[House Document 104-185]
[From the U.S. Government Publishing Office]



                                     
104th Congress, 2d Session - - - - - - - - - - - House Document 104-185


 
  DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO 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 NO. 12957 OF MARCH 15, 
    1995, AND MATTERS RELATING TO THE MEASURES IN THAT ORDER AND IN 
EXECUTIVE ORDER NO. 12959 OF MAY 6, 1995, PURSUANT TO 50 U.S.C. 1703(c) 
                       AND 22 U.S.C. 2349aa-9(c)




  March 12, 1996.--Message 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 the measures in that order and in 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 
that Executive order and 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 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 on 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 reexport, investment, and certain trade 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 specific 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 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 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 revoked 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 Speaker of the House of 
Representatives and President of the Senate by letters dated 
May 6, 1995.
    2. There was no amendments to the Iranian Transactions 
Regulations, 31 CFR Part 560 (the ``ITR'') during the reporting 
period.
    3. During the current 6-month period, the Department of the 
Treasury's Office of Foreign Assets Control (FAC) made numerous 
decisions with respect to applications for licenses to engage 
in transactions under the ITR, issuing 54 licensing 
determinations--both approvals and denials. The majority of 
denials were in response to requests to extend contract 
performance beyond the time specified by Executive Order No. 
12959 and by FAC general license. Licenses were issued 
authorizing the continued operation of Iranian diplomatic 
accounts, powers of attorney, extensions of standby letters of 
credit, payments for trade transactions pursuant to contracts 
prior to May 6, 1995, and exportation of certain agricultural 
products contracted for prior to May 6, 1995. The FAC continues 
to review under section 560.528 requests for authorization to 
export and reexport goods, services, and technology to ensure 
the safety of civil aviation and safe operation of U.S.-origin 
commercial passenger aircraft in Iran. In light of statutory 
restrictions applicable to goods and technology involved in 
these cases, Treasury continues to consult and coordinate with 
the Departments of State and Commerce on these matters, 
consistent with section 4 of Executive Order No. 12959.
    During the reporting period, FAC administered provisions on 
services related to maintaining Iranian bank accounts and 
identified and rejected Iran-related payments not authorized 
under the ITR. United States banks were notified that they 
could not process transactions on behalf of accounts held in 
the name of the Government of Iran or persons in Iran, with the 
exception of certain transactions related to interest accruals, 
customary service charges, the exportation of information or 
informational material, travel-related remittances, donations 
of articles to relieve human suffering, or lump sum closures of 
accounts by payment to their owners. United States banks 
continue to handle certain dollar payment transactions 
involving Iran between third-country banks that do not involve 
a direct credit or debit to Iranian accounts. Noncommercial 
family remittances involving Iran must be routed to or from 
non-U.S., non-Iranian offshore banks.
    The FAC continues to coordinate closely with the Federal 
Reserve Board, the Federal Reserve Bank of New York, and the 
California banking authorities concerning the treatment of 
three Iranian bank agencies--Banks Sepah, Saderat, and Melli. 
Licenses have been issued to the Iranian bank agencies 
authorizing them to pay overhead expenses under the supervision 
of the California and New York banking departments while 
meeting obligations incurred prior to May 6, 1995. 
Authorization expired at the end of December, which had enabled 
them to make payments to U.S. exporters under letters of credit 
advised prior to June 6, 1995, where the underlying exports 
were completed in accordance with the Regulations or a specific 
license issued by FAC. The FAC also had permitted the agencies 
to offer discounted advance payments on deferred payment 
letters of credit under the same conditions.
    4. 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.
    5. The expenses incurred by the Federal Government in the 
6-month period from September 15, 1995, through March 14, 1996, 
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 $965,000, 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 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 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, March 11, 1996.

                                
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