[House Document 105-273]
[From the U.S. Government Publishing Office]



105th Congress, 2d Session - - - - - - - - - - - House Document 105-273


 
 DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH THE FEDERAL REPUBLIC 
                 OF YUGOSLAVIA (SERBIA AND MONTENEGRO)

                               __________

                                MESSAGE

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT 
TO THE FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO), PURSUANT 
                          TO 50 U.S.C. 1641(c)





    June 11, 1998.--Message and accompanying papers referred to the 
     Committee on International Relations and ordered to be printed


To the Congress of the United States:
    In response to the ongoing use of excessive military force 
in Kosovo by the police and armed forces of the Federal 
Republic of Yugoslavia (Serbia and Montenegro) and the Republic 
of Serbia, which has exacerbated ethnic conflict and human 
suffering and threatens to destabilize other countries in the 
region, the United States, acting in concert with the European 
Union, has decided to impose certain economic sanctions. 
Consistent with decisions taken at the meetings of the Contact 
Group of countries, consisting of the United States, the United 
Kingdom, Germany, France, Italy, and Russia, in Birmingham, 
England, on May 16, 1998, and in Rome on April 29, 1998, the 
United States will impose a freeze on the assets of the 
Governments of the Federal Republic of Yugoslavia (Serbia and 
Montenegro), the Republic of Serbia, and the Republic of 
Montenegro, and a ban on new investment in the Republic of 
Serbia. It is our intent to exempt the Government of Montenegro 
from these sanctions wherever possible.
    The Contact Group originally agreed in Rome on April 29 to 
impose these sanctions in response to the increasingly 
dangerous situation in Kosovo and Belgrade's failure to meet 
crucial requirements concerning the adoption of a framework for 
dialogue with the Kosovar Albanian leadership and a 
stabilization package, as set out in earlier Contact Group 
meetings in London on March 9, 1998, and in Bonn on March 25, 
1998. The G8 Foreign Ministers reaffirmed the need to impose 
sanctions at their meeting in London on May 8-9, 1998. The 
Russian Federation did not associate itself with these sanction 
measures.
    At the May 16 meeting in Birmingham, England, the Contact 
Group welcomed the establishment of a dialogue between Belgrade 
and the Kosovar Albanian leadership. With the start of this 
dialogue, those Contact Group countries that had previously 
agreed to implement economic measures against the Federal 
Republic of Yugoslavia (Serbia and Montenegro) and the Republic 
of Serbia agreed that the proposed measure to stop new 
investment in the Republic of Serbia would not be put into 
effect and that they would review at their next meeting the 
implementation of the freeze on funds. However, the use of 
indiscriminate force by the police and armed forces of the 
Federal Republic of Yugoslavia (Serbia and Montenegro) and the 
Republic of Serbia has undermined the basis for dialogue.
    The Contact Group has concluded that the current situation 
in Kosovo is untenable and the risk of an escalating conflict 
requires immediate action. It has also found that, if 
unresolved, the conflict threatens to spill over to other parts 
of the region. The United States attaches high priority to 
supporting the security interests of the neighboring states and 
to ensuring security of borders. It is also of particular 
importance that developments in Kosovo should not disrupt 
progress in implementing the Dayton peace agreement in Bosnia 
and Herzegovina. This threat to the peace of the region 
constitutes an unusual and extraordinary threat to the national 
security and foreign policy of the United States.
    On June 9, 1998, by the authority vested in me as President 
by the Constitution and laws of the United States of America, 
including the International Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 
1601 et seq.), and section 301 of title 3 of the United States 
Code, I declared a national emergency to respond to the 
unacceptable actions and policies of the Belgrade authorities 
and issued an Executive order to implement the measures called 
for by the Contact Group. That order freezes the assets of the 
Governments of the Federal Republic of Yugoslavia (Serbia and 
Montenegro), the Republic of Serbia, and the Republic of 
Montenegro that are under U.S. jurisdiction and, in concert 
with the other Contact Group countries, restricts access of 
those governments to the international financial system. That 
order also prohibits new investment by United States persons, 
or their facilitation of otherpersons' new investment, in the 
Republic of Serbia. It is our intent to exempt the Government of the 
Republic of Montenegro, by means of licenses, from the prohibitions 
contained in the order wherever possible. That government has been 
included in the order to ensure effective implementation of sanctions 
against the Federal Republic of Yugoslavia (Serbia and Montenegro), of 
which the Republic of Montenegro is a constituent part.
    The order carries out these measures by:
  --blocking all property, and interests in property, of the 
        Governments of the Federal Republic of Yugoslavia 
        (Serbia and Montenegro), the Republic of Serbia, and 
        the Republic of Montenegro, including the prohibition 
        of financial transactions with, including trade 
        financing for, those governments; and
  --prohibiting new investment by United States persons, or 
        their facilitation of other persons' new investment, in 
        the territory of the Republic of Serbia.
    The 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. Thus, in the event of improvements in the actions 
and policies of Belgrade with respect to the situation in 
Kosovo, the Secretary of the Treasury, in consultation with the 
Secretary of State, would have the ability, through the 
issuance of general or specific licenses, to authorize any or 
all transactions otherwise prohibited by the order. Also, in 
implementing the sanctions, we intend to license transactions 
necessary to conduct the official business of the United States 
Government and the United Nations. We further intend to issue 
licenses to allow humanitarian, diplomatic, and journalistic 
activities to continue.
    The declaration of a national emergency made under 
Executive Order 12808, an expanded in Executive Orders 12810 
and 12831, remains in effect and is not affected by the June 9, 
1998, order

                                                William J. Clinton.
    The White House, June 10, 1998.


                            Executive Order

                              ----------                              


    Blocking Property of the Governments of the Federal Republic of 
  Yugoslavia (Serbia and Montenegro), the Republic of Serbia, and the 
Republic of Montenegro, and Prohibiting New Investment in the Republic 
            of Serbia in Response to the Situation in Kosovo

    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 
(IEEPA) (50 U.S.C. 1701 et seq.), the National Emergencies Act 
(50 U.S.C. 1601 et seq.), and section 301 of title 3, United 
States Code,
    I, William J. Clinton, President of the United States of 
America, find that the actions and policies of the Governments 
of the Federal Republic of Yugoslavia (Serbia and Montenegro) 
and the Republic of Serbia with respect to Kosovo, by promoting 
ethnic conflict and human suffering, threaten to destabilize 
countries of the region and to disrupt progress in Bosnia and 
Herzegovina in implementing the Dayton peace agreement, and 
therefore constitute an unusual and extraordinary threat to the 
national security and foreign policy of the United States, and 
hereby declare a national emergency to deal with that threat.
    I hereby order:
    Section 1. (a) Except to the extent provided in section 2 
of this order, section 203(b) of IEEPA (50 U.S.C. 1702(b)), and 
in regulations, orders, directives, or licenses that may 
hereafter be issued pursuant to this order, all property and 
interests in property of the Governments of the Federal 
Republic of Yugoslavia (Serbia and Montenegro), the Republic of 
Serbia, and the Republic of Montenegro that are in the United 
States, that hereafter come within the United States, or that 
are or hereafter come within the possession or control of 
United States persons, including their overseas branches, are 
hereby blocked,
    (b) The blocking of property and property interests in 
paragraph (a) of this section includes the prohibition of 
financial transactions with, including trade financing for, the 
Governments of the Federal Republic of Yugoslavia (Serbia and 
Montenegro), the Republic of Serbia, and the Republic of 
Montenegro by United States persons.
    Sec. 2. Nothing in section 1 of this order shall prohibit 
financial transactions, including trade financing, by United 
States persons within the territory of the Federal Republic of 
Yugoslavia (Serbia and Montenegro) if (a) conducted exclusively 
through the domestic banking system within the Federal Republic 
of Yugoslavia (Serbia and Montenegro) in local currency 
(dinars), or (b) conducted using bank notes or barter.
    Sec. 3. Except as otherwise provided in regulations, 
orders, directives, or licenses that may hereafter be issued 
pursuant to this order, all new investment by United States 
persons in the territory of the Republic of Serbia, and the 
approval or other facilitation by United States persons of 
other persons' new investment in the territory of the Republic 
of Serbia, are prohibited.
    Sec. 4. Any transaction by a United States person 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 is prohibited.
    Sec. 5. 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 ``new investment'' means (i) the acquisition 
of debt or equity interests in, (ii) a commitment or 
contribution of funds or other assets to, or (iii) a loan or 
other extension of credit to, a public or private undertaking, 
entity, or project, including the Government of the Republic of 
Serbia,other than donations of funds for purely humanitarian 
purposes to charitable organizations;
    (d) The term ``United States person'' means any United 
States citizen, permanent resident alien, juridical person 
organized under the laws of the United States (including 
foreign branches), or any person in the United States;
    (e) The term ``Government of the Federal Republic of 
Yugoslavia (Serbia and Montenegro)'' means the government of 
the Federal Republic of Yugoslavia (Serbia and Montenegro), its 
agencies, instrumentalities, and controlled entities, including 
all financial institutions and state-owned and socially owned 
entities organized or located in the Federal Republic of 
Yugoslavia (Serbia and Montenegro) as of June 9, 1998, any 
successors to such entities, and their respective subsidiaries 
and branches, wherever located, and any persons acting or 
purporting to act for or on behalf of any of the foregoing;
    (f) The term ``Government of the Republic of Serbia'' means 
the government of the Republic of Serbia, including any 
subdivisions thereof or local governments therein, its 
agencies, instrumentalities, and controlled entities, including 
all financial institutions and state-owned and socially owned 
entities organized or located in the Republic of Serbia as of 
June 9, 1998, any successors to such entities, and their 
respective subsidiaries and branches, wherever located, and any 
persons acting or purporting to act for or on behalf of any of 
the foregoing;
    (g) The term ``Government of the Republic of Montenegro'' 
means the government of the Republic of Montenegro, including 
any subdivisions thereof or local governments therein, its 
agencies, instrumentalities, and controlled entities, including 
all financial institutions and state-owned and socially owned 
entities organized or located in the Republic of Montenegro as 
of June 9, 1998, any successors to such entities, and their 
respective subsidiaries and branches, wherever located, and any 
persons acting or purporting to act for or on behalf of any of 
the foregoing.
    Sec. 6. The Secretary of the Treasury, in consultation with 
the Secretary of State, is hereby authorized to take such 
actions, including the promulgation of rules and regulations, 
and to employ all powers granted to me by the International 
Emergency Economic Powers Act, 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 which 
are hereby directed to take all appropriate measures within 
their authority to carry out the provisions of this order, 
including suspension or termination of licenses or other 
authorizations in effect as of the effective date of this 
order.
    Sec. 7. The Secretary of the Treasury, in consultation with 
the Secretary of State, shall give special consideration to the 
circumstances of the Government of the Republic of Montenegro 
and persons located in and organized under the laws of the 
Republic of Montenegro in the implementation of this order.
    Sec. 8. Nothing contained in this order shall confer any 
substantive or procedural right or privilege on any person or 
organization, enforceable against the United States, its 
agencies or its officers.
    Sec. 9. (a) This order is effective at 12:01 a.m. eastern 
daylight time on June 10, 1998.
    (b) This order shall be transmitted to the Congress and 
published in the Federal Register.

                                                William J. Clinton.
    The White House, June 9, 1998.

                                
