An unfree trade in ideas: How OFAC'S regulations restrain first amendment rights

New York University Law Review

Volumn 83, Issue 6, 2008, Pages 1883-1914

  Chin, Tracy J ^a  

^a United States District Court for the Eastern District of New York ^*  (United States)

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EID: 58649102227     PISSN: 00287881     EISSN: None     Source Type: Journal    
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References (246)

1. In this Note, I refer to "trade sanctions," "economic embargoes," and "economic sanctions" interchangeably.
2. Rachel Donadio, Is There Censorship?, N.Y. TIMES BOOK REV., Dec. 19, 2004, at 16.
3. OFAC indicated that it might be willing to grant Ebadi a specific license to publish her works, but Ebadi chose to pursue a lawsuit against OFAC Ebadi ultimately settled her suit with OFAC, see Ebadi v. Office of Foreign Assets Control, No. 04CIV8420RCC, 2005 WL 1287040 (S.D.N.Y. Apr. 22, 2005),
4. and her book, Iran Awakening: A Memoir of Revolution and Hope, was published by Random House in 2006.
5. See infra note 24 for a list of the countries and regions in which OFAC runs sanctions programs.
6. OFAC refers to its sanctions program against Burma/Myanmar as the "Burma Sanctions." See OFAC, Sanctions Program Summaries, http://www.treas.gov/offices/enforcement/ofac/programs (last visited Oct. 12, 2008) (listing sanctions programs administered by OFAC). To avoid confusion and to remain consistent in references to OFAC's sanctions programs, this Note uses the name Burma rather than Myanmar.
7. Though all of these suits have either been withdrawn or settled, questions regarding the validity of OFAC's publishing regulations remain. See Press Release, Ass'n of Am. Univ. Presses, Government Issues New Regulations on Publications from Cuba, Iran, and Sudan: Publishers' and Authors' Groups End Litigation That Prompted Change (Oct. 1, 2007), http://aaupnet.org/ ofac/release100107.html [hereinafter October 1 Press Release] (reporting authors' and publishers' continued opposition under First Amendment to government licensing of books and journals and noting that OFAC's publishing regulations remain open to potential future challenges).
8. See 31 C.F.R. § 515.577 (2007) (authorizing publishing activities under Cuban Assets Control Regulations program); § 537.526 (equivalent regulation under Burmese Sanctions Regulations program); § 538.529 (equivalent regulation under Sudanese Sanctions Regulations program); § 560.538 (equivalent regulation under Iranian Transactions Regulations program).
9. See infra note 74 and accompanying text.
10. See infra note 75 and accompanying text.
11. These statutes, which provide what has been collectively termed the "informational materials exemption" to OFAC's authority, are known as the Berman Amendment, Pub. L. No. 100-418, § 2502, 102 Stat. 1107, 1371 (1988) (codified at 50 U.S.C app. § 5(b)(4) (2000)), and the Free Trade in Ideas Act (FTIA), Pub. L. No. 103-236, § 525, 108 Stat. 382, 474 (1994) (codified as amended at 12 U.S.C. § 95a, 50 U.S.C. § 1702 (2000)). See also infra Part II (discussing statutes in detail).
12. See generally Burt Neuborne & Steven R. Shapiro, The Nylon Curtain: America's National Border and the Free Flow of Ideas, 26 WM. & MARY L. REV. 719, 728-33 (1985) (addressing regulation of informational materials prior to Berman Amendment and FTIA).
13. For literature prior to the enactment of the FTIA but after the Berman Amendment, see generally Eric Michael Bland, Comment, Constitutionality of Regulating International Sports Broadcasting: Capital Cities/ABC, Inc. v. Brady, 44 FED. COMM. L.J. 363 (1992) (discussing OFAC's interpretation of informational materials to exclude broadcasting),
14. Pamela S. Falk, Note, Broadcasting from Enemy Territory and the First Amendment: The Importation of Informational Materials from Cuba Under the Trading with the Enemy Act, 92 COLUM. L. REV. 165 (1992) (same),
15. and Marielise Kelly, Case Comment, Artwork from "Enemy" Nations: Informational Material Under the Trading with the Enemy Act, a Relic of the Perceived Communist Threat, Cernuda v. Heavey, 720 F. Supp. 1544 (S.D. Fla. 1989), 14 SUFFOLK TRANSNAT'L L.J. 567 (1991) (discussing informational materials regulated by OFAC, specifically artwork).
16. See, e.g., Falk, supra note 9, at 165 (arguing for interpretation of Berman Amendment as withdrawal of congressionally delegated authority and finding that issues of heightened deference and First Amendment remain ripe for appellate review).
17. But see Laura A. Michalec, Note, Trade with Cuba Under the Trading with the Enemy Act: A Free Flow of Ideas and Information?, 15 FORDHAM INT'L L.J. 808, 809 (1992) (arguing courts should defer to OFAC's interpretation of Berman Amendment).
18. E.g., Republic Nat'l Bank of Miami v. United States, 506 U.S. 80, 98 (1992) (White, J., concurring).
19. See Clay v. Sun Ins. Office Ltd., 363 U.S. 207, 223 n.19 (1960)
20. (Black, J., dissenting) ("The judiciary cannot, as the legislature may, avoid a measure because it approaches the confines of the constitution. . . . With whatever doubts, with whatever difficulties, a case may be attended, we must decide it, if it be brought before us." (alteration in original) (quoting Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404 (1821))).
21. In this Note, I refer to OFAC's licensing of First Amendment-protected activities (specifically, those connected to book publishing) as its "licensing scheme."
22. OFAC, Our Mission, http://www.treas.gov/offices/enforcement/ofac/mission. shtml (last visited Aug. 5, 2008) [hereinafter Mission Statement].
23. TWEA was originally enacted in 1917, after the United States entered into World War I. Act of Oct. 6, 1917, ch. 106, 40 Stat. 411 (codified as amended at 50 U.S.C. app. §§ 1-6, 7-39, 41-44 (2000)).
24. It gave the President the power to wage economic warfare against hostile nations during wartime. 50 U.S.C. app. §§3, 5(b).
25. The President delegated this authority to the Secretary of the Treasury in 1942. Exec. Order No. 9193, 7 Fed. Reg. 5205, 5206 (July 6, 1942).
26. The Secretary then delegated authority to OFAC to administer and implement TWEA. Treas. Dep't Order No. 128 (Rev. 2) (Oct. 15, 1962)
27. (as amended by Office of Foreign Assets Control: Authority and Functions, 32 Fed. Reg. 3472 (1967)).
28. TWEA states: [T]he president may, through any agency that he may designate, and under such rules and regulations as he may prescribe, by means of instructions, licenses or otherwise . . . investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition[,] holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest. . . . 50 U.S.C. app. § 5(b)(1).
29. 50 U.S.C. §§ 1701-1706 (2000). IEEPA was enacted in 1977. To exercise his powers under IEEPA, the President must declare a national emergency. § 1701. Then, he must prepare a report to Congress specifying the circumstances that require the use of IEEPA powers, why the circumstances constitute an "unusual and extraordinary threat" to the United States, what actions the President proposes to take, and the justifications for those actions. § 1703(b). The President must also continue to report to Congress every six months so long as his IEEPA powers are exercised. § 1703(c).
30. OFAC, Frequently Asked Questions and Answers, http://www.treas.gov/ offices/ enforcement/ofac/faq/answer.shtml (last visited Aug. 5, 2008) [hereinafter OFAC FAQ].
31. Id.
32. Id.
33. see also National Archives, Records of the Office of Foreign Assets Control, http://www.archives.gov/research/guide-fed-records/groups/265. html#265.1 (last visited Sept. 16, 2008) (stating that Division of Foreign Assets Control was established in December 1950 to administer control over frozen Chinese and North Korean assets after China's October 1950 intervention in Korea).
34. U.S. DEP'T OF THE TREASURY, TREASURY ORGANIZATION CHART (2008), http://www.treas.gov/organization/ org-chart-04242008.pdf.
35. Id.
36. Weapons of Mass Destruction: Stopping the Funding-the OFAC Role: Hearing Before the Subcomm. on Oversight and Investigations of the H. Comm. on Financial Servs., 109th Cong. 2 (2006) (statement of Rep. Luis V. Gutierrez);
37. id. at 15-17 (statement of Robert W. Warner, Director, OFAC).
38. As of October 2008, OFAC oversees sanctions programs for the following countries and regions: the Balkans, Belarus, Burma, Côte d'Ivoire (the Ivory Coast), Cuba, Democratic Republic of the Congo, Iran, Iraq, Former Liberian Regime of Charles Taylor, North Korea, Sudan, Syria, and Zimbabwe.
39. See OFAC, Sanctions Program Summaries, http://www.treas.gov/ offices/enforcement/ofac/programs (last visited Oct. 28, 2008). List-based sanctions programs focus on prohibiting Americans from engaging in certain activities with designated individuals. OFAC administers list-based sanctions programs for terrorism, diamond trading, narcotics trafficking, nuclear proliferation, and anti-Lebanon activities. Id.
40. For example, OFAC has frozen the assets of international charities it has suspected of supporting terrorist activity. See, e.g., Kathryn A. Ruff, Note, Scared To Donate: An Examination of the Effects of Designating Muslim Charities as Terrorist Organizations on the First Amendment Rights of Muslim Donors, 9 N.Y.U. J. LEGIS. & PUB. POL'Y 447, 458-64 (2006) (describing OFAC's role in designating four Islamic charities as terrorist organizations and freezing their assets).
41. OFAC FAQ, supra note 18.
42. Id.
43. A "license" is an authorization issued by OFAC that permits a transaction that is otherwise prohibited. Id. OFAC's regulations themselves do not provide much guidance on the definition of "license."
44. See 31 C.F.R. § 515.316 (2007) ("Except as otherwise specified, the term license shall mean any license or authorization contained in or issued pursuant to this part.").
45. Oversight of the Department of Treasury: Hearing Before the H. Subcomm. on Oversight and Investigations of the H. Comm. on Financial Servs., 108th Cong. 91 (2004)
46. [hereinafter Testimony] (testimony of R. Richard Newcomb, Director, OFAC).
47. OFAC's definition of "general license" is not very detailed. See § 515.317 ("A general license is any license or authorization the terms of which are set forth in this part."). In practice, however, a general license "authorizes a particular type of transaction for a class of persons without the need to apply for a license." OFAC FAQ, supra note 18.
48. Similarly, "specific license" is not well defined. See § 515.318 ("A specific license is any license or authorization issued pursuant to this part but not set forth in this part."). OFAC clarifies on its website that a specific license is "a written document issued by OFAC to a particular person or entity, authorizing a particular transaction in response to a written license application." OFAC FAQ, supra note 18.
49. Travel to Cuba to visit an immediate family member, for example, requires a person to submit an application for a specific license. See OFAC FastRequest, https://fastrequest.ofac.treas.gov/default.aspx (last visited Aug. 5, 2008) (allowing individuals to apply for specific license to visit immediate family members who are Cuban nationals).
50. OFAC FAQ, supra note 18.
51. However, criminal penalties and imprisonment terms for violating a regulation differ by program. For example, willful violations of TWEA (under which the Cuban embargo program is regulated) can incur penalties of up to $1,000,000 for an organization and $100,000 for an individual, or up to ten years imprisonment. § 501.701(a)(1). Read in conjunction with 18 U.S.C. § 3571, which governs the sentencing of fines, criminal penalties for violations of the Cuban embargo program can reach $250,000 for an individual and $1,000,000 for an organization or twice the pecuniary gain or loss from the violation, whichever is greater. § 501.701(b). A willful violation of the Iran embargo program, which is administered under IEEPA, can trigger criminal penalties of up to $50,000, up to twenty years' imprisonment, or both. § 535.701(a)(2).
52. OFAC FAQ, supra note 18.
53. For violations of its Cuban embargo program, OFAC can impose a civil penalty of up to $65,000 on any person who violates any license, order, or regulation issued under TWEA. § 501.701(a)(3).
54. For violations of its Iranian embargo program, OFAC can impose civil penalties of up to $50,000. § 535.701(a)(1). Between 1993 and 2004, OFAC collected $30 million in civil penalties. Testimony, supra note 29, at 92.
55. See §§ 501.703-.745 (detailing, for example, service of process procedures, evidentiary standards, hearing requests, and mandatory waiting period before penalty payment is required).
56. See infra note 105 and accompanying text.
57. Although the regulations call for a knowing or willful violation of TWEA and its regulations in order to incur a penalty, OFAC seems to take the approach that violators will be held strictly liable. Compare § 501.701,
58. with OFAC FAQ, supra note 18.
59. OFAC FAQ, supra note 18.
60. Id.
61. OFAC does not provide information on how penalties are assessed or when they are reduced as a result of self-disclosure. See generally Mark D. Menefee, Voluntary Self-Disclosures: Choosing Among Bad Options To Survive, in 1 COPING WITH U.S. EXPORT CONTROLS 2007, at 361 (PLI Commercial Law & Practice, Course Handbook Series No. 901, 2007) (contrasting Commerce Department's Bureau of Industry and Security and Treasury Department's Directorate of Defense Trade Controls, which provide clear guidance on how to submit self-disclosures and what information is required, with OFAC, which does not).
62. Interpretative letters are nonbinding, situation-specific rulings issued by OFAC to interested parties to give guidance on whether OFAC will interpret certain activities as either authorized or unauthorized by a trade embargo program. See OFAC FAQ, supra note 18 (stating that "[g]reat care should be taken" before relying on previously issued or published materials by OFAC, including interpretations of regulations);
63. Letter from Robert W. Werner, Director, OFAC, to Nelson G. Dong, Esq., Dorsey & Whitney LLP (May 9, 2005), available at http://www.ieee.org/ portal/cms-docs-iportals/iportals/aboutus/ofac/OFAC-letter-to-IEEE-050905.pdf
64. [hereinafter Werner Letter] (responding to letters sent on behalf of Institute of Electrical and Electronics Engineers (IEEE) seeking interpretative guidance on IEEE's membership activities). These letters also explain whether the party needs to take further steps to secure prior approval in the form of a specific license prior to engaging in a particular activity. Werner Letter, supra. It should be noted that OFAC has used the term "interpretative rulings" interchangeably with "interpretative letters." See OFAC, REPORT OF LICENSING ACTIVITIES PURSUANT TO THE TRADE SANCTIONS REFORM AND EXPORT ENHANCEMENT ACT OF 2000, at 1 n.1 (Oct.-Dec. 2007), available at http://www.treas.gov/offices/ enforcement/ofac/licensing/agmed/lquarter2008.pdf (referring to "interpretative letter");
65. OFAC, Interpretative Rulings, http://www.treas.gov/offices/enforcement/ ofac/rulings/index.shtml (last visited Sept. 18, 2008) (referring to "interpretative rulings"). This Note uses the term "interpretative letters" throughout.
66. For an overview of industry reaction to the IEEE letter, see, for example, Press Release, PEN Am. Ctr., First Amendment Problems Remain in Wake of Latest OFAC Pronouncement (Apr. 5, 2004), http://www.pen.org/viewmedia.php/ prmMID/261/prmID/1331,
67. and Action Letter, PEN Am. Ctr., Write to the Treasury Dept. in Protest of OFAC Regulations (Mar. 2004), http://www.pen.org/page.php/prmID/440.
68. See supra notes 4-5 and accompanying text.
69. See, e.g., Veterans & Reservists for Peace in Vietnam v. Reg'l Comm'r of Customs, 459 F.2d 676, 679-81 (3d Cir. 1972) (upholding TWEA and finding that OFAC's regulation of Northern Vietnamese literature under TWEA was valid);
70. Teague v. Reg'l Comm'r of Customs, 404 F.2d 441, 445-46 (2d Cir. 1968) (holding that, under TWEA, OFAC can regulate informational materials).
71. 132 CONG. REC. 6550 (1986) (statement of Sen. Mathias) ('"Expanding contacts across borders and permitting a free exchange or interchange of information and ideas increase confidence; sealing off one's people from the rest of the world reduce[s] it.'" (quoting President Ronald Reagan)).
72. Pub. L. No. 100-418, § 2502, 102 Stat. 1107, 1371 (1988) (codified at 50 U.S.C. app. § 5(b)(4) (2000)).
73. Pub. L. No. 103-236, § 525, 108 Stat. 382, 474 (1994) (codified as amended at 12 U.S.C. § 95a, 50 U.S.C. § 1702 (2000)).
74. The notion of a "free trade in ideas" is similar to "the marketplace of ideas." Kent Greenawalt, Free Speech Justifications, 89 COLUM. L. REV. 119, 134 (1989);
75. see also Abrams v. United States, 250 U.S. 616, 630 (1919) (Holmes, J., dissenting) ("[T]he ultimate good desired is better reached by free trade in ideas-that the best test of truth is the power of the thought to get itself accepted in the competition of the market. . . .").
76. § 2502(a)-(b), 102 Stat, at 1371.
77. 31 C.F.R. § 500.206 (1990) (exempting informational materials under OFAC's regulations governing prohibitions); § 500.550 (exempting informational materials under OFAC's licensing provisions). This exemption was later amended to include newer forms of media. 31 C.F.R. § 500.206 (1996).
78. See 31 C.F.R. § 500.332 (1990) (defining informational materials).
79. OFAC's exemption excluded, inter alia, intangible items (e.g., telecommunications transmissions), transactions related to informational materials not fully created and in existence at the time of the transaction, substantive or artistic alterations or enhancements, and marketing services by a person subject to the jurisdiction of the United States. §§ 500.206, .332, .550.
80. When the Customs Service seized over 200 Cuban paintings from Ramon Cernuda, director of the Cuban Museum in Miami, the government claimed the paintings violated TWEA. Cernuda v. Heavey, 720 F. Supp. 1544, 1545 (S.D. Fla. 1989). Cernuda applied twice for licenses to display the Cuban artwork, both before and after the seizure, but both license applications went unanswered. Id. at 1546 & n.2.
81. The court noted in dicta that there appeared to be selective enforcement by OFAC, since other institutions such as Sotheby's, Christie's, and the Museum of Modern Art in New York had displayed Cuban artwork without obtaining specific licenses. Id. at 1546 n.4.
82. Id. at 1550-51.
83. Id. at 1550 (citing Eugene Delacroix painting, Pablo Picasso's political statement against Fascism in Guernica, and political cartoons in newspapers as examples).
84. Id. at 1549.
85. Id. at 1549-50.
86. Capital Cities/ABC, Inc. v. Brady, 740 F. Supp. 1007, 1010-12, 1014-15 (S.D.N.Y. 1990) (affirming OFAC's barring of live broadcast of 1991 Pan-American Games from Cuba and deferring to OFAC's interpretation that information exemption applied only to physical works in existence).
87. See id. at 1009, 1011-12.
88. OFAC also denied the permit on the basis of ABC's exclusivity arrangement in broadcasting the games and intimated that a nonexclusive broadcast might have been permitted. See id. at 1010 & n.5.
89. Additionally, ABC had paid Cuban officials for the right to broadcast the games, which violated OFAC's mission to deny any economic benefit to embargoed countries. Id. at 1010 & n.5.
90. However, the payment to officials has been questioned as a viable economic benefit to Cuba itself, since the payment went toward the games and not to the government of Cuba. Falk, supra note 9, at 169.
91. Brady, 740 F. Supp. at 1013.
92. Id. at 1014-15.
93. Id. at 1013.
94. Free Trade in Ideas Act, Pub. L. No. 103-236, § 525, 108 Stat. 382, 474 (1994) (codified as amended at 12 U.S.C. § 95a, 50 U.S.C. § 1702 (2000)).
95. Id. § 525(b)(1), 108 Stat. 474;
96. see also id. § 525(c)(1), 108 Stat. 474.
97. 138 CONG. REC. 15,052 (1992)
98. (statement of Rep. Berman). Representative Berman also added, "[T]he insignificant sums of money . . . from trade in books, works of art, and other informational materials, cannot be a valid reason for curtailing the rights of Americans, or for cutting off the flow of ideas . . . ." Id.
99. See supra note 40 for a definition of interpretative letters.
100. See supra notes 49-59 and accompanying text.
101. Letter from R. Richard Newcomb, Director, OFAC (Sept. 30, 2003), available at http://www.treas.gov/offices/enforcement/ofac/rulings/ ia100203.pdf [hereinafter September 30 Letter].
102. The letter has been removed from OFAC's list of interpretative guidance rulings, but it is still available on OFAC's website. Addressee information has been redacted, but IEEE has identified itself as the recipient. IEEE & OFAC, Information Update, http://www.ieee.org/web/aboutus/ofac/index.html (last visited Aug. 7, 2008);
103. see also Letter from Rep. Howard L. Berman to R. Richard Newcomb, Director, OFAC (Mar. 3, 2004), available at http://www.house.gov/list/ speech/ca28-berman/newcomb-letter.html.
104. September 30 Letter, supra note 65. Another puzzling aspect of OFAC's interpretative rulings was OFAC's differential treatment of newspapers, who, like IEEE, had inquired as to whether they could publish the works of writers from Cuba, Iran, and Sudan.
105. See Letter from R. Richard Newcomb, Director, OFAC (July 19, 2004), available at http://www.treas.gov/offices/enforcement/ofac/ rulings/gn071904.pdf (responding to inquiry from newspaper after letter sent to IEEE).
106. In an interpretative letter issued to a newspaper, the same activities that OFAC told IEEE either were prohibited outright or required a specific license were exempt as "informational materials" with respect to newspapers. Id. The Berman Amendment and FTIA never distinguished between newspapers and other informational materials, such as journals.
107. This is not the only instance of differing treatment of First Amendment-protected activities within the informational materials exemption: The Court has previously rejected a challenge to the distinction drawn by OFAC between print and broadcast media. Capital Cities/ABC, Inc. v. Brady, 740 F. Supp. 1007, 1013 (S.D.N.Y. 1990) ("[T]he Court is not persuaded by ABC's claim that the Regulations impermissibly discriminate between the print and broadcast media."). These distinctions make it unclear what rules will be applied to varying types of informational materials.
108. For an explanation of why OFAC's requirement that manuscripts be "camera-ready" was considered problematic, see Potter Wickware, US Pressures Publishers To Honor Trade Embargoes, 10 NATURE MED. 109, 109 (2004).
109. I include authors, editors, publishers, translators, agents, publicists, and academic institutions within this definition.
110. See supra note 41 and accompanying text.
111. In response to concerns raised by IEEE and publishers of books and journals, OFAC declared that marketing was acceptable only if it was "incidental" and on behalf of the whole journal publication, rather than for the individual contributors. September 30 Letter, supra note 65. This may have seemed an appropriate compromise for journals, but it was not feasible for books, which are commonly written by a single author.
112. Id.
113. Publishing houses seek to publish books that can find an audience, which requires good editing, marketing, and publicity efforts. They do this not only to ensure a financial return by publishing high-quality works but also for reputational reasons. See generally ANDRÉ SCHIFFRIN, THE BUSINESS OF BOOKS (2000).
114. See supra note 5 and accompanying text.
115. Id.
116. 31 C.F.R. § 515.577(a) (2007) (stating that provision does not apply if parties to transaction include "Government of Cuba");
117. § 537.526(a) (equivalent exception for "State Peace and Development Council of Burma or the Union Solidarity and Development Association of Burma");
118. § 538.529(a) (equivalent exception for "Government of Sudan"); § 560.538(a) (equivalent exception for "Government of Iran").
119. For example, the "Government of Cuba" under the embargo program's government exclusion includes: [T]he state and the Government of Cuba, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Cuba; any person occupying the positions identified in § 515.570(a)(3); employees of the Ministry of Justice; and any person acting or purporting to act directly or indirectly on behalf of any of the foregoing with respect to the transactions described in this paragraph. § 515.577(a). The additional "prohibited officials" from § 515.570(a)(3) are: Ministers and Vice-ministers, members of the Council of State, and the Council of Ministers; members and employees of the National Assembly of People's Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub-Director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; and members and employees of the Supreme Court (Tribuno Supremo Nacional). § 515.570(a)(3).
120. E.g., id. § 515.577(a).
121. See supra Part I.B for a discussion of license enforcement.
122. The scarcity of resources affects those publishing houses most likely to publish works from international writers in the first place. See Stacy Perman, Small Publishers Book Big Rewards, BUS. WK. ONLINE, May 2, 2006, http://www.businessweek.com/smallbiz/content/ may2006/sb20060502-704137.htm (noting that English translation of non-U.S. authors is "one of the most neglected and least profitable segments of book publishing" and that small nonprofit houses are one of few avenues for such works to be published).
123. See FREEDOM OF EXPRESSION IN THE SUPREME COURT: THE DEFINING CASES 26 (Terry Eastland ed., 2000) (defining doctrine and describing Court's establishment of presumption against prior restraint and exceptional instances where prior restraint may be constitutional, such as incitements to riot or overthrow of government or wartime obstruction of military recruitment).
124. See, e.g., City of Lakewood v. Plain Dealer Publ'g Co., 486 U.S. 750, 757, 772 (1988) (finding mayor's ability to grant or deny permits for newspapers to be invalid and unconstitutional prior restraint);
125. N.Y. Times Co. v. United States, 403 U.S. 713, 714 (1971) (per curiam) (finding that New York Times and Washington Post were entitled to publish contents of classified government study of Vietnam War known as "Pentagon Papers");
126. Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 59-60, 64 (1963) (striking down state law creating commission to review literature for its potential to "corrupt" youth and to issue notices to publishers to cease publication of such materials);
127. Lovell v. City of Griffin, 303 U.S. 444, 451-52 (1938) (invalidating ordinance requiring written permission from city manager before distributing pamphlets and stating that "[t]he struggle for the freedom of the press was primarily directed against the power of the licensor").
128. Neb. Press Ass'n v. Stuart, 427 U.S. 539, 559 (1976).
129. EUGENE VOLOKH, THE FIRST AMENDMENT AND RELATED STATUTES: PROBLEMS, CASES AND POLICY ARGUMENTS 513 (2d ed. 2005) ("Whenever you see a licensing scheme ('to parade here you need a license'), a prescreening scheme ('to display this work you need to have cleared it first with this board'), or an injunction ('you may not say this and such, on pain of a contempt of court conviction'), you know there's a potential prior restraint issue involved.").
130. Plain Dealer, 486 U.S. at 759.
131. In Plain Dealer, the Court struck down an ordinance provision that gave the mayor the ability to grant or deny permits for newspaper racks to be placed on public property. Id at 772.
132. The Court noted that the lack of explicit standards and guidelines cabining an official's discretion made it impossible to determine whether a denial was "unconstitutionally motivated" by censorship or whether there was a proper restraint for legitimate reasons. Id. at 760.
133. According to the Court, such standardless guidelines created the potential for newspapers to conform their editorial practices to the mayor's preferences - a result incongruent with First Amendment law. Id. at 769-72.
134. Bantam Books, 372 U.S. at 70-71 ("We have tolerated [a restraint of expression] only where it operated under judicial superintendence and assured an almost immediate judicial determination of the validity of the restraint.").
135. Bantam Books involved a challenge by book publishers to a law creating a Rhode Island Commission charged with combating juvenile delinquency. Id. at 60 n.1.
136. The Commission notified distributors of books and publications that it found obscene, informally ordering them to remove such publications from circulation under threat of criminal prosecution for failure to comply. Id. at 61.
137. The Court found that the Rhode Island Commission's actions had the "capacity for suppression of constitutionally protected publications . . . far in excess of . . . the typical licensing scheme held constitutionally invalid by this Court" because it contained "no provision . . . for judicial review of the Commission's determination of objectionableness." Id. at 71.
138. E.g., CAMP Legal Def. Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1280 (11th Cir. 2006).
139. See Texas v. Johnson, 491 U.S. 397, 411-12 (1989) (analyzing whether criminal conviction for flag burning was content based or content neutral and deciding which test to apply as consequence of that distinction).
140. See Barnes v. Glen Theatre, Inc., 501 U.S. 560, 570-72 (1991) (finding that Indiana public indecency law requiring nude dancers to wear pasties and G-strings was content neutral and applying O'Brien test to find that law was valid under First Amendment).
141. FREDRICK SEATON SIEBERT, FREEDOM OF THE PRESS IN ENGLAND, 1476-1776: THE RISE AND DECLINE OF GOVERNMENT CONTROLS 2-3 (1952).
142. Licensing was also used for similar purposes in America. See LEONARD W. LEVY, EMERGENCE OF A FREE PRESS 22 (2004) (outlining seventeenth- and eighteenth-century efforts to restrict publishing via issuances of licenses in colonial America).
143. N.Y. Times Co. v. United States, 403 U.S. 713, 714 (1971) (per curiam).
144. Id.
145. Graff v. City of Chicago, 986 F.2d 1055, 1063 (7th Cir. 1993).
146. See supra note 83 and accompanying text.
147. 486 U.S. 750 (1988).
148. Id. at 757.
149. Recall that OFAC's interpretative letter issued to IEEE narrowly construed informational materials and implied that publishing Iranian manuscripts in its scientific journal would violate the Iran sanctions program. See supra notes 40-41, 63-66, and accompanying text.
150. For a list of projects that were endangered, suspended, or canceled altogether, see Ass'n of Am. Univ. Presses, Materials for Suit: Endangered Projects, http://aaupnet.org/ofac/projects.html (last visited Aug. 5, 2008). Some of these projects have since moved forward. October 1 Press Release, supra note 4.
151. 31 C.F.R. § 501.803 (2007) ("Except as otherwise provided by law, the provisions of each part of this chapter and any rulings, licenses (whether general or specific), authorizations, instructions, orders, or forms issued thereunder may be amended, modified or revoked at any time.").
152. Id. § 501.804(a). However, interested parties can contact the Director of OFAC in writing and request the issuance, repeal, or amendment of a rule. § 501.804(b).
153. See supra note 5.
154. See infra text accompanying note 107.
155. OFAC administers a country-based sanctions program against North Korea. OFAC, North Korea Sanctions, http://www.treas.gov/offices/enforcement/ofac/ programs/nkorea/nkorea.shtml (last visited Aug. 16, 2008).
156. Under the Berman Amendment and FTIA, OFAC is not required to issue general licenses to cover publishing activities. Arguably, OFAC's attempt to regulate informational materials itself through such general licenses exceeds the agency's authority in light of these two statutes. See supra note 10
157. OFAC FAQ, supra note 18.
158. 31 C.F.R. § 501.802 (2007).
159. An applicant shows "good cause" when there are "changed circumstances" or "additional relevant information not previously made available to OFAC." OFAC FAQ, supra note 18.
160. Id.
161. Id.
162. Id.
163. For example, the Director of OFAC testified in 2004 that the agency received over 1000 phone calls per week requesting advice on compliance matters. Testimony, supra note 29, at 92.
164. See supra note 84 and accompanying text for a discussion of the Bantam Books case, which required a reasonable time period and an appeals process.
165. OFAC recommends that license applicants wait for two weeks before checking on the status of their applications but reserves discretion in determining how long it will take to issue a license approval or denial. OFAC FAQ, supra note 18.
166. 220 F. Supp. 2d 99 (D.P.R. 2002).
167. Id. at 100.
168. Id. at 101.
169. Id. at 102.
170. Id. For a similar discussion on timeliness,
171. see supra note 50.
172. See supra note 104 and accompanying text.
173. See supra note 84 and accompanying text (citing case in which Court struck down First Amendment restrictions for not providing opportunity for judicial review).
174. E.g., United States v. Playboy Entm't Group, Inc., 529 U.S. 803, 813 (2000).
175. Id.
176. United States v. O'Brien, 391 U.S. 367, 376-77 (1968);
177. see also City of Erie v. Pap's A.M., 529 U.S. 277, 296, 301-02 (2000) (describing O'Brien test).
178. Compared to the last two prongs, these first two prongs are generally uncontroversial and seem to be met easily. See, e.g., Barnes v. Glen Theatre, Inc., 501 U.S. 560, 567-68 (1991) (finding that public indecency statutes are clearly within constitutional power of Indiana and that they further substantial governmental interests, even though "[i]t is impossible to discern . . . exactly what governmental interest the Indiana legislators had in mind when they enacted this statute").
179. Texas v. Johnson, 491 U.S. 397, 407 (1989) (holding that governmental interest was related to suppression of expression and therefore failed O'Brien test).
180. Denver Area Educ. Telecomms. Consortium, Inc. v. FCC, 518 U.S. 727, 753, 755 (1996) (finding that statute provisions requiring cable system operators to block offensive sex-related materials on television channels were not narrowly tailored to government's interest in protecting children).
181. See supra note 118 and accompanying text.
182. DECKLE MCLEAN, ESSAY ON THE FIRST AMENDMENT 2-4 (2000).
183. See Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 662 (1994) (stating that content-neutral regulation will be upheld under O'Brien if '"it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression;
184. and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest'" (quoting United States v. O'Brien, 391 U.S. 367, 377 (1968)).
185. Se. Promotions, Ltd. v. Conrad, 420 U.S. 546, 558 (1975) (stating that prior restraints are not per se unconstitutional).
186. See supra text accompanying notes 120-23 for a reminder of the O'Brien test. This Note focuses on OFAC's economic and national security interests, since they are emphasized by the agency itself.
187. See supra notes 14-20 and accompanying text (describing OFAC's mission, origin, and history of regulating economic and national security interests through administration of U.S. embargo programs).
188. See, e.g., Am. Documentary Films, Inc. v. Sec'y of Treasury, 344 F. Supp. 703, 707 (S.D.N.Y. 1972) ("The Government . . . maintains that this is not a censorship question but solely a question of administering the Foreign Assets Control regulations to prevent hard currency from finding its way to Cuba. It asserts that everything it has done is within the ambit of that purpose.").
189. See supra Part III.A (describing prior restraint doctrine and treatment of various ordinances and laws restricting expression under First Amendment);
190. see also supra note 121 (explaining that generally, first prong is easily satisfied).
191. See supra Part I.A (discussing history of OFAC and its predecessor).
192. This has been the justification offered for the continuation of the Cuban embargo program. The agency has argued that the original purpose of the trade sanctions in Cuba was to "isolate the Cuban government economically and deprive it of U.S. dollars that the Cuban Government would otherwise use to maintain or strengthen its repressive apparatus, enforce its information blockade on the Cuban people, and arrange for . . . the continuation of the totalitarian Communist government." Cuban Assets Control Regulations, Sudanese Sanctions Regulations, and Iranian Transactions Regulations, 69 Fed. Reg. 75,468 (Dec. 17, 2004).
193. E.g., Teague v. Reg'l Comm'r of Customs, 404 F.2d 441, 445-46 (2d Cir. 1968).
194. The Teague court held that withholding publications from North Korea, North Vietnam, and mainland China unless OFAC issued licenses approving their release was valid, because the purpose of the regulations was to restrict the flow of currency to hostile nations, all of the publications were treated alike, there was no inquiry into the materials' content, and the release of the publications was permitted if they were sent as gifts or to research institutions. Teague was decided prior to the enactment of the Berman Amendment, which exempted informational materials from OFAC's authority. See Cernuda v. Heavey, 720 F. Supp. 1544, 1550 n.10 (S.D. Fla. 1989) ("Through the [Berman Amendment], Congress eliminated the sort of constitutional questions that arose in cases like . . . Teague").
195. Kg., Am. Airways Charters, Inc. v. Regan, 746 F.2d 865, 867, 872 (D.C. Cir. 1984) (rejecting economic justification for OFAC's disallowance of attorney-client relationship between Florida-chartered corporation that was designated as Cuban national and attorney seeking to represent corporation).
196. The court in Regan stated that OFAC's authority over a corporate entity only extended to a corporation's external commercial relations and not to its internal decisions. Id. at 874-75.
197. Though OFAC could regulate corporate counsel's payment and fees, the court also stated that the nature of the attorney-client relationship required the court's "special care" when reviewing an attempt by an administrative agency to "expose to licensing the very creation of that relationship." Id. at 872.
198. Representative Berman called money from trade in books, art, and other informational materials "insignificant" and questioned using the economics of informational materials as a reason for restricting the flow of ideas. See supra note 62.
199. See supra note 78 and accompanying text (discussing market for publishing works by non-U.S. authors).
200. Though Cuba's publishing industry has experienced a minor resurgence, the entire industry effectively collapsed in the early 1990s. This has left little opportunity for Cuban authors to publish works in their own country, even today. See Isora Rodríguez Rojas, Cuba National Report to the Workshop Seminar "Access to Information in Latin America" (Sept. 1999) (unpublished paper), available at http://www.ifla.org/VI/2/conf/cuba-e.pdf.
201. The Sudanese government has suppressed the publication of books and unfavorable news articles. See Sudanese Authorities Ban a Novel Dealing with Darfur Atrocities, SUDAN TRIB., June 24, 2008, http://www.sudantribune.com/spip.php?article27623 (detailing confiscation of Sudanese book from Canadian publisher);
202. Bill Marx, Undesirable Reception, PRI's THE WORLD, June 29, 2008, http://www.theworld.org/?q=node/19061 (explaining how Sudanese authorities censor independent newspapers, making it impossible for them to function).
203. See, e.g., Veterans & Reservists for Peace in Vietnam v. Reg'l Comm'r of Customs, 459 F.2d 676, 680, 682 (3d Cir. 1972) (stating government's compelling interest and adding that "money is an important weapon in any international struggle");
204. Teague v. Reg'l Comm'r of Customs, 404 F.2d 441, 445-46 (2d Cir. 1968) (upholding regulations that incidentally restrict free speech because of government's compelling interest in restricting flow of money to "hostile nations"). Recall also that the first two prongs of the O'Brien test are generally easy to meet. See supra note 121.
205. Fiona McGillivray & Allan C. Stam, Political Institutions, Coercive Diplomacy, and the Duration of Economic Sanctions, 48 J. CONFLICT RESOL. 154, 154, 156, 158 (2004) (discussing use of sanctions as way to change policy or leadership).
206. See U.S. CONST, art. I, § 8, els. 1, 3, 11 (giving Congress power to regulate commerce with foreign nations and to declare war);
207. id. art. II, § 2, cl. 2 (giving President power to make treaties and to appoint ambassadors).
208. Osborne v. Ohio, 495 U.S. 103, 141 n.16 (1990) (Brennan, J., dissenting) ("Although our decisions even in the First Amendment area have taken special note of the paramount importance of national security interests, we nonetheless have required a strong showing of imminent danger before permitting First Amendment freedoms to be sacrificed." (citation omitted));
209. see also Near v. Minnesota ex rel. Olson, 283 U.S. 697, 716 (1931) (citing instances of national security interests that would justify overriding First Amendment protections).
210. See Mission Statement, supra note 14.
211. Economic embargoes are enacted and maintained to indicate disfavor with a country's political or social policies or because such countries are considered a national security risk to the United States. OFAC itself concedes that the original intentions for the Cuba sanctions are now "historical" but nevertheless considers Cuba a country that "supports] international terrorism." Testimony, supra note 29, at 90.
212. 249 U.S. 47 (1919).
213. 403 U.S. 713 (1971) (per curiam).
214. LOUIS HENKIN, FOREIGN AFFAIRS AND THE UNITED STATES CONSTITUTION 286-87 (Clarendon Press 2d ed. 1996).
215. See Gentile v. State Bar of Nev., 501 U.S. 1030, 1037-39 (1991) (describing "clear and present danger" test in relation to free expression);
216. GEOFFREY R. STONE, PERILOUS TIMES: FREE SPEECH IN WARTIME FROM THE SEDITION ACT OF 1798 TO THE WAR ON TERRORISM 522 (2004) (citing Supreme Court's affirmance of "clear and present danger" test).
217. Schenck, 249 U.S. at 52.
218. Id.
219. Id.
220. R.Y. Times Co. v. United States, 403 U.S. 713, 714 (1971) (per curiam).
221. Id.
222. Id. at 719 (Black, J., concurring).
223. Id. at 726 (Brennan, J., concurring).
224. Id.
225. (quoting Schenck, 249 U.S. at 52).
226. One immediate problem in applying OFAC's licensing scheme in the current context is the question of whether the United States is "at war." It is difficult to analogize the "war on terror" to previous wars, since the authorization of force is general and not specifically directed to a particular country. See Authorization for Use of Military Force Against September 11 Terrorists, 50 U.S.C. § 1541 (Supp. V 2005) (authorizing President to "use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons");
227. see also RICHARD F. GRIMMETT, CONG. RES. SERV., AUTHORIZATION FOR USE OF MILITARY FORCE IN RESPONSE TO THE 9/11 ATTACKS (P.L. 107-40): LEGISLATIVE HISTORY (2006), available at http://www.fas.org/sgp/crs/natsec/RS22357.pdf (summarizing legislative history surrounding AUMF).
228. N.Y. Times Co., 403 U.S. at 726-27 (Brennan, J., concurring).
229. Near v. Minnesota ex rel. Olson, 283 U.S. 697, 716 (1931).
230. See Press Release, Treasury Issues General License for Publishing Activities (Dec. 15, 2004), http://treasury.gov/press/releases/js2152.htm (clarifying that OFAC does not "discourage] the publication of dissident speech" and explaining that new rule permits "most ordinary publishing activities").
231. See supra note 5.
232. See infra Part IV.A.3.
233. See supra text accompanying note 61.
234. See supra Part II.A for a discussion of the congressional reaction to OFAC's regulation of informational materials.
235. The court in Capital Cities/ABC, Inc. v. Brady deferred to OFAC's determination that ABC's broadcast of the Pan-American Games from Havana did not fall under the informational materials exemption. 740 F. Supp. 1007, 1014 (S.D.N.Y. 1990).
236. Calling it a political question, the court reasoned that OFAC must have had a legitimate reason for distinguishing between televised broadcasts and other First Amendment-protected works. Id. Today, there is no license analogous to the publishing general license for activities incidental to filmmaking, music production, or artwork.
237. See 31 C.F.R. § 500.206 (2007) (exempting informational materials from prohibited activities applicable to all trade-sanctioned countries).
238. OFAC also provides informational materials exemptions under specific programs. See, e.g., § 515.206 (under Cuban Assets Control Regulations);
239. § 537.210 (under Burmese Assets Control Regulations); § 538.211 (under Sudanese Assets Control Regulations).
240. See supra Part I.
241. Currently, OFAC can deny a license without providing a clear reason. See Martha Brannigan, Trade Group Barred from Cuba, MIAMI HERALD, Jan. 25, 2007, at IC (reporting that OFAC denied trade group's permit because its application did not meet unspecified criteria).
242. See supra note 105 and accompanying text.
243. See supra note 110 and accompanying text.
244. See, e.g., OFAC, CIVIL PENALTIES ENFORCEMENT INFORMATION FOR FEB. 1, 2008, available at http://www.treas.gov/offices/enforcement/ofac/civpen/ penalties/02222008.pdf;
245. OFAC, CIVIL PENALTIES ENFORCEMENT INFORMATION FOR JAN. 4, 2008, available at http://www.treas.gov/offices/enforcement/ofac/civpen/penalties/01112007.pdf;
246. OFAC, CIVIL PENALTIES ENFORCEMENT INFORMATION FOR DEC. 7, 2007, available at http://www.treas.gov/offices/enforcement/ofac/civpen/penalties/12112007.pdf.