[House Document 106-261]
[From the U.S. Government Publishing Office]
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106th Congress, 2d Session - - - - - - - - - - - House Document 106-261
SIX MONTH PERIODIC REVIEW WITH RESPECT TO THE NATIONAL EMERGENCY
DECLARED IN IRAN
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A REPORT ON DEVELOPMENTS SINCE HIS LAST REPORT, CONCERNING THE NATIONAL
EMERGENCY WITH RESPECT TO IRAN THAT WAS DECLARED IN EXECUTIVE ORDER
12957 OF MARCH 15, 1995, PURSUANT TO 50 U.S.C. 1641(c)
June 27, 2000.--Message and accompanying papers referred to the
Committee on International Relations and ordered to be printed
__________
U.S. GOVERNMENT PRINTING OFFICE
79-011 WASHINGTON : 2000
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 the national emergency
with respect to Iran that was declared in Executive Order 12957
of March 15, 1995.
William J. Clinton.
The White House, June 27, 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 U.S. 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 Congressional leadership by letter dated May
6, 1995.
2. On August 19, 1997, I issued Executive Order 13059 (the
``Order'') in 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, 1996. 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 Order 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 transaction 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 a 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. Under
these sanctions, virtually all trade with Iran is prohibited
except for trade in information and informational materials and
certain other limited exceptions.
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, as well 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. A
copy of the October 27 amendments is attached to this report.
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). A copy of the amendment is attached to this report.
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 51 licenses. The
majority of 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-five licenses were issued
authorizing commercial sales and exportation to Iran of bulk
agricultural commodities; in addition, licenses were issued
that authorized three sales of other food products, three sales
of medicines or medical equipment, and one exportation of
turbines and other turbomachinery for use within Turkey in
connectionwith in-country transport of gas from the
Turkmenistan-Iran-Turkey natural gas pipeline. Other licenses that were
issued authorized certain air safety, diplomatic, legal, financial, and
travel transactions, film-making, humanitarian, journalistic, and
research activities, and the importation of art objects for public
exhibition. Pursuant to Sections 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 continues to consult with the Departments of
State and Commerce prior to issuing licenses.
For the period September 15, 1999 through March 14, 2000,
on OFAC's instructions, U.S. banks refused to process
approximately 1,400 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 $115 million worth of business
denied Iran by virtue of U.S. economic sanctions.
Since my last report, OFAC has collected nearly $122,000 in
civil monetary penalties from seven corporations and two
individuals for violations of IEEPA and the Regulations.
6. In September 1999, the president of a Wisconsin
corporation pleaded guilty in the Eastern District of Wisconsin
to one count of making a false statement to the Government and
a guilty plea was entered for his corporation for one count of
violating IEEPA. In October 1999, a federal jury found the
corporation's vice president guilty of one count of violating
IEEPA and the ITR and one count of violating the Arms Export
Control Act. The defendants had been named in an August 1998
indictment charging the illegal exportation to Iran of U.S.-
origin military aircraft component parts. A non-U.S. resident
also named in the indictment is a fugitive.
In March 1999, an individual was indicted in the Eastern
District of Michigan for the illegal importation of Iranian
carpets. The charges resulted in the civil forfeiture of the
merchandise, valued at $200,000.
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 of March 20, 1997. The
indictment charges the defendant with the attempted exportation
to Iran of gas chromatographs from the United States.
A trial date has not been scheduled for a Georgia
corporation and two of its officers who were indicted in
December 1998 for transactions relating to the illegal
exportation to Iran of automobile parts.
The U.S. Customs Service has continued to effect numerous
seizures of Iranian-origin merchandise, primarily carpets, for
violation of the import prohibitions of the ITR. 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 September 15, 1999 through March 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
$1.2 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 Adviser), 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-terriosm
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.