What legal authorities allow the U.S. executive branch to seize and sell foreign state assets like Venezuelan oil?
Executive summary
The U.S. executive branch primarily relies on a mix of sanctions authority (chiefly IEEPA implemented via presidential executive orders and OFAC regulations), civil forfeiture statutes that permit in rem actions against foreign-located property, and targeted statutory tools that let courts or agencies seize equivalent funds in U.S. accounts — together forming the legal pathways by which assets tied to foreign states (including oil revenues) can be frozen, transferred, or in limited circumstances repurposed [1] [2] [3] [4].
1. Sanctions and executive orders: the frontline tool for freezing state assets
When Washington decides to target a foreign regime it commonly does so by declaring an emergency under statutes such as the International Emergency Economic Powers Act (IEEPA) and then issuing an executive order that authorizes Treasury’s Office of Foreign Assets Control (OFAC) to block or “freeze” property and transactions connected to that regime; OFAC implements and enforces those freezes and can block transfers of funds and control which U.S. persons may deal with designated assets [1] [2].
2. Civil forfeiture and in rem jurisdiction: turning freezes into court seizures
Beyond administrative blocking, federal civil-forfeiture law lets U.S. courts issue in rem suits against property, even where the property is located abroad, under statutes like 28 U.S.C. §1355(b) and related DOJ practice manuals; those authorities permit U.S. district courts to exercise original jurisdiction in forfeiture cases and to seek foreign cooperation for actual seizure or enforcement of a forfeiture judgment [3] [5] [6].
3. Section 981(k) and the “equivalent funds” technique for assets overseas
Where assets are physically outside the United States, DOJ guidance explains a practical mechanism: 18 U.S.C. §981(k) authorizes restraint, seizure, and forfeiture of an equivalent amount from correspondent or interbank accounts that a foreign financial institution holds in the U.S., effectively allowing the U.S. to reach foreign-held funds by seizing dollar-denominated equivalents under domestic control [4].
4. Older vesting statutes and exceptional wartime powers
Historical statutes such as the Trading with the Enemy Act and the vesting powers it contemplated (including the Alien Property Custodian) have long given the President strong wartime authority to seize and “vest” property in the United States, and Congress has at times narrowed or clarified those powers (including amendments to IEEPA after 2001); these laws form part of the constitutional and statutory backdrop for extraordinary asset-control options, though their applicability to modern foreign-state seizures is fact-dependent and limited by subsequent law [7] [8].
5. Policy choices, new statutes, and the limits of unilateral seizure
Recent legislative additions — for example provisions in U.S. aid bills authorizing seizure of certain Russian state assets to benefit Ukraine — show Congress can create or narrow authority for asset transfers, and GAO has documented that the President typically issues executive orders to give agencies the practical authority to act [9] [1]. Legal scholars caution, however, that routine seizure of foreign sovereign assets raises constitutional, statutory, and international-law constraints and that existing authorities (IEEPA, civil forfeiture, §981(k)) are not an all-purpose license to vest foreign-state property without judicial process or new congressional authorization [8] [10].
6. Operational choreography: who acts and how cooperation is secured
On the ground, U.S. agencies do not act unilaterally in a vacuum; DOJ’s Money Laundering and Asset Recovery Section (MLARS) and Office of International Affairs (OIA) coordinate foreign requests and decisions about whether host countries will seize, transfer, or enforce U.S. forfeiture orders, and federal prosecutors are instructed to engage these offices and U.S. diplomatic channels before moving against foreign-based assets [6] [4] [3].
Conclusion: a patchwork of executive, judicial, and statutory tools with real constraints
The executive branch’s ability to freeze, restrain, and — in constrained circumstances — convert foreign-state assets into funds usable by the U.S. or its partners rests on a combination of executive-order-sanctions authority (IEEPA/OFAC), civil-forfeiture statutes and in rem proceedings (28 U.S.C. §1355, 18 U.S.C. §981 and DOJ procedures), specialized statutory vesting powers, and occasional new congressional mandates; each path carries legal caveats, operational dependencies, and diplomatic risks that legal commentators and GAO reports underscore [1] [2] [3] [4] [8] [9].