[House Document 106-248]
[From the U.S. Government Publishing Office]
106th Congress, 2d Session - - - - - - - - - - - House Document 106-248
SIX MONTH PERIODIC REVIEW ON THE NATIONAL EMERGENCY WITH RESPECT TO
YUGOSLAVIA AND KOSOVO
__________
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) AND
KOSOVO, PURSUANT TO 50 U.S.C. 1703(c)
May 25, 2000.--Message and accompanying papers referred to the
Committee on International Relations and ordered to be printed
__________
U.S. GOVERNMENT PRINTING OFFICE
79-011 WASHINGTON : 2000
To the Congress of the United States:
As required by 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), I
transmit herewith a 6-month periodic report on the national
emergency with respect to the Yugoslavia (Serbia and
Montenegro) emergency declared in Executive Order 12808 on May
30, 1992, and with respect to the Kosovo emergency declared in
Executive Order 13088 on June 9, 1998.
William J. Clinton.
The White House, May 25, 2000.
Report to Congress on the National Emergencies With Respect to the
Federal Republic of Yugoslavia (Serbia and Montenegro) and Kosovo
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) (the ``FRY (S&M)''), 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 FRY (S&M), and prohibiting trade-
related transactions by U.S. 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 25, 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.
On November 22, 1995, the United Nations Security Council
passed Resolution (``UNSCR'') 1022, immediately and
indefinitely suspending UN economic sanctions against the FRY
(S&M). 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. Both UNSCR 1022
and UNSCR1074, however, provided that funds and assets
previously blocked pursuant to sanctions against the FRY (S&M) that are
subject to claims and encumbrances, or that are the property of persons
deemed insolvent, shall 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,
which directed the Secretary of the Treasury to suspend the application
of sanctions on the FRY (S&M) and to continue to block property
previously blocked.
On June 9, 1998, by Executive Order 13088, I declared a
national emergency to deal with the unusual and extraordinary
threat to the national security and foreign policy of the
United States constituted by the actions and policies of the
Governments of the FRY (S&M) and the Republic of Serbia with
respect to Kosovo. Executive Order 13088, with certain
exceptions, blocked all property and interests in property of
the Governments of the FRY (S&M), the Republic of Serbia, and
the Republic of Montenegro within the United States or within
the possession or control of U.S. persons, and prohibited all
new investment in the territory of the Republic of Serbia by
U.S. persons, and the approval or other facilitation by U.S.
persons of other persons' new investment in the territory of
the Republic of Serbia.
On April 30, 1999, I took additional steps with respect to
the national emergency declared in Executive Order 13088 by
issuing Executive Order 13121 (64 Fed. Reg. 24021, May 5,
1999), which became effective at 12:01 a.m., EDT, May 1, 1999.
Executive Order 13121 blocks all property and interests in
property of the Governments of the FRY (S&M), the Republic of
Serbia, and the Republic of Montenegro within the United States
or within the possession or control of U.S. persons. The Order
also revoked section 2 of Executive Order 13088, which had
permitted U.S. persons to engage in certain financial
transactions within the territory of the FRY (S&M). Executive
Order 13121 added a new section 2 to Executive Order 13088,
which prohibits trade transactions involving the FRY (S&M).
These Orders now prohibit: (1) the exportation, reexportation,
sale, or supply, directly or indirectly, from the United
States, or by a U.S. person, wherever located, to the FRY (S&M)
or the Government of the FRY (S&M), the Government of the
Republic of Serbia, or the Government of the Republic of
Montenegro, of any goods (including petroleum and petroleum
products), software, technology (including technical data), or
services; (2) the importation into the United States, directly
or indirectly, of any goods, software, technology (including
technical data), or services from the FRY (S&M) or owned or
controlled by the Government of the FRY (S&M), the Government
of the Republic of Serbia, or the Government of the Republic of
Montenegro; and (3) any transaction or dealing by a U.S.
person, wherever located, in goods, software, technology
(including technical data), or services, regardless of country
of origin, for exportation, reexportation, sale, or supply to,
or exportation from or by, the FRY (S&M) or the Government of
the FRY (S&M), the Government of the Republic of Serbia, or the
Government of the Republic of Montenegro. This final
prohibition includes, without limitation, purchase, sale,
transport, swap, or brokerage transactions in such items, and
approving, financing, insuring, facilitating, or guaranteeing
any such transactions. The Orders also prohibit any transaction
by a U.S. person that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the
prohibitions of the Orders, and any conspiracy formed to
violate the prohibitions of the Orders.
Executive Order 13121 directs the Secretary of the
Treasury,in consultation with the Secretary of State, and in
implementation of the Order, to give special consideration to (1) the
circumstances of the Government of the Republic of Montenegro and
persons located in and organized under the laws of the Republic of
Montenegro and (2) the humanitarian needs of refugees from Kosovo and
other civilians within the FRY (S&M). The Order also directs the
Secretary of the Treasury, in consultation with the Secretary of State,
to authorize commercial sales of agricultural commodities and products,
medicine, and medical equipment for civilian end-use in the territory
of the FRY (S&M) under appropriate safeguards to prevent diversion to
military, paramilitary, or political use by the Government of the FRY
(S&M), the Government of the Republican of Serbia, or the Government of
the Republic of Montenegro.
The present report is submitted pursuant to 50 U.S.C.
1641(c) and 1703(c) and covers the period from November 30,
1999 through May 29, 2000. It discusses Administration actions
and expenses directly related to the exercise of powers and
authorities conferred by the declaration of a national
emergency in Executive Order 12808 as modified by Executive
Order 12810, Executive Order 12831, Executive Order 12846, and
Executive Order 12934, and the declaration of a national
emergency in Executive Order 13088, as revised by Executive
Order 13121.
1. The declaration of the national emergency in Executive
Order 12808 on May 30, 1992, and the declaration of a national
emergency in Executive Order 13088 on June 9, 1998, were 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 (``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 of the United States
Code. 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 of 1958 (49 U.S.C. App. 1514), and section 5 of
the United Nations Participation Act of 1945 (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 CFR Part 585 (the
``Regulations'') and the Federal Republic of Yugoslavia (Serbia
and Montenegro) Kosovo Sanctions Regulations, 31 CFR Part 586
(the ``Kosovo Sanctions Regulations'') (63 Fed. Reg. 54575,
October 13, 1998). On November 8, 1999, pursuant to the Kosovo
Sanctions Regulations, OFAC published in the Federal Register
changes to appendix A to 31 CFR Chapter V, inter alia, adding
the names of 650 entities determined to be state- or socially-
owned entities organized or located in the FRY (S&M) and 76
individuals determined to be acting for or on behalf of the
Governments of the FRY (S&M) and/or the Republic of Serbia by
virtue of the high-level positions they hold in those
governments (64 Fed. Reg. 60660).
On June 10, 1998, OFAC issued General License No. 1,
excluding the Government of the Republic of Montenegro from the
blocking provisions of the Kosovo sanctions. On May 5, 1999,
OFAC issued a Notice revoking provisions of the Kosovo
Sanctions Regulations that were inconsistent with the
additional sanctions imposed in Executive Order 13121. By the
Notice of May 5, 1999, OFAC also issued General License No. 2
authorizing trade transactions involving the Republic of
Montenegro that would otherwise be prohibited by Executive
Order 13121. These transactions include: (1) the exportation,
reexportation, sale, or supply, directly or indirectly, from
the United States, or by a U.S. person, wherever located, of
any goods (including petroleum and petroleum products),
software, technology (including technical data), or services
destined for end-use in the Republic of Montenegro (except by
the Government of the FRY (S&M) or the Government of the
Republic of Serbia) or by the Government of the Republic of
Montenegro; (2) the importation into the United States,
directly or indirectly, of any goods, software, technology
(including technical data), or services originating in the
Republic of Montenegro or owned or controlled by the government
of the Republic of Montenegro; and (3) any transaction or
dealing by a U.S. person, whenever located, in goods, software,
technology (including technical data), or services, regardless
of country of origin, for exportation, reexportation, sale, or
supply to, or exportation from or by, the Republic of
Montenegro or the Government of the Republic of Montenegro.
On May 20, 1999, OFAC issued General License No. 3,
authorizing all transactions ordinarily incident to the
exportation of goods (including petroleum and petroleum
products), software, or technology (including technical data)
from the United States or reexportation of U.S.-origin goods,
software, or technology from a foreign country to any person in
the FRY (S&M), to the Government of the FRY (S&M), or to the
Government of the Republic of Serbia, provided that the
following terms and conditions are met: (1) the exportation or
reexportation is licensed or otherwise authorized by the
Department of Commerce under the provisions of the
ExportAdministration Act of 1979 (50 U.S.C. App. 2401, et seq.) and
IEEPA; and (2) the exportation or reexportation is financed by a
financial institution in a third country that is neither a U.S. person
nor a person whose property is blocked pursuant to the Kosovo Sanctions
Regulations, or by cash payment in advance, or by open account
financing not to exceed 90 days net. General License No. 3 also
provides that financial institutions that are U.S. persons, prior to
confirming or advising, or accepting or paying drafts drawn under, or
reimbursing themselves for payment made under, any letter of credit, or
making any other payment or transfer of credit in connection with any
exportation or reexportation licensed pursuant to this general license,
or engaging in any other transactions authorized in this general
license shall satisfy themselves that: (1) each such transaction is
incident to a bona fide exportation or reexportation and is customary
in the normal course of business, and that the value of such
exportation or reexportation reasonably corresponds to the sums of
money involved in financing such transaction; and (2) the exportation
or reexportation and any financing therefor are made pursuant to all
the terms and conditions of this general license.
General License No. 3 does not authorize: (1) the financing
of any transaction from a blocked account; (2) any transaction
by a financial institution in the United States or by any U.S.
person, wherever located, under, or with respect to an
exportation or reexportation financed by, a letter of credit
issued by a person whose property is blocked pursuant to the
Kosovo Sanctions Regulations; (3) any transaction by a U.S.
person related to the reexportation of non-U.S.-origin goods,
software, or technology from a foreign country to any person in
the FRY (S&M) or to the Governments of the FRY (S&M) or the
Republic of Serbia; or (4) any transaction by a U.S. person
related to the sale or supply within the same foreign country
of goods, software, or technology to the Governments of the FRY
(S&M) or the Republic of Serbia, except as incidental to an
exportation or reexportation authorized pursuant to this
general license; or (5) the opening or operation by any U.S.
person of a correspondent account for a financial institution
whose property is blocked pursuant to the Kosovo Sanctions
Regulations. For the purposes of General License No. 3, the
terms ``foreign country'' and ``third country'' include the
Republic of Montenegro.
On August 19, 1999, OFAC issued General License No. 4,
authorizing the exportation, reexportation, sale, or supply,
directly or indirectly, by a U.S. person, wherever located, of
any services or non-U.S.-origin goods (including petroleum and
petroleum products), software, or technology (including
technical data) destined for end-use in the territory of Kosovo
(except by the Governments of the FRY (S&M) or the Republic of
Serbia), otherwise prohibited by Executive Order 13121 with
respect, inter alia, to trade with the FRY (S&M). General
License No. 4 also authorizes all transactions ordinarily
incident to the exportation of goods (including petroleum and
petroleum products), software, or technology (including
technical data) from the United States or reexportation of
U.S.-origin goods, software, or technology from a foreign
country destined for end-use in the territory of Kosovo,
provided that the following terms and conditions are met: (1)
the exportation or reexportation is licensed or otherwise
authorized by the Department of Commerce under the provisions
of the Export Administration Act of 1979 (50 U.S.C. App. 2401
et seq.) and IEEPA; (2) the exportation or reexportation is not
financed by a person whose property is blocked pursuant to the
Kosovo Sanctions Regulations; (3) the financing does not
involve any debit to a blocked account; and (4) the transaction
does not involve the opening or operation by any U.S. person of
a correspondent account for a financial institution whose
property is blocked pursuant to the Kosovo Sanctions
Regulations. The General License also authorizes (1) the
importation into the United States, directly or indirectly, of
any goods, software, technology (including technical data), or
services originating in the territory of Kosovo, and (2) any
transaction or dealing by a U.S. person, wherever located, in
goods, software, technology (including technical data), or
services, regardless of country of origin, for exportation,
reexportation, sale, or supply to, or exportation from, the
territory of Kosovo. Finally, General License No. 4 authorizes
all new investment by U.S. persons in the territory of Kosovo
and the approval or other facilitation by U.S. persons of other
persons' new investment in the territory of Kosovo.
3. Over the past four years, the Departments of State and
the Treasury have worked closely with European Union member
states and other UN member nations to implement the provisions
of UNSCR 1022 and UNSCR 1074. 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 a total of 61
specific licenses pursuant to the Regulations. Specific
licenses were issued to (1) unblock wire transfers involving
generally small amounts of individuals' purely personal funds;
(2) authorize receipt of payment for legal services; (3)
authorize certain transactions relating to air safety policy;
and (4) authorize certain administrative transactions by
otherU.S. government agencies. OFAC also registered ten nongovernmental
agencies providing humanitarian assistance in Kosovo, bringing the
total of such registrations since the inception of the program to 50.
During the past six months, OFAC has continued to oversee
the maintenance of FRY (S&M) accounts blocked pursuant to 31
CFR Part 585, and records with respect to: (1) liquidated
tangible assets and personalty of the fifteen blocked U.S.
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; and (3) remaining blocked FRY (S&M) tangible property,
including real estate. Pursuant to the Kosovo Sanctions
Regulations, 31 CFR Part 586, OFAC blocked 115 transactions
totaling more than $1.2 million during this reporting period.
Most of the blockings were of funds transfers originating from,
or destined for, Serbian banks. In addition, 195 funds
transfers totaling nearly $2.8 million were rejected by U.S.
banking institutions as contrary to U.S. sanctions.
5. OFAC has continued to work closely with the U.S. Customs
Service and other cooperating agencies to investigate alleged
violations of the sanctions imposed pursuant to Executive Order
12808, as modified, and Executive Order 13088, as revised.
On February 18, 2000, a resident alien, who had been named
along with his company in a 40-count indictment, was arrested
in California by U.S. Customs Service agents. The February 16
indictment alleged unauthorized sales and exportation from the
United States of aircraft parts to Yugoslav Airlines in the FRY
(S&M). The indictment further alleged conspiracy with U.S.
persons to acquire U.S.-manufactured aircraft parts from
companies such as Boeing, Pratt & Whitney, Honeywell, and
others for resale and exportation to Yugoslav Airlines. The
defendant shipped the aircraft parts to Yugoslav Airlines in
third countries with the knowledge that they would be
transshipped to the FRY (S&M) without authorization by the U.S.
Government.
Since my last report, OFAC collected three civil monetary
penalties totaling more than $8,500 for violations of the
sanctions. These violations involved prohibited payments either
to the Government of the FRY (S&M), persons in the FRY (S&M),
or to blocked entities owned or controlled by the Government of
the FRY (S&M). The violators included two U.S. financial
institutions and one company. An additional three cases are
undergoing penalty action for violation of the Regulations, and
an additional 37 cases are undergoing penalty action for
violation of the Kosovo Sanctions Regulations.
6. The expenses incurred by the Federal Government in the
six-month period from November 30, 1999 through May 29, 2000
that are directly attributable to the declaration of the
national emergencies in Executive Orders 12808 and 13088 are
estimated at approximately $650,00, 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
U.S. Customs Service), the Department of State, the National
Security Council, and the Department of Commerce.
7. The resolution of the crisis and conflict in the former
Yugoslavia that 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 controlled, will not be complete
until such time as all remaining blocked property is resolved,
the Peace Agreement implemented, and the terms of UNSCR 1022
have been met. Therefore, on May 25, 2000, I 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.
The declaration of the national emergency with respect to
the Federal Republic of Yugoslavia (Serbia and Montenegro) and
the Republic of Serbia contained in Executive Order No. 13088
was made in reaction to the unacceptable actions and policies
of the Belgrade authorities in Kosovo, and continues to apply.
The current situation in Kosovo is fragile and, as yet,
unresolved. It is of particular importance that developments in
Kosovo should not disrupt progress in implementing the Dayton
peace agreement. This threat to the peace of the region
constitutes an unusual and extraordinary threat to the national
security of the United States.
With this in mind, on May 25, 2000, I continued for another
year the national emergency declared on June 9, 1998, and will
continue to enforce the measures adopted pursuant thereto.
Therefore, I shall continue to exercise the powers at my
disposal with respect to the measures against the Government of
the FRY (S&M) and the Government of the Republic of Serbia 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).