[House Document 105-117]
[From the U.S. Government Publishing Office]



105th Congress, 1st Session  - - - - - - - - - - House Document 105-117


 
                    ADDITIONAL PROHIBITIONS ON IRAN

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

  A REPORT ON ADDITIONAL MEASURES TO CONFIRM THAT THE EMBARGO ON IRAN 
PROHIBITS ALL TRADE AND INVESTMENT ACTIVITIES BY UNITED STATES PERSONS, 
     WHEREVER LOCATED, AND TO CONSOLIDATE IN ONE ORDER THE VARIOUS 
  PROHIBITIONS PREVIOUSLY IMPOSED TO DEAL WITH THE NATIONAL EMERGENCY 
       DECLARED ON MARCH 15, 1995, PURSUANT TO 50 U.S.C. 1703(c)





    September 3, 1997.--Referred to the Committee on International 
                  Relations and ordered to be printed


                                           The White House,
                                       Washington, August 19, 1997.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: On March 15, 1995, I reported to the 
Congress that, pursuant to section 203(a) of the International 
Emergency Economic Powers Act (50 U.S.C. 1702(a)) (``IEEPA'') 
and section 201(a) of the National Emergencies Act (50 U.S.C. 
1621(a)) (``NEA''), I had exercised my statutory authority to 
declare a national emergency to respond to the actions and 
politics of the Government of Iran and to issue Executive Order 
12957, which prohibited United States persons from entering 
into contracts for the financing or the overall management or 
supervision of the development of petroleum resources located 
in Iran or over which Iran claims jurisdiction. On May 6, 1995, 
I exercised my authority under these statutes and under section 
505(a) of the International Security and Development 
Cooperation Act of 1985 (22 U.S.C. 2349aa-9(a)) (``ISDCA'') to 
issue Executive Order 12959, which imposed additional measures 
to respond to Iran's intensified efforts to acquire weapons of 
mass destruction and to its continuing support for 
international terrorism, including support for acts that 
undermine the Middle East peace process. Executive Order 12959 
imposed a comprehensive trade and investment embargo on Iran.
    Following the imposition of these restrictions, Iran has 
continued to engage in activities that represent a threat to 
the peace and security of all nations. I have found it 
necessary to take additional measures to confirm that the 
embargo on Iran prohibits all trade and investment activities 
by United States persons, wherever located, and to consolidate 
in one order the various prohibitions previously imposed to 
deal with the national emergency declared on March 15, 1995. I 
have issued a new Executive order and hereby report to the 
Congress pursuant to section 204(b) of IEEPA (50 U.S.C. 
1703(b)), section 301 of the NEA (50 U.S.C. 1631), and section 
505(c) of the ISDCA (22 U.S.C. 2349aa-9(c)).
    The new order I have issued with respect to Iran confirms 
the prohibition of the following transactions:
          Importation into the United States of any goods or 
        services of Iranian origin or owned or controlled by 
        the Government of Iran, except information or 
        informational material;
          Exportation, reexportation, sale, or supply from the 
        United States or by a United States person, wherever 
        located, of goods, technology, or services to Iran or 
        the Government of Iran, including knowing transfers to 
        a third country for direct or indirect supply, 
        transshipment, or reexportation to Iran or the 
        Government of Iran, or specifically for use in the 
        production of, commingling with, or incorporation into 
        goods, technology, or services to be supplied, 
        transshipped, or reexported exclusively or 
        predominantly to Iran or the Government of Iran;
          Reexportation from a third country by a person other 
        than a United States person of certain U.S. origin 
        goods, services, or technology that are subject to 
        export license application requirements under any 
        United States regulations imposed independently of this 
        embargo;
          Purchase, sale, transport, swap, brokerage, approval, 
        financing, facilitation, guarantee, or other 
        transactions or dealings by United States persons, 
        wherever located, related to direct or indirect trade 
        with Iran or the Government of Iran or to goods or 
        services of Iranian origin or owned or controlled by 
        the Government of Iran;
          New investment by United States persons in Iran or in 
        property or entities owned or controlled by the 
        Government of Iran, making clear that the applicable 
        dates under the prior orders continue to govern for 
        purposes of defining ``new'' investments;
          Approval, financing, facilitation, or guarantee by a 
        United States person of any transaction by a foreign 
        person that a United States person would be prohibited 
        from performing under the embargo; and
          Any evasion, avoidance, or attempt to violate a 
        prohibition under the order.
    By confirming that United States persons are prohibited 
from engaging in any trade- or investment-related activities 
with Iran, I want to make clear that this means all direct or 
indirect involvement in such activities wherever those 
activities occur.
    This new Executive order provides that the Secretary of the 
Treasury, in consultation with the Secretary of State, is 
authorized to take such actions, including the promulgation of 
rules and regulations, as may be necessary to carry out the 
purposes of the order. There are certain transactions subject 
to prohibition under this order that I have directed the 
Secretary of the Treasury to authorize through licensing, 
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 U.S. Government functions. In addition, under 
appropriate conditions, United States persons may be licensed 
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, Turkmenistan, and Kazakstan.
    The new Executive order takes effect at 12:01 a.m. eastern 
daylight time on August 20, 1997. Revocation of corresponding 
provisions in prior Executive orders does not affect the 
applicability of those provisions, or of regulations, licenses 
or other administrative actions taken pursuant to those 
provisions, with respect to any transaction or violation 
occurring before the new Executive order takes effect. Specific 
licenses issued pursuant to prior Executive orders continue in 
effect, unless revoked or amended by the Secretary of the 
Treasury. General licenses, regulations, orders, and directives 
issued pursuant to prior orders continue in effect, except to 
the extent inconsistent with this order or otherwise revoked or 
modified by the Secretary of the Treasury.
    The declaration of national emergency made by Executive 
Order 12957 remains in effect and is not affected by this 
order.
            Sincerely,
                                                William J. Clinton.


                            Executive Order

                              ----------                              


         Prohibiting Certain Transactions With Respect to Iran

    By the authority vested in me as President by the 
Constitution and the laws of the United States of America, 
including the International Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.) (``IEEPA''), the National Emergencies Act 
(50 U.S.C. 1601 et seq.), section 505 of the International 
Security and Development Cooperation Act of 1985 (22 U.S.C. 
2349aa-9) (``ISDCA''), and section 301 of title 3, United 
States Code,
    I, WILLIAM J. CLINTON, President of the United States of 
America, in order to clarify the steps taken in Executive 
Orders 12957 of March 15, 1995, and 12959 of May 6, 1995, to 
deal with the unusual and extraordinary threat to the national 
security, foreign policy, and economy of the United States 
declared in Executive Order 12957 in response to the actions 
and policies of the Government of Iran, hereby order:
    Section 1. Except to the extent provided in section 3 of 
this order or in regulations, orders, directives, or licenses 
issued pursuant to this order, and notwithstanding any contract 
entered into or any license or permit granted prior to the 
effective date of this order, the importation into the United 
States of any goods or services of Iranian origin or owned or 
controlled by the Government of Iran, other than information or 
informational materials within the meaning of section 203(b)(3) 
of IEEPA (50 U.S.C. 1702(b)(3)), is hereby prohibited.
    Sec. 2. Except to the extent provided in section 3 of this 
order, in section 203(b) of IEEPA (50 U.S.C. 1702(b)), or in 
regulations, orders, directives, or licenses issued pursuant to 
this order, and notwithstanding any contract entered into or 
any license or permit granted prior to the effective date of 
this order, the following are prohibited:
    (a) the exportation, reexportation, sale, or supply, 
directly or indirectly, from the United States, or by a United 
States person, wherever located, of any goods, technology, or 
services to Iran or the Government of Iran, including the 
exportation, reexportation, sale, or supply of any goods, 
technology, or services to a person in a third country 
undertaken with knowledge or reason to know that:
    (i) such goods, technology, or services are intended 
specifically for supply, transshipment, or reexportation, 
directly or indirectly, to Iran or the Government of Iran; or
    (ii) such goods, technology, or services are intended 
specifically for use in the production of, for commingling 
with, or for incorporation into goods, technology, or services 
to be directly or indirectly supplied, transshipped, or 
reexported exclusively or predominantly to Iran or the 
Government of Iran;
    (b) the reexportation from a third country, directly or 
indirectly, by a person other than a United States person of 
any goods, technology, or services that have been exported from 
the United States, if:
    (i) undertaken with knowledge or reason to know that the 
reexportation is intended specifically for Iran or the 
Government of Iran, and
    (ii) the exportation of such goods, technology, or services 
to Iran from the United States was subject to export license 
application requirements under any United States regulations in 
effect on May 6, 1995, or thereafter is made subject to such 
requirements imposed independently of the actions taken 
pursuant to the national emergency declared in Executive Order 
12957; provided, however, that this prohibition shall not apply 
to those goods or that technology subject to export license 
application requirements if such goods or technology have been:
    (A) substantially transformed into a foreign-made product 
outside the United States; or
    (B) incorporated into a foreign-made product outside the 
United States if the aggregate value of such controlled United 
States goods and technology constitutes less than 10 percent of 
the total value of the foreign-made product to be exported from 
a third country;
    (c) any new investment by a United States person in Iran or 
in property, including entities, owned or controlled by the 
Government of Iran;
    (d) any transaction or dealing by a United States person, 
wherever located, including purchasing, selling, transporting, 
swapping, brokering, approving, financing, facilitating, or 
guaranteeing, in or related to:
    (i) goods or services of Iranian origin or owned or 
controlled by the Government of Iran; or
    (ii) goods, technology, or services for exportation, 
reexportation, sale, or supply, directly or indirectly, to Iran 
or the Government of Iran;
    (e) any approval, financing, facilitation, or guarantee by 
a United States person, wherever located, of a transaction by a 
foreign person where the transaction by that foreign person 
would be prohibited by this order if performed by a United 
States person or within the United States; and
    (f) any transaction by a United States person or within the 
United States that evades or avoids, or has the purpose of 
evading or avoiding, or attempts to violate, any of the 
prohibitions set forth in this order.
    Sec. 3. Specific licenses issued pursuant to Executive 
Orders 12613 (of October 29, 1987), 12957, or 12959 continue in 
effect in accordance with their terms except to the extent 
revoked, amended, or modified by the Secretary of the Treasury. 
General licenses, regulations, orders, and directives issued 
pursuant to those orders continue in effect in accordance with 
their terms except to the extent inconsistent with this order 
or to the extent revoked, amended, or modified by the Secretary 
of the Treasury.
    Sec. 4. For the purposes of this order:
    (a) the term ``person'' means an individual or entity;
    (b) the term ``entity'' means a partnership, association, 
trust, joint venture, corporation, or other organization;
    (c) the term ``United States person'' means any United 
States citizen, permanent resident alien, entity organized 
under the laws of the United States (including foreign 
branches), or any person in the United States;
    (d) the term ``Iran'' means the territory of Iran and any 
other territory or marine area, including the exclusive 
economic zone and continental shelf, over which the Government 
of Iran claims sovereignty, sovereign rights, or jurisdiction, 
provided that the Government of Iran exercises partial or total 
de facto control over the area or derives a benefit from 
economic activity in the area pursuant to international 
arrangements;
    (e) the term ``Government of Iran'' includes the Government 
of Iran, any political subdivision, agency, or instrumentality 
thereof, and any person owned or controlled by, or acting for 
or on behalf of, the Government of Iran;
    (f) the term ``new investment'' means:
    (i) a commitment or contribution of funds or other assets; 
or
    (ii) a loan or other extension of credit, made after the 
effective date of Executive Order 12957 as to transactions 
prohibited by that order, or otherwise made after the effective 
date of Executive Order 12959.
    Sec. 5. The Secretary of the Treasury, in consultation with 
the Secretary of State and, as appropriate, other agencies, is 
hereby authorized to take such actions, including the 
promulgation of rules and regulations, the requirement of 
reports, including reports by United States persons on oil and 
related transactions engaged in by their foreign affiliates 
with Iran or the Government of Iran, and to employ all powers 
granted to me by IEEPA and the ISDCA as may be necessary to 
carry out the purposes of this order. The Secretary of the 
Treasury may redelegate any of these functions to other 
officers and agencies of the United States Government. All 
agencies of the United States Government are hereby directed to 
take all appropriate measures within their authority to carry 
out the provisions of this order.
    Sec. 6. (a) The Secretary of the Treasury may authorize the 
exportation or reexportation to Iran or the Government of Iran 
of any goods, technology, or services also subject to export 
license application requirements of another agency of the 
United States Government only if authorization by that agency 
of the exportation or reexportation to Iran would be permitted 
by law.
    (b) Nothing contained in this order shall be construed to 
supersede the requirements established under any other 
provision of law or to relieve a person from any requirement to 
obtain a license or other authorization from another department 
or agency of the United States Government in compliance with 
applicable laws and regulations subject to the jurisdiction of 
that department or agency.
    Sec. 7. The provisions of this order consolidate the 
provisions of Executive Orders 12613, 12957, and 12959. 
Executive Order 12613 and subsections (a), (b), (c), (d), and 
(f) of section 1 of Executive Order 12959 are hereby revoked 
with respect to transactions occurring after the effective date 
of this order. The revocation of those provisions shall not 
alter their applicability to any transaction or violation 
occurring before the effective date of this order, nor shall it 
affect the applicability of any rule, regulation, order, 
license, or other form of administrative action previously 
taken pursuant to Executive Orders 12613 or 12959.

                                
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