DIRECTION RELATING TO ESTABLISHMENT OF ESCROW ACCOUNTS By the authority vested in me as President by the Constitution and statutes of the United States, including Section 203 of the International Emergency Economic Powers Act (50 U.S.C. 1702), Section 301 of Title 3 of the United States Code, Section 1732 of Title 22 of the United States Code, and Section 301 of the National Emergencies Act (50 U.S.C. 1631), in view of the continuing unusual and extraordinary threat to the national security, foreign policy and economy of the United States upon which I based my declarations of national emergency in Executive Order 12170, issued November 14, 1979, and in Executive Order 12211, issued April 17, 1980, in order to implement agreements with the Government of Iran, as reflected in Declarations of the Government of the Democratic and Popular Republic of Algeria dated January 19, 1981, relating to the release of U.S. diplomats and nationals being held as hostages and to the resolution of claims of United States nationals against Iran, and to begin the process of normalization of relations between the United States and Iran, it is hereby ordered that as of the effective date of this Order: 1-101. The Secretary of the Treasury is authorized to enter into, and to license, authorize, direct, and compel any appropriate official and/or the Federal Reserve Bank of New York, as fiscal agent of the United States, to enter into escrow or related agreements with a foreign central bank and with the Central Bank of Algeria under which certain money and other assets, as and when directed by the Secretary of the Treasury, shall be credited by the foreign central bank to an escrow account on its books in the name of the Central Bank of Algeria, for transfer to the Government of Iran if and when the Central Bank of Algeria receives from the Government of Algeria a certification that the 52 U.S. diplomats and nationals being held hostage in Iran have safely departed from Iran. Such agreements shall include other parties and terms as determined by the Secretary of the Treasury to be appropriate to carry out the purposes of this Order. 1-102. The Secretary of the Treasury is authorized to license, authorize, direct, and compel the Federal Reserve Bank of New York, as fiscal agent of the United States, to receive certain money and other assets in which Iran or its agencies, instrumentalities, or controlled entities have an interest and to hold or transfer such money and other assets, and any interest earned thereon, in such a manner as he deems necessary to fulfill the rights and obligations of the United States under the Declaration of the Government of the Democratic and Popular Republic of Algeria dated January 19, 1981, and the escrow and related agreements described in paragraph 1-101 of this Order. Such money and other assets may be held in interest-bearing form and where possible shall be invested with or through the entity holding the money or asset on the effective date of this Order. 1-103. Compliance with this Executive Order, any other Executive Order licensing, authorizing, directing or compelling the transfer of the assets referred to in paragraphs 1-101 and 1-102 of this Order, or any regulations, instructions, or directions issued thereunder shall to the extent thereof be a full acquittance and discharge for all purposes of the obligation of the person making the same. No person shall be held liable in any court for or with respect to anything done or omitted in good faith in connection with the administration of, or pursuant to and in reliance on, such orders, regulations, instructions, or directions. 1-104. The Attorney General shall seek to intervene in any litigation within the United States which arises out of this Order and shall, among other things, defend the legality of, and all actions taken pursuant to, each of its provisions. 1-105. The Secretary of the Treasury is delegated and authorized to exercise all functions vested in the President by the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to carry out the purposes of this Order. 1-106. This Order shall be effective immediately. JIMMY CARTER The White House, January 19, 1981. [Filed with the Office of the Federal Register, 9:17 a.m., January 22, 1981]
Executive Order 12276—United States-Iran Agreement on Release of the American Hostages
Executive Brief • At a Glance
The Secretary of the Treasury is authorized to enter into, and to license, authorize, direct, and compel any appropriate official and/or the Federal Reserve Bank of New York, as fiscal agent of the United States, to enter into escrow or related agreements with a foreign central bank and with the Central Bank of Algeria under which certain money and other assets, as and when directed by the Secretary of the Treasury, shall be credited by the foreign central bank to an escrow account on its books in the name of the Central Bank of Algeria, for transfer to the Government of Iran if and when the Central Bank of Algeria receives from the Government of Algeria a certification that the 52 U.S. diplomats and nationals being held hostage in Iran…
Plain-English Translation & Framers' Constitutional Analysis
Early Statesman synthesis distilling legal jargon into practical meaning, statutory anchors, and structural constitutional impacts.
Signed by President Jimmy Carter on January 19, 1981, this order concerns United States-Iran Agreement on Release of the American Hostages. As of the effective date of this Order: 1-101. The Secretary of the Treasury is authorized to enter into, and to license, authorize, direct, and compel any appropriate official and/or the Federal Reserve Bank of New York, as fiscal agent of the United States, to enter into escrow or related agreements with a foreign central bank and with the Central Bank of Algeria under which certain money and other assets, as and…
Key Directives & Operative Actions
The Secretary of the Treasury is authorized to enter into, and to license, authorize, direct, and compel any appropriate official and/or the Federal Reserve Bank of New York, as fiscal agent of the United States, to enter into escrow or related agreements with a foreign central bank and with the Central Bank of Algeria under which certain money and other assets, as and when directed by the Secretary of the Treasury, shall be credited by the foreign central bank to an escrow account on its books in the name of the Central Bank of Algeria, for transfer to the Government of Iran if and when the Central Bank of Algeria receives from the Government of Algeria a certification that the 52 U.S. diplomats and nationals being held hostage in Iran…
Such agreements shall include other parties and terms as determined by the Secretary of the Treasury to be appropriate to carry out the purposes of this Order. 1-102.
Such money and other assets may be held in interest-bearing form and where possible shall be invested with or through the entity holding the money or asset on the effective date of this Order. 1-103.
Compliance with this Executive Order, any other Executive Order licensing, authorizing, directing or compelling the transfer of the assets referred to in paragraphs 1-101 and 1-102 of this Order, or any regulations, instructions, or directions issued thereunder shall to the extent thereof be a full acquittance and discharge for all purposes of the obligation of the person making the same.
Constitutional & Societal Entities Impacted
Policy Areas & Topics
The Framers' Constitutional Council
1787 PrismEvaluating this order against the constitutional debates of 1787 and the limits of Article II executive power.
"When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb."
James Madison
Separation of Powers & Legislative Primacy
"The accumulation of all powers, legislative, executive, and judiciary, in the same hands... may justly be pronounced the very definition of tyranny." — Federalist No. 47 (1788)
Madison would express grave alarm over this order. By asserting independent authority in tension with legislative limits or the Bill of Rights, the Executive risks collapsing the separation of powers into unilateral rule. Under the Madisonian model, no emergency justifies the Executive substituting its decree for a deliberative Act of Congress.
Alexander Hamilton
The Energetic Executive & Unified Command
"The direction of war implies the direction of the common strength; and the power of directing and employing the common strength must be under the direction of the single hand of the Executive." — Federalist No. 74 (1788)
Hamilton would forcefully champion executive discretion here. For foreign entanglements, commerce defense, and national security, deliberative assemblies are too slow and faction-ridden. A unified, energetic Executive exercising swift command is precisely what the Philadelphia Convention intended for national preservation.
George Mason
Bill of Rights, Due Process & 10th Amendment
"The purse and the sword ought never to be in the same hands... nor the liberties of the citizen placed at the pleasure of a single magistrate." — Virginia Ratifying Convention (1788)
George Mason and the Anti-Federalists would sound a fierce warning. They feared that Article II would inevitably evolve into an elective monarchy. When an executive order impacts private rights, property, or civil liberties without individualized judicial process, Mason would see their darkest predictions verified.
Five Measurable "Constitutional Friction" Dimensions
An objective audit measuring potential separation-of-powers tension against the United States Constitution and established Supreme Court doctrine.
Legislative Encroachment & Purse
Touches upon core congressional prerogatives: raises appropriations reallocation, tariff imposition, or statutory preemption questions.
Executive Scope & Faithfulness
Invokes broad unilateral or emergency executive authorities that test the constitutional boundary of the Take Care Clause.
Federalism & State Sovereignty
Creates friction with the Tenth Amendment by conditioning state grants, mandating local compliance, or preempting state police powers.
Due Process & Individual Rights
Applies regulatory or compliance standards to private contractors or commercial entities.
Youngstown Jacksonian Tier
The order asserts independent Article II prerogative against statutory constraints, reallocates funds without explicit appropriation, or stretches executive power into realms constitutionally reserved to the legislature or judiciary.
This directive engages significant constitutional friction across statutory authorization, legislative prerogatives, or individual liberties.
Scholarly & Legal Citations
Exec. Order No. 12,276 (Jan. 19, 1981), https://executiveordersarchive.org/orders/app-executive-order-12276-united-states-iran-agreement-release-the-american-hostages.