[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.