Also, we have not had a chance to discuss this draft on findings and purposes. I would hope that the members would stay and do that. I am wondering why in (b) you say that the Congress makes the following declarations, shouldn't that be in purpose? Mr. MAJAK. The items that follow are a combination of purposes and policies. So rather than saying that we confine the phrase to declarations-I must say that this is the phrase used in the Export Administration Act, which we used as a model here. Mr. BINGHAM. It means that the Congress declares to authorize and enable the President? Mr. MAJAK. You are right, the format in the Export Administration Act does not begin at any time with an infinitive. Mr. BINGHAM. I am sorry that I have to leave, but if the gentlemen would please carry on. Mr. CAVANAUGH [presiding]. It is your intention to mark up tomorrow? Mr. BINGHAM. Yes. Mr. MAJAK. Would you like me to go on at this point? Mr. CAVANAUGH. Yes. Mr. MAJAK. I would be prepared to pick up on page 8. I have finished what I had to say about the basic authorities. So turning to page 8, there is a new effort to stipulate that these authorities should not be used for a particular purpose having to do with the first amendment. So we have again provided in a slightly different form restrictions against use of these authorities to regulate or prohibit personal communications, collection, and dissemination of news and what we now call "uncompensated transfers of items of value." Mr. CAVANAUGH. I don't understand what subparagraph (3) conveys. Mr. MAJAK. The existing Trading With the Enemy Act provides that after a war is concluded, the Trading With the Enemy Act shall not be used to prohibit the donation of articles to the country with whom the war was fought, items for humanitarian purposes, relief. Items such as food and clothing, and medicine are specified. That provision has been used rather loosely and carried over into exercise of these authorities in times of national emergencies. So, ordinarily, when Presidents have exercised those authorities in national emergencies, they have also allowed certain items to be traded. Therefore, financial transactions do occur with respect to those items which are to be provided on a charitable basis, such as clothing, medicine, and food. That humanitarian exemption, however, has been narrowly interpreted so that, for example, when the American Friends Service Committee a year ago wanted to donate some fishnets to fishermen in Vietnam, they were not allowed to do so. Their license to do so was disapproved on grounds that those fishnets were not humanitarian items, and would contribute to the economy of Vietnam. We, therefore, define the humanitarian exemptions somewhat more narrowly, at least at the staff level. We feel that it is appropriate. We think, in fact, that there ought to be provisions for reasonable contributions of any kind of items of value, despite the other controls that might exist on a national basis. We have been groping for ways to provide that. So our subitem 3 here attempts to define a category of goods which could be transferred on a charitable basis, that is, with no compensation. The other restrictions that would apply could not be used to stop such transactions. Mr. WHALEN. What is the (b) in response to, the portion of Mr. MAJAK. That is on the basis of concern by the administration, I believe well founded, that if Americans were allowed to provide charitable contributions to a country that was otherwise controlledpresumably a country that might have a hostile government, that was hostile to the United States in some way-people from that country might also come under pressure by their government to elicit contributions from the United States. Foreign governments might even threaten their citizens with punishment if they did not seek contributions from the United States. Mr. WHALEN. Simply those citizens of those countries who may have relatives in the United States. Mr. MAJAK. Yes, and who may be put under pressure to seek contributions. Mr. WHALEN. Wouldn't the word "against" here be better than "on." Mr. MAJAK. Yes. Mr. CAVANAUGH. "Against the proposed recipients?" Mr. WHALEN. I just raised the question. I am not a grammarian. Mr. CAVANAUGH. Against the donor. Mr. MAJAK. The pressure would be put upon the recipient who would, then, appeal to his family in the United States, for example, to send contributions. suppose I should point out, and I am sure that the administration will when they comment on this exemption, that this would allow even uncompensated transfers of money. Again, we feel that with these opportunities for Presidential determinations, even reasonable transfers of money would not be prohibited on a person-to-person basis. Mr. CAVANAUGH. Another problem with this section is (b)(1). Maybe you could verbalize for me what that envisions allowing? Mr. MAJAK. It envisions allowing Mr. CAVANAUGH. Interference with the delivering of the mails, is that wiretapping? Mr. MAJAK. On the contrary, I think that it would militate against such monitoring, although the phrase which reads "would not involve the transfer of anything of value" would suggest that there would have to be a way of knowing whether a communication did or did not transfer something of value. Mr. CAVANAUGH. Let me ask you this. If the communication did involve the transfer of anything of value, does this, then, confer authority upon the President to authorize interception of postal communications or wiretapping? Mr. MAJAK. I think that it would be interpreted that way. Mr. CAVANAUGH. Other electronic surveillance, outside of other procedures. Mr. MAJAK. I don't know about other electronic surveillance, but I would think that it would be interpreted to permit interruption of the mails. Indeed, our understanding of the current usage of the Trading + With the Enermy Act is that it is done in any case with the current authorities. Mr. SANTOS. May I note for a minute that the Constitution continues to apply even when Congress passes an act, and it has been interpreted, I understand, to preclude wiretapping except under court order, and other circumstances of that sort. This, of course, is a complex subject. I don't mean to specify here what the scope of the constitutional restrictions are, but they would continue to apply. If the President were acting on this, it would be governed by those restrictions. I might add that my understanding of 5(b) in this area has been that the mails have not been opened in the absence of a court order or administrative order. Mr. CAVANAUGH. So, your answer would be, no, this does not confer new, unique, extra authority upon the President with the exception of the restriction that would be involving the transfer of a thing of value. But the other legal requirements for interception of these communications would apply. Mr. SANTOS. This language is somewhat new to me, Mr. Cavanaugh, but my understanding is that if the administrator of this law has evidence that something does involve transfer of anything of value, he may, in fact, prevent postal, telegraphic, telephonic, or other personal communications. The question of how he obtains that evidence, if it were by legal or illegal means, would be something that the person would have to raise either with the agency or with the courts. Mr. CAVANAUGH. My concern is what kind of authority are we conferring. Mr. SANTOS. Someone has pointed out to me that this language certainly does limit existing authority under 5 (b). Mr. MAJAK. The other case which arises, in the example of the Vietnam embargo, is that, for a time at least, intermittently all mails to Vietnam were interrupted. It was our understanding that this may have been due, in part, to the fact that U.S. postal assets could not be transferred to Vietnamese postal authorities for the purposes of delivering U.S. mail to Vietnam. That is, as we understand it, the way a country is compensated for delivering the mail from one country to another. The mail presumably goes from New York to Hong Kong. Then before it is delivered to Vietnam for final delivery, Vietnam goes to the International Postal Union, and presumably collects a portion of the postage for its part of the delivery. There was, apparently, some interruption of the transfer of assets from the U.S. Postal Service to the Vietnamese postal service which, at least at times, seemed to hold up the mails. This would be intended, I think, to prohibit these asset controls from being used in that way, which would really have the effect of stopping all mails to a country against which there would be transaction controls. Mr. SANTOS. I would like to note, again for your information, the history of the embargo against Rhodesia, which is not carried on under 5(b), but is carried under the United Nations participation. I would note a recent security council resolution which requires the closing of the Rhodesian Information Office here in the United States. That is presumably a function that would come in under No. 2. The United States cannot interfere with first amendment rights, but it can prevent the transfer of funds that would permit that information office to stay in existence. I would doubt that actions such as those would be carried out under 5 (b). That could not be done. Mr. WHALEN. This, however, would not permit Americans to contribute funds to the Rhodesian Information Office. Mr. SANTOS. I think that is correct. What I am trying to point out here is that the kind of power that has been ordered to be done, the kind of actions that have been in effect authorized by the Security Council to be carried out by the U.S. Government with respect to Rhodesia, admittedly under another power, would not be possible under this section. Mr. MAJAK. Section 205-I think there have been no significant changes in the consultation of report provision over the earlier staff draft. We have, on page 10, pointed out Mr. CAVANAUGH. Why does it read "every possible instance," rather than "every instance?" Mr. MAJAK. I think that one could visualize instances where it would not be possible to consult before the exercise of authorities. For example, in the case of a sudden attack upon the United States. This phrase has been used in other statutes, although I don't necessarily consider that to be a justification. But I think that we used the word "possible" because clearly there could be circumstances where it would not be feasible for a President to consult in advance. On page 11, we are providing for the first time Mr. CAVANAUGH. I had another question on page 9, subsection (4), "advises that the actions he proposes to take under this title deal with those circumstances." Is that language, then, to be read as restrictive of that report, that the President would be precluded from taking actions other than those that he proposes in that report? Mr. MAJAK. There is no such implication. We discussed that particular usage, and what is proposed there, I think, reflects the situation where the President would be consulting with respect to actions that he was about to take. Mr. WHALEN. Isn't that language really similar to section 3 of the War Powers Resolution Act? Mr. MAJAK. It is very similar to war powers, but there is no indication there that congressional approval would be required on the actions that he was proposing to take, or was taking, unless, of course, we came to matters of veto of regulations, and so forth, which might make that possible. However, as the draft currently exists, the only implication there is, I think, he would be consulting with Congress at that point. On page 11, section 207, for the first time the recommendation provides for civil penalities for violation of these restrictions. TITLE III Title 3, again, is very similar to the earlier staff draft. It transfers to the Export Administration Act some authority which is necessary, but is used more in relation with the Export Administration Act than under this act-namely, the extension of transaction controls, extraterritorial actions. This about wraps it up. Mr. CAVANAUGH. I did have one other question back on page 7, subsection 3, the first sentence of that. I don't understand it. Mr. MAJAK. I am going to ask Mr. Santos to explain that. It has to do with suits of individuals who freeze assets. Mr. SANTOS. As I understand it-this language, by the way, very similar to language now contained in section 5(b)-the purpose of this language was to, shall we say, hold harmless individuals acting pursuant to Government authority when they freeze the bank account of a particular individual. This section would presumably protect the bank which acted pursuant to a freezing order from being sued by persons claiming that they had no authority to do so. It was intended, in a sense, to provide immunity, assuming that the actions were taken under regulations issued by the Government. When I use the term immunity, I don't mean to say they could not be sued, but this would provide them with an adequate defense to any action. Taking a specific example, if a bank in the United States were ordered to freeze the accounts of all Cuban nationals, and a Cuban national came to the bank and said: "According to our contract, I am permitted to withdraw all the funds. Please deliver them." The bank could say: "I am sorry. I cannot do so. We have been ordered to freeze your account." This section would prevent any successful suit against that bank by the foreign national. Mr. CAVANAUGH. This would absolve one of criminal liability as well as civil liability? Mr. SANTOS. I would assume that it would cover both criminal and civil penalties. In most instances, it would not be a criminal penalty. It would presumably be some sort of civil suit. The criminal penalty would only arise in the case of the violation of some law. What we are talking about here is a remedy by one individual against another. Mr. CAVANAUGH. That is not clear, though. This is a blanket absolution for anything done in connection-I would think that this could be much better stated to arrive at the purposes. Mr. SANTOS. I would not argue on that point. It is an adoption of the language of 5 (b), as you have seen in other instances the language of 5(b) is very broad. Mr. CAVANAUGH. It is not only broad, it is not understandable. Mr. CAVANAUGH. I really don't think that we should have something that is incomprehensible. Mr. MOHRMAN. Wouldn't it be true anyway, that if someone is directed by the Government to do something, he could not be held liable for his compliance? Mr. SANTOS. It might depend on the contract. Mr. MAJAK. Banks have to use a lot of discretion in carrying out the requirements of the regulations. For example, you will recall, Mr. Whalen, when the Vietnamese embargo was imposed, the accounts, of all Vietnamese nationals in this country were directed to be frozen. Chase Manhattan, or somebody, froze, among other things, the accounts of the Vietnamese diplomatic mission to the United Nations. So |