DONALD REGAN, SECRETARY OF THE TREASURY, ET AL., PETITIONERS V. RUTH WALD, ET AL. No. 83-436 In the Supreme Court of the United States October Term, 1983 The Solicitor General, on behalf of the Secretary of the Treasury and the other petitioners, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the First Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the First Circuit PARTIES TO THE PROCEEDINGS In addition to Donald Regan, Secretary of the Treasury, the following are also petitioners: John M. Walker, Jr., Assistant Secretary of the Treasury for Enforcement and Operations; Dennis M. O'Connell, Director, Office of Foreign Assets Control, Department of the Treasury; George P. Shultz, Secretary of State; and Ronald Wilson Reagan, President of the United States. In addition to Ruth Wald, the following are also respondents: Marian Lowe, Rosario Morales, Francis E. Bradley, Reverend Alice Hageman, Cuba Resources Group, Robert C. Howard, Center for Cuban Studies, and Linda Turner. Intervening plaintiffs in the district court were Puerto Rico Olympic Committee and Rafael Morales Cabranes, on his own behalf and on behalf of the Asociacion de Turistas Olimpicos de Puerto Rico (Atoprico), and other Puerto Rican sports fans. The intervening plaintiffs did not participate in the court of appeals. TABLE OF CONTENTS Opinions below Jurisdiction Statutes and regulations involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H OPINIONS BELOW The opinion of the court of appeals (App. A, infra, 1a-14a) and the memorandum of the court of appeals accompanying its order denying rehearing (App. B, infra, 15a-19a) are reported at 708 F.2d 794. The order of the district court denying a motion for preliminary injunction (App. E, infra, 22a-23a) and the magistrate's report recommending denial of the motion for preliminary injunction (App. F, infra, 24a-44a) are unreported. JURISDICTION The judgment of the court of appeals (App. D, infra, 21a) was entered on May 16, 1983. A timely petition for rehearing was denied on June 16, 1983 (App. C, infra, 20a). The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTES AND REGULATIONS INVOLVED The relevant statutes and regulations are reproduced in App. H, infra, 46a-56a. QUESTION PRESENTED Section 101(b) of Pub. L. No. 95-223, 91 Stat. 1625, provides that the "authorities * * * being exercised" with respect to a country on July 1, 1977, under Section 5(b) of the Trading With the Enemy Act may continue to be exercised with respect to that country thereafter. On July 1, 1977, Treasury Department regulations prohibited all unlicensed property transactions related to Cuba, and a general license authorized certain travel-related transactions involving Cuba. The question presented is whether, under Section 101(b), the President may narrow the terms of this general license and restrict travel-related property transactions involving Cuba. STATEMENT 1. For many years the United States has not enjoyed cordial, normal relations with the Government of Cuba; and the management of relations with Cuba has posed some of the most difficult, sensitive and troublesome foreign policy problems presented to our government. /1/ It is a longstanding objective of the United States to deter conduct by the Cuban Government that is inimical to foreign policy interests of the United States and its allies, particularly Cuban attempts to subvert and destabilize governments in Central America and the Caribbean region. /2/ To further this objective, the United States, in coordination with other countries in the western hemisphere, /3/ imposed an extensive system of sanctions against the Cuban Government. A critical element in this system has, since 1963, been a wide-ranging embargo on trade and other economic transactions between Cuba and Cuban nationals, on the one hand, and persons subject to the jurisdiction of the United States, on the other. /4/ The embargo has served to give the United States leverage over Cuban conduct. /5/ By restricting Cuban access to hard currency, the embargo has also contributed to our nation's efforts to limit Cuba's ability to finance destabilizing activity in Central America and the Caribbean region and has dissociated the United States from such Cuban ventures. /6/ Over the last 20 years, the President has adjusted the embargo on a number of occasions, through amendment of the Cuban Assets Control Regulations issued by the Department of the Treasury, 31 C.F.R. Part 515; the embargo has been used as a flexible instrument of foreign policy, sensitive to the particular state of relations between the United States and Cuba. /7/ 2. The Executive has imposed the Cuban embargo pursuant to authority granted under the Trading With the Enemy Act of 1917 ("TWEA"), 50 U.S.C. App. (& Supp. V) 1 et seq. Prior to its amendment in 1977, Section 5(b) of the TWEA, 50 U.S.C. App. 5(b), gave the President, "(d)uring the time of war or during any other period of national emergency declared by the President," broad authority: under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise (to) -- (A) investigate, regulate, or prohibit, any transactions in foreign exchange, transfers of credit or payments between, by, through, or to any banking institution, and the importing, exporting, hoarding, melting, or earmarking of gold or silver coin or bullion, currency or securities, and (B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest, * * * . /8/ In 1977 Congress enacted Pub. L. No. 95-223, 91 Stat. 1625, et seq. which amended the statutory scheme governing the President's exercise of emergency economic powers. Title I of Pub. L. No. 95-223, 91 Stat. 1625, amended the TWEA so as to confine to periods of war the President's broad TWEA authority to regulate transactions and property with respect to a foreign state or national; the effect was generally to withdraw the President's authority to exercise TWEA powers during peacetime periods of declared national emergency. Title II of Pub. L. No. 95-223, 91 Stat. 1626, known as the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. (Supp. V) 1701 et seq., established a new statutory framework for the President's exercise of economic powers during periods of national emergency. /9/ Under IEEPA, the President's authority to exercise economic powers during times of peace are limited to "deal(ing) with any unusual and extraordinary threat, which has its source * * * outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such a threat." 50 U.S.C. (Supp. V) 1701. /10/ However, Congress was careful to provide for continuation of presidential authority under Section 5(b) of the TWEA to exercise economic powers in connection with previously declared peacetime national emergencies. Congress expressly determined that the President should not be required to declare a new national emergency in order to continue an existing embargo; it decided that the President should be permitted to continue under the old statutory scheme the embargoes that were in effect at the time the new legislation was being considered. Thus, it included in Title I of Pub. L. No. 95-223, 91 Stat. 1625, a "grandfather clause," which preserves the Section 5(b) authorities being exercised with respect to a country as of July 1, 1977. Section 101(b) of Pub. L. No. 95-223, 91 Stat. 1625, provides (emphasis added): (T)he authorities conferred upon the President by section 5(b) of the Trading With the Enemy Act which were being exercised with respect to a country on July 1, 1977, as a result of a national emergency declared by the President before such date, may continue to be exercised with respect to such country, except that, unless extended, the exercise of such authorities shall terminate (subject to the savings provisions of the second sentence of section 101(a) of the National Emergencies Act) at the end of the two-year period beginning on the date of enactment of the National Emergencies Act (September 14, 1976). The President may extend the exercise of such authorities for one-year periods upon a determination for each such extension that the exercise of such authorities with respect to such country for another year is in the national interest of the United States. Pursuant to the grandfather clause, Presidents Carter and Reagan have in every year since 1978 determined that it is in the national interest to continue the exercise of TWEA authorities with respect to Cuba and certain other countries. /11/ 3. Pursuant to the President's broad authority under Section 5(b) of the TWEA, inter alia, to "regulate * * * prevent or prohibit * * * any transfer * * * of * * * or transactions involving, any property in which any foreign country or a national thereof has any interest," the Cuban Assets Control Regulations have, since 1963, prohibited, "except as specifically authorized by the Secretary of the Treasury * * * transactions involv(ing) property in which (Cuba) has * * * any interest of any nature whatsoever, direct or indirect * * * (including) * * * (a)ll dealings in * * * any property * * * by any person subject to the jurisdiction of the United States * * * ." 31 C.F.R. 515.201(b); 28 Fed. Reg. 6975 (1963). /12/ The effect of these regulations is to subject all property transactions related to Cuba to a comprehensive regulatory licensing regime. The regulations block all assets of Cuba or Cuban nationals; they prohibit persons subject to United States jurisdiction from engaging directly or indirectly in unlicensed commercial or other economic transactions of any kind with Cuba or Cuban nationals. The regulations provide that any regulation or license "may be amended, modified, or revoked at any time" (31 C.F.R. 515.805; 28 Fed. Reg. 6985 (1963)), and that "(a)ny transfer * * * which is in violation of any provision of this chapter or of any regulation * * * license or other direction of authorization * * * and involves any property in which a designated national has or has had an interest * * * is null and void * * * " (31 C.F.R. 515.203(a); 28 Fed. Reg. 6975 (1963)). These regulations were in force on July 1, 1977, and continue in force today. Travel-related property transactions that inure to the benefit of Cuba or a Cuban national have been covered by the provisions of the Cuban Assets Control Regulations since 1963. /13/ In March 1977, as part of President Carter's efforts to improve relations with Cuba, the Department of the Treasury promulgated 31 C.F.R. 515.560 (1977), 42 Fed. Reg. 16621 (1977), /14/ which constituted a general license authorizing many financial transactions incident to travel to and within Cuba. Under this license persons who visited Cuba were authorized to pay for their transportation and maintenance expenses (e.g., meals, hotel bills, taxis) while in Cuba. They were, however, not permitted to buy and bring back to the United States more than $100 worth of Cuban goods for personal use. 31 C.F.R. 515.560(a)(3) (1977). The regulations expressly prohibited domestic credit card issuers from entering into contracts with Cuban enterprises for issuing credit to travelers. 31 C.F.R. 515.560(a)(7) (1977). In late 1981, it became apparent to the United States that the Cuban Government was increasing its efforts to destabilize Central American governments and at the same time was initiating a program to increase its hard currency earnings through expansion of its tourism industry, particularly by attracting tourists from the United States. /15/ In May 1982, in order to "reduce Cuba's hard currency earnings from travel by United States persons to and within Cuba," the Department of the Treasury amended 31 C.F.R. 515.560 to modify the general license for travel-related financial transactions involving Cuba. 47 Fed. Reg. 17030 (1982). /16/ It is this modification that is at issue here. As amended, Section 515.560 provides that the general license to engage in travel-related transactions is limited to persons engaged in official travel, visits to close relatives, travel completely hosted by Cuba (i.e., travel that does not involve economic benefit to Cuba), and travel related to news-gathering, professional research, or similar activities. The amended regulation also provides that specific licenses may be granted in the case of travel for humanitarian reasons or for purposes of public performances in Cuba in connection with cultural or sports events. The general effect of the amendments was to rescind those portions of the 1977 general license that authorized transactions incident to business and tourist travel. 4. a. In June 1982, respondents, who are individuals and groups interested in travel to Cuba, filed a complaint for declaratory and injunctive relief in the United States District Court for the District of Massachusetts. /17/ Respondents claimed that the restrictions on travel-related financial transactions imposed by the May 1982 amendment to 31 C.F.R. 515.560 violated 22 U.S.C. (Supp. V) 211a, which prohibits area restrictions on passports except in certain circumstances; exceeded the authority conferred by Section 5(b) of the TWEA and by IEEPA; had not been promulgated pursuant to IEEPA procedures; and violated respondents' First Amendment and due process rights, including their right to travel. Respondents' request for preliminary injunctive relief was referred to a magistrate. Following briefing and argument, the magistrate recommended denial of a preliminary injunction (App. F, infra, 24a-44a). He concluded that in enacting the grandfather clause in Pub. L. No. 95-223, Congress did not intend to freeze in place the specific regulations that happened to be in effect on July 1, 1977 (App. F, infra, 36a). Because transactions related to Cuban travel were being regulated on that date (albeit by a regulation authorizing most such transactions by general license), the magistrate concluded that the President had the authority in 1982 to change the extent of that regulation (ibid.). The magistrate found that the legislative history supported this construction of the grandfather clause and that the Executive, which was charged with enforcing the TWEA, had construed the clause in a similar manner (id. at 36a-39a). Finally, he concluded that an injunction against enforcement of the regulation would cause irreparable injury to the government's conduct of its foreign affairs and that that injury outweighed any inconvenience to respondents resulting from postponement of their planned travel (id. at 40a-42a). On July 22, 1982, after considering written and oral objections to the magistrate's report, the district court denied the motion for a preliminary injunction (App. E, infra, 22a-23a). The district court concluded that respondents were not likely to succeed on the merits of either their statutory or their constitutional claims. /18/ b. The court of appeals vacated the district court's order and remanded with instructions to issue a preliminary injunction against enforcement of 31 C.F.R. 515.560 (App. A. infra, 1a-14a). The court of appeals concluded that the grandfather clause did not authorize the 1982 amendment of the regulation, that the government had failed to follow the IEEPA procedures in amending the regulation, and that the amended regulation is therefore invalid. The court declined to reach respondents' other statutory and constitutional contentions. In concluding that the grandfather clause did not authorize the 1982 amendment to 31 C.F.R. 515.560, the court of appeals relied on its finding that on July 1, 1977, the Treasury Department was "not restricting travel to Cuba" (App. A, infra, 4a). The court recognized that on that date the government was restricting commodity purchases involving Cuba, but concluded that restriction of travel-related transactions was a "very different 'exercise()' of authority" (id. at 5a), had been treated differently from commercial restrictions in the past (id. at 5a-7a), and, unlike commercial regulations, raised special constitutional concerns (id. at 7a). The court of appeals cited various passages from the legislative history to support its conclusion that Congress intended the grandfather clause to be narrowly construed (App. A, infra, 7a-10a). It found further support for its reading of the statute in this Court's directives to lower courts to construe narrowly all delegated powers that curtail the right to travel (id. at 11a-12a). The court concluded finally that its construction of the grandfather clause would not prevent the President from regulating travel-related financial transactions, since it could use the IEEPA procedures to do so (id. at 12a), and that a narrow construction of the grandfather clause would be consistent with Congress's overall intent to "impos(e) Congressional limits upon the President's restrictive powers" (id. at 12a-13a). The court of appeals denied the government's petition for rehearing and suggestion for rehearing en banc, as well as its request for stay of the mandate (Apps. B and C, infra, 15a-20a). On July 6, 1983, this Court granted a stay of the court of appeals' mandate pending the timely filing and disposition of a petition for a writ of certiorari. REASONS FOR GRANTING THE PETITION The court of appeals has invalidated an important component of the Cuban Assets Control Program. Under that program, the Executive employs TWEA authority to regulate financial and property transactions with Cuba as one element in the management of our delicate and difficult relations with the Cuban Government. The court of appeals has held that that authority cannot be used to restrict travel-related transactions involving Cuba. Its holding is based on a wooden and cramped construction of the governing statute, one that will impair the conduct of United States foreign policy and that is inconsistent with congressional intent. The decision below therefore warrants review by this Court. /19/ 1. The United States' wide-ranging Cuban embargo, which subjects transactions involving Cuba to government supervision and regulation and which operates, where necessary, to deny Cuba hard currency, is a fundamental element of United States foreign policy. /20/ The decision of the court of appeals, which declares invalid the Executive's adjustment of that embargo with respect to one subject -- transactions related to tourist and business travel -- gives Cuba the opportunity to earn substantial sums of hard currency that it can use to advance activities inimical to the interests of the United States. /21/ More important, the court of appeals' decision casts doubt on other significant post-1977 changes in both the Cuban Assets Control Program and other critical foreign assets control programs still operating under TWEA authority (including embargoes against North Korea, Vietnam, and Cambodia (Kampuchea)). /22/ The Section 5(b) authorities on which the Treasury Department relied in amending the regulation at issue in this case are the same authorities used to effect a variety of adjustments to the Cuban embargo and the other foreign assets control programs. Thus, the decision below could be invoked in support of efforts to strike down a host of other important post-1977 amendments to these programs. /23/ This is not an idle concern. The Eleventh Circuit recently relied on the decision below as a basis for holding invalid 31 C.F.R. 515.415(a), a regulation that was promulgated during the Mariel boatlift (or "freedom flotilla") of Cuban refugees and that makes clear that 31 C.F.R. 515.201, the general prohibition on transactions with Cuba, covers the transportation to the United States of Cuban nationals without visas. United States v. Frade, 709 F.2d 1387, 1397-1401 (1983), petition for rehearing filed Sept. 2, 1983. If left unreviewed, the decision below could interfere significantly with the government's ability to enforce any post-1977 change in regulations promulgated under grandfathered TWEA authority. /24/ The decision below substantially limits the President's foreign policy options with respect to Cuba and the other countries that continue to be the subject of regulation under Section 5(b) of the TWEA. It casts doubt on the Executive's ability to exercise TWEA authorities with respect to Cuba, North Korea, Vietnam, and Cambodia (Kampuchea) in a manner that is flexible and sensitive to the needs of the diplomatic situation at any particular time. In the past Cuba had to consider the Executive's unquestioned ability to respond to Cuban misconduct swiftly and flexibly through the use of TWEA authorities. /25/ But today the President cannot be sure that adjustments to the terms of an ongoing embargo will be upheld by the courts. Ultimately the effect of the decision below is to deprive the President of a "flexible and long-standing foreign policy instrument" (Michel Declaration, supra Paragraph 10). The court of appeals indicated rather casually (App. A, infra, 12a) that the regulation it invalidated in this case could be repromulgated pursuant to IEEPA. But action under IEEPA requires the President to declare a new national emergency based on a finding that Cuba presents an "unusual and extraordinary threat" to the "national security, foreign policy or economy" of the United States. Such a step could have grave foreign policy implications. Michel Declaration, supra, Paragraph 9. Declaring a national emergency and finding an "unusual and extraordinary threat" may be appropriate as a basis for initial implementation of an assets control program (see page 22, infra); but the President may well conclude that these steps could needlessly heighten tensions and adversely affect United States foreign policy interests if used in connection with a mere modification of an existing program. Moreover, use of IEEPA in connection with adjustments to grandfathered embargoes would impose additional procedural burdens on the Executive's conduct of foreign policy and would initiate a two-track system of regulation in connection with the pre-1977 embargoes. Further, if the President were now to act under IEEPA, this would presumably render moot any challenge to what we believe to be an erroneous reading of the grandfather clause. It seems to us inappropriate to force the President to choose between acting under IEEPA (and incurring these grave consequences), on the one hand, and inaction (that is, forgoing adjustments to a grandfathered embargo he otherwise would make), on the other, in the absence of a definitive ruling by this Court that Congress intended to impose such a choice. 2. The decision below is erroneous. The court of appeals gave the grandfather clause an exceedingly narrow construction by reading it to preserve only the precise prohibitions that happened to be in place on July 1, 1977. That construction is inconsistent with the language of the governing statute, with the traditional flexibility granted to the Executive in conducting foreign assets control programs, and with the legislative history that casts light on Congress' purpose in preserving the exercise of certain existing authorities through the grandfather clause. a. The starting point in construing a statute is the language of the statute itself. Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). The grandfather clause provides that "the authorities conferred upon the President by section 5(b) of the (TWEA), which were being exercised with respect to a country on July 1, 1977, * * * may continue to be exercised with respect to such country * * * ." Pub. L. No. 95-223, Section 101(b), 91 Stat. 1625. The authorities "being exercised" with respect to Cuba on July 1, 1977, plainly encompassed the authority to impose restrictions on travel-related transactions. On that date, the Cuban Assets Control Regulations prohibited -- as they had since 1963 -- "except as specifically authorized by the Secretary of the Treasury * * * transactions involv(ing) property in which (Cuba) has * * * any interest of any nature whatsoever direct or indirect * * * by any person subject to the jurisdiction of the United States * * * ." 31 C.F.R. 515.201(b); 28 Fed. Reg. 6975 (1963). That prohibition was an exercise of the Executive's broad Section 5(b) authority, inter alia, to "regulate * * * prevent or prohibit" property transactions with foreign governments and foreign nationals. Its effect was to impose a comprehensive regulatory system -- an all-encompassing embargo -- on trade and property transactions between the United States and Cuba. The broad prohibition of Section 515.201 encompasses all sorts of commercial and financial transactions with Cuba or Cuban nationals (e.g., payment for Cuban cigars or sugar), including travel-related transactions (e.g., payment for Cuban hotel rooms), and has been so interpreted and applied since 1963. /26/ Since the authority to control such transactions was "being exercised" on July 1, 1977, by virtue of Section 515.201, it was encompassed within the Section 5(b) authorities grandfathered under Section 101(b) of Pub. L. No. 95-223. It is true that in March 1977 restrictions on travel-related financial transactions were eased. But the temporary loosening of those restrictions -- through a regulation granting a general license to engage in certain travel-related transactions -- itself constituted an exercise of the Executive's Section 5(b) authority, "by means of * * * licenses, or otherwise," to regulate all property transactions with Cuba. That authority has been continuously asserted from 1963 to 1983, in the form of the general prohibition (in Section 515.201 of the regulations) of all unlicensed property transactions. The 1977 general license in effect granted a temporary permission, needed to overcome the general prohibition -- temporary because expressly and at all times subject to amendment, modification, or revocation (see 31 C.F.R. 515.805(1977)). /27/ (In fact, the permission was itself subject to exceptions even in the 1977-1982 period.) /28/ Then, in 1982, the permission was in turn narrowed to apply only to transactions connected with travel for purposes of newsgathering, research, family visits, etc. In sum, the authority broadly to regulate all property transactions involving Cuba and Cuban nationals -- including the purchase of Cuban hotel rooms as well as the purchase of Cuban sugar -- has been continuously exercised ever since 1963, was in fact being exercised on July 1, 1977, and has continued to be exercised ever since. /29/ The court of appeals' narrow and rigid reading of the grandfather clause disaggregates the authorities being exercised under it into arbitrary compartments in a manner that is wholly inconsistent with the flexibility needed for an effective diplomatic strategy. In the court's view, since many travel-related financial transactions were authorized under the general license established by Section 515.560 of the regulations as of July 1, 1977, the grandfather clause does not permit retightening of the restrictions through modification of the general license. But the grandfather clause does not say that only the specific prohibitions on the books on July 1, 1977, may remain in effect; instead, it speaks broadly about preserving the "authorities conferred upon the President by section 5(b)." Section 5(b) itself does not include any specific reference to travel-related financial transactions, but instead gives the President broad power to regulate, prohibit or permit a wide variety of transactions in various circumstances. There is no indication whatever in the language or structure of these statutes that Congress believed that authority to regulate the purchase of Cuban hotel rooms, restaurant meals, and airline tickets constituted a separate and independent category of authority, to be isolated from the President's authority to regulate other purchases and property transactions. Congress could easily have said, had it wished to do so, that only "existing regulations" or "existing prohibitions" may remain in effect. But it did not do so. It preserved the "authorities * * * being exercised" on July 1, 1977. Since the authority to regulate all property transactions with Cuba was plainly being exercised on that date, it is that authority that was preserved by the grandfather clause. b. The court of appeals also failed to recognize the traditional manner in which foreign assets control programs have been conducted and thus disregarded an important part of the context in which Congress acted in grandfathering TWEA authority. Congress' primary purpose in enacting the grandfather clause was to leave undisturbed ongoing embargo programs. See pages 23-24, infra. As this Court has recognized, the success of those programs requires broad authority and flexibility in administration, so that they can be adjusted to the diplomatic situation as it changes. See Dames & Moore v. Regan, supra, 453 U.S. at 672; Propper v. Clark, 337 U.S. 472, 493 (1949). /30/ The court of appeals' interpretation of the grandfather clause makes it a rigid and unworkable instrument, keyed to the happenstance of that situation as it stood at one moment in 1977. Experience shows that United States policy with respect to transactions involving property of a foreign country subject to an assets control or embargo program cannot be frozen into place; these programs operate as on-going systems that are components of an on-going foreign policy and that should not be visualized as a static list of specific prohibitions. See, e.g., Dames & Moore v. Regan, supra, 453 U.S. at 662-666; Nielsen v. Secretary of the Treasury, 424 F.2d 833, 839-841 (D.C. Cir. 1970). /31/ Thus, between its 1963 inception and July 1, 1977, the Cuban Assets Control Program had itself undergone considerable change. /32/ Congress can be presumed to have been aware of this history of regulatory adjustment (see Haig v. Agee, 453 U.S. 280, 300 (1981); Lorillard v. Pons, 434 U.S. 575, 580-581 (1978)); and there is no indication that it intended to eliminate the flexibility that obviously was necessary to the continuing effectiveness of existing programs. The Executive has understood Congress' intent in these terms, and, as might be expected, the foreign assets control programs that existed on July 1, 1977, have continued to evolve since that date. /33/ Indeed, the 1982 retightening of restrictions on travel-related financial transactions, following the 1977 liberalization (which occurred only a few months before July 1, 1977), is characteristic of the sort of adjustment necessary to keep an assets control program consistent with our nation's foreign policy needs. /34/ The programs authorized by the TWEA are intimately connected to the national security and the conduct of foreign policy. The grandfather clause, preserving authorities under the TWEA, should be construed consistently with the strong tradition recognizing the Executive's inherent authority and need for flexibility in this area. See Weinberger v. Rossi, 456 U.S. 25, 32 (1982); Curran v. Laird, 420 F.2d 122, 128-133 (D.C. Cir. 1969); cf. E.W. Bliss Co. v. United States, 248 U.S. 37, 46 (1918). Indeed, because the grandfather clause implicates the Executive's responsibility under the Constitution to conduct foreign affairs, the courts "Should hesitate long before limiting or embarrassing such powers." MacKenzie v. Hare, 239 U.S. 299, 311 (1915). In the absence of convincing evidence to the contrary, it is appropriate to conclude that Congress did not intend to deprive the Executive of the flexibility to make necessary adjustments to the Cuban Assets Control Program. The court below suggested that, if the President wished to make changes in assets control programs existing on July 1, 1977, Congress intended that he use the new IEEPA procedures. See App. A, infra, 12a. But there is no indication that Congress wished to create a two-track system, under which some regulations involving Cuba (e.g., those addressed to importing Cuban cigars or sugar) would exist under grandfathered TWEA authority, while others (e.g., those addressed to buying Cuban hotel space) would be covered by new IEEPA authority. Such a construction of the statute would require the President, when he wished to tighten an existing embargo, to take the major step of declaring a new national emergency with respect to an "unusual and extraordinary threat * * * to the national security, foreign policy, or economy of the United States". Requiring such a formidable and sensitive step to be taken in connection with an adjustment to an existing program makes little sense and would limit significantly the President's flexibility in conducting foreign policy. /35/ Indeed, as we now show, it was Congress' desire to avoid this very result that led it to enact the grandfather clause. c. The legislative history of the grandfather clause, read as a whole, indicates that Congress intended to preserve the Executive's flexibility with respect to regulation of transactions involving those countries for which an embargo was in effect on July 1, 1977. The Senate Report makes clear the breadth of the authority reserved to the President under the grandfather clause: "Section 101(b) would enable the President to continue to control transactions with certain countries (Cuba and Vietnam, for example) * * * ." S. Rep. No. 95-466, 95th Cong., 1st Sess. 4 (1977) (emphasis added). The House Report recognizes that the comprehensive Cuban embargo itself was an "exercise" or "use" of Section 5(b) authorities that was in effect on July 1, 1977, and that it therefore would be preserved under the grandfather clause. H.R. Rep. No. 95-459, 95th Cong., 1st Sess. 9, 12 (1977). Many of those who spoke during congressional consideration of the grandfather clause indicated that they understood that it was the existing embargoes against particular countries that were being grandfathered. For example, during the House debates, Representative Bingham (chairman of the subcommittee responsible for the legislation) explained: (T)his legislation specifically grandfathers the embargoes against Vietnam, Cambodia, Laos, Cuba, and other existing embargoes, so that they are not affected in any way by this legislation. 123 Cong. Rec. 38166 (1977). /36/ On signing the legislation, President Carter likewise made the point that it would not affect "embargoes now being exercised against certain countries." 13 Weekly Comp. Pres. Doc. 1940, 1941 (Dec. 28, 1977). The debate in Congress did not focus on the substance of specific regulations in effect on July 1, 1977, as it presumably would have if Congress had intended to freeze those regulations in place. Rather, debate focused on whether existing embargoes should be terminated or allowed to continue. Congress recognized that it would be inappropriate for the President to have to declare a new national emergency in connection with an existing embargo. As the court below noted (App. A, infra, 10a), the legislators were sensitive to the Executive's negotiating needs: To have required the President to announce publicly a new declaration of emergency in order to continue an existing embargo would have required him to undertake a political act with international political impact. The result, as described by Prof. Lowenfeld before the subcommittee, might have been an "inappropriate interference in negotiations being carried out by the Executive Branch * * * ." (House Subcommittee Hearings,) supra, at 19. See also, e.g., House Subcommittee Hearings, supra, at 207 (statement of Rep. Bingham) (noting that the subcommittee had recognized that it "might be embarrassing for the President to have to declare new national emergencies with respect to Cuba and Vietnam"); id. at 209 (statement of R. Roger Majak, subcommittee staff director) ("The prospect of the President having to declare a new emergency with respect to some of these existing uses, such as Cuba, * * * does pose a diplomatic, or potential diplomatic problem"); id. at 190 (statement of Rep. Bingham) ("I personally would not argue that we would ask or expect the President to declare, for the first time, an emergency with respect to Cuba."); id. at 103 (testimony of Assistant Secretary of the Treasury C. Fred Bergsten); id. at 182 (testimony of Leonard Santos). Ultimately, Congress enacted the grandfather clause because it recognized that continuation of existing uses of Section 5(b) authorities was "important for the continued day-to-day functioning of the Government" (H.R. Rep. No. 95-459, supra, at 6-7) and that the legislation should avoid getting into the merits of existing embargo programs. See, e.g., House Subcommittee Hearings, supra, at 210 (remarks of Rep. Bingham). In support of its narrow construction of the grandfather clause the court of appeals relied on isolated and, at best, ambiguous statements by some legislators. In particular, the court considered references in the legislative history to "existing uses" of TWEA authorities as indicating a desire to grandfather only the specific prohibitions in effect on July 1, 1977. See App. A, infra, 7a-9a. But the court pointed to nothing in the legislative history that defines the "existing uses," and, in view of other portions of the legislative history, that phrase is more appropriately read to refer to the existing embargoes against specific countries, as the House and Senate reports suggest. /37/ Indeed, the court itself acknowledged that it could "understand how others could reasonably conclude that the legislative history is ambiguous and should be read differently" from the manner in which the court had construed it (App. B, infra, 19a). We submit that in fact the legislative history points to the conclusion that Congress wished to avoid requiring the President to declare a new national emergency in connection with an existing embargo and that it did not intend to cut back on the President's flexibility to make adjustments of the type at issue in this case. d. The court of appeals supported its restrictive construction of the grandfather clause in part by reference to this Court's statements about the constitutional protection afforded to travel and to 22 U.S.C. (Supp. V) 211a, under which Congress limited the Secretary of State's authority to impose area restrictions on United States passports. We believe the court of appeals' analysis in this respect was faulty. The challenged regulation does not limit the right to travel as such; it regulates only transactions involving transfer of money or other economic benefits to Cuba, such as payment for a hotel room or an airline ticket. The purpose of the regulation is not to prevent travel but to deny hard currency to Cuba and to head off Cuban plans to develop a lucrative tourism industry that would generate hard currency that in turn could be used for purposes detrimental to the interests of the United States. See pages 8-9, supra. The regulation is part of a broad program under which many different sorts of transactions that would result in economic benefit to Cuba are prohibited unless authorized by the Secretary of the Treasury. Moreover, the challenged regulation does not have the effect of cutting off all travel to Cuba; rather, it affects primarily transactions incident to tourist and business travel. Under the regulation, journalists, professional researchers, close family members, those whose travel expenses are paid for entirely by Cuba, artists and athletes, and various other categories of individuals are permitted to engage in travel-related transactions pursuant to general or specific licenses. To the extent the challenged regulation limits the exercise of a constitutional right to travel, that limitation is restricted to a single country and constitutes an incidental and permissible effect of a valid restriction on property transactions based on considerations of national defense and foreign relations. See, e.g., Haig v. Agee, supra, 453 U.S. at 306-310; Snepp v. United States, 444 U.S. 507, 509 n.3 (1980); Brown v. Glines, 444 U.S. 348, 354-358 (1980); United States v. O'Brien, 391 U.S. 367, 376-377 (1968); Zemel v. Rusk, 381 U.S. 1, 16-17 (1965); Veterans & Reservists for Peace in Vietnam v. Regional Commissioner of Customs, 459 F.2d 676 (3d Cir.), cert. denied, 409 U.S. 933 (1972); Teague v. Regional Commissioner of Customs, 404 F.2d 441 (2d Cir. 1968), cert. denied, 394 U.S. 977 (1969); American Documentary Films, Inc. v. Secretary of the Treasury, 344 F. Supp. 703, 710 (S.D.N.Y. 1972). /38/ Thus, constitutional principles do not require the court of appeals' restrictive reading of the grandfather clause. The challenged regulation is not inconsistent with 22 U.S.C. (Supp. V) 211a, which was amended in 1978 to limit to certain circumstances the Secretary of State's ability to place area restrictions on the use of United States passports. By its own terms the limitation is inapplicable here, because 31 C.F.R. 515.560 does not restrict the use of passports; instead, it regulates certain travel-related transactions pursuant to TWEA authority. 22 U.S.C. (Supp. V) 211a places no limits on the authority of the Secretary of the Treasury to regulate such transactions under the TWEA. Since TWEA authorities are instrumental in the conduct of United States foreign policy, no such limitation should be implied. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted REX E. LEE Solicitor General J. PAUL MCGRATH Assistant Attorney General PAUL M. BATOR Deputy Solicitor General CAROLYN F. CORWIN Assistant to the Solicitor General MICHAEL F. HERTZ Appellate Litigation Counsel PETER J. WALLISON General Counsel Department of the Treasury DAVIS R. ROBINSON Legal Adviser Department of State September 1983 /1/ Declaration of Myles R.R. Frechette, Director, Office of Cuban Affairs, Department of State Paragraph 4 (C.A.J.A. 103). A principal objective of the Cuban Government has been the overthrow of non-Communist governments in the western hemisphere and their replacement with regimes acceptable to Cuba. Declaration of Thomas O. Enders, Assistant Secretary of State for Inter-American Affairs Paragraph 5 (Attachment E to Application for Stay). In particular, since 1978 Cuba, with the political, economic, and military support of the Soviet Union, has provided widespread support for armed violence and terrorism in the western hemisphere; in addition, Cuba maintains close to 40,000 troops in various countries in Africa and the Middle East in support of objectives inimical to United States foreign policy interests. Frechette Declaration, supra Paragraph 4 (C.A.J.A. 103). The declaration of Mr. Frechette was submitted to the district court in connection with the government's response to respondents' motion for preliminary injunction. The declarations of Assistant Secretary Enders and other government officials, which update and expand declarations submitted to the district court, were filed in the court of appeals and in this Court in connection with the government's applications for stay of the mandate. We draw on these declarations in explaining the history and purpose of the Cuban embargo and the regulations at issue here. Copies of the declarations appear in either the joint appendix filed by the parties in the court of appeals or as attachments to our application for stay of mandate in this Court, filed June 23, 1983. /2/ Declaration of James H. Michel, Acting Assistant Secretary of State for Inter-American Affairs Paragraph 3 (Attachment C to Application for Stay); Enders Declaration, supra Paragraph 5; Frechette Declaration, supra, Paragraph 4(C.A.J.A. 103). /3/ The United States acted in accord with, inter alia, Resolution VIII of the Eighth Meeting of Consultation of Ministers of Foreign Affairs acting under the Inter-American Treaty of Reciprocal Assistance (Jan. 31, 1962) and Resolution I of the Ninth Meeting of Consultation of Ministers of Foreign Affairs (July 22, 1964), reprinted in, II Inter-American Treaty of Reciprocal Assistance Applications, 1948-72, at 77-78, 215-216 (General Secretariat, Organization of American States 1973). See Zemel v. Rusk, 381 U.S. 1, 14-15 & n.15 (1965). /4/ Enders Declaration, supra Paragraph 6; Declaration of John M. Walker, Jr., Assistant Secretary of the Treasury for Enforcement and Operations, Paragraph 3 (Attachment E to Application for Stay). /5/ Michel Declaration, supra Paragraph 3. /6/ Ibid.; Walker Declaration, supra Paragraph 3. /7/ See page 20 & note 32, infra. /8/ Violation of regulations promulgated under the TWEA constitutes a felony punishable by imprisonment of not more than 10 years and/or a fine of not more than $50,000. 50 U.S.C. (Supp. V) App. 16. There are no civil penalties for violation of the regulations. /9/ IEEPA established new procedures for exercising emergency authorities. Under the TWEA, the existence of any declared emergency was a sufficient predicate for exercise of any of the authorities provided under the Act. The National Emergencies Act, 50 U.S.C. 1601 et seq., enacted in 1976, terminated all authorities possessed by the President as a result of existing national emergencies (except for authorities under Section 5(b) of the TWEA) and established new procedures governing the declaration of national emergencies. Under IEEPA, the President must declare a new national emergency with respect to a specific threat before initiating the exercise of emergency economic powers. 50 U.S.C. (Supp. V) 1701. In addition, the President must consult with Congress before and during the exercise of IEEPA authorities and report to Congress at the time he begins to exercise such authorities and every six months thereafter. 50 U.S.C. (Supp. V) 1703. Under both IEEPA and the National Emergencies Act, Congress purported to retain the power to terminate a declared national emergency and to cut off the use of emergency authorities by concurrent resolution. 50 U.S.C. (& Supp. V) 1622, 1706(b). /10/ With certain limitations not directly relevant here, the President has the same broad powers under the IEEPA that he had under the TWEA. See Staff of House Comm. on International Relations, 95th Cong., 1st Sess., Markup on Revision of Trading With the Enemy Act 4 (Comm. Print 1977) (statement of Rep. Bingham). (This committee print and other legislative materials relating to the 1977 amendment to the TWEA are reproduced in a Legislative History Appendix filed by the parties in the court of appeals.) /11/ See, e.g., 47 Fed. Reg. 39797 (1982); 46 Fed. Reg. 45321 (1981); 45 Fed. Reg. 59549 (1980); 44 Fed. Reg. 53153 (1979); 43 Fed. Reg. 40449 (1978). /12/ "Property" is defined to include, inter alia, "money, checks, drafts, * * * debts, indebtedness obligations, * * * contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future or contingent" (31 C.F.R. 515.311; 28 Fed. Reg. at 6977). "Transfer" is defined to include "any * * * transaction * * * whether or not done or performed within the United States, the purpose, intent, or effect of which is to * * * surrender, release, (or) transfer * * * any * * * interest with respect to any property * * * includ(ing) the making, execution, or delivery of any * * * check * * * " (31 C.F.R. 515.310; 28 Fed. Reg. at 6976-6977). /13/ The payment of funds directly to Cuba or Cuban nationals for meals, lodging or transportation represents the discharge of an indebtedness for goods or services provided and thus is a transaction with respect to property in which Cuba has an interest, as is payment of funds to non-Cuban entities (e.g., an airline) that in turn remit proceeds to Cuba or pay fees to Cuba. Since imposition of the Cuban embargo in 1963 the Treasury Department has viewed the broad prohibition set out in 31 C.F.R. 515.201 as applying to travel-related property transactions involving Cuba. See page 16 & note 26, infra. /14/ 31 C.F.R. 515.560(a) (1977) provided in part: The following transactions are authorized: (1) All transactions ordinarily incident to travel to and from Cuba. (2) All transactions ordinarily incident to travel in Cuba, including payment of living expenses and the acquisition in Cuba of goods for personal consumption there. (3) The purchase in Cuba, and importation as accompanied baggage, of merchandise with a foreign market value not to exceed $100 per person, for personal use only. Such merchandise may not be resold. The authorization in this subparagraph may only be used once in every six consecutive months. /15/ Michel Declaration, supra Paragraph 6. For example, the Director for United States Affairs of the Cuban National and International Tourist Enterprise had requested visas for December 1981 and January 1982 visits to New York and Miami to meet 30 to 40 American travel agents for the purpose of promoting tourism to Cuba. In addition, the American Society of Travel Agents had inquired on behalf of Cuba whether Cuba could present an exhibition promoting travel to Cuba at the Society's 52nd World Travel Congress in Miami, October 10-16, 1982. Following the 1977 relaxation of licensing for travel-related financial transactions Cuba began to develop plans for a tourist complex on Cayo Largo, and possibly on two other cays, offering gambling casinos and other special attractions. A 1981-1985 five year plan called for inaugurating 22 new hotels with 2,800 rooms and recovering or improving an additional 6,900 rooms. By legislative decree, joint ventures with foreign ownership were authorized in order to attract foreign hard currency investments, primarily in tourist-related projects. See Enders Declaration, supra Paragraph 8. Reestablishment of a vigorous tourism industry could provide Cuba with a significant source of hard currency it could use to further its foreign policy goals. In 1958 Cuba earned $37 million from United States travelers alone, or two percent of its gross national product and almost four percent of foreign exchange earnings (Enders Declaration, supra Paragraph 10). United States government estimates indicated that if Cuba could return tourism to its 1958 prominence as a source of foreign exchange, within a few years it would earn a net hard currency income of approximately $190 to $225 million per year, which would amount to 20% of Cuba's annual hard currency income under present conditions (Walker Declaration, supra Paragraph 4). /16/ In July 1982, 31 C.F.R. 515.560 was further amended to clarify the scope of the general and specific licenses and the meaning of certain terms. 47 Fed. Reg. 32060 (1982). /17/ One respondent, the Center for Cuban Studies, applied to the Office of Foreign Assets Control of the Department of the Treasury for a license to engage in travel-related financial transactions. That application was denied. See C.A.J.A. 38. Although the other respondents did not apply for licenses, it does not appear from their allegations below that they would qualify either under the general license or for a specific license under the terms of 31 C.F.R. 515.560. During the course of the district court proceedings, respondent Francis E. Bradley obtained a temporary restraining order permitting him to travel to Cuba pending a hearing on the motions for preliminary injunction. See App. G, infra, 45a. /19/ Although the court of appeals remanded for issuance of a preliminary injunction, its opinion on the merits makes clear that it believed issuance of a permanent injunction would be warranted as well. Thus, the case is ripe for review by this Court at this stage. /20/ Michel Declaration, supra Paragraph 3. /21/ As we indicated in our Application for Stay (at 15-16), the Treasury Department is aware of several instances in which tour groups have announced plans for trips to Cuba following the decision below. See Declaration of John M. Walker, Jr. Paragraph 3 and Tabs A and B (Attachment D to Application for Stay). In addition, the decision below will encourage Cuba to move quickly to develop its tourism industry. Michel Declaration, supra Paragraph 7; Enders Declaration, supra Paragraph 15. /22/ As of July 1, 1977, the United States was maintaining comprehensive trade embargoes against Cuba, North Korea, Vietnam, and Cambodia (Kampuchea) under the authority of Section 5(b) of the TWEA. /23/ See pages 20-21, note 33, infra, for a description of post-July 1977 amendments to the Cuban Assets Control Regulations. /24/ Since the decision below was issued, various individuals and organizations have notified the Treasury Department of their belief that they are no longer bound by certain provisions of the Cuban Assets Control Regulations. See Walker Declaration, supra Paragraphs 4, 6-7, and Tab C; Michel Declaration, supra Paragraph 7. /25/ Michel Declaration, supra Paragraphs 3, 5 (ability of the President to act under TWEA has been "a fact of independent foreign policy significance" and a "central source of leverage the United States has over Cuba"). Cuba may well perceive that the entire Cuban Assets Control Program has been placed in jeopardy, which could affect its response to foreign policy initiatives by the United States. Michel Declaration, supra Paragraphs 7, 8, 10. /26/ See the broad definitions of "property," "interest in property," and "transfer" contained in the regulations. 31 C.F.R. 515.310, 515.311. And see page 7, note 13, supra. Since 1963, the Department of the Treasury has interpreted Section 515.201 to include a prohibition on travel-related financial transactions. The Department has sought to enforce the prohibition by investigating persons known to have traveled to Cuba, by sending questionnaires to United States businesses with foreign subsidiaries conducting licensed trade with Cuba, and by sending letters to various travel magazines, travel agencies, airlines and individuals warning them of the controls and license requirements. See United States-Cuba Trade Promotion: Hearings Before the Subcomm. on International Trade and Commerce of the House Comm. on International Relations, 94th Cong., 2d Sess. 44-46 (1976) (statement of Stanley Sommerfield, Acting Director, Office of Foreign Assets Control, Dep't of the Treasury). /27/ As this Court has noted, significant conditions can be imposed in connection with expressly revocable licenses. See Dames & Moore v. Regan, 453 U.S. 654, 673, 674 n.6 (1981) (President had authority to withdraw general license permitting legal actions against Iran, even to the extent of nullifying court orders of attachment issued while such license was in effect). See also Orvis v. Brownell, 345 U.S. 183 (1953). /28/ Under 31 C.F.R. 515.560(a)(3) (1977), travelers were authorized to bring back no more than $100 from Cuba (for personal use only). Under 31 C.F.R. 515.560(a)(5) (1977), only transactions involving nonscheduled flights and voyages to, from, and within Cuba were authorized. 31 C.F.R. 515.560(a)(7) (1977) expressly excluded domestic credit card issuers from contracts with Cuban enterprises for extension of credit to travelers. /29/ The legislative history indicates that Congress understood that authority with respect to travel-related financial transactions was being exercised at the time the grandfather clause was being considered. For example, when Leonard Santos, an Administration representative, was asked to list the authorities being exercised with respect to Cuba and Vietnam, he replied that they "would involve the travel to those countries and the exchange of goods." Emergency Controls on International Economic Transactions: Hearings Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 95th Cong., 1st Sess. 215 (1977) ("House Subcommittee Hearings"). Santos also informed the subcommittee that "all the powers conferred are exercised and that there are no additional powers that could be exercised that are not already exercised." Id. at 188. /30/ This Court has indicated that both the legislative history of the TWEA and the cases interpreting it "fully sustain the broad authority of the Executive when acting under this congressional grant of power." Dames & Moore v. Regan, supra, 453 U.S. at 672. The purpose of the TWEA is to permit the Executive to exercise full control over any property or transaction in which a foreign government or national has an interest. Propper v. Clark, supra, 337 U.S. at 493. See also Zittman v. McGrath, 341 U.S. 446, 463-464 (1951); Lyon v. Singer, 339 U.S. 841 (1950). Thus, the TWEA authorities granted by Congress have been construed broadly to preserve the Executive's flexibility. Guessefeldt v. McGrath, 342 U.S. 308 (1952); Clark v. Uebersee Finanz-Korporation, A.G., 332 U.S. 480, 488-489 (1947); Sardino v. Federal Reserve Bank, 361 F.2d 106, 110 (2d Cir.), cert. denied, 385 U.S. 898 (1966). /31/ Experience with the Iranian assets control program illustrates the sorts of adjustments that may be necessary. After Iranian assets were blocked, a general license authorized attachments of such property. That license was subsequently revoked, and the attachments obtained under the license rendered invalid. See Dames & Moore v. Regan, supra. /32/ For example, the embargo on trade with Cuba was initiated in 1962 under the narrow authority of the Foreign Assistance Act of 1961, 22 U.S.C. 2370(a). Following the 1963 Cuban missile crisis, the President tightened the embargo by exercising TWEA authority to regulate imports from third countries of goods manufactured from Cuban raw materials and trade between Cuba and Americans or American-owned subsidiaries in foreign countries. 28 Fed. Reg. 6975 (1963). In 1964, the regulations were amended to provide for the taking of a census of Cuban blocked assets in the United States (31 C.F.R. 515.607, 515.608; 29 Fed. Reg. 1617, 1619). In 1974, the regulations were amended to clarify the prohibition preventing United States persons from dealing abroad in Cuban-origin merchandise (31 C.F.R. 515.410) and to provide, inter alia, for issuance of specific licenses for importation of goods taken out of Cuba prior to July 8, 1963 (31 C.F.R. 515.543), for Cuban-origin goods sent as gifts (31 C.F.R. 515.544), for Cuban-origin books, films, tapes, news materials, and research samples (31 C.F.R. 515.545, 515.546, 515.547), and for payments to Cuba for overflights and emergency landings (31 C.F.R. 515.548). See 39 Fed. Reg. 25317, 25318, 25319, 28434 (1974). In 1975, the regulations were amended to provide for licenses for certain categories of transactions between Cuba and United States-owned or controlled firms in third countries (31 C.F.R. 515.559; 40 Fed. Reg. 47108). /33/ In addition to the regulation under challenge in this case, there have been a number of post-July 1977 changes to the Cuban Assets Control Regulations. In 1978, the regulations were amended to authorize quarterly remittances to Cuba of funds from non-blocked accounts for family support purposes, to authorize travel-related transactions of Cuban nationals with United States visas, and to allow United States travel agents or sponsors of exhibitions or performances to arrange or assist in such travel transactions, and to authorize transactions in connection with public exhibitions or performances in the United States by visiting Cuban nationals (31 C.F.R. 515.563, 515.564, 515.565; 43 Fed. Reg. 19852). In 1979, a new regulation imposed an interest payment requirement on holders of certain types of blocked Cuban property (31 C.F.R. 515.205; 44 Fed. Reg. 11770). In 1980, the regulations were amended to add a provision clarifying the application of the regulations to the Mariel boatlift (31 C.F.R. 515.415) and provisions authorizing transactions incidental to satellite communications for purposes of news coverage and authorizing licenses on a case-by-case basis for transactions incidental to other communications activities, such as the provision of telephone and telegraph services between the United States and Cuba (31 C.F.R. 515.542; 45 Fed. Reg. 58843). /34/ It will not do to suggest that the grandfather clause permits relaxation of restrictions on transactions, but does not allow tightening of an embargo without the declaration of a new national emergency. The broad TWEA authorities that are preserved under the grandfather clause should not operate on a one-way ratchet. If Congress intended to give the President the flexibility to relax the embargo in the interests of United States foreign policy, it must also have intended that he be able to impose restrictions if he determines that such a step would further United States foreign policy interests. /35/ See Michel Declaration, supra Paragraph 9 (noting that invocation of IEEPA procedures would have significant foreign policy implications). The scheme Congress established under IEEPA itself suggests that the court of appeals erred in construing the grandfather clause. Under IEEPA, the President must declare a national emergency with respect to a particular threat at the outset of a foreign assets control program. However, once the President has taken that major step, that declaration then serves as the predicate for an ongoing system of regulation, so that the Executive may issue and amend regulations with respect to the same threat without declaring a new national emergency. Rather than requiring a declaration of emergency in connection with the grandfathered TWEA authority, Congress settled for an annual declaration that exercise of such authorities with respect to a specific country was in the national interest. In view of the latter requirement, there is little reason to believe Congress also would have required declaration of a new national emergency in connection with modification of regulations issued under TWEA authority, particularly when it did not require such a declaration in connection with similar changes in IEEPA regulations. /36/ See also, e.g., House Subcommittee Hearings, supra, at 188, 193, 207, 210; Markup on Revision of Trading With the Enemy Act, supra, at 2, 7; S. Rep. No. 95-466, supra, at 4; 123 Cong. Reg. 22475 (1977) (statement of Representative Bingham, referring to continuation in effect, at the President's discretion, of "trade embargoes and asset control programs currently applied by the United States under the authority of section 5(b)"). /37/ The court of appeals also relied on the deletion from the proposed grandfather clause of language stating that "any other authority conferred upon the President by (Section 5(b)) may be exercised to deal with the same set of circumstances" and Representative Bingham's statements about that deletion. See App. A, infra, 9a-10a. The deletion may have resulted from a concern that the language could have been used to extend embargoes to countries that were not then subject to a comprehensive embargo. See House Subcommittee Hearings, supra, at 211-212. The Administration was not concerned about the deletion because it was of the view that where there was already an embargo "all the powers conferred are exercised and that there are no additional powers that could be exercised that are not already exercised." House Subcommittee Hearings, supra, at 188 (remarks of Leonard Santos). Indeed, Representative Bingham himself confirmed this understanding when, subsequent to his statements about the deleted language, he noted with respect to the embargo against Cuba that "(i)t is not the intention in this draft to interfere with that." Id. at 188. See also id. at 207. /38/ Although the right of international travel "is a part of the 'liberty' of which the citizen cannot be deprived without due process of law" (Kent v. Dulles, 357 U.S. 116, 125 (1958)), it is not a fundamental right, such as the right of interstate travel. See, e.g., Califano v. Aznavorian, 439 U.S. 170, 176-177 (1978); Califano v. Torres, 435 U.S. 1, 4 n.6 (1978). Moreover, this case concerns only the more limited interest in traveling freely to a particular foreign country -- an interest subject to reasonable regulation and restriction, based on national security and foreign policy considerations. See Haig v. Agee, supra, 453 U.S. at 306; Zemel v. Rusk, supra, 381 U.S. at 14-15. See also Aptheker v. Secretary of State, 378 U.S. 500, 509 (1964); Kennedy v. Mendoza-Martinez, 372 U.S. 144, 159-160 (1963). Appendix Omitted