The saga over the (postponed) new round of Iran sanctions designations continues.

Yesterday, the Wall Street Journal published a piece on how Congressional Democrats were becoming uneasy over the Obama administration’s approach to Iran’s ballistic missile activities in the post-deal period and had introduced two new legislative proposals aimed at forcing the White House’s hand on the sanctions designations. Meanwhile, the White House’s Chief of Staff Denis McDonough – appearing on Fox News Sunday – countered that the Administration would “issue those sanctions and those designations at the appropriate time. There’s no question about it.”

Nonetheless, the most bizarre thing about this whole controversy is how utterly ineffectual the new sanctions designations will be – in light of the fact that news of them was leaked prior to actual designation and the identities of the parties to be designated have been revealed.

The identities of the (soon-to-be) designated parties were first publicized by the Wall Street Journal in its initial round of reporting on the subject. This information was garnered from White House emails sent to Congressional offices on the eve of the sanctions designations. Last week, however, the Wisconsin Project on Nuclear Arms Control went one step further and effectively published the designation notice that the Treasury Department had drafted for public release, including the names of all parties to be designated under Executive Order 13382 for assisting Iran in its development of ballistic missile capabilities.

As a result of such publication, the element of surprise – so critical to the ultimate impact of a blocking sanction – was fatally undermined and cannot be recovered.

EO 13382 is a blocking program – meaning, that its sanctions block the property and interests in property of a designated person or entity that are or come within the United States or the possession or control of a U.S. person. For instance, U.S. persons are required to freeze the property and interests in property of a designated party that is or comes within their possession or control. If there is a funds transfer passing through a bank in New York in which a designated person has an interest, then that funds transfer must be immediately blocked.

The element of surprise is critical here, because if a designated party knows that its funds are to be frozen if they enter the United States or fall within the possession of a U.S. person, then they will seek to remove those funds and insulate them from the United States. In doing so, they limit the potential impact of the blocking measures by ensuring that they retain full access to their assets – even if they are restricted as to how those assets can be ultimately managed and utilized.

For this reason, U.S. courts have found that prior notice by the Government to the parties to be designated is not required in light of the important government interests at stake and the need for “prompt action…to protect against the transfer of assets subject to the blocking order.” Holy Land Found. for Relief and Dev. v. Ashcroft, 219 F.Supp.2d 57, 76-7 (D.D.C. 2002). As the Holy Land court stated, “Money is fungible, and any delay or pre-blocking notice would afford a designated entity the opportunity to transfer, spend, or conceal its assets, thereby making the IEEPA sanctions program virtually meaningless.” Id. at 77. (EO 13382 is one of many IEEPA sanctions programs.)

Furthermore, this is why EO 13382 includes a proviso (§ 5) stating that “because of the ability to transfer funds or other assets instantaneously, prior notice to such persons [to be designated] of measures to be taken pursuant to this order would render these measures ineffectual. I [the President] therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 12938, as amended, there need be no prior notice of a listing or determination made pursuant to [§ 1 of EO 13382].”

Having identified the persons and entities to be designated under EO 13382, the Wall Street Journal, the Wisconsin Project, and an assortment of others have unknowingly defeated the very purposes for which the sanctions were to be instituted in the first place. Presumably, the leak was aimed at undermining the White House and its campaign in support of the recent nuclear agreement with Iran – as the Administration has its fair share of detractors on Capitol Hill – but such leaks should not sacrifice the U.S. interests at stake in imposing sanctions designations in the first place.