Presidential Authority to Permit the Withdrawal of Iranian Assets Now in the Federal Reserve Bank

Headnotes: 

In order to allow Iran to withdraw its assets in the Federal Reserve Bank, the President has the power, under the International Emergency Economic Powers Act (IEEPA), to nullify existing attachments licensed under the Iranian Assets Control Regulations.  Since in consenting to attachments against the blocked Iranian assets the Government reserved the right to revoke its consent at any time, their nullification does not constitute a compensable taking of private property.

The Federal Reserve Bank may release Iranian assets which have been attached but are not yet subject to a licensed final judgment, in reliance on the Presidents’ action under the IEEPA, without applying to the court to vacate its attachment orders.  The considerations which ordinarily mandate compliance with court orders would not justify a contempt citation where the conduct in question has been clearly mandated by supervening executive action, where compliance would defeat the President’s exercise of his emergency power under the IEEPA, and where the IEEPA itself provides an express exception to contempt liability for compliance with an order issued under its authority.

Where Congress has immunized good faith compliance with a presidential order issued under the IEEPA, the Federal Reserve Bank would not be held liable to disappointed attachment creditors even if the presidential orders nullifying the attachment orders were later held unlawful.  Nor is there any basis, in the Constitution or otherwise, on which creditors whose attachments were nullified would be likely to recover against the United States itself.

Updated July 9, 2014