[Congressional Record Volume 140, Number 79 (Tuesday, June 21, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 21, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
NATIONAL EMERGENCY WITH RESPECT TO THE ACTIONS OF THE FEDERAL REPUBLIC 
  OF YUGOSLAVIA (SERBIA AND MONTENEGRO)--MESSAGE FROM THE PRESIDENT--
                                 PM127

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

To the Congress of the United States:
  On May 30, 1992, in Executive Order No. 12808, the President declared 
a national emergency to deal with the threat to the national security, 
foreign policy, and economy of the United States arising from actions 
and policies of the Governments of Serbia and Montenegro, acting under 
the name of the Socialist Federal Republic of Yugoslavia or the Federal 
Republic of Yugoslavia, in their involvement in and support for groups 
attempting to seize territory in Croatia and Bosnia-Herzegovina by 
force and violence utilizing, in part, the forces of the so-called 
Yugoslav National Army (57 FR 23299, June 2, 1992). The present report 
is submitted pursuant to 50 U.S.C. 1641 (c) and 1703 (c). 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 No. 12808 and to expanded sanctions 
against the Federal Republic of Yugoslavia (Serbia and Montenegro) (the 
``FRY (S/M)'') contained in Executive Order No. 12810 of June 5, 1992 
(57 FR 24347, June 9, 1992), Executive Order No. 12831 of January 15, 
1993 (58 FR 5253, January 21, 1993), and Executive Order No. 12846 of 
April 26, 1993 (58 FR 25771, April 27, 1993).
  1. Executive Order No. 12808 blocked all property and interests in 
property of the Governments of Serbia and Montenegro, or held in the 
name of the former Government of the Socialist Federal Republic of 
Yugoslavia or the Government of the Federal Republic of Yugoslavia, 
then or thereafter located in the United States or within the 
possession or control of United States persons, including their 
overseas branches.
  Subsequently, Executive Order No. 12810 expanded U.S. actions to 
implement in the United States the United Nations sanctions against the 
FRY (S/M) adopted in United Nations Security Council Resolution 757 of 
May 30, 1992. In addition to reaffirming the blocking of FRY (S/M) 
Government property, this order prohibits transactions with respect to 
the FRY (S/M) involving imports, exports, dealing in FRY-origin 
property, air and sea transportation, contract performance, funds 
transfers, activity promoting importation or exportation or dealings in 
property, and official sports, scientific, technical, or other cultural 
representation of, or sponsorship by, the FRY (S/M) in the United 
States.
  Executive Order No. 12810 exempted from trade restrictions (1) 
transshipments through the FRY (S/M), and (2) activities related to the 
United Nations Protection Force (``UNPROFOR''), the Conference on 
Yugoslavia, or the European Community Monitor Mission.
  On January 15, 1993, the President issued Executive Order No. 12831 
to implement new sanctions contained in United Nations Security Council 
Resolution 787 of November 16, 1992. The order revoked the exemption 
for transshipments through the FRY (S/M) contained in Executive Order 
No. 12810, prohibited transactions within the United States or by a 
United States person relating to FRY (S/M) vessels and vessels in which 
a majority or controlling interest is held by a person or entity in, or 
operating from, the FRY (S/M), and stated that all such vessels shall 
be considered as vessels of the FRY (S/M), regardless of the flag under 
which they sail.
  On April 26, 1993, I issued Executive Order No. 12846 to implement in 
the United States the sanctions adopted in United Nations Security 
Council Resolution 820 of April 17, 1993. That resolution called on the 
Bosnian Serbs to accept the Vance-Owen peace plan for Bosnia-
Herzegovina and, if they failed to do so by April 26, called on member 
states to take additional measures to tighten the embargo against the 
FRY (S/M) and Serbian-controlled areas of Bosnia-Herzegovina and the 
United Nations protected areas in Croatia. Effective April 26, 1993, 
the order blocked all property and interests in property of commercial, 
industrial, or public utility undertakings or entities organized or 
located in the FRY (S/M), including property and interests in property 
of entities (wherever organized or located) owned or controlled by such 
undertakings or entities, that are or thereafter come within the 
possession or control of United States persons.
  2. The declaration of the national emergency on May 30, 1992, was 
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 (50 U.S.C. 1701 et seq.), the National 
Emergency Act (50 U.S.C. 1601 et seq.), and section 301 of title 3 of 
the United States Code. The emergency declaration was reported to the 
Congress on May 30, 1992, pursuant to section 204(b) of the 
International Emergency Economic Powers Act (50 U.S.C. 1703(b)). The 
additional sanctions set forth in Executive Orders Nos. 12810, 12831, 
and 12846 were imposed pursuant to the authority vested in the 
President by the Constitution and laws of the United States, including 
the statutes cited above, section 1114 of the Federal Aviation Act (49 
U.S.C. App. 1514), and section 5 of the United Nations Participation 
Act (22 U.S.C. 287c).
  3. There have been no amendments to the Federal Republic of 
Yugoslavia (Serbia and Montenegro) Sanctions Regulations (the 
``Regulations''), 31 C.F.R. Part 585, since the last report. Of the two 
court cases in which the blocking authority was challenged as applied 
to FRY (S/M) subsidiaries and vessels in the United States, the 
government's position in the case involving the blocked vessels was 
upheld by the Fifth Circuit Court of Appeals. The Supreme Court 
declined to review the decision. Milena Ship Management Co. v. Newcomb, 
804 F. Supp. 859 (E.D. La. 1992), aff'd. 995 F.2nd 620 (5th Cir. 1993), 
cert. denied--U.S.--, 114 S.Ct. 877 (1994). The case involving a 
blocked subsidiary is pending a decision by the court on the 
government's motion for summary judgment.
  4. Over the past 6 months, the Departments of State and Treasury have 
worked closely with European Community (the ``EC'') member states and 
other U.N. member nations to coordinate implementation of the sanctions 
against the FRY (S/M). This has included visits by assessment teams 
formed under the auspices of the United States, the EC, and the 
Conference for Security and Cooperation in Europe (the ``CSCE'') to 
states bordering on Serbia and Montenegro; deployment of CSCE sanctions 
assistance missions (``SAMs'') to Albania, Bulgaria, Croatia, the 
Former Yugoslav Republic of Macedonia, Hungary, Romania, and Ukraine to 
assist in monitoring land and Danube River traffic; bilateral contacts 
between the United States and other countries for the purpose of 
tightening financial and trade restrictions on the FRY (S/M) and 
establishment of a mechanism to coordinate enforcement efforts and to 
exchange technical information.
  5. In accordance with licensing policy and the Regulations, FAC has 
exercised its authority to license certain specific transactions with 
respect to the FRY (S/M) that are consistent with the Security Council 
sanctions. During the reporting period, FAC has issued 114 specific 
licenses regarding transactions pertaining to the FRY (S/M) or assets 
it owns or controls, bringing the total as of April 15, 1994, to 677. 
Specific licenses have been issued (1) for payment to U.S. or third-
country secured creditors, under certain narrowly defined 
circumstances, for pre-embargo import and export transactions; (2) for 
legal representation or advice to the Government of the FRY (S/M) or 
FRY (S/M)-controlled clients; (3) for the liquidation or protection of 
tangible assets of subsidiaries of FRY (S/M)-controlled firms located 
in the United States; (4) for limited FRY (S/M) diplomatic 
representation in Washington and New York; (5) for patent, trademark 
and copyright protection and maintenance transactions in the FRY (S/M) 
not involving payment to the FRY (S/M) Government; (6) for certain 
communications, news media, and travel-related transactions; (7) for 
the payment of crews' wages, vessel maintenance, and emergency supplies 
for FRY (S/M)-controlled ships blocked in the United States; (8) for 
the removal from the FRY (S/M) of certain property owned and controlled 
by U.S. entities; and (9) to assist the United Nations in its relief 
operations and the activities of the U.N. Protection Forces. Pursuant 
to regulations implementing United Nations Security Council Resolution 
757, specific licenses have also been issued to authorize exportation 
of food, medicine, and supplies intended for humanitarian purposes in 
the FRY (S/M).
  During the past 6 months, FAC has continued to oversee the 
liquidation of tangible assets of the 15 U.S. subsidiaries of entities 
organized in the FRY (S/M). Subsequent to the issuance of Executive 
Order No. 12846, all operating licenses issued for these U.S.-located 
Serbian or Montenegrin subsidiaries or joint ventures were revoked, and 
the net proceeds of the liquidation of their assets placed in blocked 
accounts.
  The Board of Governors of the Federal Reserve Board and the New York 
State Banking Department again worked closely with FAC with regard to 
two Serbian banking institutions in New York that were not permitted to 
conduct normal business after June 1, 1992. The banks had been issued 
licenses to maintain a limited staff for audit purposes while full-time 
bank examiners were posted in their offices to ensure that banking 
records are appropriately safeguarded. Subsequent to the issuance of 
Executive Order No. 12846, all licenses previously issued were revoked. 
FAC is currently working with the Federal Reserve Board and the New 
York State Banking Department to resolve outstanding issues regarding 
the banks.
  During the past 6 months, U.S. financial institutions have continued 
to block funds transfers in which there is an interest of the 
Government of the FRY (S/M) or an entity or undertaking located in or 
controlled from the FRY (S/M). Such transfers have accounted for $58.6 
million in Yugoslav assets blocked since the issuance of Executive 
Order No. 12808, with some $22 million in funds transfers frozen during 
the past 6 months.
  To ensure compliance with the terms of the licenses that have been 
issued under the program, stringent reporting requirements are imposed. 
More than 380 submissions were reviewed since the last report and more 
than 194 compliance cases are currently open. In addition, licensed 
bank accounts are regularly audited by FAC compliance personnel and by 
cooperating auditors from bank regulatory agencies.
  6. Since the issuance of Executive Order No. 12810, FAC has worked 
closely with the U.S. Customs Service to ensure both that prohibited 
imports and exports (including those in which the Government of the FRY 
(S/M) has an interest) are identified and interdicted, and that 
permitted imports and exports move to their intended destination 
without undue delay. Violations and suspected violations of the embargo 
are being investigated and appropriate enforcement actions are being 
taken. There are currently 50 cases under active investigation. Since 
the last report, FAC has collected 20 civil penalties totaling nearly 
$75,000 from 17 financial institutions for violations involving 
transfers of funds in which the Government of the FRY (S/M) has an 
interest. Two U.S. companies and one law firm have also paid penalties 
related to exports and unlicensed payments to the Government of the FRY 
(S/M) for trademark registrations.
  7. The expenses incurred by the Federal Government in the 6-month 
period from November 30, 1993, through May 29, 1994, that are directly 
attributable to the authorities conferred by the declaration of a 
national emergency with respect to the FRY (S/M) are estimated at about 
$3 million, most of which represent wage and salary costs for Federal 
personnel. Personnel costs were largely centered in the Department of 
the Treasury (particularly in the FAC and its Chief Counsel's Office, 
and the U.S. Customs Service), the Department of State, the National 
Security Council, the U.S. Coast Guard, and the Department of Commerce.
  8. The actions and policies of the Government of the FRY (S/M), in 
its involvement in and support for groups attempting to seize and hold 
territory in Croatia and Bosnia-Herzegovina by force and violence, 
continue to pose an unusual and extraordinary threat to the national 
security, foreign policy, and economy of the United States. The United 
States remains committed to a multilateral resolution of this crisis 
through its actions implementing the binding resolutions of the United 
Nations Security Council with respect to the FRY (S/M).
  I shall continue to exercise the powers at my disposal to apply 
economic sanctions against the FRY (S/M) 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).
                                                  William J. Clinton.  
  The White House, June 21, 1994.

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