[House Document 107-264]
[From the U.S. Government Publishing Office]
107th Congress, 2d Session - - - - - - - - - - - - House Document 107-264
PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO PERSONS WHO
COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM
__________
COMMUNICATION
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A SIX MONTH PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO
PERSONS WHO COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM THAT WAS
DECLARED IN EXECUTIVE ORDER 13224 OF SEPTEMBER 23, 2002, PURSUANT TO 50
U.S.C. 1641(c) AND 50 U.S.C. 1703(c)
September 24, 2002.--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 transmit
herewith the 6-month periodic report prepared by my
Administration on the national emergency with respect to
persons who commit, threaten to commit, or support terrorism
that was declared in Executive Order 13224 of September 23,
2001.
George W. Bush.
The White House, September 19, 2002.
Periodic Report on the National Emergency With Respect to Persons Who
Commit, Threaten To Commit, or Support Terrorism
This report to the Congress covers developments over the
course of the past 6 months concerning the national emergency
declared in Executive Order 13224 of September 23, 2001,
``Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism'' (66 Fed.
Reg. 49079, September 25, 2001) (the ``Order''). 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).
1. On July 2, 2002, Executive Order 13268, ``Termination of
Emergency With Respect to the Taliban and Amendment or
Executive Order 13224 of September 23, 2001'' (67 Fed. Reg.
44751, July 3, 2002) amended the Order, to add Mohammed Omar
and the Taliban to the list of blocked persons contained in the
Annex to the Order.
2. As of September 13, 2002, 236 individuals and entities
are listed as blocked persons pursuant to the Order and have
been designated as Specially Designated Global Terrorists
(SDGTs). Some of these individuals and entities were also
previously designated as persons whose property and interests
in property are blocked in or pursuant to Executive Order 12947
of January 23, 1995 (60 Fed. Reg. 5079, January 25, 1995),
``Prohibiting Transactions with Terrorists who Threaten to
Disrupt the Middle East Peace Process,'' and Executive Order
13099 of August 22, 1998, in which the President took
additional steps by amending the Annex of Executive Order 12947
to add four individuals or entities, including Usama bin Laden
and al-Qaida.
Also included as SDGTs pursuant to the Order are 34 Foreign
Terrorist Organizations (FTO), also designated by the Secretary
of State under section 219 of the Immigration and Nationality
Act, 8 U.S.C. 1189, as amended by the Antiterrorism and
Effective Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat.
1247-1258.
3. The international community has recognized the need to
take action against terrorism and has condemned such acts of
terrorism in U.N. Security Council resolutions 1368 of
September 12, 2001; 1373 of September 28, 2001; and 1390 of
January 16, 2002. These resolutions, taken together, obligate
U.N. member states, among other things, to take necessary steps
to prevent the financing of terrorism, to deny safe haven to
terrorists, and to restrict the transfer of arms and arms-
related material to terrorists. In particular, these
resolutions impose sanctions against the Taliban, Usama bin
Laden, and al-Qaida, and obligate all U.N. member states to
``Freeze without delay the funds and other financial assets or
economic resources'' of those entities and individuals
designated by the U.N. Executive Order 13224 is a fundamental
tool in the U.S. effort to work closely with governments around
the world in identifying and freezing the assets of terrorists
and their supporters.
4. During the current reporting period, the United States
designated a number of individuals and entities pursuant to the
Order, including 44 individuals and entities whose designation
resulted from joint efforts with international partners. On
April 19, 2002, as a result of cooperation with other G-7
countries, the United States designated nine individuals and
one organization based on links to al-Qaida, and referred these
names to the U.N. jointly with the other G-7. Similarly,
working with Italy, the United States designated another 25
individuals and entities on August 29, 2002, based on al-Qaida
ties, and with Italy referred these names to the U.N. Likewise,
the United States on September 6, 2002, designated Wa'el Hamza
Julaidan as an al-Qaida supporter and, together with Saudi
Arabia, referred his name to the U.N. Additionally, in
collaboration with our European allies, the United States and
the European Union undertook a coordinated blocking action on
May 3, 2002, with respect to seven individuals and one
organization based on their ties to the FTO Euzkadi Ta
Askatasuna (ETA).
5. There have also been a series of developments with
respect to entities designated in the previous reporting
period. The Holy Land Foundation for Relief and Development
(HLF), headquartered in Richardson, Texas, was designated as an
SDGT on December 4, 2001, pursuant to the Order and Executive
Order 12947 based on its support for Hamas. On May 31, 2002,
the Treasury Department made a superseding designation of HLF
under the Order and Executive Order 12947 based on additional
information concerning the connection between HLF and Hamas.
HLF filed suit in Federal district court in the District of
Columbia raising statutory and constitutional issues and
challenging its designation. On July 18, 2002, the court heard
arguments on the parties' motion. On August 8, 2002, the court
denied HLF's motion for preliminary injunctive relief, by which
it sought to overturn the designation, and granted the
Government's motion to dismiss and/or for summary judgment as
to all but one of the statutory and constitutional claims. The
ruling is being appealed.
Funds, accounts, and business records of Global Relief
Foundation, Inc. (GRF), and Benevolence International
Foundation, Inc. (BIF), both headquartered in Chicago, were
blocked by the Department of the Treasury's Office of Foreign
Assets Control (OFAC) pending investigation on December 14,
2001. On May 24, 2002, and June 14, 2002, OFAC notified GRF and
BIF, respectively, that OFAC intended to designate them as
blocked entities pursuant to the Order. Prior to OFAC's
notification of intent to designate, GRF and BIF filed separate
lawsuits in the Northern District of Illinois raising
constitutional and statutory issues and seeking the unblocking
of their assets. GRF's motion for preliminary injunction
against the Government defendants was denied by the district
court and is now on appeal to the Seventh Circuit. Civil
proceedings in the BIF case have been stayed pending certain
criminal proceedings.
On November 7, 2001, OFAC blocked, pursuant to the Order,
persons and entities that are part of the ``Barakaat network,''
including nine entities and two individuals based in the United
States. In addition, four U.S.-based entities were blocked in
aid of investigation (``BIA entities''). One of the
individuals, Liban Hussein, was delisted on July 15, 2002, and
his property was unblocked. Aaran Money Wire, Mr. Garad Nor,
and Global Service International, all located in Minneapolis,
and one other U.S.-based entity, Barakaat Enterprises, Inc.,
located in Columbus, Ohio, and two Swedish individuals,
Abdirisak Aden and Abdi Abdulaziz Ali, all designated on
November 7, 2001, based on their affiliations with the
``Barakaat network,'' were removed from the list of blocked
entities on August 27, 2002, and their assets unblocked. The
removal of these entities and individuals from the list of
blocked persons is based on the actions taken by these
individuals and entities to sufficiently eliminate the basis
for their designations, which were premised on the parties' now
severed affiliations with the ``Barakaat network.''
6. OFAC has responded to numerous license applications
under this program. Most of these requests were made in the
context of litigation by U.S.-based entities challenging
designations or the blocking of assets in aid of investigation.
Licenses were issued authorizing payment from offshore sources
that are not blocked for legal services provided to designated
offshore entities, and the payment from blocked funds for the
legal representation of U.S.-based designated entities and
entities whose assets are blocked in aid of investigation.
Licenses were also issued authorizing the release of blocked
funds to pay debts that the designated entities and BIA
entities incurred prior to the designation or blocking; to pay
certain limited operating expenses of BIA entities while the
investigation of these entities continues; to pay living
expenses of a designated U.S. person; to release assets to the
participants of a retirement savings plan sponsored by a
designated entity, provided that any plan assets in which the
sponsor has a property interest remain blocked; and to return
blocked funds transfers after OFAC determined that no
designated entity had a property interest in the funds.
A license was issued authorizing a bank to release blocked
funds pursuant to a seizure warrant issued to another
governmental entity. Licenses were also issued authorizing the
release of, or access to, blocked property (other than funds),
particularly records and computers.
A number of license requests were denied, including
requests for the release of an entity's blocked funds to pay
the legal expenses of individuals whose personal assets are not
blocked, and requests to pay offshore creditors or to fund an
entity's offshore operations.
7. Since the effective date of the Order, OFAC has
emphasized to the financial community the importance of
identifying and blocking payments and accounts in which
interests of persons designated under the Order are implicated.
OFAC has worked very closely with banks, broker-dealers, and
others to assure the effectiveness of interdiction software
systems to identify payments, other transactions, and accounts,
and has fielded thousands of phone calls from the financial
community regarding suspect activities. As of September 13,
2002, OFAC has also blocked an additional $75,000 in terrorist-
related assets beyond the approximately $7.6 million reported
in my last report. Our international partners have taken
parallel blocking actions in their own financial sectors. Each
of the accounts frozen had the potential to be a pipeline for
far more money than what was in the account on the day that
account was frozen. In addition to closing off these identified
pipelines, blocking actions have a larger deterrent effect on
those who would otherwise consider assisting the financing of
terrorism. Between February 15 and July 24, 2002, OFAC updated
its website no less than 28 times to keep the public informed
of the latest sanctions developments. This included adding new
names to its list of Specially Designated Nationals and Blocked
Persons and posting special alerts and bulletins.
8. The expenses incurred by the Federal Government in the
six-month period beginning March 24, 2002, that are directly
attributable to the exercise of powers and authorities
conferred by the declaration of the national emergency with
respect to persons who commit, threaten to commit, or support
terrorism are estimated at approximately $8.8 million. These
data do not reflect costs of operations by the intelligence and
certain law enforcement communities. Reported costs were
predominantly related to salary and expenses for personnel in
the Department of the Treasury (particularly in the Office of
Foreign Assets Control, the Office of the General Counsel, and
the U.S. Customs Service), the Department of State, and
components of the Department of Justice.
9. The United States continues to be concerned by the grave
acts of terrorism committed or threatened by foreign
terrorists, including the heinous attacks committed in New York
and Pennsylvania, and against the Pentagon, on September 11,
2001. Available information confirms that terrorist
organizations seek to acquire weapons of mass destruction,
including chemical, biological, and nuclear weapons. In
addition, global financial networks continue to support and
fund terrorists and their ability to engage in terrorist acts
through a variety of financial mechanisms. For these reasons,
persons who commit, threaten to commit, or support terrorism
continue to pose an unusual and extraordinary threat to
international security.