For every major drug-producing or drug-transit country, the President is required to deny to any or all of its products preferential tariff treatment under the Generalized System of Preferences (GSP), the Caribbean Basin Initiative (CBI), or any other law; to raise or impose duties of up to 50 percent ad valorem on any or all of its products; to suspend air carrier transportation to or from the United States and the country and to terminate any air service agreement with the country; to withdraw U.S. personnel and resources from participating in any arrangement with the country for customs preclearance; or to take any combination of these actions considered necessary to achieve the objectives of the Act.

Such sanctions do not apply if the President determines and certifies to the Congress, at the time the annual report required by section 481(e) of the Foreign Assistance Act of 1961 is submitted, that during the previous year the country has cooperated fully with the United States or has taken adequate steps on its own (1) in satisfying goals agreed to in a bilateral or multilateral narcotics agreement with the United States; (2) in preventing illegal drugs from being sold illegally to U.S. Government personnel or their dependents or from being transported into the United States; (3) in preventing and punishing the laundering of drug-related profits or monies; and (4) in preventing and punishing bribery and other public corruption which facilitate production, processing, or shipment of illegal drugs.

A country that would not otherwise qualify for certification may be exempted from sanctions if the President determines and certifies to the Congress that the vital national interests of the United States require that sanctions not be applied. A country designated as a major drug-producing or drug-transit country in the previous year may not be determined to be cooperating fully unless it has in place a bilateral or multilateral narcotics agreement.

The Congress may disapprove the President's determination and sanctions be required through enactment of a joint resolution within 45 legislative days. Actions remain in effect until the President submits a certification of cooperation and Congress does not enact a joint resolution of disapproval within 45 legislative days.

In addition, section 803 prohibits the President from allocating any quota for imports of sugar to any country which has a government involved in illegal drug trade or which is failing to cooperate with the United States in narcotics enforcement activities.

The Urgent Assistance for Democracy in Panama Act of 1990 42 deemed the conditions under the Narcotics Control Trade Act to have been satisfied by Panama, because of U.S. vital national interests and because the Endara Government had indicated its willingness and was taking steps to cooperate fully with the United States to control narcotics production, trafficking, and money laundering. Consequently, GSP and CBI trade benefits removed under the Noriega regime by Presidential proclamation on March 23, 1988 were restored to the new Government of Panama.

42 Public Law 101-243, section 103, approved February 14, 1990.

THE INTERNATIONAL SECURITY AND DEVELOPMENT COOPERATION ACT OF 1985

Section 505 of the International Security and Development Act of 1985 43 gives the President discretionary authority to restrict or ban imports from any country which the United States determines "supports terrorism or terrorist organizations or harbors terrorists or terrorist organizations." The section requires advance consultations with Congress before invoking the authority and a semiannual report to Congress with respect to actions taken since the last report and any changes which may have occurred since the last report. Section 504 of the Act gives the President specific authority to prohibit all imports to the United States from Libya or the export to Libya of any goods or technologies subject to U.S. jurisdiction.

Embargo on Transactions With Cuba

While almost totally restrictive controls had been placed on U.S. exports to Cuba even earlier 44 under the general authority of the Export Control Act of 1949, specific authority for a total trade embargo on Cuba was contained in section 620(a) of the Foreign Assistance Act of 1961.45 Based on this authority "to establish and maintain a total embargo upon all trade between the United States and Cuba," President Kennedy proclaimed the embargo and directed the Secretaries of the Treasury (for imports) and of Commerce (for exports) to implement it. Both Secretaries were also given the authority to modify the embargo in the national interest.46

The export embargo already being in force, the added ban on imports from Cuba was implemented through Cuban Import Regulations,47 to which were subsequently added, in general terms, all transactions falling within the authority of the Trading with the Enemy Act (TWEA), based on the specific addition of TWEA to the statutory authority for the regulations.48 Under this broader authority, Cuban Assets Control Regulations applicable to imports from Cuba as well as, in great detail, to non-trade transactions with Cuba were promulgated.49 After several changes, these regulations still remain in force. The embargo on transactions with Cuba is implemented at present for exports by the Export Administration Regulations (15 U.S.C. 768–799.2), particularly sections 770, 785.1, and 799.1, and for imports and other transactions by the Cuban Assets Control Regulations (15 C.F.R. 515).

The provisions of section 620(a) of the Foreign Assistance Act of 1961 and the regulatory exercise with respect to Cuba of authorities under the TWEA, the International Emergency Economic Powers Act, and the Export Administration Act of 1979, however, have been preempted by the Cuban Democracy Act of 1992 (Title XVII of the National Defense Authorization Act of 1992) 50 to the

43 Public Law 99-83, approved August 8, 1985, 22 U.S.C. 2349 aa-8, aa-9. 44 25 F.R. 1006, October 20, 1960.

45 Public Law 87-195, approved September 4, 1961, 22 U.S.C. 2370(a)(1). 46 Proclamation 6447, 27 F.R. 1085, February 7, 1962.

47 31 C.F.R. 515, 27 F.R. 1116, February 7, 1962.

48 27 F.R. 2765, March 24, 1962.

49 28 F.R. 6974, July 9, 1963.

50 Public Law 102-484, approved October 23, 1992, 22 U.S.C. 6001 et seq.

extent that they have been either restated or modified by provisions of that Act. Section 1705 of the Act specifically permits donations of food to Cuban nongovernmental organizations and individuals; with some exceptions and subject to specific licenses and enduse verification, exports of medicines and medical supplies and equipment; providing telecommunications services and appropriate facilities, and issuing licenses for related payments; direct mail service between the United States and Cuba; and assistance for promoting nonviolent democratic change in Cuba.

On the other hand, section 1706 enacts specific restrictions: it prohibits the issuance of licenses for any transactions of Americanowned firms in foreign countries with Cuba, previously permitted by the relevant regulation; 51 requires specific license for a ship to load or unload any freight in a U.S. port if it has traded, within the past 180 days, with a Cuban port; or to enter a U.S. port or obtain ship stores if it is carrying goods or passengers to or from Cuba, or Cuban goods. These restrictions do not apply to activities allowed by sections 1705 or 1707 of the Act, or to transactions in informational materials unless subject to national security or espionage controls. The President is required to set strict controls on remittances to Cubans for the purpose of financing their travel to the United States.

The law authorizes a relaxation of the embargo by permitting humanitarian aid to Cuba under foreign assistance and Food-forPeace legislation if the President determines that the Cuban government has made and is implementing commitments to hold free elections and respect internationally recognized worker rights and basic democratic freedoms, and is not materially supporting groups in other countries seeking violent overthrow of the government. The President also is authorized to waive the restrictions of section 1706 if he determines that the Cuban government has taken steps that provide various political, human rights, and economic freedoms, and is directed to take various actions (including steps to end the trade embargo) to assist a freely and democratically elected Cuban government. The Act empowers the Secretary of the Treasury to enforce its provisions under the authority of the TWEA, to which provisions for civil penalties, forfeitures, and judicial review are added.

Iraq Sanctions Act of 1990

The Iraq Sanctions Act of 1990 was enacted as part of the Foreign Assistance and Related Program Appropriations Act for fiscal year 1991,52 in response to Iraq's invasion of Kuwait on August 2, 1990. The Act makes a number of declarations concerning Iraq's invasion of Kuwait and requires the President to consult with the Congress on U.S. actions taken in response.

Section 586C enacts into law the trade embargo and other economic sanctions imposed on Iraq by Presidential executive order under authority of the International Emergency Economic Powers

51 31 C.F.R. 515. 559.

52 Public Law 101-513, sections 586 through 586J, approved November 5, 1990.

Act and the National Emergencies Act.53 Those sanctions entailed a near-total prohibition on transactions between the United States and Iraq, including a ban on: imports and exports; most travel and fulfillment of contracts; and credits and loans. The executive orders also froze all assets of the Governments of Iraq and Kuwait. Section 586C requires the President to notify Congress at least 15 days before the termination of any of the above sanctions. Section 586E imposes civil and criminal penalties on persons violating the executive orders.

The Iraq Sanctions Act also imposes sanctions on Iraq beyond those imposed by executive order. Section 586G imposes a wide range of sanctions, including a ban on the following transactions: arms sales; exports of certain goods and technology, including nuclear technology and equipment; U.S. Government credits and credit guarantees; and other forms of assistance. Those sanctions may be waived by the President if he makes a certification of fundamental changes in Iraqi leadership, policies, or actions, under criteria set forth in Section 586H.

The Act contains provisions aimed at increasing compliance by third countries with United Nations Security Council sanctions against Iraq. Section 586D denies assistance under the Foreign Assistance Act of 1961 or the Arms Export Control Act to any country not in compliance with the U.N. sanctions, subject to certain exceptions. It also authorizes the President to ban imports into the United States from any country that has not imposed a ban on trade with Iraq, if he considers that such action would promote the effectiveness of the U.N. and U.S. sanctions against Iraq. Section 5861 denies export licenses for super-computer exports to any country the President determines is assisting Iraq to improve its capabilities in rocket technology or chemical, biological, or nuclear weapons.

Finally, the Iraq Sanctions Act mandates a number of studies and reports to Congress concerning international exports to Iraq of nuclear, biological, chemical and ballistic missile technology; Iraq's offensive military capability; and third country sanctions against Iraq.

Section 27 of the Merchant Marine Act, 1920 (Jones Act)

The Jones Act is a cabotage law, that restricts the transportation of property by water between points in the United States, its possessions and territories (with very few exceptions) to vessels built and (if applicable) substantially repaired in U.S. shipyards, owned by U.S. citizens, manned by U.S. citizen crews, and registered in the United States. The first act passed by the First Congress was a cabotage measure that made it extremely expensive for foreignflag, foreign-built vessels to operate in our coasting trades. Early cabotage laws (1789, 1790, 1817) were, it is claimed, in response to similar laws enforced by England, France, and other European countries.

53 Executive Orders 12724 and 12725 (August 9, 1990), and, to the extent that they were still in effect on the date of enactment, Executive Orders 12722 and 12723 (August 2, 1990).

During World War I, U.S. cabotage prohibitions were relaxed temporarily, but reinstated in 1920 by Section 27 of the Merchant Marine Act, 1920, now usually referred to as the Jones Act. The penalty for violation is forfeiture of the cargo.

Section 721 of the Defense Production Act of 1950 (“Exon/

Florio")

The proposed purchase in 1988 of an 80 percent share of Fairchild Semiconductor Corporation by Fujitsu, Ltd. sparked Congressional interest concerning takeovers of American firms by foreign companies which raise national security considerations. Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 amended Title VII of the Defense Production Act of 1950 54 to add provisions (commonly known as "Exon/Florio", the chief Congressional sponsors) because of concerns that the Federal Government lacked specific authority to prevent such acquisitions.

The provisions authorize the President, after he makes certain findings, to take actions for such time as he considers appropriate to suspend or prohibit any acquisition, merger, or takeover of a person engaged in interstate commerce in the United States by or with foreign persons so that such control will not threaten to impair the national security. To activate this authority, the President has to find that there is credible evidence that leads him to believe the foreign interest exercising control might take action that threatens to impair the national security and that other laws do not provide adequate and appropriate authority to protect the national security in the matter. The President has to report the findings to the Congress with a detailed explanation.

In making any decision to exercise the authority under this provision, the President may consider such factors as: (a) domestic production needed for projected national defense requirements; (b) the capability and capacity of domestic industries to meet national defense requirements; and (c) the control of domestic industries and commercial activities by foreign citizens as it affects the capability and capacity of the United States to meet the requirements of national security. The standard of review is "national security"; the provision affects only overseas investment flowing into the United States and is not intended to authorize investigations of investments that could not result in foreign control of persons engaged in interstate commerce nor to have any effects on transactions which are outside the realm of national security.

Among the actions available to the President is the ability to suspend a transaction. The President may also seek appropriate relief in the District Courts of the United States in order to implement and enforce the provisions, including broad injunctive and equitable relief including, but not limited to divestment relief.

54 50 U.S.C. App. 2170 as added by Public Law 100-418, section 5021, approved August 23, 1988.