[House Document 104-117]
[From the U.S. Government Publishing Office]





                                     

        104th Congress, 1st Session - - - - - - - - - - - - House 
Document 104-117


 
    DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAN

                               __________

                                MESSAGE

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

   A REPORT ON DEVELOPMENTS SINCE HIS LAST REPORT OF MARCH 15, 1995, 
CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAN, PURSUANT TO 50 
                U.S.C. 1703(c) AND 22 U.S.C. 2349aa-9(c)




 September 18, 1995.--Message and accompanying papers referred to the 
     Committee on International Relations and ordered to be printed
To the Congress of the United States:
    I hereby report to the Congress on developments concerning 
the national emergency with respect to Iran that was declared 
in Executive Order No. 12957 of March 15, 1995, and matters 
relating to Executive Order No. 12959 of May 6, 1995. This 
report is submitted pursuant to section 204(c) of the 
International Emergency Economic Powers Act, 50 U.S.C. 1703(c) 
(IEEPA), 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 No. 12957 and matters relating to Executive Order No. 
12959.
    1. On March 15, 1995, I issued Executive Order No. 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 United 
States 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 No. 12959 to further 
respond to the Iranian threat to the national security, foreign 
policy, and economy of the United States.
    Executive Order No. 12959 (60 Fed. Reg. 24757, May 9, 1995) 
(1) prohibits exportation from the United States to Iran or to 
the Government of Iran of goods, technology, or services; (2) 
prohibits the reexportation of certain U.S. goods and 
technology to Iran from third countries; (3) prohibits 
transactions such as brokering and other dealing by United 
States persons in goods and services of Iranian origin or owned 
or controlled by the Government of Iran; (4) prohibits new 
investments by United States persons in Iran or in property 
owned or controlled by the Government of Iran; (5) prohibits 
U.S. companies and other United States persons from approving, 
facilitating, or financing performance by a foreign subsidiary 
or other entity owned or controlled by a United States person 
of transactions that a United States person is prohibited from 
performing; (6) continues the 1987 prohibition on the 
importation into the United States of goods and services of 
Iranian origin; (7) prohibits any transaction by any United 
States person or within the United States that evades or avoids 
or attempts to violate any prohibition of the order; and (8) 
allowed U.S. companies a 30-day period in which to perform 
trade transactions pursuant to contracts predating the 
Executive order.
    In Executive Order No. 12959, I directed the Secretary of 
the Treasury to authorize through licensing certain 
transactions, including transactions by United States persons 
related to the Iran-United States Claims Tribunal in The Hague, 
established pursuant to the Algiers Accords, and other 
international obligations and United States Government 
functions. Such transactions also include 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 United 
States 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 No. 12959 revokes sections 1 and 2 of 
Executive Order No. 12613 of October 29, 1987, and sections 1 
and 2 of Executive Order No. 12957 of March 15, 1995, to the 
extent they are inconsistent with it. A copy of Executive Order 
No. 12959 was transmitted to the President of the Senate and 
Speaker of the House by letter dated May 6, 1995.
    2. In its implementation of the sanctions imposed against 
Iran pursuant to Executive Order No. 12959, the Office of 
Foreign Assets Control (FAC) of the Department of the Treasury 
has issued 12 general licenses and 2 general notices 
authorizing various transactions otherwise prohibited by the 
Executive order or providing statements of licensing policy. In 
order to ensure the widest dissemination of the general 
licenses and general notices in advance of promulgation of 
amended regulations, FAC published them in the Federal Register 
on August 10, 1995 (60 Fed. Reg. 40881). In addition, FAC 
disseminated this information by its traditional methods such 
as electronic bulletin boards, FAX, and mail. Copies of these 
general licenses and general notices are attached to this 
report.
    General License No. 1 described those transactions which 
were authorized in connection with the June 6, 1995 delayed 
effective date contained in Executive Order No. 12959 for trade 
transactions related to pre-May 7 trade contracts. General 
License No. 2 authorized payments to or from Iran under certain 
circumstances and certain dollar clearing transactions 
involving Iran by U.S. financial institutions. General License 
No. 3 authorized the exportation of certain services by U.S. 
financial institutions with respect to accounts held for 
persons in Iran, the Government of Iran, or entities owned or 
controlled by the Government of Iran. General License No. 3 
also contained an annex identifying 13 Iranian banks and 62 of 
their branches, agencies, representative offices, regional 
offices, and subsidiaries as owned or controlled by the 
Government of Iran. General License No. 4 authorized (1) 
domestic transactions involving Iranian-origin goods already 
within the United States except for transactions involving the 
Government of Iran or an entity owned or controlled by the 
Government of Iran, and (2) transactions by United States 
persons necessary to effect the disposition of Iranian-origin 
goods or services located or to be performed outside the United 
States, provided that they were acquired by that United States 
person in transactions not prohibited by the order or by 31 
C.F.R. Part 560, that such disposition does not result in the 
importation of these goods or services into the United States, 
and that such transactions are completed prior to August 6, 
1995. General License No. 5 authorized the importation into the 
United States of information and informational materials, 
confirmed the exemption of such information from the ban on 
exportation from the United States, and set forth a licensing 
policy for the exportation of equipment necessary to establish 
news wire feeds or other transmissions of information. General 
License No. 6 authorized the importation into the United States 
and the exportation to Iran of diplomatic pouches and their 
contents. General License No. 7 provided a statement of 
licensing policy for consideration, on a case-by-case basis, to 
authorize the establishment and operation of news organization 
offices in Iran by U.S. organizations whose primary purpose is 
the gathering and dissemination of news to the general public. 
General License No. 8 authorized transactions in connection 
with the exportation of agricultural commodities pursuant to 
pre-May 7 trade contracts provided that the terms of such 
contract require delivery of the commodity prior to February 2, 
1996. General License No. 9 authorized import, export, and 
service transactions necessary to the conduct of official 
business by the missions of the Government of Iran to 
international organizations and the Iranian Interests Section 
of the Embassy of Pakistan in the United States. General 
License No. 10 provided a statement of licensing policy with 
respect to transactions incident to the resolution of disputes 
between the United States or U.S. nationals and the Government 
of Iran in international tribunals and domestic courts in the 
United States and abroad. General License No. 11 authorized the 
exportation of household goods and personal effects for persons 
departing from the United States to relocate in Iran. General 
License No. 12 authorized the provision of certain legal 
services to the Government of Iran or to a person in Iran and 
the receipt of payment therefor under certain circumstances.
    General Notice No. 1 described information required in 
connection with an application for a specific license to 
complete the performance of pre-May 7 trade contracts prior to 
August 6, 1995 (except with respect to agricultural commodities 
as provided by General License No. 8). General Notice No. 2 
indicated that the Department of the Treasury had authorized 
the U.S. agencies of Iranian banks to complete, through 
December 29, 1995, transactions for U.S. exporters involving 
letters of credit, which they issued, confirmed, or advised 
prior to June 6, 1995, provided that the underlying export was 
completed in accordance with the terms of General License No. 1 
or a specific license issued to the exporter by FAC. General 
Notice No. 2 also noted that the U.S. agencies of the Iranian 
banks were authorized to offer discounted advance payments on 
deferred payment letters of credit, which they issued, 
confirmed, or advised, provided that the same criteria are met.
    3. The Iranian Transactions Regulations, 31 CFR Part 560 
(the ``ITR''), have been comprehensively amended to implement 
the provisions of Executive Orders No. 12957 and No. 12959. The 
amended ITR were issued by FAC on September 11, 1995 (60 Fed. 
Reg. 47061-74) and incorporate, with some modifications, the 
General Licenses cited above. A copy of the amended regulations 
is attached to this report.
    4. In consultation with the Department of State, FAC 
reviewed applications for specific licenses to permit continued 
performance of trade contracts entered into prior to May 7, 
1995. It issued more than 100 such licenses allowing 
performance to continue up to August 6, 1995.
    5. The expenses incurred by the Federal Government in the 
6-month period from March 15 through September 14, 1995, that 
are directly attributable to the exercise of powers and 
authorities conferred by the declaration of a national 
emergency with respect to Iran are approximately $875,000, most 
of which represents 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 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 Politico-Military Affairs, and the 
Office of the Legal Adviser), and the Department of Commerce 
(the Bureau of Export Administration and the General Counsel's 
Office).
    6. The situation reviewed above continues to involve 
important diplomatic, financial, and legal interests of the 
United States and its nationals and presents 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 No. 12957 and the comprehensive economic sanctions 
imposed by Executive Order No. 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 
No. 12957 and No. 12959 continue to advance important 
objectives in promoting the nonproliferation and antiterrorism 
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.

                                                William J. Clinton.
    The White House, September 18, 1995.
    
    
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