[Congressional Record Volume 140, Number 22 (Thursday, March 3, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
     REPORT ON THE NATIONAL EMERGENCY WITH IRAQ--MESSAGE FROM THE 
                            PRESIDENT--PM 93

  The PRESIDING OFFICER laid before the Senate the following message 
from the President of the United States, together with an accompanying 
report; which was referred to the Committee on Banking, Housing, and 
Urban Affairs:

To the Congress of the United States:
  I hereby report to the Congress on the developments since my last 
report of August 2, 1993, concerning the national emergency with 
respect to Iraq that was declared in Executive Order No. 12722 of 
August 2, 1990. 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, 50 U.S.C. 1703(c).
  Executive Order No. 12722 ordered the immediate blocking of all 
property and interests in property of the Government of Iraq (including 
the Central Bank of Iraq), then or thereafter located in the United 
States or within the possession or control of a U.S. person. That order 
also prohibited the importation into the United States of goods and 
services of Iraqi origin, as well as the exportation of goods, 
services, and technology from the United States to Iraq. The order 
prohibited travel-related transactions to or from Iraq and the 
performance of any contract in support of any industrial, commercial, 
or governmental project in Iraq. U.S. persons were also prohibited from 
granting or extending credit or loans to the Government of Iraq.
  The foregoing prohibitions (as well as the blocking of Government of 
Iraq property) were continued and augmented on August 9, 1990, by 
Executive Order No. 12724, which was issued in order to align the 
sanctions imposed by the United States with United Nations Security 
Council Resolution No. 661 of August 6, 1990.
  Executive Order No. 12817 was issued on October 21, 1992, to 
implement in the United States measures adopted in United Nations 
Security Resolution No. 778 of October 2, 1992. Resolution 778 requires 
U.N. member states temporarily to transfer to a U.N. escrow account to 
$200 million apiece in Iraqi oil sale proceeds paid by purchasers after 
the imposition of U.N. sanctions on Iraq. These funds finance Iraq's 
obligations for U.N. activities with respect to Iraq, such as expenses 
to verify Iraqi weapons destruction and to provide humanitarian 
assistance in Iraq on a nonpartisan basis. A portion of the escrowed 
funds will also fund the activities of the U.N. Compensation Commission 
in Geneva, which will handle claims from victims of the Iraqi invasion 
of Kuwait. The funds placed in the escrow account are to be returned, 
with interest, to the member states that transferred them to the United 
Nations, as funds are received from future sales of Iraqi oil 
authorized by the U.N. Security Council. No member state is required to 
fund more than half of the total contributions to the escrow account.

  This report discusses only matters concerning the national emergency 
with respect to Iraq that was declared in Executive Order No. 12722 and 
matters relating to Executive Orders Nos. 12724 and 12817. The report 
covers events from August 2, 1993, through February 1, 1994.
  1. During the reporting period, there were technical amendments to 
the Iraqi Sanctions Regulations relating to notification of transfers 
into blocked accounts and registration of persons holding blocked 
property, 58 Fed. Reg. 47643 (September 10, 1993). A copy of the 
amendments is attached for reference.
  2. Investigations of possible violations of the Iraqi sanctions 
continue to be pursued and appropriate enforcement actions taken. These 
are intended to deter future activities in violation of the sanctions. 
Additional civil penalty notices were prepared during the reporting 
period for violations of the International Emergency Economic Powers 
Act and Iraqi Sanctions Regulations with respect to transactions 
involving Iraq. Three penalties totaling nearly $54,000 were collected 
from three banks for violation of the prohibitions against funds 
transfers to Iraq, and noncompliance with reporting requirements and an 
Office of Foreign Assets Control directive license.

  3. Investigation also continues into the roles played by various 
individuals and firms outside Iraq in the Iraqi government procurement 
network. These investigations may lead to additions to the Office of 
Foreign Assets Control's listing of individuals and organizations 
determined to be Specially Designated Nationals of the Government of 
Iraq.
  4. Pursuant to Executive Order No. 12817 implementing United Nations 
Security Council Resolution No. 778, on October 26, 1992, the Office of 
Foreign Assets Control directed the Federal Reserve Bank of New York to 
establish a blocked account for receipt of certain post-August 6, 1990, 
Iraqi oil sales proceeds, and to hold, invest, and transfer these funds 
as required by the order. On July 20, 1993, following payments by the 
Governments of Saudi Arabia and Denmark of, respectively $40,589,419.00 
and $674,360.00, to the special United Nations-controlled account, 
entitled United Nations Security Council Resolution No. 778 Escrow 
Account, the Federal Reserve Bank of New York was directed to transfer 
a corresponding amount of $41,263,779.00 from the blocked account it 
holds to the United Nations-controlled account. Similarly, on August 2, 
1993, following the payment of $1,765,138.33 by the Government of the 
United Kingdom, the Federal Reserve Bank of New York was directed to 
transfer a corresponding amount of $1,765,138.33 to the United Nations-
controlled account; on September 11, 1993, following payments of 
$1,547,054.35 by the Government of Canada, $276,000.00 by the 
Government of Greece, $3,196,897.72 from the Commission of the European 
Community, and $1,006,614.89 from the Government of Denmark, the 
Federal Reserve Bank of New York was directed to transfer a 
corresponding amount of $6,026,566.96 to the United Nations-controlled 
account; and on December 15, 1993, following payments of $5,223,880.60 
by the Government of the United Kingdom, $621,426.80 by the Government 
of Germany, and $1,219,941.98 from the Government of the Netherlands, 
the Federal Reserve Bank of New York was directed to transfer a 
corresponding amount of $7,065,249.38 to the United Nations-controlled 
account. Total transfers from the blocked Federal Reserve Bank of New 
York account since issuance of Executive Order No. 12817 have amounted 
to $107,613,270.99 of the $200 million for which the United States is 
potentially obligated, on a matching basis, pursuant to United Nations 
Security Council Resolution No. 778.

  5. Since the last report, there have been developments in one case. 
In Campia et al. v. Newcomb et al., a settlement was entered into by 
the parties addressing payment of back rent to the landlord and return 
to the landlord of premises leased by the Matrix Churchill Corporation. 
To implement the settlement, certain blocked property owned by Matrix 
Churchill was sold, with the proceeds placed in a blocked account. 
Matrix Churchill's remaining property and records were placed in secure 
storage.
  6. The Office of Foreign Assets Control has issued a total of 444 
specific licenses regarding transactions pertaining to Iraq or Iraqi 
assets since August 1990. Since my last report, 53 specific licenses 
have been issued. Licenses were issued for transactions such as the 
filing of legal actions against Iraqi governmental entities, for legal 
representation of Iraq, and the exportation to Iraq of donated 
medicine, medical supplies, and food intended for humanitarian relief 
purposes, the execution of powers of attorney relating to the 
administration of personal assets and decedents' estates in Iraq, and 
the protection of pre-existent intellectual property rights in Iraq.
  7. The expenses incurred by the Federal Government in the 6 month 
period from August 2, 1993, through February 1, 1994, that are directly 
attributable to the exercise of powers and authorities conferred by the 
declaration of a national emergency with respect to Iraq are reported 
at about $3.1 million, most of which represents wage and salary costs 
for Federal personnel. Personnel costs were largely centered in the 
Department of the Treasury (particularly in the Office of Foreign 
Assets Control, the U.S. Customs Service, the Office of the Assistant 
Secretary for Enforcement, and the Office of the General Counsel), the 
Department of State (particularly the Bureau of Economic and Business 
Affairs, the Bureau of Near East and South Asian Affairs, the Bureau of 
International Organizations, and the Office of the Legal Adviser), and 
the Department of Transportation (particularly the U.S. Coast Guard).
  8. The United States imposed economic sanctions on Iraq in response 
to Iraq's invasion and illegal occupation of Kuwait, a clear act of 
brutal aggression. The United States, together with the international 
community, is maintaining economic sanctions against Iraq because the 
Iraqi regime, despite international will, has failed to comply fully 
with United Nations Security Council resolutions. Security Council 
resolutions on Iraq call for the elimination of Iraqi weapons of mass 
destruction, the inviolability of the Iraq-Kuwait boundary, the release 
of Kuwaiti and other third-country nationals, compensation for victims 
of Iraqi aggression, long-term monitoring of weapons of mass 
destruction capabilities, the return of Kuwaiti assets stolen during 
Iraq's illegal occupation of Kuwait, renunciation of terrorism, an end 
to internal Iraqi repression of its own civilian population, and the 
facilitation of access of international relief organizations to all 
those in need in all parts of Iraq. Nonetheless, we see a pattern 
of defiance: repeated public claims to Kuwait, sponsorship of 
terrorism, incomplete declarations to weapons inspectors, and ongoing 
widespread human rights violations, among other things. The U.N. 
sanctions remain in place; the United States will continue to enforce 
those sanctions under domestic authority.

  The Baghdad government continued to violate basic human rights by 
repressing the Iraqi civilian population and depriving it of 
humanitarian assistance. For more than 2 years, Baghdad has maintained 
a complete blockade of food, fuel, and medicine on northern Iraq. The 
Iraqi military routinely harasses residents of the north, and has 
attempted to ``Arabize'' Kurdish, Turcoman, and Assyrian areas in the 
north. Iraq continues to launch artillery attacks against civilian 
population centers in the south, and its efforts to drain the southern 
marshes have forced thousands to flee to neighboring States.
  In 1991, the United Nations Security Council adopted Resolutions 706 
and 712 that permit Iraq to sell up to $1.6 billion of oil under U.N. 
auspices to fund the provision of food, medicine, and other 
humanitarian supplies to the people of Iraq. Under the U.N. 
resolutions, the equitable distribution within Iraq of this assistance 
would be supervised and monitored by the United Nations. The Iraqi 
regime so far has refused to accept these resolutions and has thereby 
chosen to perpetuate the suffering of its civilian population. In 
October 1993, the Iraqi government informed the United Nations that it 
would not implement Resolutions 706 and 712.
  The policies and actions of the Saddam Hussein regime continue to 
pose an unusual and extraordinary threat to the national security and 
foreign policy of the United States, as well as to regional peace and 
security. Because of Iraq's failure to comply fully with United Nations 
Security Council resolutions, the United States will continue to apply 
economic sanctions to deter Iraq from threatening peace and stability 
in the region, and I will continue to report periodically to the 
Congress on significant developments, pursuant to 50 U.S.C. 1703(c).
                                                  William J. Clinton.  
  The White House, March 3, 1994.

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