[House Document 105-207]
[From the U.S. Government Publishing Office]
105th Congress, 2d Session - - - - - - - - - - House Document 105-207
DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAQ
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A REPORT ON DEVELOPMENTS SINCE HIS LAST REPORT OF JULY 31, 1997,
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)
February 4, 1998.--Message and accompanying papers 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 the developments since
my last report of July 31, 1997, concerning the national
emergency with respect to Iraq that was declared in Executive
Order 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 (IEEPA), 50 U.S.C. 1703(c).
Executive Order 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
United States 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. United States
persons were 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 12724, which was issued in
order to align the sanctions imposed by the United States with
United Nations Security Council Resolution (UNSCR) 661 of
August 6, 1990.
This report discusses only matters concerning the national
emergency with respect to Iraq that was declared in Executive
Order 12722 and matters relating to Executive Orders 12724 and
12817 (the ``Executive Orders''). The report covers events from
August 2, 1997, through February 1, 1998.
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 every 90 days for a totalof 180 days
under U.N. supervision in order to finance the purchase of food,
medicine, and other humanitarian supplies. 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. On
August 8, 1996, the UNSC committee established pursuant to UNSCR 661
(``the 661 Committee'') adopted procedures to be employed by the 661
Committee in implementation of UNSCR 986. On December 9, 1996, the
President of the Security Council received the report prepared by the
Secretary General as requested by paragraph 13 of UNSCR 986, making
UNSCR 986 effective as of 12:01 a.m. December 10, 1996.
On June 4, 1997, the U.N. Security Council adopted UNSCR
1111, renewing for another 180 days the authorization for Iraqi
petroleum sales and purchases of humanitarian aid contained in
UNSCR 986 of April 13, 1995. The Resolution became effective on
June 8, 1997. On September 12, 1997, the Security Council,
noting Iraq's decision not to export petroleum and petroleum
products pursuant to UNSCR 1111 during the period June 8 to
August 13, 1997, and deeply concerned about the resulting
humanitarian consequences for the Iraqi people, adopted UNSCR
1129. This resolution replaced the two 90-day quotas with one
120-day quota and one 60-day quota in order to enable Iraq to
export its full $2 billion quota of oil within the original 180
days of UNSCR 1111. On December 4, 1997, the U.N. Security
Council adopted UNSCR 1143, renewing for another 180 days,
beginning December 5, 1997, the authorization for Iraqi
petroleum sales and humanitarian aid purchases contained in
UNSCR 986. As of January 2, 1998, however, Iraq still had not
exported any petroleum under UNSCR 1143. During the reporting
period, imports into the United States under this program
totaled about 14.2 million barrels, bringing total imports
since December 10, 1996, to approximately 23.7 million barrels.
2. There have been two amendments to the Iraqi Sanctions
Regulations, 31 C.F.R. Part 575 (the ``ISR'' or the
``Regulations'') administered by the Office of Foreign Assets
Control (OFAC) of the Department of the Treasury during the
reporting period. The Regulations were amended on August 25,
1997. General reporting, recordkeeping, licensing, and other
procedural regulations were moved from the Regulations to a
separate part (31 C.F.R. Part 501) dealing solely with such
procedural matters (62 Fed. Reg. 45098, August 25, 1997). A
copy of the amendment is attached.
On December 30, 1997, the Regulations were amended to
remove from appendices A and B to 31 C.F.R. chapter V the name
of an individual who had been determined previously to act for
or on behalf of, or to be owned or controlled by, the
Government of Iraq (62 Fed. Reg. 67729, December 30, 1997). A
copy of the amendment is attached.
As previously reported, the Regulations were amended on
December 10, 1996, to provide a statement of licensing policy
regarding specific licensing of United States persons seeking
to purchase Iraqi-origin petroleum and petroleum products from
Iraq (61 Fed. Reg. 65312, December 11, 1996). Statements of
licensing policy were also provided regarding sales of
essential parts and equipment for the Kirkuk-Yumurtalik
pipeline system, and sale of humanitarian goods to Iraq,
pursuant to United Nations approval. A general license was also
added to authorize dealings in Iraqi-origin petroleum and
petroleum products that have been exported from Iraq with
United Nations and United States Government approval.
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
placedin 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
661 Committee and satisfaction of other conditions established by the
United Nations, 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.
On July 15, 1995, a jury in the Eastern District of New
York returned a verdict of not guilty for two defendants
charged with the attempted exportation and transshipment to
Iraq of zirconium ingots in violation of IEEPA and the ISR. The
two were charged in a Federal indictment on July 10, 1995,
along with another defendant who entered a guilty plea on
February 6, 1997.
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.
Since my last report, OFAC collected civil monetary
penalties totaling more than $1.125 million for violations of
IEEPA and the ISR relating to the sale and shipment of goods to
the Government of Iraq and an entity in Iraq. Additional
administrative proceedings have been initiated and others await
commencement.
4. The Office of Foreign Assets Control has issued hundreds
of licensing determinations regarding transactions pertaining
to Iraq or Iraqi assets since August 1990. Specific licenses
have been issued for transactions such as the filing of legal
actions against Iraqi governmental entities, legal
representation of Iraq, and the exportation of Iraq of donated
medicine, medical supplies, and food intended for humanitarian
relief purposes, sales of humanitarian supplies to Iraq under
UNSCR 986 and 1111, diplomatic transactions, 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, 88 specific licenses have been issued, most with
respect to sales of humanitarian goods.
Since December 10, 1996, OFAC has issued specific licenses
authorizing commercial sales of humanitarian goods funded by
Iraqi oil sales pursuant to UNSCR 986 and 1111 valued at more
than $239 million. Of that amount, approximately $222 million
represents sales of basic foodstuffs, $7.9 million for
medicines and medical supplies, $8.2 million for water testing
and treatment equipment, and nearly $700,000 to fund a variety
of United Nations activities in Iraq. International
humanitarian relief in Iraq is coordinated under the direction
of the United Nations Office of the Humanitarian Coordinator of
Iraq. Assisting U.N. agencies include the World Food Program,
the U.N. Population Fund, the U.N. Food and Agriculture
Organization, the World Health Organization, and UNICEF. As of
January 8, 1998, OFAC had authorized sales valued at more than
$165.8 million worth of humanitarian goods during the reporting
period beginning August 2, 1997.
5. The expenses incurred by the Federal Government in the
6-month period from August 2, 1997, through February 1, 1998,
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 $1.2
million, most of which represents wage and salary costs for
Federal personnel. Personnel costs were largely centered in the
Department of theTreasury (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 Bureau of Intelligence and Research, the U.S. Mission to
the United Nations, and the Office of the Legal Adviser), and the
Department of Transportation (particularly the U.S. Coast Guard).
6. 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 relevant United Nations Security Council
resolutions. Iraqi compliance with these resolutions is
necessary before the United States will consider lifting
economic sanctions. 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. Seven
and a half 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 to
provide immediate, unconditional, and unrestricted access to
sites by these inspectors; 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 all
forms of political expression, oppression of minorities, and
denial of humanitarian assistance. The Government of Iraq has
repeatedly said it will not comply with UNSCR 688 of April 5,
1991. The Iraqi military routinely harasses residents of the
north, and has attempted to ``Arabize'' the Kurdish, Turkomen,
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 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.
William J. Clinton.
The White House, February 3, 1998.