[House Document 104-77]
[From the U.S. Government Publishing Office]





                                     

        104th Congress, 1st Session - - - - - - - - - - - - - House 
Document 104-77


 
    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 NOVEMBER 18, 1994, 
CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAN, PURSUANT TO 50 
                U.S.C. 1703(c) AND 22 U.S.C. 2349aa-9(c)




   May 18, 1995.--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 since the 
last Presidential report on November 18, 1994, concerning the 
national emergency with respect to Iran that was declared in 
Executive Order No. 12170 of November 14, 1979, and matters 
relating to Executive Order No. 12613 of October 29, 1987. 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 April 18, 1995. It discusses 
only matters concerning the national emergency with respect to 
Iran that was declared in Executive Order No. 12170 and matters 
relating to Executive Order No. 12613. Matters relating to the 
March 15, 1995, Executive Order regarding a ban on investment 
in the petroleum sector, and the May 6, 1995, Executive Order 
regarding new trade sanctions, will be covered in separate 
reports. My last report, dated November 18, 1994, covered 
events through October 18, 1994.
    1. There have been no amendments to the Iranian 
Transactions Regulations, 31 CFR Part 560, or to the Iranian 
Assets Control Regulations, 31 CFR Part 535, since the last 
report.
    2. The Office of Foreign Assets Control (``OFAC'') of the 
Department of the Treasury continues to process applications 
for import licenses under the Iranian Transactions Regulations. 
However, a substantial majority of such applications are 
determined to be ineligible for licensing and, consequently, 
are denied.
    During the reporting period, 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 Iranian Transactions Regulations. OFAC and 
Customs Service investigations of these violations have 
resulted in forfeiture actions and the imposition of civil 
monetary penalties. Additional forfeiture and civil penalty 
actions are under review.
    3. The Iran-United States Claims Tribunal (the 
``Tribunal''), established at The Hague pursuant to the Algiers 
Accords, continues to make progress in arbitrating the claims 
before it. However, since my last report, the Tribunal has not 
rendered any awards although payments were received by 
claimants in late November for awards rendered during the prior 
reporting period. Thus, the total number of awards remains at 
557. Of this total, 373 have been awards in favor of American 
claimants. Two hundred twenty-five (225) of these were awards 
on agreed terms, authorizing and approving payment of 
settlements negotiated by the parties, and 150 were decisions 
adjudicated on the merits. The Tribunal has issued 38 decisions 
dismissing claims on the merits and 85 decisions dismissing 
claims for jurisdictional reasons. Of the 59 remaining awards, 
three approved the withdrawal of cases and 56 were in favor of 
Iranian claimants. As of April 18, 1995, the Federal Reserve 
Bank of New York reported that the value of awards to 
successful American claimants from the Security Account held by 
the NV Settlement Bank stood at $2,365,160,410.39.
    Iran has not replenished the Security Account since October 
8, 1992, and the Account has remained continuously below the 
balance of $500 million required by the Algiers Accords since 
November 5, 1992. As of April 10, 1995, the total amount in the 
Security Account was $191,219,759.23, and the total amount in 
the Interest Account was $24,959,218.79.
    The United States continues to pursue Case A/28, filed in 
September 1993, to require Iran to meet its obligations under 
the Algiers Accords to replenish the Security Account. Iran has 
yet to file its Statement of Defense in that case.
    4. The Department of State continues to present United 
States Government claims against Iran, in coordination with 
concerned government agencies, and to respond to claims brought 
against the United States by Iran.
    On April 18, 1995, the United States filed the first of two 
parts of its consolidated submission on the merits in Case B/
61. 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 U.S. Government's refusal to allow the export of the 
equipment after January 19, 1981, in alleged contravention of 
the Algiers Accords. As directed by the Tribunal, the United 
States' submission addresses Iran's claims regarding both 
liability and compensation and damages.
    5. The Foreign Claims Settlement Commission (``FSCS'') on 
February 24, 1995, successfully completed its case-by-case 
review of the more than 3,000 so-called ``small claims'' 
against Iran arising out of the 1979 Islamic revolution. These 
``small claims'' (of $250,000 or less each) were originally 
filed before the Iran-United States Claims Tribunal, but were 
transferred to the FCSC pursuant to the May 13, 1990 Settlement 
Agreement between Iran and the United States.
    The FCSC issued decisions on 3,066 claims for total awards 
of $86,555,795. Of that amount, $41,570,936 represented awards 
of principal and $44,984,859 represented awards of interest. 
Although originally only $50 million were available to pay 
these awards, the funds earned approximately $9 million in 
interest over time, for a total settlement fund of more than 
$59 million. Thus, all awardees will receive full payment on 
the principal amounts of their awards, with interest awards 
paid on a pro rata basis.
    The FCSC's awards to individuals and corporations covered 
claims for both real and personal property seized by Iran. In 
addition, many claims arose out of commercial transactions, 
including contracts for the sale of goods and contracts for the 
supply of services such as teaching, medical treatment, data 
processing, and shipping. The FCSC is now working with the 
Department of the Treasury to facilitate final payment on all 
FCSC awards.
    6. 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. Similarly, the Iranian Transactions Regulations issued 
pursuant to Executive Order No. 12613 continue to advance 
important objectives in combating international terrorism. 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, May 18, 1995.