[House Document 104-137]
[From the U.S. Government Publishing Office]





        104th Congress, 1st Session - - - - - - - - - - - -  House 
Document 104-137


 
  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 MAY 18, 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)




  November 28, 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 since the 
last Presidential report of May 18, 1995, concerning the 
national emergency with respect to Iran that was declared in 
Executive Order No. 12107 of November 14, 1979. This report is 
submitted pursuant to section 204(c) of the International 
Emergency Economic Powers Act, 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). This report 
covers events through September 29, 1995. My last report, dated 
May 18, 1995, covered events through April 18, 1995.
    1. On March 15 of this year by Executive Order No. 12957, I 
declared a separate national emergency pursuant to the 
International Emergency Economic Powers Act and imposed 
separate sanctions. Executive Order No. 12959, issued May 6, 
1995, then significantly augmented those new sanctions. As a 
result, as I reported on September 18, 1995, in conjunction 
with the declaration of a separate emergency and the imposition 
of new sanctions, the Iranian Transactions Regulations, 31 CFR 
Part 560, have been comprehensively amended.
    There have been no amendments to the Iranian Assets Control 
Regulations, 31 CFR Part 535, since the last report. However, 
the amendments to the Iranian Transactions Regulations that 
implement the new separate national emergency are of some 
relevance to the Iran-United States Claims Tribunal (the 
``Tribunal'') and related activities. For example, sections 
560.510, 560.513, and 560.525 contain general licenses with 
respect to, and provide for specific licensing of, certain 
transactions related to arbitral activities.
    2. The Tribunal, established at The Hague pursuant to the 
Algiers Accords, continues to make progress in arbitrating the 
claims before it. Since my last report, the Tribunal has 
rendered four awards, bringing the total number to 566. As of 
September 29, 1995, the value of awards to successful American 
claimants from the Security Account held by the NV Settlement 
Bank stood at $2,368,274,541.67.
    Iran has not replenished the Security Account established 
by the Accords to ensure payment of awards to successful U.S. 
claimants since October 8, 1992. The Account has remained 
continuously below the $500 million balance required by the 
Algiers Accords since November 5, 1992. As of September 29, 
1995, the total amount in the Security Account was 
$188,105,627.95, and the total amount in the Interest Account 
was $32,066,870.62.
    Therefore, the United States continues to pursue Case A/28, 
filed in September 1993, to require Iran to meet its 
obligations under the Accords to replenish the Security 
Account. Iran filed its Statement of Defense in that case on 
August 31, 1995. The United States is preparing a Reply for 
filing on December 4, 1995.
    3. The Department of State continues to present other 
United States Government claims against Iran, in coordination 
with concerned government agencies, and to respond to claims 
brought against the United States by Iran, in coordination with 
concerned government agencies.
    In September 1995, the Departments of Justice and State 
represented the United States in the first Tribunal hearing on 
a government-to-government claim in 5 years. The Full Tribunal 
heard arguments in Cases A/15(IV) and A/24. Case A/15(IV) is an 
interpretive dispute in which Iran claims that the United 
States has violated the Algiers Accords by its alleged failure 
to terminate all litigation against Iran in U.S. courts. Case 
A/24 involves a similar interpretive dispute in which, 
specifically, Iran claims that the obligation of the United 
States under the Accords to terminate litigation prohibits a 
lawsuit against Iran by the McKesson Corporation from 
proceeding in U.S. District Court for the District of Columbia. 
The McKesson Corporation reactivated that litigation against 
Iran in the United States following the Tribunal's negative 
ruling on Foremost McKesson Incorporated's claim before the 
Tribunal.
    Also in September 1995, Iran filed briefs in two cases, to 
which the United States is now preparing responses. In Case A/
11, Iran filed its Hearing Memorial and Evidence. In that case, 
Iran has sued the United States for $10 billion, alleging that 
the United States failed to fulfill its obligations under the 
Accords to assist Iran in recovering the assets of the former 
Shah of Iran. Iran alleges that the United States improperly 
failed to (1) freeze the U.S. assets of the Shah's estate and 
certain U.S. assets of close relatives of the Shah; (2) report 
to Iran all known information about such assets; and (3) 
otherwise assist Iran in such litigation.
    In Case A/15(II:A), 3 years after the Tribunal's partial 
award in the case, Iran filed briefs and evidence relating to 
10 of Iran's claims against the United States Government for 
nonmilitary property allegedly held by private companies in the 
United States. Although Iran's submission was made in response 
to a Tribunal order directing Iran to file its brief and 
evidence ``concerning all remaining issues to be decided by 
this Case,'' Iran's filing failed to address many claims in the 
case.
    In August 1995, the United States filed the second of two 
parts of its consolidated submission on the merits in Case B/
61, addressing issues of liability and compensation. As 
reported in my May 1995 Report, Case B/61 involves a claim by 
Iran for compensation with respect to primarily military 
equipment that Iran alleges it did not receive. The equipment 
was purchased pursuant to commercial contracts with more than 
50 private American companies. Iran alleges that it suffered 
direct losses and consequential damages in excess of $2 billion 
in total because of the United States Government's refusal to 
allow the export of the equipment after January 19, 1981, in 
alleged contravention of the Algiers Accords.
    4. Since my last report, the Tribunal has issued two 
important awards in favor of U.S. nationals considered dual 
U.S.-Iranian nationals by the Tribunal. On July 7, 1995, the 
Tribunal issued Award No. 565, awarding a claimant $1.1 million 
plus interest for Iran's expropriation of the claimant's shares 
in the Iranian architectural firm of Abdolaziz Farmafarmaian & 
Associates. On July 14, 1995, the Tribunal issued Award No. 
566, awarding two claimants $129,869 each, plus interest, as 
compensation for Iran's taking of real property inherited by 
the claimants from their father. Award No. 566 is significant 
in that it is the Tribunal's first decision awarding dual 
national claimants compensation for Iran's expropriation of 
real property in Iran.
    5. The situation reviewed above continues to implicate 
important diplomatic, financial, and legal interests of the 
United States and its nationals and presents an unusual 
challenge to the national security and foreign policy of the 
United States. The Iranian Assets Control Regulations issued 
pursuant to Executive Order No. 12170 continue to play an 
important role in structuring our relationship with Iran and in 
enabling the United States to implement properly the Algiers 
Accords. I shall continue to exercise the powers at my disposal 
to deal with these problems and will continue to report 
periodically to the Congress on significant developments.

                                                William J. Clinton.
    The White House, November 28, 1995.

                                
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