Trading with the Enemy Act (United States, 1917)

The Trading with the Enemy Act (TWEA) is the United States wartime trading and enemy-property statute enacted on 6 October 1917. Amendments in 1933 and 1941 turned section 5(b) into a wider emergency financial and property power. Congress confined new uses to time of war in 1977, transferred the peacetime emergency architecture to the International Emergency Economic Powers Act (1977) and preserved specified existing exercises. On 29 July 2026, the Cuban Assets Control Regulations remain the only programme continuing under that grandfathered TWEA authority.

Legal authority and statutory evolution

The original 1917 Act prohibited unlicensed trade with an enemy or ally of enemy, defined enemy status in territorial and associational terms and established the Alien Property Custodian. Section 3 trading prohibitions, section 5(b) transaction powers and custodial authority over property were separate parts of the statute. Their triggers, procedures and legal consequences should not be collapsed.

The text of section 5(b) changed materially. The 1917 provision operated in wartime. The Emergency Banking Relief Act of 9 March 1933 extended section 5(b) to a national emergency declared by the President and supported domestic banking and gold controls. The First War Powers Act of 18 December 1941 expanded the wartime text again. A description of an exercise must quote or paraphrase the version then in force. The broad 1941 power was not the provision Congress enacted in 1917.

The statute supported regulation of foreign exchange, banking transfers and property in which a foreign country or national had an interest. It also underpinned the wartime foreign-funds-control system associated with Executive Order 8389. Blocking and vesting remained distinct. Blocking immobilises property without transferring title. A separate vesting order transfers the relevant interest to the United States under the applicable authority and process.

The 1977 division between war and peace

Public Law 95-223 did not repeal TWEA. Title I limited new section 5(b) use to time of war. Title II enacted IEEPA for qualifying peacetime national emergencies. The transition provision preserved specified authorities already being exercised, subject to annual presidential continuation. This created a legal boundary between current wartime TWEA authority, grandfathered programmes and the newer IEEPA system.

The distinction prevents a misleading claim that TWEA's descendants carry almost the entire modern sanctions system. IEEPA became the principal peacetime emergency statute, alongside programme-specific laws, executive orders and regulations. TWEA itself retains wartime trading and enemy-property provisions in chapter 53 of title 50 and supports the continuing Cuba programme through the 1977 grandfather.

North Korea is no longer a TWEA programme. On 26 June 2008, President George W. Bush terminated TWEA application to North Korea; Executive Order 13466 continued specified restrictions under IEEPA. Treating every older country programme as still grounded in TWEA obscures the governing law.

Statecraft use and institutional roles

TWEA supported First World War trading controls and enemy-property administration, Second World War foreign-funds controls and post-war country programmes before the 1977 reform. The state nexus is direct. Congress creates and limits authority, the President invokes and delegates it and Treasury administers the current Cuba controls. Historically, the Alien Property Custodian and successor authorities vested and administered specified property. Banks and firms act as regulated intermediaries.

Wartime denial and enemy-property administration were explicit statutory functions. The objectives of a grandfathered peacetime programme must come from its operative regulations and presidential policy. They cannot be inferred from the 1917 title. Enemies, allies of enemies, blocked governments and nationals are also different legal categories, not interchangeable labels for any strategic target.

The Act established durable administrative techniques: executive activation, Treasury licensing, transaction control and property blocking. That institutional lineage does not make the Alien Property Custodian an earlier name for OFAC. The offices, mandates and legal settings differ.

Doctrine and contested interpretation

Doctrine

Enemy character, wartime power, delegation, blocking, vesting, due process and foreign-affairs deference shape TWEA disputes. In Propper v Clark, the Supreme Court distinguished the effect of a wartime blocking order from a later vesting order in the property dispute before it. The decision supplies a bounded legal distinction, not a rule that every property action follows the same procedure.

Contested interpretation

In Regan v Wald, the Supreme Court upheld the Cuba travel-related transaction restrictions challenged under grandfathered authority and addressed the constitutional claim before it. The judgment did not validate every future change to the Cuba programme or every use of emergency economic power. Claims concerning expansion within grandfathered authority still require analysis of the instrument, preserved power and later statute.

Current legal position at 29 July 2026

Chapter 53 remains in force as amended. New section 5(b) exercises are limited to time of war, while specified pre-1977 uses can continue under the grandfather provision. Presidential Determination 2025-11 continues the relevant Cuba authority through 14 September 2026. The Cuban Assets Control Regulations remain in 31 C.F.R. part 515. Any publication after 14 September 2026 must identify a new presidential determination before describing the programme as continued.

See also

International Emergency Economic Powers Act (1977) · Executive Order 8389 and Foreign Funds Control (US, 1940) · Alien Property Custodian (US) · First War Powers Act (United States, 1941) · Trading with the Enemy Act (UK, 1914) · The Prize Cases (United States Supreme Court, 1863) · Economic statecraft

Sources

1. Trading with the Enemy Act, ch. 106, 40 Stat. 411, 6 October 1917, original enactment.
2. Office of the Law Revision Counsel, 50 U.S.C. chapter 53, preliminary edition checked 29 July 2026.
3. Emergency Banking Relief Act, ch. 1, 48 Stat. 1, 9 March 1933.
4. First War Powers Act, 1941, Pub. L. 77-354, title III, 55 Stat. 838, 18 December 1941.
5. International Emergency Economic Powers Act, Pub. L. 95-223, title I, section 101, 91 Stat. 1625, 28 December 1977, transition text.
6. Presidential Determination 2025-11, 'Continuation of the Exercise of Certain Authorities Under the Trading With the Enemy Act', 29 August 2025, 90 Fed. Reg. 42795.
7. Electronic Code of Federal Regulations, 31 C.F.R. part 515, Cuban Assets Control Regulations, checked 29 July 2026.
8. Office of Foreign Assets Control, Cuba Sanctions, checked 29 July 2026.
9. Propper v Clark, 337 U.S. 472 (1949), United States Reports opinion.
10. Regan v Wald, 468 U.S. 222 (1984), United States Reports opinion.
11. Executive Order 8389, 'Protecting Funds of Victims of Aggression', 10 April 1940, as amended, set out in the notes to 50 U.S.C. section 4305.
12. Executive Order 13466, 'Continuing Certain Restrictions With Respect to North Korea and North Korean Nationals', 26 June 2008, 73 Fed. Reg. 36787.
13. Benjamin A. Coates, 'The Secret Life of Statutes: A Century of the Trading with the Enemy Act', Modern American History 1, no. 2 (2018), 151-172, doi:10.1017/mah.2018.12.