## Facts

- The appeal arose from a multi-defendant prosecution captioned **United States v. Dhafir**, but the **defendant-appellant** was **Osameh Al Wahaidy**.
- Congress enacted the **International Emergency Economic Powers Act (IEEPA)**, 50 U.S.C. § 1701 et seq., which allows the President, after declaring a national emergency, to regulate or prohibit specified categories of international economic and financial transactions connected to foreign threats.
- After Iraq invaded Kuwait in 1990, President George H. W. Bush declared a national emergency and issued **executive orders** restricting financial transactions involving Iraq and Kuwait; the Treasury Department’s **Office of Foreign Assets Control (OFAC)** issued implementing regulations.
- The government charged Al Wahaidy in the **Northern District of New York** with **willfully** violating the Iraq sanctions program by transferring money into Iraq on three occasions in **1999–2000**.
- Al Wahaidy moved to dismiss the indictment, arguing that IEEPA unconstitutionally delegates Congress’s legislative power because the President (and OFAC) effectively define conduct that is punishable by **criminal penalties**.
- The district court denied the motion. Al Wahaidy later **pleaded guilty** while preserving his right to appeal the constitutional question, and he appealed to the Second Circuit on that single issue.

## Issues

1. Whether IEEPA’s authorization for the President to issue sanctions regulations, backed by criminal penalties for willful violations, is an unconstitutional delegation of Congress’s power to define criminal offenses.

## Decision

- The Second Circuit **affirmed** the district court’s denial of Al Wahaidy’s motion to dismiss.
- The court held that **IEEPA is a constitutional delegation** because it supplies an **intelligible principle** that limits when and how the President may act.
- The court rejected the claim that the delegation becomes invalid merely because violations of regulations issued under IEEPA may be punished criminally.
- Because IEEPA was constitutional, the executive orders and OFAC regulations restricting transfers to Iraq were valid grounds for Al Wahaidy’s conviction.

## Legal Principles

- A delegation of legislative authority is permissible when Congress provides an **intelligible principle** that states the policy goal and meaningfully limits the Executive’s discretion.
- IEEPA contains limiting standards by:
  - allowing presidential action only after a declared national emergency based on an **“unusual and extraordinary”** threat to U.S. national security, foreign policy, or the economy, with a source at least partly **outside** the United States; and
  - specifying the kinds of transactions that may be investigated, regulated, or prohibited (including foreign exchange and certain transfers of credit or payments involving foreign interests).
- The presence of **criminal penalties** for willful violations of regulations issued under a properly limited delegation does not, by itself, violate the nondelegation doctrine; Congress may make it a crime to willfully violate validly issued regulations and leave implementation details to the Executive.
- In the areas of **foreign affairs and national security**, courts have historically permitted broader discretion to the political branches, and that context supports the constitutionality of IEEPA’s emergency-based sanctions framework.

## Conclusion

In United States v. Dhafir, the Second Circuit held that IEEPA does not violate the nondelegation doctrine even though the President’s sanctions orders and OFAC regulations can be enforced through criminal prosecution for willful violations; the statute’s emergency trigger, foreign-source requirement, and transaction-specific limits supplied sufficient guidance, so the court affirmed the denial of Al Wahaidy’s motion to dismiss and left his conviction based on the Iraq sanctions regime intact.


United States v. Dhafir, 461 F.3d 211 (2006)