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United States v. Saboonchi

United States District Court, D. Maryland, Southern Division

May 7, 2014

UNITED STATES OF AMERICA,
v.
ALI SABOONCHI, et al.

MEMORANDUM OPINION

PAUL W. GRIMM, District Judge.

Defendant Ali Saboonchi is alleged to have violated Iranian Transactions and Sanctions Regulations (the "ITSR") promulgated under the International Emergency Economic Powers Act (the "IEEPA"). Saboonchi has moved to dismiss the indictment on the grounds that the IEEPA is an unconstitutional delegation of legislative power to the executive and that, in any event, the ITSR is unconstitutionally vague. Because I find that the IEEPA contains an intelligible principle to guide the President's actions, and that the ITSR clearly describes the conduct that it prohibits, I disagree and deny the motion.

I. BACKGROUND

Defendant Ali Saboonchi was indicted for violations of the Iranian Transactions and Sanctions Regulations ("ITSR"), 31 C.F.R. part 560, which were promulgated pursuant to the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. ch. 35. See Second Superseding Indictment, ECF No. 95.

Under the IEEPA, "the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise-(A) investigate, regulate, or prohibit-(i) any transactions in foreign exchange." 50 U.S.C. § 1702(a)(1). These powers only may be exercised "to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat, " 50 U.S.C. § 1701(a), and "may not be exercised for any other purpose." § 1701(b). When the President exercises his authority under the IEEPA, he is required to report to Congress every six months "with respect to the actions taken, since the last such report, in the exercise of such authorities, and with respect to any changes which have occurred." 50 U.S.C. § 1703(c).

The ITSR was promulgated pursuant to three Executive Orders signed by President Clinton, two in 1995 and one in 1997. Executive Order 12957, signed March 15, 1995, declared a "national emergency" pursuant to the National Emergencies Act and prohibited certain transactions with Iran. 60 Fed. Reg. 14615. Executive Order 12959, signed May 6, 1995, and Executive Order 13059, signed August 19, 1997, "clarify" the prior orders, recognize "the usual and extraordinary threat to the national security, foreign policy, and economy of the United States, " and prohibit certain transactions with Iran. 60 Fed. Reg. § 24757; 62 Fed. Reg. § 14615.

The ITSR provides that:

Except as otherwise authorized... the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran is prohibited including the exportation, reexportation, sale, or supply of any goods, technology, or services to a person in a third country undertaken with knowledge or reason to know that:
(a) Such goods, technology, or services are intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran or the Government of Iran....

31 C.F.R. § 560.204. Pursuant to 31 C.F.R. § 530.203, "Any transaction... that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in [the ITSR] is prohibited, " § 530.203(a), as is any conspiracy to violate the ITSR, § 560.203(b).

Saboonchi argues that the IEEPA and the ITSR are invalid because (1) they are improper delegations of legislative authority to the executive, Def.'s Mot. to Dismiss 5, ECF No. 111, and (2) the ITSR is unconstitutionally vague, id. at 8. The Government has responded, Gov't Opp'n, ECF No. 123, and Saboonchi has replied, ECF No. 127. A hearing on, inter alia, Defendant's Motion to Dismiss was held before me on May 6, 2014.

II. NONDELEGATION DOCTRINE

Saboonchi makes two arguments: first, that the IEEPA is an unlawful delegation of legislative authority because it lacks an intelligible principle, and second, that Congress has ...


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