[House Document 105-300]
[From the U.S. Government Publishing Office]
105th Congress, 2d Session - - - - - - - - - - - House Document 105-300
DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH RESPECT TO IRAQ
__________
COMMUNICATION
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A REPORT ON DEVELOPMENTS SINCE HIS LAST REPORT OF FEBRUARY 3, 1998,
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. 1703(c)
September 9, 1998.--Referred to the Committee on International
Relations and ordered to be printed
The White House,
Washington, August 13, 1998.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: I hereby report to the Congress on the
developments since my last report of February 3, 1998,
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 government 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
February 2 through August 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 total of 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 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 14, 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.
On February 20, 1998, the U.N. Security Council adopted
UNSCR 1153, authorizing the sale of Iraqi petroleum and
petroleum products and the purchase of humanitarian aid for a
180-day period beginning with the date of notification by the
President of the Security Council to the members thereof of
receipt of the report requested in UNSCR 1153. UNSCR 1153
authorized the sale of $5.256 billion worth of Iraqi petroleum
and petroleum products. On March 25, 1998, the Security
Council, noting the shortfall in revenue from Iraqi's sale of
petroleum and petroleum products during the first 90-day period
of implementation of UNSCR 1143, due to the delayed
resumptionin sales and a serious decrease in prices, and concerned
about the resulting humanitarian consequences for the Iraqi people,
adopted UNSCR 1158. This Resolution reaffirmed the authorization for
Iraqi petroleum sales and purchases of humanitarian aid contained in
UNSCR 1143 for the remainder of the second 90-day period and set the
authorized value during that time frame to $1.4 billion pending
implementation of UNSCR 1153. The 180-day period authorized in UNSCR
1153 began on May 30, 1998. On June 19, 1998, the Security Council
adopted UNSCR 1175, authorizing the expenditure of up to $300 million
on Iraqi oil infrastructure repairs in order to help Iraq reach the
higher export ceiling permitted under UNSCR 1153. UNSCR 1175 also
reaffirmed the Security Council's endorsement of the Secretary
General's recommendation that the ``oil-for-food'' distribution plan be
ongoing and project-based. During the period covered by this report,
imports into the United States under the program totaled about 14.2
million barrels, bringing total imports since December 10, 1996, to
approximately 51.5 million barrels.
2. There have been no 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.
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 sales 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 placed
in 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.
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 has collected two civil monetary
penalties totaling $9,000 from one company and one individual
for violations of IEEPA and ISR prohibitions against
transactions with Iraq.
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 to Iraq of donated
medicine, medical supplies, and food intended for humanitarian
relief purposes, sales of humanitarian supplies to Iraq under
UNSCRs 986, 1111, 1143, and 1153, diplomatic transactions, the
execution of powers of attorney relating to the administration
of personal assets and decendents' estates in Iraq, and the
protection of preexisting intellectual property rights in Iraq.
Since my last report, 75 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 UNSCRs 986, 1111, 1143, and 1153
valued at more than $324 million. Of that amount, approximately
$298 million represents sales of basic foodstuffs, $14 million
for medicines and medical supplies, $9.2 million for water
testing and treatment equipment, and nearly $3 million 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
June 29, 1998, OFAC had authorized sales valued at more than
$85 million worth of humanitarian goods during the current
reporting period.
5. The expenses incurred by the Federal Government in the
6-month period from February 2 through August 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 $1.1 million, most of
which represents 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 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 by international relief
organizations of all those in need in all parts of Iraq. Eight
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.
Sincerely,
William J. Clinton.