Opinion ID: 162841
Heading Depth: 2
Heading Rank: 2

Heading: Constitutionality of Executive Order and Related Regulations

Text: 28 Mr. Soussi next argues [t]he Executive Order and related regulations are unconstitutionally vague as applied to [him]. He asserts the Executive Order does not clearly prohibit a United States citizen from helping a foreign company export goods from the United States to Libya. He also claims the regulations are ambiguous concerning an exception to the export ban when the goods come to rest in a third country. 29 Because whether the Executive Order and related regulations are vague is a question of law, we apply a de novo standard of review. United States v. Agnew, 931 F.2d 1397, 1403 (10th Cir.1991). According to the Supreme Court, a penal statute [must] define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement. Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983). That the government might, without difficulty, have chosen clearer and more precise language equally capable of achieving the end which it sought does not mean that the [regulations] which it in fact drafted [are] unconstitutionally vague. United States v. Hescorp, Heavy Equip. Sales Corp., 801 F.2d 70, 77 (2d Cir.1986) (alterations in original; quotation marks omitted). Instead, an executive order and regulations are unconstitutionally vague only if they subject a potential defendant `to some risk or detriment without giving him fair warning of the nature of the proscribed conduct.' Id. (quoting Rowan v. United States Post Office Dep't, 397 U.S. 728, 740, 90 S.Ct. 1484, 25 L.Ed.2d 736 (1970)). 30
31 Although Mr. Soussi recognizes the Executive Order prohibits any transaction by a United States person that `evades or avoids, or has the purpose of evading or avoiding,' the export ban, Mr. Soussi believes the Order does not clearly prohibit participation by a United States person in a transaction in which a foreign company exports United States goods to Libya. (Emphasis in original.) 32 We conclude the Executive Order and related regulations clearly prohibited Mr. Soussi's conduct. They are not unconstitutionally vague. We again stress Mr. Soussi was not charged with, or convicted of, exporting trailers to Libya. He was convicted of engaging in transactions which had the purpose of evading or avoiding the export ban. The Executive Order and regulations specifically prohibited transactions designed to evade or avoid the Libyan export ban. Exec. Order No. 12543, 3 C.F.R. 181 (1986); 31 C.F.R. § 550.208 (1991). Mr. Soussi engaged in transactions designed to evade the export ban by making it look as though a foreign company was the exporter, when in fact, a United States citizen and his domestic company were the driving forces behind the transactions. This conduct was clearly prohibited by the Executive Order and related regulations. 33
34 Mr. Soussi also asks us to consider what he calls an ambiguity in the regulations designed to address instances where goods are exported from the United States to a third country before being shipped to Libya. According to Mr. Soussi, Section 550.409(a), 31 C.F.R., states that such export to a third country is prohibited where the goods do not come to rest in a third country and are not substantially transformed or incorporated into manufactured products. (Emphasis in original.) In contrast, Mr. Soussi argues subsection (d) states that such exports are not prohibited if the goods come to rest in a third country or are substantially transformed or incorporated into manufactured products. (Emphasis in original). Mr. Soussi believes, because the conjunctive and was used in subsection (a) and the disjunctive or was used in subsection (d), the regulations are vague and did not give notice of [the] proscribed conduct. 35 After reviewing the regulations and arguments posed by Mr. Soussi, we conclude there is no ambiguity. It is useful first to consider the text of the two subsections. Subsection (a) provides: 36 Exports of goods or technology ... from the United States to third countries are prohibited if the exporter knows, or has reason to know, that: 37 ... The goods ... are intended for transshipment to Libya ... without coming to rest in a third country and without being substantially transformed or incorporated into manufactured products in a third country.... 38 31 C.F.R. § 550.409(a)(1) (1991). Subsection (d) provides: 39 Exports of goods or technology from the United States to third countries are not prohibited where the exporter has reasonable cause to believe that: 40 (1) Except as otherwise provided in paragraph (a) of this section, the goods will be substantially transformed or incorporated into manufactured products before export to Libya, or 41 (2) The goods will come to rest in a third country for purposes other than reexport to Libya, e.g., for purposes of restocking the inventory of a distributer whose sales of the particular goods are not predominantly to Libya.... 42 31 C.F.R. § 550.409(d) (1991). Although the regulations could have been more artfully drafted, they are consistent. Subsection (a) admonishes an exporter his shipment is illegal if he knows or has reason to know both that the goods will not come to rest in a third country and that the goods will not be substantially transformed or incorporated. 31 C.F.R. § 550.409(a) (1991). Both conditions must be present for the shipment to be illegal. Id. If, on the other hand, one of the conditions from subsection (a) is not present, the shipment is not illegal. 31 C.F.R. § 550.409(a), (d) (1991). Stated differently, if the exporter has reasonable cause to believe the goods will either be transformed or will come to rest in a third country, then the shipment is not illegal. 31 C.F.R. § 550.409(d) (1991). In short, we conclude the regulations can be harmoniously applied and are not excessively confusing or unconstitutionally vague.