SW Legal Educational Publishing

Asset Seizure Rules Were Not Illegally Retroactive
Description Company lost payment for goods sold to Iraq when Iraqi letter of credit was frozen during Gulf War. New regulations denied the company the right to the payment. Court held the retroactive nature of the rules not illegal.
Topic International Law
Key Words Rulemaking, Retroactivity, Asset Seizure
C A S E   S U M M A R Y
Facts Bergerco sold goods to Iraq. The letter of credit issued to Bergerco by the Iraqi government was frozen when Iraqi assets were seized during the Gulf War. President Bush ordered the Office of Foreign Assets Control (OFAC) to issue regulations governing seized assets and how they would be handled for claims against the frozen funds. Bergerco was denied payment based on regulations issued by OFAC issued after the seizure. Bergerco sued, claiming the rules were retroactive in application. The district court agreed with Bergerco, OFAC appealed.
Court of Appeals Decision Reversed. Bergerco was not grandfathered in under the rules that existed prior to the regulations issued after the president exercised his authority under the International Emergency Economic Powers Act. The regulations under which Bergerco had operated prior to the new regulations did not create a "right" to a given outcome, so this is not an instance of illegal retroactive rulemaking.
Citation Bergerco Canada v. U.S. Treasury Dept., ---F.3d--- (1997 WL 699225, D.C. Cir.)
129 F.3d 189 (D.C. Cir., 1997)

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