[House Document 105-89]
[From the U.S. Government Publishing Office]
105th Congress, 1st Session - - - - - - - - - - - House Document 105-89
DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO THE
FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO) AND THE BOSNIAN
SERBS
__________
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) (THE
``FRY (S/M)'') AND THE BOSNIAN SERBS, PURSUANT TO 50 U.S.C. 1703(c)
June 3, 1997.--Message and accompanying papers referred to the
Committee on International Relations and ordered to be printed
To the Congress of the United States:
On May 30, 1992, by Executive Order 12808, President Bush
declared a national emergency to deal with the unusual and
extraordinary threat to the national security, foreign policy,
and economy of the United States constituted by the actions and
policies of the Governments of Serbia and Montenegro, blocking
all property and interests in property of those Governments.
President Bush took additional measures to prohibit trade and
other transactions with the Federal Republic of Yugoslavia
(Serbia and Montenegro) by Executive Orders 12810 and 12831,
issued on June 5, 1992, and January 15, 1993, respectively.
On April 25, 1993, I issued Executive Order 12846, blocking
the property and interests in property of all commercial,
industrial, or public utility undertakings or entities
organized or located in the Federal Republic of Yugoslavia
(Serbia and Montenegro) (the ``FRY (S&M)''), and prohibiting
trade-related transactions by United States persons involving
those areas of the Republic of Bosnia and Herzegovina
controlled by the Bosnian Serb forces and the United Nations
Protected Areas in the Republic of Croatia. On October 24,
1994, because of the actions and policies of the Bosnian Serbs,
I expanded the scope of the national emergency by issuance of
Executive Order 12934 to block the property of the Bosnian Serb
forces and the authorities in the territory that they control
within the Republic of Bosnia and Herzegovina, as well as the
property of any entity organized or located in, or controlled
by any person in, or resident in, those areas.
On November 22, 1995, the United Nations Security Council
passed (``Resolution 1022''), immediately and indefinitely
suspending economic sanctions against the FRY (S&M). Sanctions
were subsequently lifted by the United Nations Security Council
pursuant to Resolution 1074 on October 1, 1996. Resolution
1022, however, continues to provide for the release of funds
and assets previously blocked pursuant to sanctions against the
FRY (S&M), provided that such funds and assets that are subject
to claims and encumbrances, or that are the property of persons
deemed insolvent, remain blocked until ``released in accordance
with applicable law.'' This provision was implemented in the
United States on December 27, 1995, by Presidential
Determination No. 96-7. The Determination, in conformity with
Resolution 1022, directed the Secretary of the Treasury, inter
alia, to suspend the application of sanctions imposed on the
FRY (S&M) pursuant to the above-referenced Executive orders and
to continue to block property previously blocked until
provisions is made to address claims or encumbrances, including
the claims of the other successor states of the former
Yugoslavia. This sanctions relief was an essential factor
motivating Serbia and Montenegro's acceptance of the General
Framework Agreement for Peace in Bosnia and Herzegovina
initialed by the parties in Dayton on November 21, 1995 (the
``Peace Agreement'') and signed in Paris on December 14, 1995.
The sanctions imposed on the FRY (S&M) and on the United
Nations Protected Areas in the Republic of Croatia were
accordingly suspended prospectively, effective January 16,
1996. Sanctions imposed on the Bosnian Serb forces and
authorities and on the territory that they control within the
Republic of Bosnia and Herzegovina were subsequently suspended
prospectively, effective May 10, 1996, in conformity with UNSCR
1022. On October 1, 1996, the United Nations passed UNSCR 1074,
terminating U.N. sanctions against the FRY (S&M) and the
Bosnian Serbs in light of the elections that took place in
Bosnia and Herzegovina on September 14, 1996. UNSCR 1074,
however, reaffirms the provisions of UNSCR 1022 with respect to
the release of blocked assets, as set forth above.
The present report is submitted pursuant to 50 U.S.C.
1641(c) and 1703(c) and covers the period from November 30,
1996, through May 29, 1997. It discusses Administration actions
and expenses directly related to the exercise of powers and
authorities conferred by the declaration of a national
emergencyin Executive Order 12808 as expanded with respect to
the Bosnian Serbs in Executive Order 12934, and against the FRY (S&M)
contained in Executive Orders 12810, 12831, and 12846.
1. The declaration of the national emergency on May 30,
1992, was made pursuant to the authority vested in the
President by the Constitution and laws of the United States,
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. The emergency declaration was reported to the Congress on
May 30, 1992, pursuant to section 204(b) of the International
Emergency Economic Powers Act (50 U.S.C. 1703(b)) and the
expansion of that national emergency under the same authorities
was reported to the Congress on October 25, 1994. The
additional sanctions set forth in related Executive orders were
imposed pursuant to the authority vested in the President by
the Constitution and laws of the United States, including the
statutes cited above, section 1114 of the Federal Aviation Act
(49 U.S.C. App. 1514), and section 5 of the United Nations
Participation Act (22 U.S.C. 287c).
2. The Office of Foreign Assets Control (OFAC), acting
under authority delegated by the Secretary of the Treasury,
implemented the sanctions imposed under the foregoing statutes
in the Federal Republic of Yugoslavia (Serbia and Montenegro)
and Bosnian Serb-Controlled Areas of the Republic of Bosnia and
Herzegovina Sanctions Regulations, 31 C.F.R. Part 585 (the
``Regulations''). To implement Presidential Determination No.
967, the Regulations were amended to authorize prospectively
all transactions with respect to the FRY (S&M) otherwise
prohibited (61 FR 1282, January 19, 1996). Property and
interests in property of the FRY (S&M) previously blocked
within the jurisdiction of the United States remain blocked, in
conformity with the Peace Agreement and UNSCR 1022, until
provision is made to address claims or encumbrances, including
the claims of the other successor states of the former
Yugoslavia.
On May 10, 1996, OFAC amended the Regulations to authorize
prospectively all transactions with respect to the Bosnian
Serbs otherwise prohibited, except with respect to property
previously blocked (61 FR 24696, May 16, 1996). On December 4,
1996, OFAC amended Appendices A and B to 31 C.F.R. chapter V,
containing the names of entities and individuals in
alphabetical order and by location that are subject to the
various economic sanctions programs administered by OFAC, to
remove the entries for individuals and entities that were
determined to be acting for or on behalf of the Government of
the Federal Republic of Yugoslavia (Serbia and Montenegro).
These assets were blocked on the basis of these persons'
activities in support of the FRY (S&M)--activities no longer
prohibited--not because the Government of the FRY (S&M) or
entities located in or controlled from the FRY (S&M) had any
interest in those assets (61 FR 64289, December 4, 1996). A
copy of the amendment is attached to this report.
On April 18, 1997, the Regulations were amended by adding a
new section 585.528, authorizing all transactions after 30 days
with respect to the following vessels that remained blocked
pursuant to the Regulations, effective at 10:00 a.m. local time
in the location of the vessel on May 19, 1997: the M/V
Moslavina, M/V Zeta, M/V Lovcen, M/V Durmitor and M/V Bar (a/k/
a M/V Inviken) (62 FR 19672, April 23, 1997). During the 30-day
period, United States persons were authorized to negotiate
settlements of their outstanding claims with respect to the
vessels with the vessels' owners or agents and were generally
licensed to seek and obtain judicial warrants of maritime
arrest. If claims remained unresolved 10 days prior to the
vessels' unblocking (May 8, 1997), service of the warrants
could be effected at that time through the United States
Marshal's Office in the district where the vessel was located
to ensure that United States creditors of a vessel had the
opportunity to assert their claims. Appendix C to31 CFR,
chapter V, containing the names of vessels blocked pursuant to the
various economic sanctions programs administered by OFAC (61 FR 32936,
June 26, 1996), was also amended to remove these vessels from the list
effective May 19, 1997. A copy of the amendment is attached to this
report.
3. Over the past year, the Departments of State and the
Treasury have worked closely with European Union member states
and other U.N. member nations to implement the provisions of
UNSCR 1022. In the United States, retention of blocking
authority pursuant to the extension of a national emergency
provides a framework for administration of an orderly claims
settlement. This accords with past policy and practice with
respect to the suspension of sanctions regimes.
4. During this reporting period, OFAC issued seven specific
licenses regarding transactions pertaining to the FRY (S&M) or
assets it owns or controls. Specific licenses have been issued
(1) to authorize the unblocking of certain funds and other
financial assets previously blocked; (2) for the payment of
crews' wages, vessel maintenance, and emergency supplies for
FRY (S&M)-controlled ships blocked in the United States; and
(3) to authorize performance of certain transactions under pre-
sanctions contracts.
During the past 6 months, OFAC has continued to oversee the
maintenance of blocked accounts and records with respect to:
(1) liquidated tangible assets and personality of the 15
blocked United States subsidiaries of entities organized in the
FRY (S&M); (2) the blocked personalty, files, and records of
the two Serbian banking institutions in New York previously
placed in secure storage; (3) remaining tangible property,
including real estate; and (4) the 5 Yugoslav-owned vessels
recently unblocked in the United States.
5. Despite the prospective authorization of transactions
with the FRY (S&M), OFAC has continued to work closely with the
United States Customs Service and other cooperating agencies to
investigate alleged violations that occurred while sanctions
were in force.
Since my last report, OFAC has collected six civil monetary
penalties totaling nearly $39,000 for violations of the
sanctions. These violations included prohibited imports,
exports, contract dealings, and payments to the Government of
the FRY (S&M), persons in the FRY (S&M), or to blocked entities
owned or controlled by the FRY (S&M).
6. The expenses incurred by the Federal Government in the
6-month period from November 30, 1996, through May 29, 1997,
that are directly attributable to the declaration of a national
emergency with respect to the FRY (S&M) and the Bosnian Serb
forces and authorities are estimated at approximately a
$400,000, most of which represents wage and salary costs for
Federal personnel. Personnel costs were largely centered in the
Department of the Treasury (particularly in OFAC and its Chief
Counsel's Office, and the United States Customs Service), the
Department of State, the National Security Council, and the
Department of Commerce.
7. In the last year and a half, substantial progress has
been achieved to bring about a settlement of the conflict in
the former Yugoslavia acceptable to the parties. UNSCR 1074
terminates sanctions in view of the first free and fair
elections to occur in the Republic of Bosnia and Herzegovina,
as provided for in the Peace Agreement. In reaffirming
Resolution 1022, however, UNSCR 1074 contemplates the continued
blocking of assets potentially subject to conflicting claim and
encumbrances until provision is made to address them under
applicable law, including claims of the other successor states
of the former Yugoslavia.
The resolution of the crisis and conflict in the former
Yugoslavia that has resulted from the actions and policies of
the Government of the Federal Republic of Yugoslavia (Serbia
and Montenegro), and of the Bosnian Serb forces and the
authorities in the territory that they control, will not be
complete until such time as the Peace Agreement is implemented
and the terms of UNSCR 1022 have been met. Therefore, I have
continued for another year the national emergency declared on
May 30, 1992, as expanded in scope on October 25, 1994, and
will continue to enforce the measures adopted pursuant thereto.
I shall continue to exercise the powers at my disposal with
respect to the measures against the Government of the Federal
Republic of Yugoslavia (Serbia and Montenegro), and the Bosnian
Serb forces, civil authorities, and entities, as long as these
measures are appropriate, and will continue to report
periodically to the Congress on significant developments
pursuant to 50 U.S.C. 1703(c).
William J. Clinton.
The White House, May 30, 1997.