[House Document 107-179]
[From the U.S. Government Publishing Office]


107th Congress, 2d Session - - - - - - - - - - - - House Document 107-179

                        PERIODIC REPORT ON THE






          PURSUANT TO 50 U.S.C. 1641(c) AND 50 U.S.C. 1703(c)

  February 5, 2002.--Message and accompanying papers referred to the 
     Committee on International Relations and ordered to be printed
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, 50 U.S.C. 1703(c), I am 
providing a 6-month periodic report prepared by my 
Administration on the national emergency with respect to Iraq 
that was declared in Executive Order 12722 of August 2, 1990.

                                                    George W. Bush.
    The White House, February 4, 2002.
     Periodic Report on the National Emergency With Respect to Iraq

    This report to the Congress covers the developments over 
the course of the past 6 months concerning the national 
emergency with respect to Iraq that was declared in Executive 
Order 12722 of August 2, 1990, and matters relating to 
Executive Order 12724 of August 9, 1990, and Executive Order 
12817 of October 23, 1992. This report is submitted pursuant to 
section 204(c) of the International Emergency Economic Powers 
Act, 50 U.S.C. 1703(c) (``IEEPA''), and section 401(c) of the 
National Emergencies Act, 50 U.S.C. 1641(c).
    1. There have been no amendments to the Iraqi Sanctions 
Regulations, 31 C.F.R. Part 575 (the ``Regulations'') during 
the current reporting period.
    2. Since December 10, 1996, OFAC has issued specific 
licenses authorizing participation by U.S. persons in 
commercial sales of humanitarian goods to Iraq funded by Iraqi 
oil sales, and imports of Iraqi petroleum products, pursuant to 
United Nations Security Council Resolution (``UNSCR'') 986 and 
succeeding resolutions. the total value of humanitarian sales 
since 1996 is approximately $669 million. Of this amount, OFAC 
licenses have authorized sales of about $462 million in basic 
foodstuffs, nearly $68 million for medicines and medical 
supplies, more than $123 million for water testing and 
treatment equipment, irrigation systems, and other 
infrastructure components essential to the delivery to the 
Iraqi people of food, medicine, other necessities of life, and 
approximately $15 million to fund a variety of United Nations 
activities in Iraq. During the current reporting period, as of 
December 3, 2001, OFAC-authorized humanitarian sales were 
valued at nearly $22 million, a decrease of $38 million from 
the prior reporting period.
    In the period from February 2 to November 27, 2001, 
importations of Iraqi crude oil, authorized by OFAC pursuant to 
UNSCR 1153, were valued at approximately $203 million. In 
addition, sales of oil infrastructure merchandise authorized 
since November 10, 1998, in conformity with UNSCRs 1153 and 
1175, were valued at nearly $140 million. OFAC issued 58 
licenses during the reporting period for the sale of oilfield 
parts and equipment to the Government of Iraq.
    Finally, an additional 24 licenses were issued authorizing 
certain diplomatic and travel transactions, the provision of 
legal services (including the protection of intellectual 
property), and the unblocking of wire transfer transactions 
where it was determined that there was no interest of the 
Government of Iraq.
    3. As of December 5, 2001, 29 transactions totaling more 
than $1 million were blocked during the reporting period. 
Forty-one transactions, not involving blockable interests, were 
rejected by U.S. banks causing a disruption of more than $5 
million in business for Iraq.
    4. Since my last report, OFAC has collected 4 civil 
monetary penalties totaling nearly $280,000 for violations of 
the sanctions. Two U.S. companies and three individuals paid 
the penalties for violations involving exports and an attempted 
export of goods to Iraq. An additional twenty cases are 
undergoing agency penalty or debt collection action for 
violation of the Regulations.
    On November 23, 2001, OFAC issued an order to a U.S. 
company to place into a blocked account funds reflecting a 
contract price for approximately 1.075 million barrels of 
Iraqi-origin oil that were excluded from OFAC's general license 
authorizing the importation of oil from Iraq under the oil for 
food program. The unlicensed oil was part of a larger shipment 
of oil purchased from Iraq by a non-U.S. entity that is 
believed to have exceeded the exportation authorization granted 
to it by the U.N. 661 Committee. An investigation of this 
matter is continuing.
    5. The expenses incurred by the Federal Government in the 6 
month period from August 2, 2001, through February 1, 2002, 
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 
$195,000, 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 Department of State.
    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.
    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 Security Council 
resolutions affirm that the Security Council review Iraq's 
policies and practices in judging Iraq's compliance with those 
resolutions. 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.