[House Document 107-95]
[From the U.S. Government Publishing Office]


107th Congress, 1st Session - - - - - - - - - - - House Document 107-95







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

 July 10, 2001.--Referred to the Committee on International Relations 
                       and ordered to be printed
                                           The White House,
                                          Washington, July 4, 2001.
Hon. Richard B. Cheney,
President of the Senate,
Washington, DC.
    Dear Mr. President: 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.
                                                    George W. Bush.
 President's Periodic Report on the National Emergency With Respect to 

    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 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. In light of the recent passage of the Trade Sanctions 
Reform and Export Enhancement Act of 2000, Title IX of Public 
Law 106-387 (October 28, 2000) (the ``Trade Act''), conforming 
amendments are being promulgated to the Libyan Sanctions 
Regulations, 31 CFR Part 550 (the ``Regulations''). The Trade 
Act requires the President to terminate most unilateral 
sanctions on the exportation of agricultural commodities and 
medicine and medical devices and imposes the requirement, with 
certain exceptions, that exports of such products to the 
government of and any other entity within countries, such as 
Libya, designated by the Secretary of State to have repeatedly 
provided support for acts of international terrorism, only be 
made available pursuant to 1-year licenses.
    2. During the current reporting period, the Office of 
Foreign Assets Control (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 (41) 
involved types of financial transactions that are consistent 
with U.S. policy. Most of these licenses authorized remittances 
between persons who are not blocked parties to flow through 
Libyan banks located outside Libya. Eighty-nine applications to 
unblock funds transfers were denied due to a Government of 
Libya interest, as well as four applications to engage in 
certain commercial transactions. Fourteen licenses were issued 
authorizing the commercial sale and exportation of bulk 
agricultural commodities and four for medicine or medical 
equipment, while six applications were denied as inconsistent 
with U.S. policy. Eight licenses authorizing certain legal 
services, including intellectual property protection, were also 
issued. Finally, three licenses were issued to U.S. companies 
authorizing travel transactions to and within Libya; one 
insurance-related transaction and one diplomatic transaction 
were also authorized.As of May 14, 2001, a total of 73 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 May 16, 2001, 218 transactions, totaling 
more than $9.5 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 the Government of Libya. During the 
reporting period, 150 transactions were rejected, without 
further processing, by U.S. banks causing a disruption of more 
than $4.4 million in financial dealings involving Libya.
    4. Since the President's last report, OFAC has collected 
seven civil monetary penalties totaling nearly $99,000 for 
violations of IEEPA and the Regulations. Five banks and two 
corporations paid penalties for transactions relating to the 
Government of Libya or entities owned or controlled by the 
Government of Libya or to exports to Libya in violation of the 
sanctions. An additional 42 cases are undergoing penalty action 
for violation of IEEPA and the Regulations.
    Trial has been scheduled for August 20, 2001, for a 
Houston-based corporation and its two principal officers who 
were charged in a 23-count criminal indictment on April 26, 
2000. The indictment charges violations of IEEPA and other 
Federal statutes involving the illegal exportation to Libya of 
pipe coating material for use in the Great Man Made River 
Project. Other enforcement actions carried over from previous 
reporting periods continue and new reports of alleged 
violations are being aggressively pursued.
    5. The expenses incurred by the Federal Government in the 
6-month period from January 7 through July 6, 2001, that are 
directly attributable to the exercise of powers and authorities 
conferred by the declaration of the Libyan national emergency, 
are estimated at approximately $605,000. Personnel costs were 
largely centered 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 the Department of Commerce.
    6. Despite the U.N. Security Council's suspension of U.N. 
sanctions against Libya upon the Libyan Government's 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. I will continue to exercise the powers at my disposal to 
apply these sanctions fully and effectively, as long as they 
remain appropriate. I will continue to report periodically to 
the Congress on significant developments as required by law.