Sacks v. Office of Foreign , 466 F.3d 764 ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BERTRAM SACKS, 
Plaintiff-Appellant,
v. No. 04-36136
OFFICE OF FOREIGN ASSETS
CONTROL, United States  D.C. No.
CV-04-00108-JLR
Department of the Treasury;
RICHARD NEWCOMB, Director,
Office of Foreign Assets Control,
Defendants-Appellees.

BERTRAM SACKS, 
Plaintiff-Appellee,
v. No. 05-35001
OFFICE OF FOREIGN ASSETS
CONTROL, United States  D.C. No.
CV-04-00108-JLR
Department of the Treasury;
OPINION
RICHARD NEWCOMB, Director,
Office of Foreign Assets Control,
Defendants-Appellants.

Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding
Argued and Submitted
July 24, 2006—Seattle, Washington
Filed October 10, 2006
Before: J. Clifford Wallace, Kim McLane Wardlaw, and
Raymond C. Fisher, Circuit Judges.
17319
17320 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
Opinion by Judge Wardlaw
17322 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
COUNSEL
Donald B. Scaramastra (argued) and Gary D. Swearingen,
Garvey Schubert Barer, Seattle, Washington, for appellant/
cross-appellee Bertram Sacks.
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17323
H. Thomas Byron III (argued) and Douglas Letter, Depart-
ment of Justice, Washington, DC, for appellees/cross-
appellants Office of Foreign Assets Control.
Kenneth S. Kagan, Carney Badley Spellman, P.S., Seattle,
Washington, for amicus curiae Washington Physicians for
Social Responsibility.
OPINION
WARDLAW, Circuit Judge:
These consolidated cross-appeals arise from a challenge to
the pre-2003 United States sanctions prohibiting both travel to
and the unlicensed donation of humanitarian medical supplies
to Iraq. We affirm the district court’s decision that Bertram
Sacks has standing to challenge the ban on travel and that the
travel ban regulation was validly promulgated. Sacks fails,
however, to demonstrate a concrete and imminent likelihood
that he will be penalized for violations of the restriction on
medical donations. Therefore, his challenge to the restriction
on medical donations does not fulfill the constitutional
requirements of standing and ripeness. We also affirm the dis-
trict court’s holding that the Office of Foreign Assets Control
(OFAC) regulation in effect at the time prohibited the govern-
ment from referring Sacks’s unpaid penalty to a private col-
lection agency.
I. BACKGROUND
Bertram Sacks traveled to Iraq nine times between 1990
and 2003 in violation of sanctions the United States imposed
against Iraq following the 1990 invasion of Kuwait. Accord-
ing to Sacks’s Amended Complaint, the twelve years of
United States and United Nations sanctions were a dire time
for Iraqi civilians, marked by malnutrition, high rates of infant
17324 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
and child mortality, and shortages of medicine.1 Sacks, and an
advocacy group called Voices in the Wilderness (Voices),
opposed these sanctions on humanitarian grounds. In an effort
to draw attention to the effect of the sanctions, Sacks and
other Voices members traveled to Iraq repeatedly while the
sanctions were in effect, bringing with them medicine and
medical supplies for which they had failed to procure an
export license. They did so in knowing violation of the United
States regulations prohibiting travel and the sending of unli-
censed humanitarian donations to Iraq. Sacks has been
assessed a penalty by the federal government for one violation
arising from these trips, and he seeks relief from enforcement
of that penalty.
A. Iraqi Sanctions
To place this case in context, it is necessary to review the
history of the Iraqi sanctions regime. On August 2, 1990, one
day after Saddam Hussein’s armies invaded Kuwait, President
George H.W. Bush issued Executive Order 12,722, which
declared a national emergency and imposed sweeping prohi-
bitions on numerous economic and social transactions with
1
In support of his claims, Sacks cites, among other documents, the fol-
lowing sources: UNICEF, The Situation of Children in Iraq 20 (2003),
available at http://www.unicef.org/publications/index_4439.html (review-
ing data on increased infant and child mortality during the sanctions
regime period and concluding that “most of the children who are dying in
Iraq are dying from preventable illness”); UNICEF, Iraq’s Children: A
Lost Generation 3 (2001), available at http://www.scn.org/ccpi/
UnicefMay2001.html (“Mounting evidence shows that the sanctions are
having a devastating humanitarian impact on Iraq.”); Marc Bossuyt, U.N.
Econ. & Soc. Council, The Adverse Consequences of Economic Sanctions
on the Enjoyment of Human Rights ¶¶ 63-67 (June 21, 2000), available at
http://www.globalpolicy.org/security/sanction/unreports/bossuyt.htm
(“[T]he sanctions upon Iraq have produced a humanitarian disaster compa-
rable to the worst catastrophes of the past decades. . . . Owing to the lack
of medical supplies, it was estimated that, by 1997, 30 per cent of hospital
beds were out of use, 75 per cent of all hospital equipment did not work
and 25 per cent of Iraq’s 1,305 health centres were closed.”).
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17325
Iraq. 55 Fed. Reg. 31,803 (Aug. 2, 1990). Four days later, the
United Nations Security Council passed Resolution 661,
which called on all Member States to prevent their nationals
from engaging in economic and financial transactions with
Iraq except for humanitarian donations of food and medical
supplies. Prohibited activities included:
(c) The sale or supply by their nationals or from their
territories or using their flag vessels of any commod-
ities or products, including weapons or any other
military equipment, whether or not originating in
their territories but not including supplies intended
strictly for medical purposes, and, in humanitarian
circumstances, foodstuffs, to any person or body in
Iraq or Kuwait . . . and any activities by their nation-
als or in their territories which promote or are calcu-
lated to promote such sale or supply of such
commodities or products;
S.C. Res. 661, ¶ 3, U.N. Doc. S/RES/661 (Aug. 6, 1990). Fol-
lowing passage of this resolution, President Bush replaced the
earlier Executive Order with Executive Order 12,724, a more
thorough and detailed set of sanctions, which likewise
included an exception for humanitarian donations of food and
medicine. It prohibited, among other things:
(b) The exportation to Iraq . . . , directly or indi-
rectly, of any goods, technology . . . or services
either (i) from the United States, or (ii) requiring the
issuance of a license by a Federal agency, or any
activity that promotes or is intended to promote such
exportation, except donations of articles intended to
relieve human suffering, such as food and supplies
intended strictly for medical purposes;
(d) Any transaction by a United States person
relating to travel by any United States citizen or per-
manent resident alien to Iraq, or to activities by any
17326 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
such person within Iraq, after the date of this order,
other than transactions necessary to effect (i) such
person’s departure from Iraq, (ii) travel and activities
for the conduct of the official business of the Federal
Government or the United Nations, or (iii) travel for
journalistic activity by persons regularly employed
in such capacity by a news-gathering organization;
55 Fed. Reg. 33,089, 33,089 (Aug. 9, 1990). For the Presi-
dent’s authority to impose these sanctions, Executive Order
12,724 relied upon the International Emergency Economic
Powers Act, 50 U.S.C. §§ 1701 et seq., and the United
Nations Participation Act, 22 U.S.C. § 287c. 55 Fed. Reg. at
33,089. The Executive Order also made clear that the sanc-
tions described therein could be modified or limited by future
regulation, and authorized the Treasury Secretary to promul-
gate whatever regulations were necessary to carry out its pro-
scriptions. Id.
A month after its initial resolution on Iraq, the United
Nations Security Council became concerned that the Iraqi
government was diverting donated humanitarian food and
medical supplies to its military. U.N. SCOR, 4th Sess., 2939th
mtg. at 12-13, 19, 25, U.N. Doc. S/PV.2939 (Sept. 13, 1990).
It therefore passed a new resolution recommending, among
other steps to be taken, “that medical supplies should be
exported under the strict supervision of the Government of the
exporting State or by appropriate humanitarian agencies.”
S.C. Res. 666, ¶ 8, U.N. Doc. S/RES/666 (Sept. 13, 1990).
When the United States Congress engaged the issue that
November, it authorized the President to continue the
embargo and sanctions embodied in Executive Order 12,724,
but also required that transactions involving “foodstuffs . . .
exempted ‘in humanitarian circumstances’ ” be conducted
pursuant to the later Security Council Resolution, Resolution
666. Iraq Sanctions Act of 1990, Pub. L. No. 101-513, 104
Stat. 1979, 2048 (1990).
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17327
In January 1991, OFAC, an agency within the Department
of Treasury responsible for coordinating international sanc-
tions, published a final rule in the Federal Register establish-
ing the Iraqi Sanctions Regulations (the Iraqi Sanctions). 56
Fed. Reg. 2112-01 (Jan. 18, 1991) (codified at 31 C.F.R.
§§ 575.101 et seq.). These regulations included the two at
issue here: 31 C.F.R. § 575.207, which prohibited all United
States persons from conducting “any transaction relating to
travel by any U.S. citizen or permanent resident alien to Iraq,
or to activities . . . within Iraq,” except for journalists, United
States or United Nations officials, and those assisting Ameri-
can citizens or permanent residents to flee Iraq (the Travel
Ban); and 31 C.F.R. § 575.205, which banned the export of
goods, services, and technology to Iraq but retained an excep-
tion for “donated foodstuffs in humanitarian circumstances,
and donated supplies intended strictly for medical purposes,
the exportation of which has been specifically licensed” (the
Medicine Restrictions). OFAC also established a licensing
program to enable humanitarian donations of food and medi-
cal supplies, id. §§ 575.501, 575.520, 575.521, repealed by 68
Fed. Reg. 61,362, 61,363 (Oct. 28, 2003), and a process for
assessing penalties against those who violated the sanctions,
id. §§ 575.701-705. The Iraqi Sanctions remained in place
until, soon after the American-led invasion of Iraq in 2003,
the United Nations lifted all non-weapons trade restrictions
against Iraq, S.C. Res. 1483, ¶ 10, U.N. Doc. S/RES/1483
(May 22, 2003), and OFAC issued a general license permit-
ting all Iraq-related transactions that previously had been pro-
hibited, including unlicensed humanitarian donations, 68 Fed.
Reg. 38,188, 38,189 (June 27, 2003) (codified at 31 C.F.R.
§ 575.533).
B. Assessment of the Penalty
Following a highly-publicized November 1997 humanitar-
ian trip to Iraq in which Sacks participated, OFAC issued
Sacks a Prepenalty Notice, pursuant to 31 C.F.R. § 575.702.
The Prepenalty Notice accused Sacks, other individuals, and
17328 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
Voices of violating the Iraqi Sanctions.2 In its Violations sec-
tion, the Prepenalty Notice described “your and [Voices]’
exportation of donated goods, including medical supplies and
toys, to Iraq absent specific prior authorization by OFAC.” It
then listed ten specific violations. Six of these violations
accused Voices of exporting medical supplies and/or other
goods “absent prior specific license or other authorization.”
Sacks was individually charged with only one violation:
6. Between on or about November 21-30, 1997,
Messrs. Handleman, Mullins, Sacks and Zito
engaged in currency travel-related transactions to/
from/within Iraq absent prior license or other autho-
rization from OFAC. These currency transactions
included, but are not limited to, the purchase of food,
lodging, ground transportation, and incidentals;
The Prepenalty Notice proposed a $10,000 penalty for
Sacks and the other individuals described in the sixth charge,
and a $120,000 penalty for Voices ($20,000 for each of the
six violations). It further provided Sacks an opportunity to
respond to the charges in writing, which he did. Although he
was individually charged only with violating the Travel Ban,
in his written response Sacks admitted that he had violated the
Medicine Restrictions, as well as the Travel Ban, stating,
“You are correct to say in your prepenalty letter (12/3/98) that
I brought medical supplies and toys to Iraq absent prior
OFAC approval.” Although he did not explicitly address the
travel charge, the statement that he “brought medical supplies
and toys to Iraq” is an implied admission that he had traveled
to Iraq.
Three-and-a-half years later, OFAC issued Sacks a formal
Penalty Notice, which described his prior admission ambigu-
2
It appears from the record that a single Prepenalty Notice was issued
to Sacks and the other named individuals. Presumably, a separate Pre-
penalty Notice was issued to Voices.
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17329
ously: “You admitted the Notice’s allegation in Count 6 that
you exported goods to Iraq absent prior OFAC approval.” Cit-
ing his willful violation of the Iraqi Sanctions, OFAC
imposed the full $10,000 penalty against him and demanded
that it be paid within thirty days. When Sacks did not pay the
penalty, he received a letter in August 2003 from the Ocwen
Federal Bank, which sought to collect the debt — $13,767.08
including interest and late fees — on behalf of the United
States Department of Treasury.
C. Procedural History
Seeking to prevent collection of the penalty, Sacks brought
suit in the United States District Court for the Western Dis-
trict of Washington against OFAC and its director, Richard
Newcomb (collectively, OFAC). He sought declaratory and
injunctive relief on the theory that the Medicine Restrictions
and the Travel Ban lacked statutory authority and violated
principles of international law. Sacks also alleged that
OFAC’s claims against him were time-barred. The district
court granted OFAC’s motion to dismiss, holding that the
Travel Ban was validly promulgated and enforceable; that,
regardless of whether Sacks had standing to challenge the
Medicine Restrictions, they too were validly promulgated;
that international law did not render these regulations uncon-
stitutional; and that enforcement of the penalty was not time-
barred. However, the court held that OFAC was prohibited by
its own regulations from referring the unpaid penalty to a col-
lection agency.
Sacks appeals the district court’s dismissal only on the
ground that the two regulations were invalidly promulgated.3
3
Sacks does not appeal the district court’s ruling that enforcement of the
penalty is not time-barred. Sacks disclaims on appeal the argument that
international law forbids the President from placing limits on humanitarian
medical donations. Instead, he posits that the international treaties and
conventions he cites were background principles that Congress intended
to codify when it limited the President’s emergency authority in the Inter-
national Emergency Economic Powers Act of 1977. We discuss this argu-
ment below.
17330 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
OFAC cross-appeals the district court’s determination that it
could not use an outside collection agency to collect the pen-
alty and was required to refer the penalty to the Department
of Justice for collection in a federal civil suit. We have juris-
diction over these consolidated appeals pursuant to 28 U.S.C.
§ 1291, and we now affirm.
II. STANDARD OF REVIEW
We review de novo a district court’s grant of a defendant’s
motion to dismiss. See Decker v. Advantage Fund, Ltd., 362
F.3d 593, 595-96 (9th Cir. 2004). Standing is a question of
law reviewed de novo, see S.D. Myers, Inc. v. City and
County of San Francisco, 253 F.3d 461, 474 (9th Cir. 2001),
as are challenges that an agency’s regulations exceed its statu-
tory authority, see Perez-Martin v. Ashcroft, 394 F.3d 752,
757 (9th Cir. 2005). On cross-appeal, we review the district
court’s interpretation of OFAC’s enforcement regulation de
novo, according deference to OFAC’s interpretation of its
own regulations so long as that interpretation is not plainly
erroneous or inconsistent with the regulation. See League of
Wilderness Defenders/Blue Mountains Biodiversity Project v.
Forsgren, 309 F.3d 1181, 1183 (9th Cir. 2002).
III. STANDING
[1] Sacks challenges two provisions within the Iraqi Sanc-
tions: the Travel Ban and the Medical Restrictions. We must
first determine whether he has standing to assert these claims.
“[S]tanding is a threshold question which we must resolve
before proceeding to the merits.” Los Angeles County Bar
Ass’n v. Eu, 979 F.2d 697, 700 (9th Cir. 1992). This principle
is grounded in the “case or controversy” requirement of Arti-
cle III of the United States Constitution: If Sacks suffered no
injury-in-fact caused by the Travel Ban or Medicine Restric-
tions themselves, then any opinion we render on that provi-
sion would be merely advisory. See Scott v. Pasadena Unified
Sch. Dist., 306 F.3d 646, 654 (9th Cir. 2002).
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17331
The requirements of Article III standing are well-
established:
[A] plaintiff must show (1) it has suffered an “injury
in fact” that is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical;
(2) the injury is fairly traceable to the challenged
action of the defendant; and (3) it is likely, as
opposed to merely speculative, that the injury will be
redressed by a favorable decision.
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),
Inc., 528 U.S. 167, 180-81 (2000). Article III standing
requires the plaintiff to establish standing for each challenge
he wishes to bring and each form of relief he seeks. See id.To survive a Rule 12(b)(6) motion to dismiss, Sacks must
allege facts in his Amended Complaint that, if proven, would
confer standing upon him. Warren v. Fox Family Worldwide,
Inc., 328 F.3d 1136, 1140 (9th Cir. 2003); see also Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992) (noting that,
at this stage, “general factual allegations of injury resulting
from the defendant’s conduct may suffice”). Therefore, we
must determine whether Sacks’s Amended Complaint identi-
fies an injury caused by each of the two regulations that is
both concrete and actual or imminent.
A. Travel Ban
[2] Sacks has standing to challenge the Travel Ban and the
government does not contend otherwise. The Prepenalty
Notice that explained the charge against him explicitly men-
tioned his violation of the prohibition on travel to and
currency-related travel transactions within Iraq. Where the
“plaintiff is himself an object of the action (or forgone action)
at issue . . . there is ordinarily little question that the action
or inaction has caused him injury, and that a judgment pre-
venting or requiring the action will redress it.” Lujan, 504
U.S. at 561-62. The government, through the Ocwen Federal
17332 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
Bank, now seeks to collect a civil penalty from Sacks for vio-
lating the Travel Ban. A civil fine is a pecuniary injury, and
“[p]ecuniary injury is clearly a sufficient basis for standing.”
Cent. Ariz. Water Conserv. Dist. v. EPA, 990 F.2d 1531, 1537
(9th Cir. 1993) (internal quotation marks omitted).
B. Medicine Restrictions
[3] Sacks challenges only the facial validity of the restric-
tions on unlicensed medical donations, and not the application
of the licensing regime. Sacks concedes that he did not apply
for an OFAC license to donate humanitarian medical supplies
to Iraq, as 31 C.F.R. § 575.521 allowed. We clarified in
United States v. Hugs that a plaintiff’s failure to apply for an
available permit precludes him from challenging the operation
of the permitting scheme but not the facial validity of the stat-
ute or regulations. 109 F.3d 1375, 1378 (9th Cir. 1997). Sacks
therefore lacks standing to challenge the operation of the
licensing regime but is not prohibited under Hugs from
facially challenging the Medicine Restrictions.
Sacks cites three reasons why he satisfies the injury-in-fact
requirement as to the Medicine Restrictions: (1) he has been
actually punished for violating the Medicine Restrictions; (2)
he will be called upon to pay the penalties assessed against
Voices; and (3) he legitimately fears future prosecution for
openly violating the Medicine Restrictions. We find none of
these to be persuasive.
[4] Sacks contends that his 2003 penalty was assessed for
violation of the Medicine Restrictions. We disagree. OFAC’s
treatment of Sacks indicates its belief that penalties were
assessed only for the Travel Ban violation. The Penalty
Notice, while confusing, expressly references “Count 6” of
the earlier Notice, which referred only to the Travel Ban.
Moreover, it was reasonable for OFAC to treat Sacks’s admis-
sion that he “brought” medical supplies to Iraq as an admis-
sion that he traveled to Iraq. As Sacks concedes, bringing
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17333
medical supplies to Iraq can be accomplished only by travel-
ing to that country to deliver them. Finally, the $10,000 pen-
alty ultimately levied against Sacks was consistent with those
proposed in the Penalty Notice for violating the Travel Ban;
in contrast, the proposed penalties for violating the Medicine
Restrictions were $20,000 per violation. Therefore, we con-
clude that Sacks was not penalized for violating the Medicine
Restrictions.
[5] Nor does Sacks’s status as a member of Voices expose
him to liability for the penalties assessed against the organiza-
tion so as to confer standing. Sacks does not suggest that he
has third-party standing to challenge the Medicine Restric-
tions on Voices’s behalf; indeed, Voices has already chal-
lenged the penalties assessed against it. See Office of Foreign
Assets Control v. Voices in the Wilderness, 329 F. Supp. 2d
71 (D.D.C. 2004). More importantly, nothing in the Amended
Complaint or in the record indicates that Sacks has any finan-
cial responsibility for Voices’s fine; that action against him
has been initiated or is imminent; or even that OFAC has ever
turned to individual group members of an unincorporated
organization to collect civil fines against the organization.
Therefore, Sacks’s mere membership in a penalized organiza-
tion does not create a “ ‘realistic danger of [his] sustaining a
direct injury as a result of the statute’s operation or enforce-
ment.’ ” LSO, Ltd. v. Stroh, 205 F.3d 1146, 1154 (9th Cir.
2000) (quoting Babbitt v. United Farm Workers Nat’l Union,
442 U.S. 289, 298 (1979)).
[6] Finally, Sacks does not face imminent, or even likely,
prosecution for violating the Medicine Restrictions. It is true
that the Executive Order terminating the “national emergen-
cy” in Iraq explicitly reserved the government’s right to bring
proceedings based on acts in violation of the sanctions com-
mitted before the sanctions expired. Exec. Order No. 13,350,
69 Fed. Reg. 46,055, 46,055 (July 29, 2004). Therefore, Sacks
theoretically may be subject to penalties for taking medicine
17334 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
to Iraq, even though the United States has allowed humanitar-
ian medical donations to Iraq since May 2003.
However, while it is well-established that an individual
need not await prosecution under a law or regulation before
challenging it, see Babbitt, 442 U.S. at 298; Canatella v. Cali-
fornia, 304 F.3d 843, 852 (9th Cir. 2002) (as amended), we
require a “genuine threat of imminent prosecution” and not
merely an “imaginary or speculative fear of prosecution.” San
Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121,
1126 (9th Cir. 1996) (internal quotation marks omitted).
The requirement that a fear of prosecution be fairly certain
to confer standing on the plaintiff is informed by the same
considerations as the doctrine of ripeness. The ripeness
requirement aims to “prevent the courts, through avoidance of
premature adjudication, from entangling themselves in
abstract disagreements.” Abbott Laboratories v. Gardner, 387
U.S. 136, 148 (1967), abrogated on other grounds by Caifano
v. Sanders, 430 U.S. 99 (1977). As we have previously
observed, “the constitutional component of the ripeness
inquiry . . . , in many cases, . . . coincides squarely with stand-
ing’s injury in fact prong.” Thomas v. Anchorage Equal
Rights Comm’n, 220 F.3d 1134, 1138 (9th Cir. 2000) (en
banc). Therefore, we employ the same test to determine if a
plaintiff has established standing based on a fear of prosecu-
tion that we use to determine if a case or controversy is suffi-
ciently ripe.
In evaluating the genuineness of a claimed threat of
prosecution, we look to whether the plaintiffs have
articulated a “concrete plan” to violate the law in
question, whether the prosecuting authorities have
communicated a specific warning or threat to initiate
proceedings, and the history of past prosecution or
enforcement under the challenged statute.
See id. at 1139 (citing San Diego County Gun Rights Comm.
98 F.3d at 1126-27). Whether viewed through the lens of
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17335
standing or ripeness, Sacks’s challenge to the Medicine
Restrictions is not justiciable.
Sacks has established two of the requisite elements required
to survive the motion to dismiss on standing or ripeness
grounds. He had more than a “concrete plan” to violate the
Medicine Restrictions; he admits that he actually did violate
them on a number of occasions. See Jacobus v. Alaska, 338
F.3d 1095, 1105 (9th Cir. 2003). He also alleges that OFAC
has historically targeted other alleged violators of the Medi-
cine Restrictions, including Voices. Because, on review of a
district court’s Rule 12(b)(6) dismissal, we assume all facts
alleged in the Amended Complaint are true, see Bassidji v.
Goe, 413 F.3d 928, 930 (9th Cir. 2005), these allegations are
sufficient to satisfy the first two elements.
Sacks’s fear of prosecution runs aground on the govern-
ment’s decision to charge and penalize him for only the viola-
tion of the Travel Ban and not for the Medicine Restrictions
violation. In Jacobus v. Alaska, we similarly confronted a
plaintiff who feared future prosecution under a repealed stat-
ute. The plaintiffs in Jacobus had knowingly violated Alaska
campaign finance laws capping contributions to political par-
ties and volunteer professional services to campaigns. 338
F.3d at 1101. In the wake of a district court ruling against the
state, the Alaska legislature revised its campaign finance laws
to remove the offending provisions, but the state continued to
argue their legality on appeal. The Alaska Public Offices
Commission (APOC) then wrote Jacobus indicating that “if
the law were upheld it reserved the right to prosecute any past
violations” he had committed, “although it would not pursue
any enforcement action during the pendency of the litigation.”
Id. at 1104. We held that Jacobus faced a genuine threat of
imminent prosecution because even though “the letter sent to
Jacobus does not threaten to initiate enforcement proceedings
in so many words, it indicates that APOC is only awaiting the
outcome of the litigation to initiate such proceedings.” Id. at
1105.
17336 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
Sacks is in a materially different position than the Jacobus
plaintiffs. Contrary to Sacks’s contention, the government’s
decision to penalize him for only the Travel Ban violation,
when it was fully aware he had also violated the Medicine
Restrictions, indicates that the government does not intend to
penalize him for any of his numerous violations of the Medi-
cine Restrictions. OFAC has not taken the step it normally
would take to express its intent to penalize Sacks and thus
preserve its right to do so, by sending him a prepenalty notice.
The Amended Complaint is devoid of any allegations suggest-
ing that OFAC has communicated an intent to punish him fur-
ther.
[7] To demonstrate the requisite “specific warning or threat
to initiate proceedings,” Thomas, 220 F.3d at 1139, Sacks
points only to a footnote in OFAC’s Motion to Dismiss that
reads: “Although OFAC has not yet acted in response to
Plaintiff’s eight other trips to Iraq, it reserves the right to do
so in the future.” While this language is similar to the lan-
guage used by the agency in Jacobus, that alone does not
demonstrate that prosecution is imminent. First and foremost,
unlike the agency in Jacobus, which could not bring charges
against the plaintiff because the relevant law had been
declared unconstitutional by the district court, nothing has
prevented OFAC from charging Sacks under the Medicine
Restrictions over the last decade. OFAC’s declination to
charge him for the Medicine Restrictions violations during the
last eight years, therefore, is a strong indication of its lack of
intent to do so in the future. Furthermore, the footnote Sacks
relies on to demonstrate the threat of prosecution does not
mention the Medicine Restrictions at all, but rather references
his violation for engaging in travel-related transactions.
Therefore, Sacks has failed to demonstrate any specific threat
of prosecution for violations of the Medicine Restrictions. See
Friends of the Earth, 528 U.S. at 180 (noting that Article III
requires plaintiff’s injury to be “actual or imminent, not con-
jectural or hypothetical”).
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17337
Moreover, it is not clear from the Amended Complaint that
OFAC could still bring charges against Sacks for violating the
Medicine Restrictions. The relevant statute of limitations for
the government to bring proceedings enforcing a civil penalty
is five years from the date of the act. See 28 U.S.C. § 2462.
A plaintiff’s standing is evaluated as of the date the complaint
was filed, in this case January 14, 2004. See Bernhardt v.
County of Los Angeles, 279 F.3d 862, 868 (9th Cir. 2002).
The Amended Complaint does not allege that Sacks violated
the Medicine Restrictions after January 14, 1999. The alleged
violations are thus likely time-barred, diminishing any threat
of prosecution that would have supported standing at the out-
set of this suit. Moreover, even if Sacks had more recently
violated the Medicine Restrictions, it is quite possible that the
statute of limitations on those violations has also passed, ren-
dering his fears of prosecution moot. See Jacobus, 338 F.3d
at 1102 (noting that mootness may warrant dismissal where it
is “ ‘absolutely clear that the litigant no longer ha[s] any need
of the judicial protection’ ” he seeks (quoting Adarand Con-
structors, Inc. v. Slater, 528 U.S. 216, 224 (2000))).
[8] Because Sacks fails to allege a concrete and imminent
injury-in-fact caused by the Medicine Restrictions, this claim
is not justiciable both for lack of standing and ripeness. Of
course, should OFAC take action to penalize Sacks for violat-
ing the Medicine Restrictions at a later date, he would then
have standing to challenge their legitimacy. We therefore do
not reach Sacks’s challenge to the district court’s ruling that
the Medicine Restrictions were validly promulgated. See Mus-
tang Marketing, Inc. v. Chevron Products Co., 406 F.3d 600,
606 (9th Cir. 2005) (“Our review is not limited to a consider-
ation of the grounds upon which the district court decided the
issues; the Court can affirm the district court on any grounds
supported by the record.”).
IV. VALIDITY OF THE TRAVEL BAN
Sacks does not challenge OFAC’s basic authority to restrict
travel to Iraq at the President’s direction under the United
17338 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
Nations Participation Act (UNPA). See 22 U.S.C. § 287c(a)
(allowing the President to prohibit rail, sea, and air “commu-
nication” with another country in order to comply with United
Nations directives); Karpova v. Snow, 402 F. Supp. 2d 459,
469 (S.D.N.Y. 2005) (holding that the Iraq Travel Ban is duly
authorized by the UNPA). Instead, he alleges that the Travel
Ban regulation, 31 C.F.R. § 575.207, exceeded the President’s
statutory authority because it indirectly regulated the donation
of humanitarian medical supplies, something Sacks contends
the International Emergency Economic Powers Act (IEEPA)
forbids the President from doing. Because the IEEPA imposes
no such burden on the President’s powers when he acts under
the UNPA, we reject this argument.
[9] The IEEPA grants the President authority to unilaterally
impose regulations on economic transactions between the
United States or its nationals, and foreign countries or their
nationals. 50 U.S.C. § 1702(a)(1). To trigger this authority,
the President must declare a “national emergency” necessi-
tated by an “unusual and extraordinary threat.” Id. § 1701.
However, the President’s power under the IEEPA is con-
strained: It “does not include the authority to regulate or pro-
hibit, directly or indirectly . . . donations, by persons subject
to the jurisdiction of the United States, of articles, such as
food, clothing and medicine, intended to be used to relieve
human suffering,” unless the President determines that such
donations would seriously impair his ability to address the
emergency or would endanger the safety of American combat
forces engaged in hostilities. Id. § 1702(b)(2). The President,
acting under the IEEPA, is also precluded from regulating the
export of postal, telegraphic, telephonic and personal commu-
nications; information or informational materials, including
magazines, photographs, and artwork; and travel to or from a
country. Id. § 1702(b).
As the district court recognized, however, the IEEPA is not
the lone source of the President’s power to enact economic
sanctions. Executive Order 12,724, which instructed the Trea-
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17339
sury Secretary or his designate (OFAC) to promulgate regula-
tions enforcing the economic sanctions against Iraq, derived
its power from both the IEEPA and the UNPA. 55 Fed. Reg.
33,089 (Aug. 9, 1990). OFAC contends that Congress did not
intend the IEEPA’s limits to interfere with the President’s
authority under the UNPA. Our review of the structure and
plain language of the two statutes convinces us that OFAC is
correct.
[10] The economic restrictions authorized by the IEEPA
(and the related limits on that authority) are confined to a par-
ticular circumstance: the declared national emergency. See 50
U.S.C. § 1701(b) (“The authorities granted to the President by
section 1702 of this title may only be exercised to deal with
an unusual and extraordinary threat with respect to which a
national emergency has been declared . . . .”); id. § 1702(b)
(“The authority granted to the President by this section does
not include the authority to regulate [humanitarian aid, travel,
etc.].” (emphasis added)). The IEEPA also requires the presi-
dent to consult with Congress before acting, and to regularly
consult and report to Congress after exercising his authority.
Id. § 1703. By contrast, the UNPA allows the President to
impose sanctions that are more wide-ranging, without any
built-in congressional review and “[n]otwithstanding the pro-
visions of any other law.” 22 U.S.C. § 287c. When called
upon to enforce a Security Council directive, the UNPA
authorizes the President:
to the extent necessary to apply such measures . . .
[to] investigate, regulate or prohibit, in whole or in
part, economic relations or rail, sea, air, postal, tele-
graphic, radio and other means of communication
between any foreign country or national thereof . . .
and the United States or any person subject to the
jurisdiction thereof.
Id. The UNPA thus authorizes the President to take measures
when enforcing a Security Council resolution, such as limit-
17340 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
ing postal communication and air travel, that he could not
take independently by declaring a national emergency.
Sacks’s proposed interpretation would treat Congress’s pas-
sage of the IEEPA in 1977 as a partial sub silentio repeal of
the UNPA. We are reluctant to conclude that a statute has
been repealed without a clear statement from Congress:
“[E]ven when two statutes are in some conflict, repeal is to be
regarded as implied only if necessary to make the latter-
enacted law work, and even then, only to the minimum extent
necessary.” Lujan Armendariz v. INS, 222 F.3d 728, 744 (9th
Cir. 2000) (internal quotation marks and brackets omitted).
[11] We refuse to read Congress’s passage of the IEEPA as
repealing key provisions of the UNPA. Proper functioning of
the IEEPA does not depend on a repealing of the UNPA,
since the two statutes authorize presidential actions in unique,
albeit sometimes overlapping, situations. Reading the statutes
to avoid a conflict maintains the complete viability of both
statutes and is most faithful to Congress’s plain language.
The legislative history of the IEEPA and the UNPA sup-
ports our view. The IEEPA was passed by Congress to
counter the perceived abuse of emergency controls by presi-
dents to unilaterally sanction foreign governments or interfere
with international trade in non-emergency, peacetime situa-
tions. The Senate Committee Report explains:
The bill is a response to two developments: first,
extensive use by Presidents of emergency authority
under section 5(b) of the Trading with the Enemy
Act of 1917 to regulate both domestic and interna-
tional economic transactions unrelated to a declared
state of emergency, and second, passage of the
National Emergencies Act of 1977 which provides
safeguards for the role of Congress in declaring and
terminating national emergencies . . . .
S. Rep. No. 95-466, at 2 (1977), as reprinted in 1977
U.S.C.C.A.N. 4540, 4541. The Senate Report then describes
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17341
the four national emergencies that were in effect in 1976, two
of which had been in place for more than twenty-five years.
Id. at 4541-42.
[12] By contrast, the Senate Report accompanying passage
of the UNPA acknowledged that the statute granted extraordi-
nary powers to the President to enforce United Nations sanc-
tions as quickly as possible, but stated the Committee’s belief
that such powers were necessary to fulfill the United States’s
obligations under the United Nations Charter and make inter-
national sanctions effective. As the House Report states,
The committee realizes that the powers proposed to
be granted to the President under this section are
very great. However, the basic decision in this regard
was made when the Charter was ratified and this
provision is simply a necessary corollary to our
membership in this Organization [the U.N.]. The
committee also believes that the Security Council
must be placed in the most effective position possi-
ble to act under article 41 since the prompt and
effective application of economic and diplomatic
sanctions by all the United Nations (or even the
threat or possibility thereof) may avoid the necessity
for the use of the armed forces available to the
Security Council.
The better prepared this country is to participate
promptly in action of this kind, the more effective
will be the Security Council and the more hope there
will be that the United Nations may serve its major
purpose, namely, the prevention of armed conflict.
U.S. Code Cong. Serv., 79th Cong., p. 932 (1945). This legis-
lative history confirms what the plain text of the statute indi-
cates: that the IEEPA significantly restricted the President’s
emergency authority but did not intend to alter the President’s
17342 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
“very great” powers to impose economic sanctions enforcing
a United Nations resolution.
Nor does the IEEPA’s legislative history indicate, as Sacks
contends, that the statute was intended to codify and make
binding international law principles on humanitarian relief
that had emerged since the passage of the UNPA thirty years
earlier. Neither the IEEPA nor its legislative history mentions
international law or a universal right to medical supplies.
Congress’s only indication of its intent in exempting medical
supplies from the President’s emergency powers is a state-
ment in the Senate Report that the exemption would “enable
U.S. persons to make humanitarian contributions in accor-
dance with their conscience.” S. Rep. No. 95-466, 1977
U.S.C.C.A.N. at 4544. Sacks’s claim of congressional intent
is further belied by the IEEPA provision allowing the Presi-
dent to unilaterally regulate, or even prohibit, humanitarian
medical supplies simply by declaring that doing so is neces-
sary to address the declared national emergency, as President
George W. Bush did when he prohibited the export of human-
itarian supplies to al-Qaeda and other terrorist entities follow-
ing the September 11, 2001 terrorist attacks. See Exec. Order
No. 13,224, 66 Fed. Reg. 49,079, 49,080-81 (Sept. 23, 2001).
[13] Therefore, the district court correctly held that the
medical supplies exception to presidential power embodied in
the IEEPA did not limit the President’s ability to ban travel
to and within Iraq pursuant to the UNPA.4
V. USE OF COLLECTION AGENCY
In its cross-appeal, OFAC asks us to vacate the district
court’s injunction prohibiting OFAC’s use of the Ocwen Fed-
4
Beause we conclude that the IEEPA provisions do not restrict the Pres-
ident’s authority under the UNPA, we do not reach OFAC’s argument that
the Travel Ban is not an indirect regulation of humanitarian medical dona-
tions.
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17343
eral Bank to collect Sacks’s unpaid penalty. Because the
OFAC regulation in effect when Sacks’s penalty was assessed
clearly required referral exclusively to the United States
Department of Justice for collection in a federal civil suit, we
affirm the district court’s issuance of the injunction.
Neither Executive Order 12,724 nor the Iraq Sanctions Act
specified the method by which penalties should be imposed or
collected, effectively leaving that gap to be filled by OFAC,
the agency to which the President delegated his regulatory
powers over the Iraqi Sanctions. See Morton v. Ruiz, 415 U.S.
199, 231 (1974) (“The power of an administrative agency to
administer a congressionally created . . . program necessarily
requires the formulation of policy and the making of rules to
fill any gap left, implicitly or explicitly, by Congress.”).
OFAC promulgated regulations for the collection of unpaid
penalties under the Iraqi Sanctions. In relevant part, they read:
In the event that the person named does not pay the
penalty imposed pursuant to this subpart or make
payment arrangements acceptable to the Director
within 30 days of the mailing of the written notice of
the imposition of the penalty, the matter shall be
referred to the United States Department of Justice
for appropriate action to recover the penalty in a
civil suit in a Federal district court.
31 C.F.R. § 575.705 (2002). OFAC claims that this provision
also allowed it to use administrative collection efforts, includ-
ing outside collection agencies, to obtain unpaid penalties.
Where an agency offers an interpretation of its own regula-
tions in federal court, we must give “substantial deference” to
that interpretation “unless an alternative reading is compelled
by the regulation’s plain language or by other indications of
the [agency’s] intent at the time of the regulation’s promulga-
tion.” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512
(1994) (internal quotation marks omitted). We will defer to
17344 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
the agency’s interpretation of its own regulation, unless that
interpretation is “plainly erroneous or inconsistent with the
regulation.” Udall v. Tallman, 380 U.S. 1, 16-17 (1965);
Rendleman v. Shalala, 21 F.3d 957, 961 (9th Cir. 1994).
[14] Here, the agency’s command is absolute: if the penalty
is unpaid after thirty days, “the matter shall be referred to the
[Justice Department] for appropriate action to recover the
penalty in a civil suit.” Following the guidance of the
Supreme Court, see, e.g., Lopez v. Davis, 531 U.S. 230, 241
(2001) (explaining the difference between Congress’s use of
the “permissive ‘may’ ” and its “use of a mandatory ‘shall’ ”),
we have previously made clear that Congress’s or an agency’s
use of the word “shall” indicates a mandatory duty that is not
subject to discretion. For example, in Center for Biological
Diversity v. United States Forest Service, 349 F.3d 1157,
1167 (9th Cir. 2003), we held that a Council on Environmen-
tal Quality regulation stating that an agency “shall” discuss
opposing viewpoints and its response to them in a final envi-
ronmental impact statement could not be satisfied merely by
including and analyzing a more environmentally-restrictive
alternative to the proposed plan. Similarly, in Webber v.
Crabtree, 158 F.3d 460, 461 (9th Cir. 1998) (per curiam), we
held that a Bureau of Prisons regulation stating that wardens
“shall identify” outdoor smoking areas left the warden no dis-
cretion but to do so. Although we will depart from the inter-
pretation of “shall” as mandatory where a “convincing
argument to the contrary is made,” Newman v. Chater, 87
F.3d 358, 361 (9th Cir. 1996) (internal quotation marks omit-
ted); see also Sierra Club v. Whitman, 268 F.3d 898, 904 (9th
Cir. 2001), such occasions are rare. OFAC offers three rea-
sons to support its contentions that we should disregard the
plain language of the regulations. None of these is persuasive.
First, OFAC argues that all government agencies are autho-
rized, and even encouraged, to utilize private collection agen-
cies and other administrative collection efforts before
referring cases to the Department of Justice. We do not dis-
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17345
agree. For example, 31 U.S.C. § 3718(a) expressly authorizes
federal agency heads to establish contracts with collection ser-
vices to recover United States assets. Current Treasury
Department regulations, codified in 2002, go even further,
indicating that every unpaid debt should be referred for debt
collection services, 31 C.F.R. § 5.9, that multiple collection
remedies should be utilized, id. § 5.2, and even that “aggres-
sive collection activity” should take place before referral to
the Department of Justice, id. § 5.16. We may even accept,
without deciding, OFAC’s contention that it would not need
to adopt an explicit regulation before utilizing administrative
collection efforts. As the district court noted, however, what
OFAC overlooks in emphasizing these general, permissive
provisions is that the one provision that specifically addresses
violations of the Iraqi Sanctions, 31 C.F.R. § 575.705, did not
take advantage of OFAC’s authority to permit the use of out-
side collection agencies and, in fact, made referral to the Jus-
tice Department mandatory. See Bonneville Power Admin. v.
FERC, 422 F.3d 908, 916 (9th Cir. 2005) (discussing the
“basic principle of statutory construction . . . that the specific
prevails over the general”). We do not know why the Iraqi
Sanctions failed to provide for administrative collection
efforts or the utilization of collection agencies.5 This omission
may have reflected the due process concern that individuals
might face harassment by aggressive nongovernmental collec-
5
The sanctions regulations established before the Iraqi Sanctions Regu-
lations similarly mandated referral to the Department of Justice, and did
not provide for other collection efforts. At some point in the 1990s, how-
ever, without the prompting of a court decision, OFAC began including
language in its sanctions regulations that unpaid penalties shall be, or may
be, “referred for administrative collection measures . . . or to the United
States Department of Justice” for recovery in a civil suit. See, e.g., 58 Fed.
Reg. 13,199, 13,212-13 (Mar. 10, 1993) (codified at 31 C.F.R. § 585.705)
(Yugoslavian sanctions regulations); 60 Fed. Reg. 47,061, 47,073 (Sept.
11, 1995) (codified at 31 C.F.R. § 560.706) (Iranian sanction regulations);
61 Fed. Reg. 3805, 3812 (Feb. 2, 1996) (codified at 31 C.F.R. § 595.705)
(terrorism sanction regulations); 70 Fed. Reg. 48,240, 48,524 (Aug. 16,
2005) (codified at 31 C.F.R. § 537.705) (Burmese sanctions regulations).
17346 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
tion agencies for penalties of up to $250,000, without ever
having had an opportunity to challenge their penalties before
an Article III court. Regardless of the rationale for the regula-
tion, there is nothing in the regulatory scheme or the Presi-
dent’s Executive Order that would justify the abandonment of
the general rules that the plain language of a regulation con-
trols, and that “shall” indeed means “shall.”
Second, OFAC points to its recent revision of section
575.705 as evidence of how the previous section 575.705 was
understood and should be interpreted. In response to the dis-
trict court’s ruling in this very case, OFAC issued a rule revis-
ing 31 C.F.R. § 575.705 to read that, if the penalized
individual does not make arrangements to pay within thirty
days, “the matter may be referred for administrative collec-
tion measures by the Department of the Treasury or to the
United States Department of Justice for appropriate action to
recover the penalty in a civil suit in a Federal district court.”
70 Fed. Reg. 15,761, 15,762 (Mar. 29, 2005) (emphasis
added). While OFAC does not argue that the revised regula-
tion applies retroactively, it contends that the revision is dis-
positive proof that OFAC consistently has interpreted the
collection regulation to provide for administrative collection
in addition to civil suits in federal court. See 70 Fed. Reg. at
15,761 (stating that the rule was revised “to reaffirm that
administrative collection of unpaid civil penalties imposed by
OFAC is authorized in addition to judicial means of collec-
tion”). It is unclear why an interpretive statement added to the
Federal Register post-litigation should be entitled to any more
deference than the litigation position OFAC already advances.
Indeed, although an agency interpretation first articulated in
a legal brief is not categorically “unworthy of deference,”
OFAC’s position appears to be little more than a “post hoc
rationalization advanced . . . to defend past agency action
against attack.” Auer v. Robbins, 519 U.S. 452, 462 (1997)
(internal quotation marks omitted) (alteration in original).
Even if OFAC’s interpretive statement represents the agen-
cy’s reasoned interpretation as of 2005, it tells us nothing of
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17347
the agency’s interpretation during the life of the Iraqi Sanc-
tions. As such, the statement in the Federal Register is neither
controlling nor particularly helpful.
Third, OFAC makes the novel claim that section 575.705’s
“silence concerning administrative collection remedies” per-
mits the use of those remedies in satisfaction of the regulatory
requirement. In other words, a regulation or statute mandating
that an agency “shall” do x in fact means that it “shall” do x
or y, unless the statute or regulation explicitly states that it
“shall not” do y. This proposed “rule of the silent disjunctive”
is patently absurd. By OFAC’s rationale, the Endangered Spe-
cies Act’s requirement that the final determination of whether
a species is threatened “shall be published in the Federal Reg-
ister” could also be satisfied by publishing that information in
USA Today. Though the Mandatory Victims Restitution Act
requires that the sentencing court shall order the defendant to
pay restitution, applying OFAC’s proposed interpretive rule,
the sentencing court could also comply with the statute by
ordering the defendant to make a public apology. Or, to bring
the examples closer to home, the requirement of former 31
C.F.R. § 575.521 that an application for a license to send
medicine to Iraq “shall be made in advance” of the exporta-
tion could have been satisfied by Sacks if he submitted an
application in advance or within ten years following the
exportation.
We rejected a similar argument in Webber, where the war-
den asserted that a regulation stating that he “shall” identify
outdoor smoking areas at federal prison facilities, to prevent
employee exposure to second-hand smoke, also would allow
him to achieve that goal by banning all smoking at the facil-
ity, 158 F.3d at 461. Our view has not changed. We will not
require that Congress or an agency articulate all of the acts the
agency may not engage in simply to guarantee that mandatory
prescriptions are followed.
Our decision in Lawrence v. Commodity Futures Trading
Comm’n, 759 F.2d 767 (9th Cir. 1985), is not to the contrary.
17348 SACKS v. OFFICE OF FOREIGN ASSETS CONTROL
In Lawrence, a commodities broker consented to findings that
he had violated the Commodities Exchange Act and agreed to
pay a $3,500 civil penalty. Id. at 769. When he refused to pay
the penalty, the Commodity Futures Trading Commission
suspended his registration pursuant to a statutory provision
allowing it to do so if an individual violated one of its rules
or orders. Id. at 770 & n.5 (citing 7 U.S.C. §§ 12a(3)-(4)).
Lawrence argued that the Commission was powerless to sus-
pend him because a separate statutory provision stated that
“collection of overdue money penalties imposed by the [Com-
mission] shall be referred to the Attorney General for recov-
ery in a federal district court action.” Id. at 771 (citing 7
U.S.C. § 9a). We rejected Lawrence’s claim, holding that
referral to the Justice Department was not intended to be the
Commission’s “exclusive remedy for violation of its orders to
pay fines.” Id. at 772. Despite OFAC’s multiple citations to
it, Lawrence is inapposite. The alternative remedy taken by
the Commission, suspension of Lawrence’s registration, was
explicitly articulated in the same statute, whereas nothing in
the Iraqi Sanctions regulations mentions administrative col-
lection. Furthermore, as we recognized in Lawrence, suspen-
sion of the license and referral to the Justice Department were
not mutually exclusive remedies. See id. at 771-72. The Law-
rence court was not required to reach the question of whether
the agency could collect the penalty using means other than
Justice Department referral because suspension of his regis-
tration was a different punishment altogether.
[15] Rather than adopt OFAC’s troublesome “rule of the
silent disjunctive,” we hold that the plain language of the reg-
ulation authorizes no other methods for the collection of
unpaid penalties. Because the regulation is clear, no deference
is owed to OFAC’s questionable interpretation. See Thomas
Jefferson Univ., 512 U.S. at 512. If OFAC wishes to collect
the $10,000 penalty from Sacks, it may do so by referring the
matter to the Department of Justice for the filing of a civil suit
in federal district court as its own regulation mandates.
SACKS v. OFFICE OF FOREIGN ASSETS CONTROL 17349
VI. CONCLUSION
Sacks lacks standing to challenge the Medicine Restric-
tions, and his challenge to the Travel Ban fails because
OFAC’s power to promulgate it was authorized by the UNPA
and not limited by any other statute. Therefore, the penalty
against Sacks is valid. However, OFAC is precluded by its
own then-operative regulations from utilizing the Ocwen Fed-
eral Bank or any private third-party entity to collect the
$10,000 penalty from Sacks. Therefore, we AFFIRM the dis-
trict court’s order dismissing Sacks’s complaint for declara-
tory relief. We also AFFIRM the district court’s order
enjoining OFAC from collecting the penalty from Sacks in a
manner inconsistent with the then-effective version of 31
C.F.R. § 575.705.
AFFIRMED.