Treasury re-sanctions UN Palestine rapporteur after appeals court stay

Congress passed the International Emergency Economic Powers Act in 1977 to replace the Trading with the Enemy Act of 1917, a wartime statute that had given presidents sweeping authority to regulate foreign commerce. Sen. Frank Church (D-ID) led the reform after a Senate investigation discovered the U.S. had technically been in a continuous state of national emergency since 1933, with presidents treating that standing emergency as blanket authority to freeze foreign assets with no time limit and no congressional check. IEEPA created new guardrails: a president must declare a specific national emergency, identify an unusual and extraordinary threat to national security or foreign policy originating overseas, and file reports with Congress. But it preserved the core power to block transactions, freeze assets, and blacklist foreign nationals.

Presidents have invoked IEEPA 77 times since Carter first used it in November 1979, most to maintain long-running sanctions programs against countries or criminal networks. Carter's first use froze $12 billion in Iranian government assets ten days after Iranian students seized the U.S. embassy in Tehran and took American diplomats hostage. The Supreme Court upheld that asset freeze in Dames & Moore v. Regan (1981), setting the precedent that IEEPA gives the president broad authority over foreign-owned U.S. assets during a declared emergency. Before Trump's second term, the statute had almost never been used to sanction an individual for speech — its targets were governments, drug cartels, terrorism financiers, and weapons proliferators.

The U.S. relationship with the International Criminal Court has been hostile since before the court opened. The U.S. was one of only seven countries — alongside China, Iraq, Israel, Libya, Qatar, and Yemen — that voted against the Rome Statute in 1998. President Clinton signed the statute in 2000 but didn't submit it for Senate ratification. On May 6, 2002, President George W. Bush formally withdrew the U.S. signature, sending a note to the UN secretary-general that the U.S. had no obligations under the treaty, an act international lawyers called 'unsigning.' Congress later passed the American Servicemembers' Protection Act, which authorized the president to use military force to free any American detained by the ICC.

Trump's first administration used IEEPA against the ICC in 2020 on narrower grounds. In June 2020, Trump signed Executive Order 13928 declaring the ICC's investigation of U.S. military conduct in Afghanistan an extraordinary threat to national security. OFAC designated ICC Prosecutor Fatou Bensouda and senior official Phakiso Mochochoko on the SDN list in September 2020. The Biden administration revoked those sanctions in April 2021. Trump's second-term EO 14203, signed Feb. 6, 2025, went further: it targeted not just ICC staff but any person who 'directly engaged' with the court on investigations involving U.S. or Israeli nationals — a category broad enough to cover advocates, academics, and a UN volunteer who wrote letters to corporations.

On Feb. 6, 2025, President Trump signed Executive Order 14203, titled 'Imposing Sanctions on the International Criminal Court,' invoking IEEPA authority. EO 14203 targets anyone who directly engages with the ICC to investigate, arrest, detain, or prosecute U.S. or Israeli nationals without those countries' consent. The scope covers not just ICC staff but private individuals, lawyers, academics, and advocates who cooperate with ICC proceedings involving American or Israeli nationals — a breadth that alarmed international law scholars and NGO workers who feared it would chill ordinary human rights documentation.

On July 9, 2025, Treasury's Office of Foreign Assets Control added Francesca Albanese to the Specially Designated Nationals and Blocked Persons list, the master blacklist that freezes U.S.-connected assets and bars American individuals and businesses from transacting with her. Secretary of State Marco Rubio accused Albanese of running a campaign of political and economic warfare against the U.S. and Israel through letters to global companies recommending the ICC pursue investigations of their executives. Albanese, appointed to her UN role by the Human Rights Council in March 2022, is an unpaid volunteer who receives no salary from the UN. Her mandate, established in 1993, is to report on the human rights situation in the Palestinian territories occupied since 1967. According to Human Rights First, this was the first time in the UN's 80-year history that the U.S. had sanctioned a serving Special Rapporteur.

Albanese's husband, Massimiliano Cali, a senior economist with the World Bank, and the couple's 13-year-old daughter, identified in court filings as L.C. and a U.S. citizen, filed a federal lawsuit in February 2026 in U.S. District Court in Washington. They named President Trump, Attorney General Pam Bondi, Treasury Secretary Scott Bessent, and Secretary of State Marco Rubio as defendants. The complaint argued the sanctions violated the First, Fourth, and Fifth Amendments, unreasonably seized property without , and exceeded statutory authority. Cali said in filings that the World Bank told him in October 2025 that his position as senior country economist for Syria was suspended, and that he'd have to leave the bank's Middle East and North Africa division by July 2026.

On May 13, 2026, Senior U.S. District Judge Richard Leon, nominated by President George W. Bush and confirmed by voice vote on Feb. 14, 2002, issued a 26-page preliminary injunction against the sanctions. Leon found the Trump administration had likely violated Albanese's rights. Leon wrote that 'Albanese has done nothing more than speak,' and that her ICC recommendations 'have no binding effect on the [court's] actions — they are nothing more than her opinion.' He determined that foreign nationals residing abroad can hold First Amendment protections if they can show 'substantial connections' to the United States, applying a doctrine first articulated by the Supreme Court in United States v. Verdugo-Urquidez (1990), and concluded Albanese met that standard because she owns property in the U.S. and her daughter is an American citizen.

The government argued the First Amendment doesn't apply to Albanese at all. The DOJ pointed to a 2020 Supreme Court ruling holding that foreign citizens outside U.S. territory don't possess constitutional rights, and argued the 'substantial connections' standard from Verdugo-Urquidez — a 1990 Fourth Amendment case — doesn't extend to First Amendment claims for foreign nationals abroad. Even if it did, DOJ said Albanese didn't qualify. The DOJ filed an emergency motion challenging Leon's ruling within days. That legal dispute — whether a foreign critic of U.S. foreign policy can claim First Amendment protection by virtue of U.S. property ownership or family ties — is unsettled constitutional law with no controlling appellate precedent.

Around May 20-21, 2026, Treasury removed Albanese from the SDN list, complying with Leon's injunction. Her name came off the list roughly one week after the court order, per Treasury's OFAC website. The State Department publicly said it had not changed its position on the underlying sanctions decision. Being removed from the SDN list meant U.S. banks and businesses could again transact with Albanese, her assets were unfrozen, and the professional pressure on her husband's World Bank career eased temporarily. The window lasted less than a week.

On May 23-24, 2026, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, consisting of Trump-appointed judges, issued an administrative stay of Leon's ruling. An administrative stay is a short-term procedural hold that courts use to preserve the status quo while they decide whether to issue a longer stay pending appeal — it requires no ruling on the merits. The DC Circuit's order stated explicitly that it 'should not be construed in any way as a ruling on the merits.' Administrative stays became one of the most contested procedural tools in the federal courts in spring 2025 as the Trump administration repeatedly sought them to overturn district court injunctions. Law professor Rachel Bayefsky has documented that federal courts haven't adopted a uniform standard for granting them, and the test that formally applies — the four-factor Nken v. Holder standard — requires courts to weigh the likelihood of success on the merits, irreparable harm, balance of equities, and public interest.

On May 27, 2026, Treasury's website showed that Albanese was back on the SDN list, reinstated as a sanctioned individual under the ICC-related sanctions program. The reimposition happened within days of the DC Circuit's administrative stay, before any court had ruled on the constitutional merits of the sanctions. The DC Circuit's order told the parties to submit additional filings in early June, with the appeals court then expected to decide whether the sanctions should stay in place throughout the duration of the full appeal. Until that decision, Albanese's assets remain frozen, U.S. institutions can't transact with her, and the professional constraints on her husband's World Bank position return.

The Foundation for Defense of Democracies, a hawkish Washington think tank that supported the sanctions, welcomed the DC Circuit's stay. The Council on American-Islamic Relations called Leon's original injunction a victory for free speech and human rights. The UN Secretary-General's office said U.S. sanctions on a serving Special Rapporteur threatened the integrity of the entire UN human rights system — a concern grounded in the 1946 Convention on the Privileges and Immunities of the United Nations, which the U.S. ratified in 1970 and which grants Special Rapporteurs 'immunity from legal process of every kind' for words spoken in the course of their mission. The Knight First Amendment Institute at Columbia University noted that OFAC's broad interpretation of its sanctions authority creates a documented chilling effect on American NGOs, lawyers, and academics who work on international human rights issues.

The case sits at the intersection of three unresolved legal questions: Can IEEPA authorize sanctions against an individual for speech alone, or does it require conduct beyond advocacy? Do foreign nationals with U.S. property and citizen children have First Amendment standing? And can an appellate court use an administrative stay — a procedure with no uniform standard — to reimpose a blacklisting before any merits ruling? The DC Circuit's ruling on whether to block the sanctions pending appeal will be the most significant appellate test yet of how much judicial check remains on executive foreign-policy sanctions power when the president's target is expression rather than commerce.