[House Document 104-254]
[From the U.S. Government Publishing Office]
104th Congress, 2d Session - - - - - - - - - - House Document 104-254
DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAQ
__________
COMMUNICATION
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A REPORT ON DEVELOPMENTS SINCE HIS LAST REPORT OF FEBRUARY 9, 1996,
CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAQ THAT WAS
DECLARED IN EXECUTIVE ORDER NO. 12722 OF AUGUST 2, 1990, PURSUANT TO 50
U.S.C. 1641(c) AND 50 U.S.C. 1703(c)
September 4, 1996.--Referred to the Committee on International
Relations and ordered to be printed
The White House,
Washington, August 14, 1996.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: I hereby report to the Congress on the
developments since my last report of February 9, 1996,
concerning the national emergency with respect to Iraq that was
declared in Executive Order No. 12722 of August 2, 1990. This
report is submitted pursuant to section 401(c) of the National
Emergencies Act, 50 U.S.C. 1641(c), and section 204(c) of the
International Emergency Economic Powers Act, 50 U.S.C. 1703(c).
Executive Order No. 12722 ordered the immediate blocking of
all property and interests in property of the Government of
Iraq (including the Central Bank of Iraq) then or thereafter
located in the United States or within the possession or
control of a U.S. person. That order also prohibited the
importation into the United States of goods and services of
Iraqi origin, as well as the exportation of goods, services,
and technology from the United States to Iraq. The order
prohibited travel-related transactions to or from Iraq and the
performance of any contract in support of any industrial,
commercial, or governmental project in Iraq. U.S. persons are
also prohibited from granting or extending credit or loans to
the Government of Iraq.
The foregoing prohibitions (as well as the blocking of
Government of Iraq property) were continued and augmented on
August 9, 1990, by Executive Order No. 12724, which was issued
in order to align the sanctions imposed by the United States
with United Nations Security Council Resolution 661 of August
6, 1990.
Executive Order No. 12817 was issued on October 21, 1992,
to implement in the United States measures adopted in United
Nations Security Council Resolution (``UNSCR'') 778 of October
2, 1992. UNSCR 778 requires U.N. Member States to transfer to a
U.N. escrow account any funds (up to $200 million apiece)
representing Iraqi oil sale proceeds paid by purchasers after
the imposition of U.N. sanctions on Iraq, to finance Iraq's
obligations for U.N. activities with respect to Iraq, such as
expenses to verify Iraqi weapons destruction, and to provide
humanitarian assistance in Iraq on a nonpartisan basis. A
portion of the escrowed funds also funds the activities of the
U.N. Compensation Commission in Geneva, which handles claims
from victims of the Iraqi invasion and occupation of Kuwait.
Member States also may make voluntary contributions to the
account. The funds placed in the escrow account are to be
returned, with interest, to the Member States that transferred
them to the United Nations, as funds are received from future
sales of Iraqi oil authorized by the U.N. Security Council. No
Member State is required to fund more than half of the total
transfers or contributions to the escrow account.
This report discusses only matters concerning the national
emergency with respect to Iraq that was declared in Executive
Order No. 12722 and matters relating to Executive Orders No.
12724 and 12817 (the ``Executive Orders''). The report covers
events from February 2, 1996, through August 1, 1996.
1. In April 1995, the U.N. Security Council adopted UNSCR
986 authorizing Iraq to export up to $1 billion in petroleum
and petroleum products per quarter for 6 months under U.N.
supervision in order to finance the purchase of food, medicine,
and other humanitarian supplies. This arrangement may be
renewed by the Security Council for additional 6-month periods.
UNSCR 986 includes arrangements to ensure equitable
distribution of humanitarian goods purchased with UNSCR 986 oil
revenues to all the people of Iraq. The resolution also
provides for the payment of compensation to victims of Iraqi
aggression and for the funding of other U.N. activities with
respect to Iraq. On May 20, 1996, a memorandum of understanding
was concluded between the Secretariat of the United Nations and
the Government of Iraq agreeing on terms for implementing UNSCR
986. Further implementation procedures are being considered by
the Iraq Sanctions Committee which is composed of members of
the Security Council.
2. During the reporting period, there was one amendment to
the Iraqi Sanctions Regulations (the ``ISR''). On July 10,
1996, the Department of the Treasury's Office of Foreign Assets
Control (``OFAC'') amended the ISR to provide a general license
authorizing U.S. persons to enter into executory contracts with
the Government of Iraq for the purchase of Iraqi-origin
petroleum and petroleum products, the sale of essential parts
and equipment for the Kirkuk-Yumurtalik pipeline system, and
the sale of humanitarian goods and services, with performance
conditioned upon approval by the Office of Foreign Assets
Control within the framework of United Nations Security Council
Resolution 986 (1995). (61 Fed. Reg. 36627, July 12, 1996.) A
copy of the amended Regulations is attached.
All executory contracts must contain terms requiring that
all proceeds of oil purchases from the Government of Iraq,
including the State Oil marketing organization, must be placed
in the U.N. escrow account at Banque Nationale de Paris, New
York (the ``986 Escrow Account''), and all Iraqi payments for
authorized sales of pipeline parts and equipment, humanitarian
goods, and incidental transaction costs borne by Iraq will,
upon approval by the UNSC committee established pursuant to
UNSCR 661 (``the 661 Committee''), be paid or payable out of
the 986 Escrow Account.
3. Investigations of possible violations of the Iraqi
sanctions continue to be pursued and appropriate enforcement
actions taken. Several cases from prior reporting periods are
continuing and recent additional allegations have been referred
by OFAC to the U.S. Customs Service for investigation. Several
OFAC civil penalty proceedings are pending.
Investigation also continues into the roles played by
various individuals and firms outside Iraq in the Iraqi
government procurement network. These investigations may lead
to additions to OFAC's listing of individuals and organizations
determined to be Specially Designated Nationals (``SDNs'') of
the Government of Iraq.
4. Pursuant to Executive Order No. 12817 implementing UNSCR
778, on October 28, 1992, OFAC directed the Federal Reserve
Bank of New York to establish a blocked account for receipt of
certain post-August 6, 1990, Iraqi oil sales proceeds, and to
hold, invest, and transfer these funds as required by the
Order. Cumulative transfers from the blocked Federal Reserve
Bank of New York account since issuance of Executive Order No.
12817 amounted to $200 million as of December 21, 1995, fully
satisfying the United States' commitment to match the payments
of other Member States from blocked Iraqi oil payments, and its
obligation pursuant to UNSCR 778.
5. The Office of Foreign Assets Control has issued a total
of 630 specific licenses regarding transactions pertaining to
Iraq or Iraqi assets since August 1990. Licenses have been
issued for transactions such as the filing of legal actions
against Iraqi governmental entities, legal representation of
Iraq, and the exportation to Iraq of donated medicine, medical
supplies, and food intended for humanitarian relief purposes,
the execution of powers of attorney relating to the
administration of personal assets and decedents' estates in
Iraq and the protection of preexistent intellectual property
rights in Iraq. Since my last report, 12 specific licenses have
been issued.
6. The expenses incurred by the Federal Government in the
6-month period from February 2, 1996, through August 1, 1996,
that are directly attributable to the exercise of powers and
authorities conferred by the declaration of a national
emergency with respect to Iraq are reported to be about $1
million, 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 International Organization
Affairs, the Bureau of Political-Military Affairs, the U.S.
Mission to the United Nations, and the Office of the Legal
Advisor), and the Department of Transportation (particularly
the U.S. Coast Guard).
7. The United States imposed economic sanctions on Iraq in
response to Iraq's illegal invasion and occupation of Kuwait, a
clear act of brutal aggression. The United States, together
with the international community, is maintaining economic
sanctions against Iraq because the Iraqi regime has failed to
comply fully with United Nations Security Council resolutions.
Security Council resolutions on Iraq call for the elimination
of Iraqi weapons of mass destruction, Iraqi recognition of
Kuwait and the inviolability of the Iraq-Kuwait boundary, the
release of Kuwaiti and other third-country Nationals,
compensation for victims of Iraqi aggression, long-term
monitoring of weapons of mass destruction capabilities, the
return of Kuwaiti assets stolen during Iraq's illegal
occupation of Kuwait, renunciation of terrorism, an end to
internal Iraqi repression of its own civilian population, and
the facilitation of access of international relief
organizations to all those in need in all parts of Iraq. Six
years after the invasion, a pattern of defiance persists: a
refusal to account for missing Kuwaiti detainees; failure to
return Kuwaiti property worth millions of dollars, including
military equipment that was used by Iraq in its movement of
troops to the Kuwaiti border in October 1994; sponsorship of
assassinations in Lebanon and in northern Iraq; incomplete
declarations to weapons inspectors and refusal of unimpeded
access; and ongoing widespread human rights violations. As a
result, the U.N. sanctions remain in place; the United States
will continue to enforce those sanctions under domestic
authority.
The Baghdad government continues to violate basic human
rights of its own citizens through systematic repression of
minorities and denial of humanitarian assistance. The
Government of Iraq has repeatedly said it will not be bound by
UNSC Resolution 688. For nearly 5 years, Baghdad has maintained
a blockade of food, medicine, and other humanitarian supplies
against northern Iraq. The Iraqi military routinely harasses
residents of the north, and has attempted to ``Arabize'' the
Kurdish, Turcomen, and Assyrian areas in the north. Iraq has
not relented in its artillery attacks against civilian
population centers in the south, or in its burning and draining
operations in the southern marshes, which have forced thousands
to flee to neighboring States.
The policies and actions of the Saddam Hussein regime
continue to pose an unusual and extraordinary threat to the
national security and foreign policy of the United States, as
well as to regional peace and security. The U.N. resolutions
affirm that the Security Council must be assured of Iraq's
peaceful intentions in judging its compliance with sanctions.
Because of Iraq's failure to comply fully with these
resolutions, the United States will continue to apply economic
sanctions to deter it from threatening peace and stability in
the region.
Sincerely,
William J. Clinton.