    [House Document 107-161]
    [From the U.S. Government Publishing Office]

    107th Congress, 2d Session - - - - - - - - - - - House Document 107-161

                   PERIODIC REPORT ON THE NATIONAL EMERGENCY
                             WITH RESPECT TO LIBYA

                                   __________

                                 COMMUNICATION

                                      from

                       THE PRESIDENT OF THE UNITED STATES

                                  transmitting

     A SIX MONTH PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO
     LIBYA THAT WAS DECLARED IN EXECUTIVE ORDER 12543 OF JANUARY 7, 1986,
              PURSUANT TO 50 U.S.C. 1641(c) AND 50 U.S.C. 1703(c)

    January 23, 2002.--Referred to the Committee on International Relations
                           and ordered to be printed

                                               The White House,
                                           Washington, January 3, 2002.

    Hon. J. Dennis Hastert,
    Speaker of the House of Representatives,
    Washington, DC.

        Dear Mr. Speaker: 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 Libya that was
    declared in Executive Order 12543 of January 7, 1986.

                Sincerely,
                                                        George W. Bush.

        Periodic Report on the National Emergency With Respect to Libya

        I hereby report to the Congress on developments over the
    course of the past 6 months concerning the national emergency
    with respect to Libya that was declared in Executive Order
    12543 of January 7, 1986. This report, based on information
    provided by relevant sources, is submitted pursuant to section
    401(c) of the National Emergencies Act, 50 U.S.C. 1641(c);
    section 204(c) of the International Emergency Economic Powers
    Act (``IEEPA''), 50 U.S.C. 1703(c); and section 505(c) of the
    International Security and Development Cooperation Act of 1985,
    22 U.S.C. 2349aa-9(c).
        1. Amendments have been promulgated to the Libyan Sanctions
    Regulations, 31 CFR Part 550 (the ``Regulations''), in order to
    conform the Regulations to the Trade Sanctions Reform and
    Export Enhancement Act of 2000, Title IX of Public Law 106-387
    (October 28, 2000) (the ``Trade Act''). These amendments were
    published in the Federal Register on July 12, 2001, (66 FR
    36683, July 12, 2001). A copy of the amendments is attached.
        2. During the current reporting period, OFAC reviewed
    numerous applications for licenses to authorize transactions
    under the Regulations. Consistent with OFAC's ongoing scrutiny
    of banking transactions, the largest category of authorizations
    (40) involved types of financial transactions that are
    consistent with U.S. policy. Most of these licenses authorize
    remittances between persons who are not blocked parties to flow
    through Libyan banks located outside Libya. Ten licenses were
    issued authorizing the commercial sale and exportation of bulk
    agricultural commodities and six for medicine or medical
    equipment. Seven licenses authorizing certain legal services
    were also issued. Finally, two licenses were issued authorizing
    travel transactions to and within Libya; one license for the
    provision of banking services was also authorized. As of
    November 6, 2001, a total of 66 licenses had been issued during
    the reporting period.
        3. OFAC continues to emphasize to the international banking
    community in the United States the importance of identifying
    and blocking payments made by or on behalf of the Government of
    Libya. OFAC worked closely with banks to assure the
    effectiveness of interdiction software systems used to identify
    such payments. As of November 2, 2001, 80 transactions,
    totaling more than $3.8 million, were blocked during this
    reporting period. Under the Regulations, unauthorized
    commercial funds transfers involving Libya must be returned to
    the remitters without further processing, rather than blocked,
    where there is no blockable interest of theGovernment of Libya.
    During the reporting period, 103 transactions were rejected, without
    further processing, by U.S. banks causing a disruption of more than $10
    million in financial dealings involving Libya.
        4. Since my last report, OFAC has collected eight civil
    monetary penalties totaling nearly $58,000 for violations of
    IEEPA and the Regulations from three U.S. financial
    institutions, one carrier, and four companies. Two of the
    companies remitted penalties as part of plea agreements with
    the Department of Justice. An additional 36 cases are
    undergoing penalty action for violation of IEEPA and the
    Regulations.
        5. On August 8, 2001, the President and Vice President of a
    Houston, Texas, corporation entered guilty pleas to charges
    outlined in a one-count criminal information filed in the
    illegal transshipment in 1995 of concrete pipe coating material
    to Libya for use on the Great Man Made River Project
    (``CMMRP''). Each defendant was sentenced to 3 years probation
    and each paid a civil monetary penalty in the amount of $5,000
    to OFAC. The defendants were originally named in a multiple
    count criminal indictment in April 2000 charging violations of
    the Regulations, IEEPA, and other federal statutes for
    transactions in furtherance of a multimillion-dollar contract
    to supply pipe coating material for the GMMRP in Libya. All of
    these transactions occurred without a specific license from
    OFAC. In addition to the criminal prosecution, the Department
    of Justice proceeded with criminal forfeiture against the
    defendants in this case. Other enforcement actions carried over
    from previous reporting periods continue and new reports of
    alleged violations are being aggressively pursued.
        On September 17, 2001, the U.S. District Court for the
    Southern District of Texas granted the government's motion for
    summary judgment in the case Vitol, S.A. v. U.S. Dep't. of the
    Treasury, et al. The plaintiff, Vitol, S.A., challenged the
    government's 1994 blocking of approximately 350,000 barrels of
    Libyan-origin fuel oil. In granting the government's motion,
    the Court affirmed the blocking based on the government's
    reasonable determination that a U.S. person has constructive
    possession or control of the oil at a time when the Government
    of Libya held a blockage interest in the property.
        6. The expenses incurred by the Federal Government in the
    6-month period from July 7, 2001, through January 6, 2002, that
    are directly attributable to the exercise of powers and
    authorities conferred by the declaration of a national
    emergency with respect to Libya, are reported to be more than
    $410,000, 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) and the Departments of State and Commerce.
        7. Despite the U.N. Security Council's suspension of U.N.
    sanctions against Libya upon the Libyan government hand over of
    the Pan Am 103 bombing suspects in April 1999, and a Scottish
    court's conviction of one suspect on January 31, 2001, Libya
    has not yet complied with U.N. Security Council Resolutions 731
    (1992), 748 (1992), and 883 (1993), including Libya's
    obligation to accept responsibility for the actions of Libyan
    officials and to pay appropriate compensation. Libya continues
    to pose an unusual and extraordinary threat to the national
    security and foreign policy interests of the United States and
    U.S. economic sanctions will, therefore, remain in force.