[House Document 107-6]
[From the U.S. Government Publishing Office]
107th Congress, 1st Session - - - - - - - - - - - - - House Document 107-6
REPORT TO CONGRESS ON THE NATIONAL EMERGENCIES WITH RESPECT TO THE
FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND MONTENEGRO) AND KOSOVO
__________
COMMUNICATION
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)
January 3, 2001.--Referred to the Committee on International Relations
and ordered to be printed
The White House,
Washington, December 20, 2000.
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 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.
Sincerely,
William J. Clinton.
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 the 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 U.N. 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 UNSCR 1074, 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 remained 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 new
and separate 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, which became effective at 12:01
a.m., EDT, May 1, 1999. Executive Order 13121 continues to
block 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).
On October 12, 2000, in support of Yugoslavia's newly
elected leaders, I directed the Department of the Treasury and
the Department of State to take immediate steps to begin
lifting trade and financial sanctions imposed against Serbia in
1998 and 1999, except those targeted against members of the
former regime. This directive included, with immediate effect,
lifting of the oil embargo and flight ban.
The present report is submitted pursuant to 50 U.S.C.
1641(c) and 1703(c) and covers the period from May 30 through
November 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, the declaration of a national emergency
in Executive Order 13088, as revised by Executive Order 13121,
and my October 12 statement on the lifting of sanctions against
Serbia.
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, sections 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
and Executive orders in the Federal Republic of Yugoslavia
(Serbia and Montenegro) and Bosnia 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''). 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 certain trade and trade-related transactions
involving the Republic of Montenegro that would otherwise be
prohibited by Executive Order 13088, as revised.
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, among others, 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; 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.
On August 19, 1999, OFAC issued General License No. 4,
authorizing, subject to specific terms and conditions, certain
trade and trade-related transactions involving the territory of
Kosovo that would otherwise be prohibited by Executive Order
13088, as revised. General License No. 4 also 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.
To implement the President's directive on the lifting of
sanctions against Serbia, on October 12, OFAC issued General
Licenses No. 5 and No. 6. General License No. 5 authorizes air
transportation-related transactions involving the FRY (S&M).
This authorization includes: (1) the provision of air
transportation services, directly or indirectly, between the
United States and the FRY (S&M); (2) the provision of ground
support services by Judoslovenski Aerotransport (``JAT'') in
the FRY (S&M) or in any third country; (3) the operation of
charter flights to or from the FRY (A&M), except for a charter
flight operated by or for JAT; and (4) the payment of charges
for services rendered and all fees assessed in connection with
taking off from, landing in, or overflying the FRY (S&M).
General License No. 5 does not authorize any transactions or
dealings, directly or indirectly, by a U.S. person relating to
JAT taking off from, landing in, or overflying the United
States. Finally, General License No. 5 does not excuse a person
from complying with other applicable laws, including, but not
limited to, title 49 of the U.S. Code and regulations issued
thereunder, as well as those laws governing the importation,
exportation, reexportation, sale or supply of goods, software,
technology (including technical data), or services.
General License No. 6 authorizes transactions relating to
the exportation of petroleum and petroleum products to the FRY
(S&M). All transactions or dealings relating to the
exportation, reexportation, sale, or supply, directly or
indirectly, from the United States, or by a U.S. person,
wherever located, of any petroleum or petroleum products to the
FRY (S&M) are authorized. General License No. 6 does not
authorize: (1) any transactions or dealings, directly or
indirectly, with Jugopetrol or Nis-Nafta Industrija Srebije;
(2) any transactions or dealings, by a U.S. person with any
financial institution located or headquartered in the Republic
of Serbia; or (3) any debit to a blocked account orsetoff
against blocked property. Moreover, General License No. 6 does not
excuse a person from complying with other applicable U.S. laws and
regulations, including, but not limited to, those governing the
exportation, reexportation, sale or supply of goods, software,
technology (including technical data), or services.
3. Over the past four years, 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 and UNSCR 1074. In the United States,
retention of statutory blocking authority pursuant to the
extension of a national emergency helps provide a framework for
administration of an orderly claims settlement process. 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 59
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 the settlement of pending legal actions and
receipt of payment for legal services; (3) authorize certain
transactions relating to air safety policy; and (4) authorize
certain administrative transactions by other United States
government agencies. No additional OFAC registrations of
nongovernmental agencies providing humanitarian assistance have
been made since my last report. Thus, the total of such
registrations since the inception of the program remains at 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 146 transactions
totaling more than $3.7 million during this reporting period.
Most of the blockings were of funds transfers originating from,
or destined for, Serbian banks. In addition, 369 funds
transfers totaling more than $3.8 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 16, 2000, a resident alien, along with his
company, was named in a 40-count indictment in the Central
District of California. The indictment alleged unauthorized
sales and exportation from the United States of aircraft parts
to Jugoslovenski Aerotransport (``JAT'') in the FRY (S&M) and
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 JAT. The defendant shipped the aircraft parts to
JAT in third countries with the knowledge that they would be
transshipped to the FRY (S&M) without authorization by the
United States Government. Trial has been scheduled for February
2001.
On October 10, 2000, a New York corporation pleaded guilty
in the Southern District of New York to one count of exporting
carbon black from the United States to Serbia in violation of
IEEPA and the Regulations. Carbon black is a component in the
manufacture of tires. This action was the culmination of a
lengthy and difficult investigation by the U.S. Customs Service
that began in 1993. The defendant has stipulated in a plea
agreement to pay a criminal fine of between $40,000 and $60,000
for its violation of IEEPA and the FRY (S&M) sanctions.
Since my last report, OFAC has collected six civil monetary
penalties totaling more than $80,000 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), as well as the export of unauthorized services
to the FRY (S&M). The violators included three U.S. financial
institutions, one company, one organization, and one
individual. An additional two cases are undergoing penalty
action for violation of the Regulations, and an additional 46
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 May 30 through November 29, 2000 that are
directly attributable to the declaration of the national
emergencies in Executive Orders 12808 and 13088 are estimated
at approximately $700,000, 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, the Chief Counsel's Office (Office of
Foreign Assets Control), and the U.S. Customs Service), the
Department of State, the National Security Council, and the
Department of Commerce.
7. Serbia's September 24, 2000, elections unleashed a chain
of events leading to the dramatic end of the Milosevic
dictatorship a few days later. Following confirmation of the
victory of democratic forces, on October 12, 2000, I directed
the Departments of Treasury and State to remove the flight ban
and oil embargo and take immediate steps to lift remaining
sanctions. We have a strong interest in supporting Yugoslavia's
newly elected leaders as they work to build a truly democratic
society. Further, we will ensure that such sanctions-lifting
measures do not allow supporters of Milosevic to continue the
systematic theft of resources that have marked the last
thirteen years.
I shall continue to exercise the powers at my disposal with
respect to the measures against the former Government of the
FRY (S&M) and the former 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).