[House Document 105-131]
[From the U.S. Government Publishing Office]
105th Congress, 1st Session - - - - - - - - - - - - House Document 105-131
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)
September 17, 1997.--Message and accompanying papers referred to the
Committee on International Relations and ordered to be printed
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U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1997
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 12957 of March 15, 1995, and matters
relating to the measures in that order and in Executive Order
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), section 401(c) of the National
Emergencies Act, 50 U.S.C. 1641(c), 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 12957 and does not deal with those
relating to the emergency declared on November 14, 1979, in
connection with the hostage crisis.
1. On March 15, 1995, I issued Executive Order 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 United
States 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
Speaker of the House and the President of the Senate by letter
dated 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 thatundermine the Middle East peace process, and its
intensified efforts to acquire weapons of mass destruction. On May 6,
1995, I issued Executive Order 12959 to further respond to the Iranian
threat to the national security, foreign policy, and economy of the
United States.
Executive Order 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 dealings
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 certain reexport, investment, and trade
transactions that a United States person is prohibited from
perform- ing; (6) continues the 1987 prohibition on the
importation into the United States of goods and services of
Iranian origin; (7) prohibits any transaction by a 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.
At the time of signing Executive Order 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
preexistingcontracts 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 12959 revoked sections 1 and 2 of Executive
Order 12613 of October 29, 1987, and sections 1 and 2 of
Executive Order 12957 of March 15, 1995, to the extent they are
inconsistent with it. A copy of Executive Order 12959 was
transmitted to the Speaker of the House and the President of
the Senate by letter dated May 6, 1995.
2. On March 5, 1997, I renewed for another year the
national emergency with respect to Iran pursuant to IEEPA. This
renewal extended the authority for the current comprehensive
trade embargo against Iran in effect since May 1995. Under
these sanctions, virtually all trade with Iran is prohibited
except for trade in information and informational materials and
certain other limited exceptions.
3. On August 19, 1997, I issued Executive Order 13059 in
order to clarify the steps taken in Executive Order 12957 and
Executive Order 12959, 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. A copy of
Executive Order 13059 was transmitted to the Speaker of the
House and the President of the Senate by letter dated August
19, 1997.
The order prohibits (1) the 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; (2) the 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 toa
third country for direct or indirect supply, transshipment, or
reexportation to Iran or the Government of Iran, or specifically for
use in the production, 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; (3)
reexportation from a third country of controlled U.S.-origin goods,
technology, or services by a person other than a United States person;
(4) 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; (5) new
investment by United States persons in Iran or in property or entities
owned or controlled by the Government of Iran; (6) 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 (7) any evasion, or attempt to
violate a prohibition under the order.
Executive Order 13059 became effective 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, other administrative actions taken
pursuant to those provisions, with respect to any transaction
or violation occurring before the effective day of Executive
Order 13059. 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 Executive Order 13059 or otherwise revoked or modified by
the Secretary of the Treasury.
4. The Iranian Transactions Regulations, 31 CFR Part 560
(the ``ITR''), were amended on April 18, 1997 (62 Fed. Reg.
19670, April 23, 1997), on July 30, 1997 (62 Fed. Reg. 41851,
August 4, 1997), and on August 25, 1997 (62 Fed. Reg. 45098,
August 25, 1997). In April 1997, Section 560.603 was amended to
require a United States person to file a transaction report as
to each foreign affiliate that engages in reportable oil-
related transactions involving Iran of $1,000,000 or more
during the calendar quarter.
In July 1997, sections 560.510 (d)(1) and (d)(2) were
amended to generally license all payments of awards against
Iran issued by the Iran-United States Claims Tribunal in The
Hague, irrespective of the source of funds for payment, and to
generally license implementation (except exports or reexports
that are subject to export license application requirements of
Federal agencies other than the Department of the Treasury's
Office of Foreign Assets Control (OFAC)) as well as payment of
awards or settlements in cases to which the United States
Government is a party.
Sections 560.525 (a)(3) and (a)(5)(i) were amended to
generally license the provision of legal services to initiate
and conduct United States court and other domestic legal
proceedings on behalf of persons in Iran or the Government of
Iran and to initiate proceedings to resolve disputes between
the Government of Iran or an Iranian national and the United
States or a United States national, notwithstanding the
prohibition on exportation of services to Iran. On August 25,
1997, general reporting, record keeping, licensing, and other
procedural regulations were moved from the ITR to a separate
part (31 CFR Part 501) dealing solely with such procedural
matters. (62 Fed. Reg. 45098, August 25, 1997). A copy of these
amendments is attached.
5. During the current 6-month period, OFAC made numerous
decisions with respect to applications for licenses to engage
in transactions under the ITR, and issued 12 licenses. The
majority of denials were in response to requests to authorize
commercial exports to Iran--particularly of machinery and
equipment for various industries--and the importation of
Iranian-origin goods. The licenses issued authorized certain
financial transactions, including those relating to disposal of
United States-owned goods located in Iran and extension of, but
not payment under, standby letters of credit. Pursuant to
sections 3 and 4 of Executive Order 12959 and consistent with
the Iran-Iraq Arms Non-Proliferation Act of 1992 and other
statutory restrictions concerning certain goods and technology,
including those involved in air-safety cases, Treasury
continues to consult with the Departments of State and Commerce
on these matters.
The United States financial community continues to
scrutinize transactions associated with Iran and to consult
with OFAC about their appropriate handling. Many of these
inquiries have resulted in investigations into the activities
of U.S. parties and, where appropriate, the initiation of
enforcement action.
6. On March 20, 1997, a seven-count indictment was returned
by a grand jury in the District of Maryland against a United
States resident and two Iranian co-conspirators. The March
indictment superseded a two-count indictment handed down on
February 13, 1997. Each indictment charged violations of IEEPA
and the ITR involving the attempted exportation from the United
States to Iran of sophisticated state-of-the-art gas
chromatographs used in the electric power industry, which were
prevented from reaching Iran.
The United States Customs Service has continued to effect
numerous seizures of Iranian-origin merchandise, primarily
carpets, for violation of the import prohibitions of the ITR.
Variousenforcement actions carried over from previous reporting
periods are continuing and new reports of violations are being
aggressively pursued. Since my last report on March 14, 1997, OFAC has
collected four civil monetary penalties totaling nearly $22,000. The
violations relate to the unlicensed import from or export of goods to
Iran. Civil penalty action is pending against 37 companies, financial
institutions, and individuals for violations of the Regulations.
7. The expenses incurred by the Federal Government in the
6-month period from March 15 through September 14, 1997, 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 $850,000, most
of which represent 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 Intelligence and Research, and the Office of the
Legal Adviser), and the Department of Commerce (the Bureau of
Export Administration and the General Counsel's Office).
8. The situation reviewed above continues to present 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 12957 and the comprehensive
economic sanctions imposed by Executive Order 12959 underscore
the United States Government 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
12957 and 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, September 17, 1997.