[House Document 108-52]
[From the U.S. Government Publishing Office]



                                     

108th Congress, 1st Session - - - - - - - - - - - - - House Document 108-52


 
PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO PERSONS WHO 
           COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM

                               __________

                                MESSAGE

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

  A 6-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, 2001, PURSUANT TO 50 
                  U.S.C. 1641(c) AND 50 U.S.C. 1703(c)




   March, 24, 2003.--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 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, March 21, 2003.
 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''). The 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. As of January 31, 2003, the United States designated 22 
individuals and entities as ``Specially Designated Global 
Terrorists'' (SDGTs), for a total of 258 individuals and 
entities currently listed as blocked persons pursuant to the 
Order and designated as 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.
    2. Also designated in or pursuant to the Order are 36 
Foreign Terrorist Organizations (FTOs), 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, Public Law 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 United Nations Security Council resolutions 1267 
of October 15, 1999, 1333 of December 19, 2000, 1368 of 
September 12, 2001, 1373 of September 28, 2001, 1390 of January 
16, 2002, and 1455 of January 17, 2003. 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, resolutions 1267, 1390, and 1455 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 included on the consolidated 
list maintained by the U.N. 1267 Sanctions Committee pursuant 
to resolutions 1267, 1390, and 1455. 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. During the current 
reporting period, on October 23, 2002, more than 40 countries 
joined with the United States in requesting that the entity 
Jemaah Islamiya be included on the consolidated list maintained 
by the U.N. 1267 Sanctions Committee pursuant to United Nations 
Security Council resolutions 1267, 1390, and 1455.
    4. There have also been a series of developments with 
respect to previously designated entities. On December 4, 2001, 
the Holy Land Foundation for Relief and Development (HLF), 
headquartered in Richardson, Texas, was designated as an SDGT 
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 argument 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 and has been briefed by both parties.
    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 and June 14, 2002, OFAC notified GRF and BIF, 
respectively, that OFAC intended to designate them as blocked 
entities pursuant to the Order. On October 17, 2002, and 
November 18, 2002, OFAC designated GRF and BIF, respectively, 
as SDGTs. As a result of the designations, OFAC issued orders 
to both GRF and BIF informing them of their designation under 
the Order and blocking all of their property and interests in 
property located in the United States and within the possession 
or control of U.S. persons anywhere in the world.
    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 GRF appealed this decision to 
the Seventh Circuit. On December 31, 2002, the Seventh Circuit 
dismissed the Constitutional claims and remanded to the 
District Court the issue as to whether there was sufficient 
evidence for OFAC to designate GRF. In the BIF criminal case, 
the Director, Enaam Aranout, pled guilty to a racketeering 
conspiracy charge. As a result, BIF has dropped its civil suit.
    5. 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 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 
(``BIA entities''). Licenses were also issued to: release 
blocked funds to pay debts that the designated entities and BIA 
entities incurred prior to the designation or blocking; return 
blocked funds after OFAC determined that no designated entity 
had a property interest in the funds; and authorize access to 
blocked property (other than funds), particularly records and 
computers.
    6. 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 January 22, 2003, 
there are $5.6 million in terrorist-related assets reported 
domestically to OFAC as currently blocked. This figure 
represents a decrease of approximately $2 million since the 
last report in September 2002. The decrease is attributable to 
the licensed transactions described in paragraph five above, as 
well as a decline in the value of certain blocked marketable 
securities. Also, the total U.S. figure understates the actual 
impact of blocking actions in several ways: 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 the account was frozen. In addition to 
closing off these identified pipelines, blocking actions have a 
larger deterrent effect on those who would consider assisting 
the financing of terrorism.
    Between July 25, 2002, and January 23, 2003, OFAC updated 
its website no less than 40 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, posting special alerts and bulletins, and removing 
names that had been delisted.
    7. The expenses incurred by the Federal Government in the 
6-month period from September 24, 2002 through March 23, 2003, 
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 in the Order are estimated at 
approximately $9 million. These data do not reflect certain 
costs of operations by the intelligence and 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.
    8. 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 weapons. In addition, global financial 
networks continue to support and fund terrorists and their 
ability to escape 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.

                                
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