"OF COURSE THIS WILL HURT BUSINESS"1: FOREIGN STANDING UNDER THE FOREIGN NARCOTICS KINGPIN DESIGNATION ACT OF 1999 AND AMERICA'S WAR ON DRUGS

George Washington International Law Review, The, 2005 by Duncan, David T

I. INTRODUCTION

The Oasis Hotel and Convention Center lies approximately fifteen miles south of Tijuana, Mexico.2 What once was a booming beach resort favorite among Americans looking to spend money and soak up the sun3 is now "crippled."4 "Upkeep on the grounds is slipping; paint is chipping and bathroom fixtures are leaking; and lights throughout the complex flicker with increasing frequency."5 By September 2002, the full-time Oasis staff dropped to about half its normal size.6

United States Customs agents passed fliers to U.S. citizens crossing the Mexican border warning them not to patronize or visit the Oasis.7 It behooved Americans to heed this warning. U.S. citizens who spent any money at the Oasis were subject to a maximum fine of one million dollars by the U.S. government.8 Shockingly, this exorbitant fine could be slapped on a U.S. citizen "for each violation, even if the violation was inadvertent and the individual . . . tried in good faith to comply with the law."9

The Oasis is currently "blacklisted" by the U.S. government under the authority of the Foreign Narcotics Kingpin Designation Act of 1999 (KDA).10 The KDA is a type of economic "smart" sanction employed in the United States' ongoing war on drugs.11 What makes these economic sanctions "smart" is their precision. Smart sanctions "narrowly target" individuals and entities by identifying (i.e., "blacklisting") and blocking (i.e., "freezing") access to assets.12 Blacklisting an individual or entity under smart sanctions generally requires all "U.S. persons"13 to freeze "all such property and interests in property within the United States, or within the possession or control of any United States person" which are owned or controlled by the target.14 Smart sanctions generally forbid any and all unlicensed "transaction [s] or dealing [s] by a United States person, or within the United States, in property or interests in property" of any target designated.15 Draconian criminal and civil penalties may ensue for violations of smart sanctions.16

The KDA targets significant drug traffickers identified by the president as "direct and immediate"17 threats to U.S. national security, foreign policy, or the economy.18 The KDA has a global application, and has been vilified by some as one of the most "horrific attack [s]" upon private ownership of property in the history of the United States,19 and as an unjust and oppressive example of unbridled executive power.20 Conversely, supporters of the legislation laud the KDA as a clear signal that the United States remains committed to the war on drugs.21

This Note seeks to expose the KDA to further public scrutiny and academic comment. As a controversial piece of legislation, surprisingly little legal scholarship has been directed at the statute, even though it was passed nearly five years ago. Much of the recent scholarship discussing the economic war on terrorism focuses on the USA PATRIOT ACT.22 Meanwhile, the KDA, which is in several respects a precursor to the broad powers exercised under the USA PATRIOT ACT, is largely ignored. Part II of this Note examines the KDA in its historical context by briefly contrasting the traditional and contemporary uses and purposes of economic sanctions by the U.S. government. Part III closely examines the KDA itself and highlights its particularly controversial provisions. Part III also identifies the findings and recommendations of the Judicial Review Commission on Foreign Asset Control (the Commission), which was created by the KDA.23 Part IV of this Note analyzes the issue of foreign nationals' standing to challenge actions taken pursuant to authority under the KDA. Specifically, Part IV argues that a statutory grant of limited foreign standing, despite a lack of minimum contacts, to challenge the constitutionality of agency action under the KDA would be consistent with current judicial precedent, would further U.S. foreign policy and national security goals, and would serve to protect the interests of U.S. citizens and businesses.

II. BACKGROUND

A. The Purposes of Economic Sanctions Generally

Economic sanctions are a tool of first-resort in U.S. foreign policy when confronting actual and perceived threats to national security.24 Indeed, some academic commentators describe economic sanctions as the principle instrument employed when the U.S. confronts complex international affairs.25 Professor Raj Bhala drove this point home in 1999, declaring that two-thirds of the world's population was subject to some type of U.S. economic sanction.26

Barry Carter, a leading expert on economic sanctions, defines economic sanctions as "coercive economic measures taken against one or more countries to force a change in policies, or at least to demonstrate a country's opinion about the other's policies."27 Economic sanctions can take a number of different forms: limiting exports or imports; restricting international finance and lending; freezing or seizing assets; or cutting off altogether or reducing foreign aid and direct investment.28