Opinion ID: 3032245
Heading Depth: 2
Heading Rank: 2

Heading: The Executive Order

Text: [4] Executive Order 13,059 prohibits, among other things: any transaction or dealing by a United States per- son, wherever located, including purchasing, selling, transporting, swapping, brokering, approving, financing, facilitating, or guaranteeing, in or related to: (i) goods or services of Iranian origin or owned or controlled by the Government of Iran[.] Order, § 2(d) & d(i). [5] The interpretation of section 2(d) is an issue of first impression in the federal courts. As is true of interpretation of statutes, the interpretation of an Executive Order begins with its text. See United States v. Hassanzadeh, 271 F.3d 574, 580 (4th Cir. 2001). The text must be construed consistently with the Order’s “object and policy.” Northwest Forest Res. Council v. Glickman, 82 F.3d 825, 830 (9th Cir. 1996) (quoting Alarcon v. Keller Indus., Inc., 27 F.3d 386, 389 (9th Cir. 1994)) (internal quotation marks omitted). [6] The text of section 2(d) plainly prohibits Goe’s conduct. The Artemia cysts were “goods . . . of Iranian origin,” and the guarantee covered costs incurred in harvesting them. The transaction between Arshian and Goe was certainly “related to” the brine shrimp eggs; the only reason for the transaction was to facilitate their harvesting.9 Goe’s “guaranteeing” of financial repayment is explicitly included as a type of “transaction or dealing” prohibited by section 2(d). 9 In addition, the provision of harvesting licenses and customs clearances could well be viewed as “services owned or controlled by the government of Iran.” We need not so decide, however, as section 2(d) applies whether or not one accepts the characterization of governmental licenses and clearances as “services.” BASSIDJI v. GOE 7099 In response to this textual analysis, Bassidji argues that the Executive Order is simply too broad to permit a literal interpretation. Bassidji contends, for example, that if an American in Hong Kong purchased soup containing Iranian shrimp, that conduct would fall within section 2(d). Bassidji is incorrect. The Iranian Transactions Regulations, 31 C.F.R. pt. 560, promulgated under the authority of the Executive Order,10 carve out exceptions for personal expenses related to travel within a foreign country, “including payment of living expenses and acquisition of goods or services for personal use.” 31 C.F.R. § 560.210(d). Similarly, the suggestion at oral argument that a broad reading of the Order would forbid transportation companies to carry a carpet of Iranian origin from one place to another within the United States is inconsistent with the implementing regulations. See id. § 560.518(a) (“Except for transactions involving the Government of Iran, all domestic transactions with respect to Iranian-origin goods located in the United States are authorized . . . .” (exception not here pertinent omitted)). Apparently unaware of the limitations incorporated in the implementing regulations, the district court followed a limiting principle of its own. The court concluded that the Executive Order bans only transactions facilitating conduct, such as the importing of goods or services, otherwise banned by the Order. The district court’s interpretation is not only unnecessary for addressing concerns about de minimis application of the Order, given the regulations, but also in tension with the overarching purpose of the Executive Order. Limitation of “imports” and “exports” under sections 1 and 2(a) is but a means toward the larger end of exerting economic pressure on Iran. 10 Sections 1 and 2 of the Executive Order both qualify their prohibitions with: “Except to the extent provided . . . in regulations, orders, directives, or licenses issued pursuant to this order.” Section 5 authorizes the Secretary of the Treasury to promulgate regulations implementing the Order. 7100 BASSIDJI v. GOE Overall, these sanctions aim to induce Iran’s government to reduce the threat that, according to the Executive Order, Iran poses to United States interests. Cf. Hassanzadeh, 271 F.3d at 579 (violating the Order’s import restrictions on Iranian goods is harmful because of the “[c]ontribution of financial support to terrorism”). With this purpose in mind, sections 2(b)-(f) cannot be construed as merely implementing sections 1 and 2(a). Section 2(c), for example, which limits “investment” in Iran, does not exist merely to effectuate the prohibition on trade. Rather, the prohibition against investment goes to the heart of the economic sanctions regime. Investment in Iran directly aids the Iranian economy whether or not it ultimately leads to an exchange of goods between Iran and the United States. See generally Letter to Congressional Leaders on Prohibiting Certain Transactions with Respect to Iran, 1997 PUB. PAPERS 1113, 1114 (Aug. 19, 1997) (stating that the embargo prohibits “any trade- or investment-related activities with Iran” and “mak[ing] clear that this means all direct or indirect involvement in such activities wherever those activities occur” (emphasis added)). Similarly, although the transaction that Goe guaranteed was not directly related either to the import or to the export of goods between Iran and the United States, it furthered a result inconsistent with the purposes of the Executive Order. The transaction promoted the transfer of wealth to Iran, including, it appears, the payment of fees to the Iranian government. That the licenses pertained to a business deal, the export of brine shrimp eggs from Iran to Hong Kong, that is not illegal under the Executive Order, is irrelevant. While the Executive Order does not, and could not, ban all trade between Hong Kong and Iran, see 50 U.S.C. § 1702(a)(1) (granting the President the authority under IEEPA to regulate trade only of persons “subject to the jurisdiction of the United States”), United States citizens are expressly prohibited from facilitating such BASSIDJI v. GOE 7101 trade by guaranteeing the payment of costs incurred by parties to the sale. See Order § 2(d). [7] We therefore reject the district court’s limiting interpretation of the Executive Order. The guarantees, we conclude, violated both the text and the animating purpose of the Executive Order. On the facts before us, they were illegal.