What Is IEEPA? The 1977 Law Behind U.S. Sanctions
IEEPA: Born from Crisis — Why the U.S. Needed a New Emergency Law in 1977
Ever wonder how U.S. presidents can suddenly freeze a foreign country’s bank accounts, ban certain imports, or slap sanctions on international criminals — all without waiting for Congress? That’s thanks to a law most Americans have never heard of: the International Emergency Economic Powers Act, or IEEPA.
Today, it’s the backbone of U.S. sanctions. But when it was passed in 1977, it was actually meant to rein in presidential power — not expand it.
Let’s go back to where it all started.
The Problem: Presidents Had Too Much Power
For decades, U.S. presidents had been using a World War I-era law called the Trading with the Enemy Act (TWEA) to deal with all sorts of situations — even ones that had nothing to do with war or enemies.
Here’s the wild part:
From 1933 to 1976, the U.S. was technically under a continuous national emergency. That meant the president could control international trade, freeze assets, and block financial transactions — with almost no checks from Congress.
At one point, President Nixon even used this power during a postal workers’ strike. That had nothing to do with foreign threats — and people in both parties started asking:
“Is this really how we want emergency powers to work?”
Congress Steps In: The National Emergencies Act
After years of concern about unchecked executive power — especially during the Vietnam War and Watergate — Congress passed the National Emergencies Act (NEA) in 1976.
The NEA required:
Presidents to formally declare emergencies
Emergencies to be reviewed annually
Reports to Congress so lawmakers could keep tabs
It was a big step toward restoring the balance of power between the executive branch and Congress.
Then Came IEEPA
But Congress still needed a law to let the president respond quickly to real foreign threats — just without the loopholes and lack of oversight that came with TWEA.
So, in 1977, Congress passed the International Emergency Economic Powers Act (IEEPA).
IEEPA was supposed to be:
A narrower, more focused tool
Only usable in true national emergencies
Limited to threats that come from outside the U.S.
Bound by rules that protect free speech and personal communication
In short, it was meant to give the president power with limits.
The Big Idea: National Security, Not Political Power
Congress didn’t want presidents using emergency powers for everyday policy fights or domestic issues.
IEEPA was supposed to be reserved for “unusual and extraordinary threats” — things like terrorism, foreign wars, cyberattacks, or weapons trafficking.
It was about protecting the country, not helping presidents win trade disputes or punish political opponents.
But as we’ll see in the next post, that original intention hasn’t always held up.
Up Next: How Presidents Have Actually Used IEEPA
From the Iran hostage crisis to sanctions on TikTok, IEEPA has been used to freeze billions in assets, isolate hostile regimes, and go after terrorists, hackers, and even app developers.
In the next couple of posts, we’ll show how the National Emergencies Act (NEA) interacts with IEEPA, and we’ll explore how IEEPA evolved from a little-known reform law into one of the most powerful tools in the presidential toolbox.