[House Document 105-201]
[From the U.S. Government Publishing Office]



105th Congress, 2d Session  - - - - - - - - - - House Document 105-201


 
   DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH RESPECT TO IRAN


                               __________

                             COMMUNICATION

                                  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 12170 OF NOVEMBER 14, 1979 
                     PURSUANT TO 50 U.S.C. 1703(c)





February 3, 1998.--Referred to the Committee on International Relations 
                       and ordered to be printed


                                           The White House,
                                     Washington, November 25, 1997.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: I hereby report to the Congress on 
developments since the last Presidential report of May 13, 
1997, concerning the national emergency with respect to Iran 
that was declared in Executive Order 12170 of November 14, 
1979. This report is submitted pursuant to section 204(c) of 
the International Emergency Economic Powers Act, 50 U.S.C. 
1703(c) (IEEPA). This report covers events through September 
30, 1997. My last report, dated May 13, 1997, covered events 
through March 31, 1997.
    1. The Iranian Assets Control Regulations, 31 CFR Part 535 
(IACR), were amended on August 25, 1997. General reporting, 
recordkeeping, licensing, and other procedural regulations were 
moved from the IACR to a separate part (31 CFR Part 501) 
dealing solely with such procedural matters (62 Fed. Reg. 
45098, August 25, 1997). No substantive changes to the IACR 
were made. A copy of the amendment is attached.
    2. 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. Since the period covered in my last report, the 
Tribunal has rendered five awards. This brings the total number 
of awards rendered by the Tribunal to 584, the majority of 
which have been in favor of U.S. claimants. As of September 30, 
1997, the value of awards to successful U.S. claimants from the 
Security Account held by the NV Settlement Bank was 
$2,480,897,381.53.
    Since my last report, Iran has failed to replenish the 
Security Account established by the Algiers Accords to ensure 
payment of awards to successful U.S. claimants. Thus, since 
November 5, 1992, the Security Account has continuously 
remained below the $500 million balance required by the Algiers 
Accords. As of September 30, 1997, the total amount in the 
Security Account was $127,880,441.04, and the total amount in 
the Interest Account was $17,771,382.12. Therefore, the United 
States continues to pursue Case A/28, filed in September 1993, 
to require Iran to meet its obligation under the Algiers 
Accords to replenish the Security Account. Iran filed its 
Rejoinder in Case A/28 on April 7, 1997. The United States has 
requested that the Tribunal schedule a hearing in the case.
    The United States also continues to pursue Case A/29 to 
require Iran to meet its obligation of timely payment of its 
equal share of advances for Tribunal expenses when directed to 
do so by the Tribunal. Iran has not yet filed its Rejoinder in 
the case.
    3. The Department of State continues to respond to claims 
brought against the United States by Iran, in coordination with 
concerned government agencies. On August 8, 1997, the United 
States filed its Statement of Defense in Case A/30, in which 
Iran alleges that the United States has violated paragraphs 1 
and 10 of the General Declaration of the Algiers Accords. Iran 
bases its claim, inter alia, on press statements about an 
alleged covert action program aimed at Iran and on U.S. 
economic sanctions.
    Under the February 22, 1996, settlement agreement related 
to the Iran Air case before the International Court of Justice 
and Iran's bank-related claims against the United States before 
the Tribunal (reported in my report of May 17, 1996), the 
Department of State has been processing payments. As of 
September 30, 1997, the Department has authorized payment to 
U.S. nationals of 35 claims against Iranian banks totaling 
$12,021,532.54. The Department has also authorized payments to 
surviving family members of the aerial incident, totaling 
$41,550,000.00.
    The Tribunal has scheduled a hearing date of February 17-
19, 1998, in Case No. A/11. In this case, Iran alleges that the 
United States failed to perform its obligations under 
Paragraphs 12-14 of the Algiers Accords, relating to the return 
to Iran of assets of the late Shah and his close relatives.
    4. U.S. nationals continue to pursue claims against Iran at 
the Tribunal. Since my last report, the Tribunal has issued 
awards in five private claims, all of which were filed prior to 
the January 19, 1982, filing deadline by individuals who are 
dual U.S.-Iranian nationals.
    On April 23, 1997, Chamber Three issued an award in Vivian, 
Jamshid and Keyvan Tavakoli v. Iran, AWD No. 580-832-3. The 
Tribunal dismissed the claims of Jamshid and Keyvan Tavakoli 
for lack of jurisdiction, finding that they had not proven 
their dominant and effective U.S. nationality. The Tribunal 
determined that Vivian Tavakoli's claim fell within the 
Tribunal's jurisdiction and awarded her $375,952 plus interest 
plus $10,000 in arbitration costs for Iran's expropriation of 
170 shares in the Western Industrial Group recorded in her 
name. The Tribunal rejected her claim for other additional 
shares in that company for lack of proof.
    On May 22, 1997, Chamber One issued an award in Vera-Jo, 
Laura and J.M. Aryeh v. Iran, AWD No. 581-842/843/866-1, 
finding that all three claimants were dominant and effective 
U.S. nationals for purposes of Tribunal jurisdiction, and 
awarding the claimants a total of $19,658,063.84 plus interest 
and $200,000 in arbitration costs for Iran's expropriation of 
the claimants' shares in various Iranian companies.
    On June 20, 1997, Chamber Two issued an award in Betty 
Monemi v. Iran, AWD No. 582-274-2, dismissing the claim for 
lack of proof. The Tribunal held that the claimant had not 
established that Iran had taken actions resulting in the loss 
of rent from and real estate value of the home to which her 
claim related or that she had made the requisite demand for the 
funds in her bank account to allow recovery.
    On September 25, 1997, Chamber Three issued an award in 
Moussa Aryeh v. Iran, AWD No. 583-266-3, directing Iran to pay 
the claimant $519,571 plus interest and $15,000 in arbitration 
costs for Iran's expropriation of the claimant's real property. 
In so doing, the Tribunal found that Iranian law did not 
expressly prohibit ownership of real property by dual nationals 
so as to bar recovery in this case. It held that while Iranian 
law placed certain restrictions on the ownership of real 
property by an Iranian national who acquires a second 
nationality, those restrictions as applied in the Aryeh case 
simply required sale of the property under certain conditions, 
with the proceeds to be paid to the dual national owner. Also 
on September 25, 1997, Chamber Three issued an award in Ouziel 
and Eliyahou Aryeh v. Iran, AWD No. 584-839/840-3, dismissing 
the claims on the grounds that the claimants did not prove that 
they inherited under their father's will the property which 
they alleged was expropriated by Iran or that they held a 
beneficial interest in other properties purchased by their 
brother.
    In Tribunal-related litigation in United States courts, on 
June 23, 1997, the District Court of the District of Columbia 
issued its decision in McKesson Corp. v. The Islamic Republic 
of Iran, granting McKesson's motion for summary judgment. The 
court found that Iran's interference with McKesson's 
shareholder rights ripened into an expropriation by April of 
1982. In its decision, the court gave preclusive effect to the 
Tribunal's findings in the Foremost Tehran, Inc. v. Iran award, 
issued on April 10, 1986.
    5. 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 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. 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.
            Sincerely,
                                        William J. Clinton.





                                
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