[House Document 105-229]
[From the U.S. Government Publishing Office]




105th Congress, 2d Session - - - - - - - - - - - - House Document 105-229


 
    DEVELOPMENTS CONCERNING 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, PURSUANT TO 50 U.S.C. 1703(c)




   March 16, 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 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, and in Executive Order 13059 of August 
19, 1997. 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 that undermine the Middle East peace process, and its 
intensified efforts to acquire weapons of mass destruction. On 
May 6, 1995, I issued Executive Order 12959 (60 Fed. Reg. 
24757, May 9, 1995) to further respond to the Iranian threat to 
the national security, foreign policy, and economy of the 
United States. The terms of that order and an earlier order 
imposing an import ban on Iranian-origin goods and services 
(Executive Order 12613 of October 29, 1987) were consolidated 
and clarified in Executive Order 13059 of August 19, 1997.
    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 
U.S. Government functions, and transactions related to the 
export of agricultural commodities pursuant to preexisting 
contracts 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 Congressional leadership by letter dated May 
6, 1995.
    2. 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 
thevarious prohibitions previously imposed to deal with the national 
emergency declared on March 15, 1995. A copy of the Order 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 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, 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) knowing 
reexportation from a third country to Iran or the Government of 
Iran of certain controlled U.S.-origin goods, technology, or 
services by a person other than a United States person; (4) the 
purchase, sale, transport, swap, brokerage, approval, 
financing, facilitation, guarantee, or other transactions or 
dealings by United States persons, wherever located, related to 
goods, technology, or services for exportation, reexportation, 
sale or supply, directly or indirectly, to 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 terms of the Order; and (7) any transaction that evades, 
avoids, or attempts to violate a prohibition under the Order.
    Executive Order 13059 became effective at 12:01 a.m., 
eastern daylight time on August 20, 1997. Because the Order 
consolidated and clarified the provisions of prior orders, 
Executive Order 12613 and paragraphs (a), (b), (c), (d), and 
(f) of section 1 of Executive Order 12959 were revoked by 
Executive Order 13059. The revocation of corresponding 
provisions in the prior Executive Orders did 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 effective date 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.
    The declaration of national emergency made by Executive 
Order 12957, and renewed each year since, remains in effect and 
is not affected by the Order.
    3. On March 4, 1998, 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.
    4. There have been no amendments to the Iranian 
Transactions Regulations, 31 C.F.R. Part 560 (the ``ITR''), 
since my report of September 17, 1997.
    5. During the current 6-month period, the Department of the 
Treasury's Office of Foreign Assets Control (OFAC) made 
numerous decisions with respect to applications for licenses to 
engage in transactions under the ITR, and issuedseven 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, transactions 
relating to air safety policy, and to disposal of U.S.-owned goods 
located in Iran. 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, the 
Department of the Treasury continues to consult with the Departments of 
State and Commerce on these matters.
    The U.S. 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. 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 ITR. 
Various enforcement actions carried over from previous 
reporting periods are continuing and new reports of violations 
are being aggressively pursued. Since my last report, OFAC has 
collected six civil monetary penalties totaling nearly $84,000 
for violations of IEEPA and the ITR.
    7. The expenses incurred by the Federal Government in the 
6-month period from September 15, 1997, through March 14, 1998, 
that are directly attributable to the exercise of powers and 
authorities conferred by the declaration of a national 
emergency with respect to Iran are reported to be approximately 
$1.3 million, 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's 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, 12959, and 13059 continue to advance important 
objectives in promoting the nonproliferation and anti-terrorism 
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, March 16, 1998.

                                
