fla. 1988).\n\n368\n\n\x0cEligibility o f a Noncitizen D ual National fo r a Paid Position Within the Department o f Justice\n\ni.e., that his dominant, effective nationality was American, not Egyptian. Although\nthe plaintiff had resided in Egypt rather than in the United States, his actions\n\xe2\x80\x9c manifested] his continued, voluntary association with the United States and his\nintent to remain an American.\xe2\x80\x9d 615 F.2d at 1188.5 For example, he had registered\nwith the U.S. Embassy during his sojourns abroad, had cast an absentee ballot\nin a Presidential election, and had not sought employment that might jeopardize\nhis status as a naturalized U.S. citizen. Id.\nThese tests should be used to determine the dominant, effective nationality of\nthe applicant in question.6 The primary question to be asked is what nationality\nis indicated by the applicant\xe2\x80\x99s residence or other voluntary associations. A second\nquestion is whether the applicant has manifested an intention to be a national\nof one of the two States, while also seeking to avoid or terminate nationality\nin the other. Of these two questions, the former will ordinarily be the more impor\xc2\xad\ntant. In Sadat itself, it was the plaintiffs voluntary associations with the United\nStates that led the court to find that his dominant nationality was American: he\nhad not sought to terminate or avoid his Egyptian nationality, and had in fact\nmaintained significant contacts with that country. Consequently, we believe that\na dual national can be found to have a dominant, effective nationality of one\ncountry, even if he or she takes no affirmative steps to terminate or avoid the\nnationality of the other\xe2\x80\x94 indeed, even if he or she makes a conscious decision\nto retain the latter nationality.7\nWe believe that the procedure we have outlined serves the various, and some\xc2\xad\ntimes conflicting, goals of section 606. In particular, it will enable the United\nStates to demonstrate its good will toward allied States and its confidence in their\nnationals, without compromising national security. Moreover, the results of fol\xc2\xad\nlowing the procedure should be both fair to individual applicants and satisfactory\nto federal employers. Because \xe2\x80\x9c municipal law determines how citizenship may\nbe acquired,\xe2\x80\x9d Perkins v. Elg, 307 U.S. 325, 329 (1939),8 an applicant may be\ndeemed a national of a particular country under its domestic law, even if he or\nshe has no significant voluntary ties whatever to that country.9 It would be unfair\n3 As the Internationa] Court o f Justice explained in Nottebohm, \xe2\x80\x9c the habitual residence o f the individual concerned\nis an important factor [in determining dominant nationality], but there are other factors such as the centre o f his\ninterests, his family ties, his participation in public life, attachment shown by him for a given country and inculcated\nin his children, etc.\xe2\x80\x9d 1955 I.C J. at 22.\n6 Although making these determinations may entail some administrative inconvenience, we think that the difficulties\nshould not be substantial.\n7 We note also that it may be a legal impossibility, under applicable municipal law, for an individual to renounce\na particular nationality. Knowing that the effort to renounce that nationality would be futile, the individual may\nmake no attempt to do so. In such a case, the decision not to make such an attempt should obviously not prevent\na court or agency from fmding the individual\'s other nationality to be dominant.\ne See also Murarka v. Bachrack Bros., Inc., 215 F.2d 547, 553 (2d Cir. 1954) (Harlan, J.) ( \xe2\x80\x9c It is the undoubted\nright of each country to determine w ho are its nationals, and it seems to be general international usage that such\na determination will usually be accepted by other nations.\xe2\x80\x9d ).\n9 \xe2\x80\x9c Municipal laws broadly applying the doctrine o f jus sanguinis can . . . create dual nationality without regard\nto the individual\'s connection to the state. Under this doctrine children are nationals if their parents are nationals.\nContinued\n\n369\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 20\n\nto deny the possibility of federal employment to that applicant merely because\nof such an incidental, nonvoluntary status, if the country in question happened\nto be nonallied. Equally, it would be unreasonable to treat such an applicant as\neligible for federal employment merely because the country happened to be allied,\nwhen the applicant\xe2\x80\x99s actions and choices demonstrated a conscious commitment\nto the nationality of another, nonallied State.\nRICHARD L. SHIFFRIN\nD eputy Assistant A ttorney General\nOffice o f Legal Counsel\n\nirrespective o f the links (birth o r domicile) between the child and the state.\xe2\x80\x9d Note, supra note 3, at 607 (footnote\nom itted).\n\n370\n\n\x0c'


b"Legality of the International Agreement with Iran\nand Its Implementing Executive Orders\nExecutive orders providing for the establishment of escrow accounts with the Bank of\nEngland and the Central Bank o f Algeria, directing the transfer of previously blocked\nIranian governm ent assets to those accounts, and nullifying all interests in the assets\nother than the interests of Iran and its agents, are within the President\xe2\x80\x99s authority under\nthe International Em ergency Econom ic Pow ers A ct (IEEPA ). Banks and other holders\nof Iranian assets need not await formal vacation of court-ordered attachm ents before\ncomplying with transfer orders, since they as well as Executive Branch officials are\nrelieved from any liability for actions taken in good faith in reliance on the IEEPA .\nExecutive order prohibiting the prosecution o f any claims against Iran arising from the\nhostage seizure, and term inating any previously instituted judicial proceedings based on\nsuch a claim, is within the President\xe2\x80\x99s authority under the IE E PA and the Hostage\nAct. The order does not purport to preclude any claimant from petitioning Congress\nfor relief in connection w ith his claim, nor could it constitutionally do so.\nProvisions o f executive order blocking property of the form er Shah\xe2\x80\x99s estate and that of\nhis close relatives, and requiring all persons subject to the jurisdiction of the United\nStates to submit to the Secretary of the T reasury information about this property to be\nmade available to the governm ent of Iran, are within the President\xe2\x80\x99s authority under\nthe IE E PA . Proposed order also directs the A ttorney General to assert in appropriate\ncourts that claims o f Iran for recovery o f this property are not barred by foreign\nsovereign immunity or act o f state doctrines, and asserts that all Iranian decrees\nrelating to the form er Shah and his family should be enforced in courts of the United\nStates.\nThe President has constitutionally and congressionally conferred authority to enter an\nagreem ent designating the Iran-United States Claims Tribunal as the sole forum for\ndeterm ination o f claims by the United States or its nationals against Iran, and to confer\nupon the Tribunal jurisdiction over claims against the United States.\n\nJanuary 19, 1981\nT h e P r e s id e n t\nT h e W h it e H o u se\n\nI have been asked for my opinion concern\xc2\xad\ning the legality of certain actions designed to resolve issues arising from\nthe detention in Iran of 52 American hostages, including the diplomatic\nand consular staff in Tehran.\nAn international agreement has been reached with Iran. The agree\xc2\xad\nment, which consists of four separate documents, commits the United\nStates and Iran to take specified steps to free the hostages and to\nresolve specified claims between the United States and its nationals and\nIran and its nationals. These documents embody the interdependent\n302\nM y D e a r M r . P r e s id e n t :\n\n\x0ccommitments made by the two parties for which Algeria has been\nacting as intermediary.\nThe first document is captioned \xe2\x80\x9cDeclaration of the Government of\nthe Democratic and Popular Republic of Algeria\xe2\x80\x9d (Declaration). The\nDeclaration provides, first, for non-intervention by the United States in\nthe internal political and military affairs of Iran.\nSecond, the Declaration provides generally for return of Iranian\nassets. The transfer utilizes the Central Bank of Algeria as escrow agent\nand the Bank of England in London as depositary: their obligations and\npowers are specified in two other documents, the \xe2\x80\x9cEscrow Agreement\xe2\x80\x9d\nand the \xe2\x80\x9cDepositary Agreement.\xe2\x80\x9d Separate timetables and conditions\nare described for assets in the Federal Reserve Bank of New York\n(Fed), in foreign branches of United States banks, and in domestic\nbranches of United States banks, and for other financial assets and other\nproperty located in the United States and abroad. The transfer of the\nassets in the Fed and in the foreign branches to the Bank of England is\nscheduled to take place first. Upon Iran\xe2\x80\x99s release of the hostages, the\nCentral Bank of Algeria, as escrow agent, shall direct the Bank of\nEngland, under the terms of the Escrow and Depositary Agreements,\nto disburse the escrow account in accordance with the undertakings of\nthe United States and Iran with respect to the Declaration.\nThe transfer from the Central Bank of Algeria to Iran of the assets\npresently in the domestic branches will take place upon Iran\xe2\x80\x99s establish\xc2\xad\nment with the Central Bank of Algeria of a Security Account to be\nused for the purpose of paying claims against Iran in accordance with a\nClaims Settlement Agreement set forth in the fourth document, which\nis captioned \xe2\x80\x9cDeclaration of the Government of the Democratic and\nPopular Republic of Algeria Concerning the Settlement of Claims by\nthe Government of the United States of America and the Government\nof the Islamic Republic of Iran\xe2\x80\x9d (Claims Settlement Agreement). The\nClaims Settlement Agreement provides for the establishment of an IranUnited States Claims Tribunal, which will have jurisdiction to decide\nthree categories of claims: (1) claims by United States nationals against\nIran and claims by Iranian nationals against the United States, and\ncounterclaims arising out of the same transaction or occurrence, for\nclaims and counterclaims outstanding on the date of the Agreement; 1\n(2) Official claims of the governments of the United States and Iran\nagainst each other arising out of contracts for the purchase and sale of\ngoods and services; and (3) any dispute as to the interpretation or\nperformance of any provision of the Declaration.\n\xe2\x80\x99 T w o categories o f claims are specifically excluded: (1) claims relating to the seizure or detention\no f the hostages, injury to United States property or property within the com pound o f the embassy in\nTehran, and injury to persons or property as a result o f actions in the course o f the Islamic Revolution\nin Iran w hich w ere not actions o f the governm ent of Iran and (2) claims arising under the term s o f a\nbinding contract specifically providing that any disputes thereunder shall be within the sole jurisdic\xc2\xad\ntion of the com petent Iranian courts.\n\n303\n\n\x0cThird, the Declaration provides for nullification of trade sanctions\nagainst Iran and withdrawal of claims now pending in the International\nCourt of Justice. The United States also agrees not to prosecute its\nclaims and to preclude prosecution by a United States national or in the\nUnited States courts of claims arising out of the seizure of the embassy\nand excluded by the Claims Settlement Agreement.\nFourth, the Declaration provides for actions by the United States\ndesigned to help effectuate the return to Iran of the assets of the family\nof the former Shah.\nA series of executive orders has been proposed to carry out the\ndomestic, and some foreign, aspects of the international agreement. It is\nmy opinion that under the Constitution, treaties, and laws of the United\nStates you, your subordinates, the Fed, and the Federal Reserve Board\nare authorized to take the actions described in the four documents\nconstituting the international agreement and in the executive orders.2\nI shall first examine the proposed executive orders and consider them\nas to form and legality. Subsequently I shall consider certain questions\nwhich arise from other proposed actions and documents related thereto.\n1. The first proposed executive order is captioned \xe2\x80\x9cDirection Relat\xc2\xad\ning to Establishment of Escrow Accounts.\xe2\x80\x9d Under it, the Secretary of\nthe Treasury is authorized to direct the establishment of an appropriate\nescrow agreement with the Bank of England and with the Central Bank\nof Algeria to provide as necessary for distribution of funds in connec\xc2\xad\ntion with the release of the hostages. The Escrow Agreement provides,\namong other things, that certain assets in which Iran has an interest\nshall be credited by the Bank of England to an escrow account in the\nname of the Central Bank of Algeria and transferred to Iran after the\nCentral Bank of Algeria receives certification from the Algerian gov\xc2\xad\nernment that the 52 hostages have safely departed from Iran.\nThe International Emergency Economic Powers Act (IEEPA), 50\nU.S.C. \xc2\xa7\xc2\xa7 1701-1706 (Supp. I 1977), provides you with authority,\nduring a declared national emergency, to direct transactions and trans\xc2\xad\nfers of property in which a foreign country has an interest under such\nregulations as you may prescribe. As the proposed order recites, such\nan emergency has been declared. IEEPA was the authority for the\nblocking order of November 14, 1979, Executive Order No. 12,170,\nwhich asserted control over Iranian government assets. Moreover, the\nstatute known as the Hostage Act, 22 U.S.C. \xc2\xa7 1732, authorizes the\nPresident, when American citizens are unjustly deprived of liberty by a\nforeign government, to use such means, not amounting to acts of war,\nas he may think \xe2\x80\x9cnecessary and proper\xe2\x80\x9d to bring about their release.\nThe phrase \xe2\x80\x9cnecessary and proper\xe2\x80\x9d is, of course, borrowed from the\nConstitution, and has been construed as providing very broad discre\xc2\xad\n2 D ocum ents testifying to the adherence to the agreem ent by both the United States and Iran will\nalso be executed; these docum ents present no substantive legal issues.\n\n304\n\n\x0ctionary powers for legitimate ends. U.S. Const. Art. I, \xc2\xa7 8, cl. 18;\nMcCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819). Establishment of\nthe escrow account is directed to the release of the hostages. This order\nthus falls within your powers under these Acts.3\nIt is approved as to form and legality.\n2. The second proposed executive order is captioned \xe2\x80\x9cDirection to\nTransfer Iranian Government Assets.\xe2\x80\x9d The Fed is directed to transfer\nto its account at the Bank of England, and then to the escrow account\nreferred to in paragraph 1, the assets of the government of Iran, as\ndirected by the Secretary of the Treasury. The order also revokes the\nauthorization for, and nullifies all interests in, the frozen Iranian gov\xc2\xad\nernment property except the interests of Iran and its agents. The effect\nof this order will be to void the rights of plaintiffs in any possible\nlitigation to enforce certain attachments and other prejudgment reme\xc2\xad\ndies that were issued against the blocked assets following the original\nblocking order.\nI believe that this provision is lawful for several reasons. I am\ninformed, first, that the Iranian funds on deposit in the Fed are funds of\nthe Bank Markazi, the Central Bank of Iran. As such, they are clearly\nnot subject to attachment. The Foreign Sovereign Immunities Act of\n1976 specifically states that the property of a foreign central bank held\nfor its own account shall be immune from attachment and execution\nunless that immunity has been explicitly waived. 28 U.S.C. \xc2\xa7 1611(b). It\nis my view that there has been no such waiver.\nEven assuming, arguendo, that the attachments are not precluded by\n28 U.S.C. \xc2\xa7 1611(b), there is power under IEEPA to nullify them or to\nprevent the exercise of any right under them. Under IEEPA, the\nPresident has authority in time of emergency to prevent the acquisition\nof interests in foreign property and to nullify new interests that are\nacquired through ongoing transactions. The original blocking order\ndelegated this power to the Secretary of the Treasury, who promul\xc2\xad\ngated regulations prohibiting the acquisition, through attachment or any\nother court process, of any new interest in the blocked property. The\neffect of these regulations was to modify both the substantive and the\nprocedural law governing the availability of prejudgment remedies to\ncreditors of Iran. The regulations contemplated that provisional reme\xc2\xad\ndies might be permitted at a later date but provided that any unauthor\xc2\xad\nized remedy would be \xe2\x80\x9cnull and void.\xe2\x80\x9d 31 C.F.R. \xc2\xa7 535.203(e).\nSubsequently, all of the attachments and all of the other court orders\nagainst the Iranian assets held by the Fed were entered pursuant to a\ngeneral license or authorization given by the Secretary of the Treasury\neffective November 23, 1979. This authorization, like all authorizations\nissued under the blocking regulations, may be revoked at any time in\n3 A lthough I do not specifically discuss the applicability of the H ostage A ct to the other proposed\norders described in this opinion, I believe that it generally supports their issuance.\n\n305\n\n\x0caccordance with 31 C.F.R. \xc2\xa7 535.805, which expressly provides that\nany authorization issued under the blocking order could be \xe2\x80\x9camended,\nmodified, or revoked at any time.\xe2\x80\x9d See Orvis v. Brownell, 345 U.S. 183\n(1953). The regulations did not purport to authorize any transaction to\nthe extent that it was prohibited by any other law (other than IEEPA),\nsuch as the Foreign Sovereign Immunities Act.4 31 C.F.R. \xc2\xa7 535.101(b).\nUpon revocation, the exercise or prosecution of any interests created\nby the outstanding attachments and other orders will be unauthorized.\nThe orders themselves will no longer confer any enforceable right upon\nthe creditors. Indeed, because IEEPA expressly grants to the President\na power of nullification, the interests created by these provisional reme\xc2\xad\ndies are themselves subject to nullification, in addition to nullification\nby the revocation of the underlying authorization. In this respect the\nPresident\xe2\x80\x99s power under IEEPA is analogous to his constitutional\npower to enter into international agreements that terminate provisional\ninterests in foreign property acquired through domestic litigation if\nnecessary in the conduct of foreign affairs. See The Schooner Peggy, 5\nU.S. (1 Cranch) 103 (1801). The nullification of these interests is an\nappropriate exercise of the President\xe2\x80\x99s traditional power to settle inter\xc2\xad\nnational claims. United States v. Pink, 315 U.S. 203 (1942); United States\nv. Belmont, 301 U.S. 325 (1937).\nUpon the direction of the Secretary of the Treasury, the Fed will be\nfree to transfer the Iranian assets; the attachments and other prejudgment encumbrances will have been rendered unenforceable by the\ncontemporaneous change in law. Moreover, the Fed may comply with\nthe Secretary\xe2\x80\x99s directive without litigating in advance the issue of the\nSecretary\xe2\x80\x99s authority to nullify the provisional interests. IEEPA explic\xc2\xad\nitly states, and the proposed order affirms, that \xe2\x80\x9c[n]o person shall be\nheld liable in any court . . . for anything done or omitted in good faith\nin connection with the administration of, or pursuant to and in reliance\non, [IEEPA] or any regulation, instruction, or direction issued under\n[IEEPA].\xe2\x80\x9d 50 U.S.C. \xc2\xa7 1702(a)(3). I believe that Congress intended this\nprovision to relieve holders of foreign property, as well as individuals\nadministering or carrying out orders issued pursuant to IEEPA, from\nany liability for actions taken in good faith in reliance on IEEPA and\npresidential directives issued under IEEPA. This provision protects not\nonly the Fed and the Federal Reserve Board but Executive Branch\nofficials as well. In my opinion, this provision is valid and effective for\nthat purpose.\n4 In New England Merchants National Bank v. Iran Power Generation and Transmission Co., 502 F.\nSupp. 120 (S.D.N.Y. 1980), the district court took the position that the freeze order under IEE PA\ntook precedence o ver the Foreign Sovereign Immunities A ct, thus rem oving Iran\xe2\x80\x99s immunity. Assum\xc2\xad\ning, arguendo, the correctness o f that position, the legal effect o f the totality of actions discussed\nherein w ould be to reinstate Iran's immunity, thereby rem oving the ratio decedendi o f the district\ncou rt\xe2\x80\x99s decision.\n\n306\n\n\x0cSimilarly, the Secretary himself is empowered, in my opinion, to\nnullify these provisional interests and to license the transfer of the assets\nwithout submitting the issue to litigation and without insisting that the\nFed refuse any; transfer until all objections to the transfer have been\ndefinitively rejected by the courts. As noted, the interests, if any,\ncreated by these prejudgment remedies were created upon the condi\xc2\xad\ntion that the authority for the underlying transactions might be revoked\n\xe2\x80\x9cat any time\xe2\x80\x9d; and that condition may be invoked without delay. The\npowers that the Constitution gives and the Congress has given the\nPresident to resolve this kind of crisis could be rendered totally ineffec\xc2\xad\ntive if they could not be exercised expeditiously to meet opportunities\nas they arise. The primary implication of an emergency power is that it\nshould be effective to deal with a national emergency successfully.\nUnited States v. Yoshida International, Inc., 526 F.2d 560, 573 (C.C.P.A.\n1975).\nMoreover, the Fed may transfer the assets before the outstanding\ncourt orders have been formally vacated. When a supervening legisla\xc2\xad\ntive act expressly authorizes a course of conduct forbidden by an\noutstanding judicial order, the new legislation need not require the\npersons subject to it to submit the matter to litigation before pursuing\nthe newly authorized course. See Pennsylvania v. Wheeling & Belmont\nBridge Co., 59 U.S. (18 How.) 421 (1855). I believe that this case is\nclosely on point. A valid executive order has the force of a federal\nstatute, superseding state actions to the extent that it is inconsistent.\nContractors Association of Eastern Pennsylvania v. Secretary of Labor, 442\nF.2d 159, 166 (3d Cir.), cert, denied, 404 U.S. 854 (1971). Thus, the\nholding of the Wheeling case applies here.\nThe order is approved as to form and legality, and actions taken\nconsistent with and pursuant to it will be lawful and valid.\n3. The third proposed executive order is captioned \xe2\x80\x9cDirection to\nTransfer Iranian Government Assets Overseas.\xe2\x80\x9d In general, it directs\nbranches of United States banks outside the country to transfer Iranian\ngovernment funds and property to the account of the Fed in the Bank\nof England. The transfer is to include interest at commercially reason\xc2\xad\nable rates from the date of the blocking order. The Secretary of the\nTreasury shall determine when the transfers shall take place. Any\nbanking institution that executed a set-off against Iranian funds after\nentry of the blocking order is directed to cancel the set-off and to\ntransfer the funds in the same manner as the other overseas deposits.\nThe Iranian funds in the branches of American banks overseas were\nsubject to the November 1979 blocking order. Subsequently the Secre\xc2\xad\ntary of the Treasury licensed foreign branches and subsidiaries of\nAmerican banks to set off their claims against Iran or Iranian entities by\ndebit to the blocked accounts held by them for Iran or Iranian entities.\n31 C.F.R. \xc2\xa7535.902. As a result of this license, American banks with\n307\n\n\x0cbranches overseas set off various debts owing to them by Iran and\nIranian entities. I understand that most of the debts were loans origi\xc2\xad\nnally made from offices in the United States and that most of the\noverseas deposits were in branches located in the United Kingdom. The\nbanks with overseas Iranian accounts set off amounts owing not only to\nthem directly but to other banks with whom they were participants in\nsyndicated loans. The banks have acted on the assumption that any loan\nmade to Iran or an Iranian entity could be set off against any account\nof Iran or an Iranian entity or enterprise on the theory that, as a result\nof the control of the Iranian economy by the government of Iran and\nnationalization of private enterprises, all such entities and enterprises\nwere the same party for purpose of setting off debts. In addition, the\nbanks accelerated the amounts due on loans that were in default, and,\nunder the doctrine of anticipatory breach, set off loans that had not\ncome due.\nThe blocking order delegated to the Secretary of the Treasury the\nauthority to license the set-offs to the extent that the executive order\nprevented them. The license did not, however, determine whether the\nset-offs were valid under any other law. 31 C.F.R. \xc2\xa7 535.101(b). I\nunderstand that Iran and its entities are contesting in litigation overseas\nwhether the set-offs are lawful. The issues include the proper situs of\nthe debts, identity of the parties, the propriety of acceleration, and the\nanticipation of breach.\nIEEPA authorizes the President, under such regulations as he may\nprescribe, to nullify and void transactions involving property in which a\nforeign country has an interest and to nullify and void any right re\xc2\xad\nspecting property in which a foreign country has an interest. 50 U.S.C.\n\xc2\xa7 1702. Either analysis is appropriate here: Iran had an interest in the\noriginal set-off transaction and continues to have an interest both in the\namounts in the accounts which have and have not been set off. The\nlatter, as noted, are the subject of litigation abroad. See 31 C.F.R.\n\xc2\xa7\xc2\xa7 535.311-312. Cf. Behring International v. Miller, 504 F. Supp. 552\n(D.N.J. 1980) (holding that Iran continues to have interest in a trust\naccount created to pay debt). The very use of the words \xe2\x80\x9cnullify\xe2\x80\x9d and\n\xe2\x80\x9cvoid\xe2\x80\x9d persuades me that Congress intended to authorize the President\nto set aside preexisting transactions.5\nAs noted, the order also requires the overseas banks, when transfer\xc2\xad\nring the Iranian assets, to include interest on those assets from Novem\xc2\xad\nber 14, 1979, at commercially reasonable rates. I understand that in\nmost cases the accounts in overseas branches of American banks are\ninterest-bearing. To the extent that they are not, such interest represents\n51 believe that the present case is distinguishable in several respects from that in Brownell v.\nNational City Bank, 131 F. Supp. 60 (S.D.N.Y. 1955). T here, the district court concluded that the\n\nm ere revocation o f a license did not serve to void a preexisting and apparently uncontested set-off; the\nbank, m oreover, had no opportunity to recoup its potential loss by bringing the loan current.\n\n308\n\n\x0cthe benefit realized by the banks from holding the blocked Iranian\nassets which, under the law of restitution, should accrue to the owners\nof the assets. C f Phillips Petroleum Co. v. Adams, 513 F.2d 355 (5th\nCir.), cert, denied, 423 U.S. 930 (1975). As such, the interest or benefit\nrealized by the banks is property in which Iran has an interest.6\nFor these reasons, I believe that you are thus authorized under\nIEEPA to compel the transfer of both principal and interest to the\nFederal Reserve account at the Bank of England as provided by the\norder and to nullify or prevent the exercise of any interests in this\nproperty by anyone other than Iran. I also believe, as discussed in\nparagraph 2 above, that 50 U.S.C. \xc2\xa7 1702(a)(3) relieves from liability\nanyone taking action in good faith under this executive order.7\nThe proposed order is approved as to form and legality, and actions\ntaken consistent with and pursuant to it will be lawful and valid.\n4. The fourth proposed executive order is captioned \xe2\x80\x9cDirection to\nTransfer Iranian Government Assets Held by Domestic Banks.\xe2\x80\x9d The\nproposed order directs American banks in the United States with Ira\xc2\xad\nnian deposits to transfer them, including interest from the date of\nblocking at commercially reasonable rates, to the Fed, which will hold\nthe funds subject to the direction of the Secretary of the Treasury.\nAs discussed in paragraphs 2 and 3, the President has power under\nIEEPA to direct the transfer of funds of Iran, including interest, and to\nnullify or prevent the exercise of any interests of anyone other than\nIran in Iranian property. Actions taken in good faith pursuant to this\norder will be, as discussed above, immune from liability.\nThe order is approved as to form and legality, and actions taken\nconsistent with and pursuant to it will be lawful and valid.\n5. The fifth proposed executive order is captioned \xe2\x80\x9cDirection to\nTransfer Iranian Government Financial Assets Held by Non-Banking\nInstitutions.\xe2\x80\x9d This order is similar to the order described in paragraph 4\nexcept that it requires the transfer to the Fed of funds and securities\nheld by non-banking institutions. The President has the power to direct\nthe transfer of funds and securities of Iran held by non-banking institu\xc2\xad\ntions, and actions taken in good faith pursuant to this order shall\nlikewise enjoy the immunity from liability as reflected in 50 U.S.C.\n\xc2\xa7 1702(a)(3).\nThe proposed order is approved as to form and legality, and actions\ntaken consistent with and pursuant to it will be lawful and valid.\n6See also A rt. VII(2)(b) o f the T reaty of A m ity, Econom ic Relations, and Consular Rights, Aug. 15,\n1955, United States-Iran, 8 U.S.T. 901, 905, T.I.A.S! No. 3853.\n1Cf. Cities Service Co. v. McGrath. 342 U.S. 330, 334-36 (1952). It is my opinion that a person w ho\nhas taken action in com pliance w ith this executive order and is subsequently finally required by any\ncourt to pay amounts w ith respect to funds transferred pursuant to this executive order will have the\nright as a m atter o f due process to recover such amount from the United States to the extent of any\ndouble liability.\n\n309\n\n\x0c6. The sixth proposed executive order is captioned \xe2\x80\x9cDirection to\nTransfer Certain Iranian Government Assets.\xe2\x80\x9d The order would require\nanyone in possession or control of property owned by Iran, not includ\xc2\xad\ning funds and securities, to transfer the property as directed by the\nIranian government. The order recites that it does not relieve persons\nsubject to it from existing legal requirements other than those based on\nIEEPA. It does, however, nullify outstanding attachments and court\norders in the same manner as does the order discussed in paragraph 2.\nFor the reasons discussed in the preceding paragraphs, the President\nhas power under IEEPA to order the transfer of property owned by\nIran as directed by Iran and to nullify outstanding attachments and\ncourt orders related to such property. Actions taken in good faith\npursuant to this order shall likewise enjoy the immunity from liability\nas reflected in 50 U.S.C. \xc2\xa7 1702(a)(3).\nThe order is approved as to form and legality, and actions taken\nconsistent with and pursuant to it will be lawful and valid.\n7. The seventh proposed executive order is captioned \xe2\x80\x9cRevocation of\nProhibitions against Transactions Involving Iran.\xe2\x80\x9d It revokes the prohi\xc2\xad\nbitions of Executive Order No. 12,205 of April 7, 1980; Executive\nOrder No. 12,211 of April 17, 1980; and Proclamation 4702 of Novem\xc2\xad\nber 12, 1979. The two executive orders limited trade with and travel to\nIran. The proclamation restricted oil imports from Iran. It is my under\xc2\xad\nstanding that although the prohibitions are revoked, the underlying\ndeclarations of emergency remain in effect.\nThe order is approved as to form and legality.\n8. The eighth proposed executive order is captioned \xe2\x80\x9cNonProsecution of Claims of Hostages and for Actions at the United States\nEmbassy and Elsewhere.\xe2\x80\x9d The order directs the Secretary of the Treas\xc2\xad\nury to promulgate regulations prohibiting persons subject to U.S. juris\xc2\xad\ndiction from prosecuting in any court or elsewhere any claim against\nIran arising from the hostage seizure on November 4, 1979, and the\noccupation of the embassy in Tehran, and also terminating any previ\xc2\xad\nously instituted judicial proceedings based upon such claims.\nThe President has the power under IEEPA and the Hostage Act to\ntake steps in aid of his constitutional authority 8 to settle claims of the\nUnited States or its nationals against a foreign government.9 Thus, he\nhas the right to license litigation involving property in which a foreign\nnational has an interest, as described in paragraph 2. That license can be\nsuspended by the Executive acting alone. New England Merchants Na\xc2\xad\ntional Bank v. Iran Power Generation and Transmission Co., 508 F. Supp.\n47 (S.D.N.Y., 1980) (Duffy, J.). But see National Airmotive Corp. v.\n*See, \xc2\xa3\xc2\xa3., Restatem ent (Second) o f Foreign Relations Law o f the United States \xc2\xa7213 (1965).\n9 IE E P A was drafted and enacted w ith the explicit recognition that the blocking of assets could be\ndirectly related to a later claims settlem ent. H. R. Rep. N o. 459, 95th Cong., 1st Sess. 17 (1977); S.\nRep. N o. 466, 95th Cong., 1st Sess. 6 (1977). See 50 U.S.C. \xc2\xa7 1706(aXl) (authorizing continuation of\ncontrols, after the em ergency has ended, w here necessary for claims settlement purposes).\n\n310\n\n\x0cGovernment and State of Iran, 499 F. Supp. 401 (D.D.C., 1980)\n(Greene, J.).10\nThe order is approved as to form and legality.\n9. The final proposed executive order is captioned \xe2\x80\x9cRestrictions on\nthe Transfer of Property of the Former Shah of Iran.\xe2\x80\x9d It invokes the\nblocking powers of IEEPA to prevent transfer of property located in\nthe United States and controlled by the Shah\xe2\x80\x99s estate or by any close\nrelative until litigation surrounding the estate is terminated. The order\nalso invokes the reporting provisions of IEEPA, 50 U.S.C. \xc2\xa7 1702(a)(2),\nto require all persons subject to the jurisdiction of the United States to\nsubmit to the Secretary of the Treasury information about this property\nto be made available to the government of Iran. The property involved\nis property in which \xe2\x80\x9c[a] foreign country or a national thereof\xe2\x80\x9d has an\ninterest. Restrictions on transfer and reporting requirements therefore\nfall within the authority provided by IEEPA.\nThe order would further direct me, as Attorney General, to assert in\nappropriate courts that claims of Iran for recovery of this property are\nnot barred by principles of sovereign immunity or the act of state\ndoctrine. I have previously communicated to you and to the Depart\xc2\xad\nment of State my view to this effect (based on advice furnished to me\nby the-Office of Legal Counsel and the Civil Division of this Depart\xc2\xad\nment) and will so assert in appropriate proceedings. The proposed\norder also recites that it is the position of the United States that all\nIranian decrees relating to the assets of the former Shah and his family\nshould be enforced in our courts in accordance with United States law.\nThe proposed order is approved as to form and legality.\n10. The other questions relate to the Claims Settlement Agreement. I\nconclude that you have the authority to enter an agreement designating\nthe Iran-United States Claims Tribunal as the sole forum for determina\xc2\xad\ntion of claims by United States nationals or by the United States itself\nagainst Iran and to confer upon the Tribunal jurisdiction over claims\nagainst the United States, including both official contract claims and\ndisputes arising under the Declaration.\nThe authority to agree to the establishment of the Tribunal as an\ninitial matter cannot be challenged. The Claims Settlement Agreement\nfalls squarely within powers granted to the Executive by the Constitu\xc2\xad\ntion, by treaty, and by statute.\nAs a step in the reestablishment of diplomatic relations with Iran, the\nClaims Settlement Agreement represents an appropriate exercise of the\nPresident\xe2\x80\x99s powers under Article II of the Constitution to conduct\nforeign relations. Moreover, by Article XXI(2) of the 1957 Treaty with\n101 note that the issue of appropriate compensation for the hostages will be considered by a\nCommission on Hostage Compensation established by separate executive order. Moreover, this eighth\norder does not, of course, purport to preclude any claimant from presenting his claim to Congress and\npetitioning for relief; nor could it constitutionally do so.\n\n311\n\n\x0cIran, the Senate gave its agreement for the two nations to settle dis\xc2\xad\nputes as to the interpretation or application of the treaty by submission\nto the International Court of Justice or by any \xe2\x80\x9cpacific means.\xe2\x80\x9d 11\nArbitration by the Iran-United States Claims Tribunal is a pacific means\nof dispute settlement. Finally, by the Hostage Act, 22 U.S.C. \xc2\xa7 1732,\nCongress has conferred upon the President specific statutory powers\napplicable to this crisis. The agreement to resolve by arbitration the\ndisputes now obstructing the release of the hostages is a proper exercise\nof this power.\nI note in conclusion the congruence of your constitutional powers\nand the congressionally conferred authority. In this situation, of course,\nyour authority is at its maximum. Youngstown Sheet & Tube Co. v.\nSawyer, 343 U.S. 579, 635-36 (1952) (Jackson, J., concurring).\nThe specific jurisdiction conferred upon the Tribunal must be further\nexamined. The first category of claims, the private claims based on\ndebts, contracts, expropriations, or other measures affecting property\nrights, includes both claims by United States nationals against Iran and\nclaims by Iranian nationals against the United States. The former are\nreferrable to the Tribunal under the constitutional authority to settle\nclaims recognized in United States v. Pink, 315 U.S. 203 (1942), and\nUnited States v. Belmont, 301 U.S. 324 (1937). See also Restatement\n(Second) of Foreign Relations Law of the United States \xc2\xa7 213 (1965).12\nFrom these claims are excluded claims arising out of the seizure of\nthe embassy and claims on binding contracts providing for dispute\nresolution solely by Iranian courts. Again, the power to settle claims\nincludes the power to exclude certain claims from the settlement proc\xc2\xad\ness. Cf. Aris Gloves, Inc. v. United States, 420 F.2d 1386 (Ct. Cl. 1970).\nMoreover, the exclusion is not intended to be a final settlement or\ndetermination of these claims. I understand that the claims based on the\nseizure will be given separate consideration, see note 10 supra. I note\nalso that the exclusion of the claims on binding contracts that provide\nthe exclusive procedure for dispute resolution does not adversely affect\nany option that these claimants would have had prior to the hostage\ncrisis and all the actions taken in response to it. These claimants are not\ndisadvantaged by the Claims Settlement Agreement; as to them, the\nstatus quo as of the time that the hostages were taken is merely\npreserved.\nn Art. XXI(2) provides:\nAny dispute between the High Contracting Parties as to the interpretation or applica\xc2\xad\ntion of the present Treaty, not satisfactorily adjusted by diplomacy, shall be submitted\nto the International Court of Justice, unless the High Contracting Parties agree to\nsettlement by some other pacific means.\nBecause the Treaty provides for peace and friendship between the two nations, trade and commercial\nfreedom, protection and security of nationals, prompt and just compensation for the taking of\nproperty, and the absence of restrictions on the transfer of funds, the disputes to be referred to the\nTribunal are disputes \xe2\x80\x9cas to the interpretation or application of the . . . Treaty.\xe2\x80\x9d\n13Here again, your constitutional powers are supplemented by statute. See note 9 supra.\n\n312\n\n\x0cThe latter claims in the first category, the claims by Iranian nationals\nagainst the United States, and also the official claims in the second\ncategory by Iran against the United States, are referrable to the Tribu\xc2\xad\nnal for adjudication under the same authority. The President\xe2\x80\x99s power to\nrefer these claims to binding arbitration as part of an overall settlement\nof our disputes with Iran is within the authority conferred on him by\nthe Treaty and the Hostage Act and is also within his sole authority\nunder Article II of the Constitution. Any award made by the Tribunal\nagainst the United States would create an obligation under international\nlaw. Such obligations have invariably been honored by the Congress in\nour constitutional system.\nThe remainder of the claims in this second category are official\nclaims of the United States against Iran. The submission of the claims to\nthe Tribunal is a matter for the Executive\xe2\x80\x99s sole determination in the\nconduct of foreign relations.\nFinally, jurisdiction over the third category of claims, consisting of\ndisputes as to the interpretation or performance of the Declaration, is\nappropriately conferred upon the Tribunal incident to the exercise of\nthe power to agree to the Declaration in the first instance.\nFor these reasons, I conclude that the United States may enter into\nthe international agreement and that you have legal authority to issue\nall of these documents and executive orders.\nRespectfully,\nB e n j a m i n R. C i v i l e t t i\n\n313\n\n\x0c"