[House Document 106-297]
[From the U.S. Government Publishing Office]
106th Congress, 2d Session - - - - - - - - - - House Document 106-297
SIX-MONTH PERIODIC REPORT WITH RESPECT TO THE NATIONAL EMERGENCY IN
IRAN
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT
TO IRAN THAT WAS DECLARED IN EXECUTIVE ORDER 13059 OF AUGUST 19, 1997,
PURSUANT TO 50 U.S.C. 1641(c)
September 25, 2000.--Message and accompanying papers referred to the
Committee on International Relations and ordered to be printed
To the Congress of the United States:
As required by section 401(c) of the National Emergencies
Act, 50 U.S.C. 1641(c), section 204(c) of the International
Emergency Economic Powers Act (IEEPA) 50 U.S.C. 1703(c), and
section 505(c) of the International Security and Development
Cooperation Act of 1985, 22 U.S.C. 2349aa-9(c), I transmit
herewith a 6-month periodic report on developments concerning
the national emergency with respect to Iran that was declared
in Executive Order 12957 of March 15, 1995, and matters
relating to the measures in that order and in Executive Order
12959 of May 6, 1995, and in Executive Order 13059 of August
19, 1997.
William J. Clinton.
The White House, September 26, 2000.
President's Periodic Report on the National Emergency With Respect to
Iran
I hereby report to the Congress on developments concerning
the national emergency with respect to Iran that was declared
in Executive Order 12957 of March 15, 1995, and matters
relating to the measures in that order and in Executive Order
12959 of May 6, 1995, and in Executive Order 13059 of August
19, 1997. This report is submitted pursuant to section 204(c)
of the International Emergency Economic Powers Act, 50 U.S.C.
1703(c) (``IEEPA''), section 401(c) of the National Emergencies
Act, 50 U.S.C. 1641(c), and section 505(c) of the International
Security and Development Cooperation Act of 1985, 22 U.S.C.
2349aa-9(c). This report discusses only matters concerning the
national emergency with respect to Iran that was declared in
Executive Order 12957 and does not deal with those relating to
the emergency declared on November 14, 1979, in connection with
the hostage crisis.
1. On March 15, 1995, I issued Executive Order 12957 (60
Fed. Reg. 14615, March 17, 1995) to declare a national
emergency with respect to Iran pursuant to IEEPA, and to
prohibit the financing, management, or supervision by U.S.
persons of the development of Iranian petroleum resources. This
action was in response to actions and policies of the
Government of Iran, including support for international
terrorism, efforts to undermine the Middle East peace process,
and the acquisition of weapons of mass destruction and the
means to deliver them. A copy of the order was provided to the
Congress by message dated March 15, 1995.
Following the imposition of these restrictions with regard
to the development of Iranian petroleum resources, Iran
continued to engage in activities that represent a threat to
the peace and security of all nations, including Iran's
continuing support for international terrorism, its support for
acts that undermine the Middle East peace process, and its
intensified efforts to acquire weapons of mass destruction. On
May 6, 1995, I issued Executive Order 12959 (60 Fed. Reg.
24757, May 9, 1995) to further respond to the Iranian threat to
the national security, foreign policy, and economy of the
United States. The terms of that order and an earlier order
imposing an import ban on Iranian-origin goods and services
(Executive Order 12613 of October 29, 1987) were consolidated
and clarified in Executive Order 13059 of August 19, 1997.
At the time of signing Executive Order 12959, I directed
the Secretary of the Treasury to authorize through specific
licensing certain transactions, including transactions by U.S.
persons related to the Iran-United States Claims Tribunal in
The Hague, established pursuant to the Algiers Accords, and
related to other international obligations and United States
Government functions, and transactions related to the export of
agricultural commodities pursuant to preexisting contracts
consistent with section 5712(c) of Title 7, United States Code.
I also directed the Secretary of the Treasury, in consultation
with the Secretary of State, to consider authorizing U.S.
persons through specific licensing to participate in market-
based swaps of crude oil from the Caspian Sea area for Iranian
crude oil in support of energy projects in Azerbaijan,
Kazakhstan, and Turkmenistan.
Executive Order 12959 revoked sections 1 and 2 of Executive
Order 12613 of October 29, 1987, and sections 1 and 2 of
Executive Order 12957 of March 15, 1995, to the extent they are
inconsistent with it. A copy of Executive Order 12959 was
transmitted to the Speaker of the House and the President of
the Senate by letter dated May 6, 1995.
2. On August 19, 1997, I issued Executive Order 13059 (the
``order'') to clarify the steps taken in Executive Order 12957
and Executive Order 12959, to confirm that the embargo on Iran
prohibits all trade and investment activities by U.S. persons,
wherever located, and to consolidate in one order the various
prohibitions previously imposed to deal with the national
emergency declared on March 15, 1995. A copy of the order was
transmitted to the Speaker of the House and the President of
the Senate by letter dated August 19, 1997.
The other prohibits: (1) the importation into the United
States of any goods or services of Iranian origin or owned or
controlled by the Government of Iran except information or
informational materials; (2) the exportation, reexportation,
sale, or supply from the United States or by a U.S. person,
wherever located, of goods, technology, or services to Iran or
the Government of Iran, including knowing transfers to a third
country for direct or indirect supply, transshipment, or
reexportation to Iran or the Government of Iran, or
specifically for use in the production, commingling with, or
incorporation into goods, technology, or services to be
supplied, transshipped, or reexported exclusively or
predominantly to Iran or the Government of Iran; (3) knowing
reexportation from a third country to Iran or the Government of
Iran of certaincontrolled U.S.-origin goods, technology, or
services by a person other than a U.S. person; (4) the purchase, sale,
transport, swap, brokerage, approval, financing, facilitation,
guarantee, or other transactions or dealings by U.S. persons, wherever
located, related to goods, technology, or services for exportation,
reexportation, sale or supply, directly or indirectly, to Iran or the
Government of Iran, or to goods or services of Iranian origin or owned
or controlled by the Government of Iran; (5) new investment by U.S.
persons in Iran or in property or entities owned or controlled by the
Government of Iran; (6) approval, financing, facilitation, or guarantee
by a U.S. person of any transaction by a foreign person that a U.S.
person would be prohibited from performing under the terms of the
order; and (7) any transaction that evades, avoids, or attempts to
violate a prohibition under the order.
Executive Order 13059 became effective at 12:01 a.m.,
eastern daylight time on August 20, 1997. Because the order
consolidated and clarified the provisions of prior orders,
Executive Order 12613 and paragraphs (a), (b), (c), (d) and (f)
of section 1 of Executive Order 12959 were revoked by Executive
Order 13059. The revocation of corresponding provisions in the
prior Executive orders did not affect the applicability of
those provisions, or of regulations, licenses or other
administrative actions taken pursuant to those provisions, with
respect to any transaction or violation occurring before the
effective date of Executive Order 13059. Specific licenses
issued pursuant to prior Executive orders continue in effect,
unless revoked or amended by the Secretary of the Treasury.
General licenses, regulations, orders, and directives issued
pursuant to prior orders continue in effect, except to the
extent inconsistent with Executive Order 13059 or otherwise
revoked or modified by the Secretary of the Treasury.
The declaration of national emergency made by Executive
Order 12957, and renewed each year since, remains in effect and
is not affected by the order.
3. On March 13, 2000, I renewed for another year the
national emergency with respect to Iran pursuant to IEEPA. This
renewal extended the authority for the current comprehensive
trade embargo against Iran in effect since May 1995.
4. On April 28, 1999, I announced that existing unilateral
economic sanctions programs would be amended to modify
licensing policies to permit case-by-case review of specific
proposals for the commercial sale of agricultural commodities
and products, aswell as medicine and medical equipment, where
the United States Government has the discretion to do so. I further
announced that the Administration was developing country-specific
licensing criteria to guide the case-by-case review process so that
governments subject to sanctions do not gain unwarranted benefits from
such sales.
On July 27, 1999, the Iranian Transactions Regulations, 31
CFR Part 560 (the ``ITR'' or the ``Regulations'') were amended
to add statements of licensing policy with respect to
commercial sales of agricultural commodities and products,
medicine and medical equipment (64 Fed. Reg. 41784, August 2,
1999). These provisions were amended on October 27, 1999 (64
Fed. Reg. 58789, November 1, 1999) to remove language that had
prohibited the issuance of specific licenses authorizing
financing by entities of the governments of Sudan, Libya, and
Iran. In addition, technical revisions were made to the
Regulations pertaining to informational materials and visas.
On March 17, 2000, Secretary of State Madeleine Albright
announced that economic sanctions against Iran would be eased
to allow Americans to purchase and import carpets and food
products such as dried fruits, nuts, and caviar from Iran. To
implement this policy, the Department of the Treasury's Office
of Foreign Assets Control (``OFAC'') amended the Regulations to
authorize by general license the importation into the United
States of, and dealings in, certain Iranian-origin foodstuffs
and carpets and related transactions (65 Fed. Reg. 25642, May
3, 2000).
5. During the current six-month period, OFAC made numerous
decisions with respect to applications for licenses to engage
in transactions under the ITR, and issued 62 licenses. The
majority of license denials were in response to requests to
authorize commercial exports to Iran--particularly of machinery
and equipment for various industries--and the importation of
Iranian-origin goods. Twenty-one licenses were issued
authorizing commercial sales and exportation to Iran of bulk
agricultural commodities; in addition, licenses were issued
that authorized 20 sales of medicines or medical equipment.
Other licenses that were issued authorized certain air and
marine safety, diplomatic, legal, financial, and travel
transactions, filmmaking, humanitarian, journalistic, and
research activities, and the importation of the art objects for
public exhibition. Pursuant to Section 3 and 4 of Executive
Order 12959, Executive Order 13059, and consistent with
statutory restrictions concerning certain goods and technology,
including those involved in air safety cases, Treasury
continuesto consult with the Department of State and Commerce
prior to issuing licenses.
For the period March 15 through September 14, 2000, on
OFAC's instruction, U.S. banks refused to process more than
1,100 commercial transactions, the majority involving foreign
financial institutions, that would have been contrary to U.S.
sanctions against Iran. The transactions rejected amounted to
nearly $170 million worth of business denied Iran by virtue of
U.S. economic sanctions.
Since my last report, OFAC has collected nearly $342,000 in
civil monetary penalties for violations of IEEPA and the
Regulations. The violators included one insurer, seven
companies, six U.S. financial institutions, and six
individuals. An additional 102 cases are undergoing penalty
action for violations of IEEPA and the Regulations.
6. On January 14, 2000, the vice president of a Wisconsin
corporation was sentenced in the Eastern District of Wisconsin
to 41 months in prison for his October 1999 jury conviction on
charges he violated IEEPA and the Arms Export Control Act by
illegally exporting U.S.-origin military aircraft component
parts to Iran. On February 3, 2000, the corporation president
was sentenced to six months in prison and ordered to pay $5,000
fine for his guilty plea to one count of making false
statements to the Government, and the corporation was ordered
to pay a fine of $15,000. The defendants were charged with
violating sanctions against Iran in an August 1998 indictment.
A California resident is scheduled to be tried in October
2000 in the District of Maryland for IEEPA and other charges
filed in a superseding indictment on March 20, 1997. The
indictment charges the defendant with the attempted exportation
to Iran of gas chromatographs from the United States.
On May 10, 2000, a Georgia corporation plead guilty in U.S.
District Court in Atlanta to one count of violating IEEPA by
exporting automobile parts from the United States to Iran
through third countries. Two company officials and entered
guilty pleas for making false statements to the United States
Government in connection with the shipments. Sentencing is
pending. The guilty pleas were the result of a 24-count
indictment returned in December 1998.
Various enforcement actions carried over from previous
reporting periods are continuing and new reports of violations
are being aggressively pursued.
7. The expenses incurred by the Federal Government in the
six-month period from March 15 through September 14, 2000 that
are directly attributable to the exercise of powers and
authorities conferred by the declaration of a national
emergency with respect to Iran are reported to be approximately
$1.5 million, most of which represent wage and salary costs for
Federal personnel. Personnel costs were largely centered in the
Department of the Treasury (particularly in the Office of
Foreign Assets Control, the U.S. Customs Service, the Office of
the Under Secretary for Enforcement, and the Office of the
General Counsel), the Department of State (particularly the
Bureau of Economic and Business Affairs, the Bureau of Near
Eastern Affairs, the Bureau of Intelligence and Research, and
the Office of the Legal Advisor), and the Department of
Commerce (the Bureau of Export Administration and the Chief
Counsel's Office).
8. The situation reviewed above continues to present an
extraordinary and unusual threat to the national security,
foreign policy, and economy of the United States. The
declaration of the national emergency with respect to Iran
contained in Executive Order 12957 and the comprehensive
economic sanctions imposed by Executive Order 12959 underscore
the United States Government's opposition to the actions and
policies of the Government of Iran, particularly its support of
international terrorism and its efforts to acquire weapons of
mass destruction and the means to deliver them. The Iranian
Transactions Regulations issued pursuant to Executive Orders
12957, 12959, and 13059 continue to advance important
objectives in promoting the nonproliferation and anti-terrorism
policies of the United States. I shall exercise the powers at
my disposal to deal with these problems and will report
periodically to the Congress on significant developments.