The Memorandum invites the Secretary to devise more open-minded uses of presidential powers to restrict, regulate, void, or prohibit Chinese investments in the United States beyond those contained in the Defense Production Act, 50 USC § 2170 (DPA) and its implementing CFIUS regulations, 31 CFR Part 800. While nothing has yet been officially announced, the Trump administration may be exploring its options for “executive branch action” under the broad authorities of the International Emergency Economic Powers Act, 50 USC 1701-1707 (IEEPA), which could be used to support presidential action affecting Chinese investments within the United States. How Broad Is IEEPA?

ertain financial assistance) on foreign persons and entities named in the report. Id. at § 2(b). At least five sanctions are to be chosen from a long list of economic measures that are available to prevent, stop, and penalize the illegal conduct. Most important, perhaps, is that the property of a foreign entity or person can effectively be frozen by United States authorities. Id. at § 2(b)(1)(A) (entities), Id. at § 2(b)(2)(A)(individuals). Individuals may also lose their visas and be ineligible for admission into the United States. Id. at § 2(b)(2)(B). PAIPA permits the President to waive sanctions when such waiver is in the national interest. Id. at § 2(c). Moreover, PAIPA itself lists a number of exceptions for both entities and individuals based on treaties and commitments to other countries, as well as their value, contributions, and/or ties to the United States. Id. at § 2(e).PAIPA grounds the President’s authority to act in the International Economic Emergency Act, specifically 50 U.S. Code §§ 1701-1705, which permits the President during times of national emergency and war to exercise powers to control a range of economic activity and to pass regulations to facilitate this regulation. PAIPA explicitly references § 1705, which contains significant civil and criminal penalties for persons and entities who violate the terms of the economic sanctions or conspire to do so. However, 50 U.S. Code § 1701(b) limits the use of authority granted to the President by § 1702 (and hence §§ 1703-1705) to deal with an unusual and extraordinary threat with “respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purpose.” PAIPA, however, includes all of the powers under the International Economic Emergency Act, as well as its own delegation of additional powers, even if there is no national emergency.Interestingly, PAIPA contains no provision for judicial review before or after the President adds a foreign entity or person to the lis

This broad definition gives DoD a significant amount of discretion. The operative part of this section authorizes the President, once the list is published, to exercise powers under the International Emergency Economic Powers Act of 1977, 50 USC. § 1701 et seq. (IEEPA) to regulate or prohibit certain commercial activity within the United States involving one or more of the listed entities. So, in theory, the publication of this list could potentially lay the groundwork for the imposition of sanctions that would prohibit US persons from engaging in most US commercial activity with such entities.

In allowing the Government’s case to move forward, Judge Berman found that prosecutors had sufficiently alleged that Mr. Zarrab and his co-conspirators had engaged in business transactions where relevant information regarding sanctioned entities was withheld from U.S. banks in a deceitful manner that made it more difficult for both the banks to comply with the law and OFAC to carry out its lawful functions.II. Conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. §§ 1701-1706, and the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. §§ 560.202-205.The second sanctions charge leveled against Mr. Zarrab alleged that he and his associates conspired to violate the IEEPA and the ITSR.

In allowing the Government’s case to move forward, Judge Berman found that prosecutors had sufficiently alleged that Mr. Zarrab and his co-conspirators had engaged in business transactions where relevant information regarding sanctioned entities was withheld from U.S. banks in a deceitful manner that made it more difficult for both the banks to comply with the law and OFAC to carry out its lawful functions.II. Conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. §§ 1701-1706, and the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. §§ 560.202-205.The second sanctions charge leveled against Mr. Zarrab alleged that he and his associates conspired to violate the IEEPA and the ITSR.

existing OFAC Iranian sanctions authorities against certain enumerated Government of Iran officials.Terrorism-relatedHamas and Other Palestinian Terrorist Groups International Financing Prevention Act (the Hamas Act) – The Hamas Act mandates that the President impose blocking sanctions, not later than 180 days after the date of enactment of the Act, on certain foreign persons the President determines assist in sponsoring or providing significant financial, material or technological support for, or goods or other services to enable, acts of terrorism, or engage directly or indirectly, in certain transactions with enumerated terrorist groups, including Hamas, Palestine Islamic Jihad, Al-Aqsa Martyrs Brigade, the Lion’s Den or senior members of designated “foreign terrorist organizations.”Strengthening Tools to Counter the Use of Human Shields Act (the Shields Act) – The Shields Act modifies the already codified Sanctioning the Use of Civilians as Defenseless ShieldsAct (Pub. L. 115-348; 50 U.S.C. 1701) to mandate that the President, on or after enactment of the Shields Act and annually thereafter, submit a list to the appropriate congressional committees of each foreign person the President determines is a member of Palestine Islamic Jihad and “knowingly orders, controls, or otherwise directs the use of civilians protected as such by the law of war to shield military objectives from attack.” Pursuant to the Sanctioning the Use of Civilians as Defenseless ShieldsAct, the President is also mandated to impose blocking and visa sanctions on such foreign persons. Moreover, the Shields Act also permits the President to impose blocking and visa sanctions, on or after 180 days from the date of enactment of the Act, on foreign persons that are responsible for, complicit in, or have knowingly engaged in cyber activities that pose a threat to U.S. national security, foreign policy and economic stability, as well as foreign persons that have provided certain material assistance for any such a

ive personal data.” This data includes but is not limited to: biometric enrollment data, geolocation data, financial data, U.S. government personnel security clearance status, genetic testing results (including genetic sequencing data), personal financial data, and personal health data, all of which is specifically identified in the DoJ ANPRM. Such close overlap begs the question of why the CFIUS regulations appear to be overwritten. Has the Administration determined that the CFIUS regulations do not cast a wide enough net (the CFIUS regulations do require a U.S. business target to collect or maintain such data for at least one million individuals) to stop the flow of sensitive personal data to countries of concern? Only future enactment and enforcement of the DoJ regulation will shed light on this question.---[1] The EO was issued pursuant to the President’s authority under the U.S. Constitution and laws of the United States, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), and section 301 of title 3, United States Code.

On February 28, 2024, President Biden issued a new Executive Order in order to better secure the private data of U.S. citizens from being exploited by foreign adversaries of the United States. By issuing his Executive Order on Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern, President Biden has directed the U.S. Department of Justice (“DOJ”), in conjunction with Homeland Security, to promulgate regulations that will enact the goals of this Order. Ultimately, these regulations will be tailored to prevent bulk data from U.S. citizens from ending up in the hands of U.S. adversaries.President Biden issued this Order pursuant to his powers under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (“IEEPA”), which is the same authority that grants his powers to issue orders instituting the various sanctions programs. As such, this order includes some aspects that many sanctions compliance practitioners will recognize. For example, the Order will prohibit violations either “directly or indirectly.” Indirect violations can be a challenge for compliance officers, as this typically means that a company may need to understand what happens with the data past simply just who the buyer is. Turning to parallels in sanctions compliance, U.S. companies can risk violations by selling products to distributors that in turn sell those goods to prohibited entities. As such, these transactions will now likely require elevated due diligence to better understand potential counterparties, with strong care taken to identify and review any potential red flags.In similar parallels with sanctions regulations, the Order includes a general catch all for “[a]ny transaction or other activity that

data transmission via network infrastructure and focuses in particular on the risks of data transits using a submarine cable that is owned, operated, or controlled by a country of concern.Health care data will also be subject to the EO due to the concerns that even if it is anonymized, it may still be accessed by countries of concern.The data broker industry is also highlighted in the EO as posing a particular risk of collecting and disseminating bulk sensitive personal data or U.S. Government-related data to countries of concern.In addition to strictly commercial businesses, government contractors are affected by this EO because of the sensitive data they routinely encounter as a result of their federal contracts and grants.What is the President’s claimed authority for doing this?The EO indicates that it was issued pursuant to the authority vested in the President by the Constitution and the laws of the United States including the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1701, et seq., the National Emergencies Act (NEA), 50 U.S.C. § 1601, et seq., and Section 301 of Title 3 of the United States Code.Additionally, the EO seeks to expand the scope of the national emergency declared in EO 13873, Securing the Information and Communications Technology and Services Supply Chain (May 15, 2019) and the additional measures addressed in EO 14034, Protecting Americans’ Sensitive Data from Foreign Adversaries, (June 9, 2021). The President indicates that this EO is needed due to the continuing effort of certain countries of concern to access Americans’ sensitive personal data and U.S. Government-related data, which presents an unusual and extraordinary threat to the national security and foreign policy of the United States.What comes next?The Attorney General will issue draft regulations subject to public notice and comment on prohibited or restricted transactions.The Attorney General will publish a proposed rule for public notice and comment by August 26, 2024, that

roduction Act of 1950 (DPA), 50 USC §§ 4501, et seq., and the International Emergency Economic Powers Act, 17 USC §§ 1701, et seq., as its underlying authority—two statutes that maximize the president’s flexibility when it comes to announcing policy and directing agencies to implement that policy through regulatory constructs.The DPA was used extensively during the COVID-19 pandemic and allows the president to regulate and compel the means and manner of industrial production in furtherance of national defense and security. While first conceived during the Cold War, the law remains relevant and was most recently the lynchpin of vaccine and other production during the initial stages of the pandemic. It remains a key tool of administrations in the technology industry, where the DPA has been invoked to declare critical materials and issue rated orders to support national security requirements.Similarly, the president’s invocation of the International Emergency Economic Powers Act (IEEPA), 50 USC §§ 1701, et seq., emphasizes the importance the administration places on its ability to declare a national emergency and take immediate and potentially unilateral actions. Under this provision, even with the existence of the Export Control Reform Act of 2018 (ECRA), we anticipate additional export controls on AI writ large—whether on the software, hardware, technology, equipment, or materials side.However, the EO is necessarily heavily dependent on agency rulemaking and implementation. Rulemaking may be constrained by the US Supreme Court’s recent resurrection of the Major Questions Doctrine and action the Court may take with respect to Chevron deference in the current term. Congress also wields influence through its ability to legislate, limit funding, develop funding constraints, or condition funding upon completion of other actions.Moreover, because AI risks are transnational and not readily stopped at a physical border, enforcement of many of the proposed efforts remains uncertain. Absent