[Congressional Record Volume 141, Number 126 (Tuesday, August 1, 1995)]
[Senate]
[Pages S11105-S11106]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     REPORT ON THE NATIONAL EMERGENCY WITH IRAQ--MESSAGE FROM THE 
                            PRESIDENT--PM 71

  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 February 8, 1995, 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. United States 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 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 Council Resolution 778 of October 2, 1992. Resolution 778 
requires U.N. Member States to transfer to a U.N. escrow account any 
funds (up to $200 million apiece) representing Iraqi-oil sale proceeds 
paid by purchasers after the imposition of U.N. sanctions on Iraq, to 
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 also funds the activities of the U.N. Compensation 
Commission in Geneva, which handles claims from victims of the Iraqi 
invasion and occupation of Kuwait. Member States also may make 
voluntary contributions to the account. 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 transfers 
or 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 
``Executive orders''). The report covers events from February 2, 1995, 
through August 1, 1995.
  1. During the reporting period, there were no amendments to the Iraqi 
Sanctions Regulations.
  2. The Department of the Treasury's Office of Foreign Assets Control 
(``FAC'') continues its involvement in lawsuits seeking to prevent the 
unauthorized transfer of blocked Iraqi assets. In Consarc Corporation 
v. Iraqi-ministry of Industry and Minerals, a briefing schedule has 
been set for disposition of FAC's December 16, 1994, appeal of the 
district court's order of October 17, 1994, transferring blocked 
property.
  Investigations of possible violations of the Iraqi sanctions continue 
to be pursued and appropriate enforcement actions taken. There are 
currently 43 enforcement actions pending, including nine cases referred 
by FAC to the U.S. Customs Service for joint investigation. Additional 
FAC civil penalty notices were prepared during the reporting period for 
violations of the International Emergency Economic Powers Act and Iraqi 
Sanction Regulations with respect to transactions involving Iraq. Three 
penalties totaling $8,905 were collected from two banks for 

[[Page S11106]]
funds transfers in violation of the prohibitions against transactions 
involving Iraq.
  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 FAC's listing of 
individuals and organizations determined to be Specially Designated 
Nationals (``SDNs'') of the Government of Iraq.
  4. Pursuant to Executive Order No. 12817 implementing United Nations 
Security Council Resolution 778, on October 26, 1992, FAC directed the 
Federal Reserve Bank of New York to establish a blocked account for 
receipt of certain post-August 6, 1990, Iraq-oil sales proceeds, and to 
hold, invest, and transfer these funds as required by the Order. On 
March 21, 1995, following payments by the Governments of Canada 
($1,780,749.14), the European Community ($399,695.21), 
Kuwait ($2,500,000.00), Norway ($261,758.10), and Switzerland 
($40,000.00), respectively, to the special United Nations-controlled 
account, entitled ``United Nations Security Council Resolution 778 
Escrow Account,'' the Federal Reserve Bank of New York was directed to 
transfer a corresponding amount of $4,982,202.45 from the blocked 
account it holds to the United Nations-controlled account. Similarly, 
on April 5, 1995, following the payment of $5,846,238.99 by the 
European Community, the Federal Reserve Bank of New York was directed 
to transfer a corresponding amount of $5,846,238.99 to the United 
Nations-controlled account. Again, on May 23, 1995, following the 
payment of $3,337,941.75 by the European Community, $571,428.00 by the 
Government of the Netherlands and $1,200,519.05 by the Government of 
the United Kingdom,
 the Federal Reserve Bank of New York was directed to transfer a 
corresponding amount of $5,109,888.80 to the United Nations--controlled 
account. Finally, on June 19, 1995, following the payment of 
$915,584.96 by the European Community and $736,923.12 by the Government 
of the United Kingdom, the Federal Reserve Bank of New York was 
directed to transfer a corresponding amount of $1,652,508.08 to the 
United Nations--controlled account. Cumulative transfers from the 
blocked Federal Reserve Bank of New York account since issuance of 
Executive Order No. 12817 have amounted to $175,133,026.20 of the up to 
$200 million that the United States is obligated to match from blocked 
Iraqi oil payments, pursuant to United Nations Security Council 
Resolution 778.

  5. The Office of Foreign Assets Control has issued a total of 590 
specific licenses regarding transactions pertaining to Iraq or Iraqi 
assets since August 1990. Licenses have been issued for transactions 
such as the filing of legal actions against Iraqi governmental 
entities, legal representation of Iraq, and the exportation to Iraq of 
donated medicine, medical supplies, food intended for humanitarian 
relief purposes, the execution of powers of attorney relating to the 
administration of personal assets and decedents' estates in Iraq, the 
protection of preexistent intellectual property rights in Iraq and 
travel to Iraq for the purposes of visiting Americans detained there. 
Since my last report, 57 specific licenses have been issued.
  6. The expenses incurred by the Federal Government in the 6 month 
period from February 2, 1995, through August 1, 1995, which are 
directly attributable to the exercise of powers and authorities 
conferred by the declaration of a national emergency with respect to 
Iraq are reported to be about $4.9 million, most of which represents 
wage and salary costs for Federal personnel. Treasury (particularly in 
the Office of Foreign Assets Control, the U.S. Customs Service, the 
Office of the Under 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 Eastern Affairs, the 
Bureau of International Organization Affairs, the Bureau of Political-
Military Affairs, the U.S. Mission to the United Nations, and the 
Office of the Legal Adviser) and the Department of Transportation 
(particularly the U.S. Coast Guard).
  7. The United States imposed economic sanctions on Iraq in response 
to Iraq's illegal invasion and 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 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, Iraqi recognition of 
Kuwait and 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 
Iraqi'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. More than 5 years after the 
invasion, a pattern of defiance persists: a refusal to account for 
missing Kuwaiti detainees; failure to return Kuwaiti property worth 
millions of dollars, including military equipment that was used by Iraq 
in its movement of troops to the Kuwaiti border in October 1994; 
sponsorship of assassinations in Lebanon and in northern Iraq; 
incomplete declarations to weapons inspectors; and ongoing widespread 
human rights violations. As a result, the U.N. sanctions remain in 
place; the United States will continue to enforce those sanctions under 
domestic authority.
  Baghdad government continues to violate basic human rights of its own 
citizens through systematic repression of minorities and denial of 
humanitarian assistance. The Government of Iraq has reportedly said it 
will not be bound by United Nations Security Council Resolution 688. 
For more than 4 years, Baghdad has maintained a blockade of food, 
medicine, and other humanitarian supplies against northern Iraq. The 
Iraqi military routinely harasses residents of both the north and has 
attempted to ``Arabize'' the Kurdish, Turcomen, and Assyrian areas of 
the north. Iraq has not relented in its artillery attacks against 
civilian population centers in the south or in its burning and draining 
operations in the southern marshes, which have forced thousands to flee 
to neighboring States. In April 1995, the U.N. Security Council adopted 
resolution 986 authorizing Iraq to export limited quantities of oil (up 
to $1 billion per quarter) under U.N. supervision in order to finance 
the purchase of food, medicine, and other humanitarian supplies. The 
resolution includes arrangements to ensure equitable distribution of 
such assistance to all the people of Iraq. The resolution also provides 
for the payment of compensation to victims of Iraqi aggression and for 
the funding of other U.N. activities with respect to Iraq. Resolution 
986 was carefully crafted to address the issues raised by Iraq to 
justify its refusal to implement similar humanitarian resolutions 
adopted in 1991 (Resolutions 706 and 712), such as oil export routes 
and questions of national sovereignty. Nevertheless, Iraq refused to 
implement this humanitarian measure. This only reinforces our view that 
Saddam Hussein is unconcerned about the hardships suffered by the Iraqi 
people.
  The policies and actions of 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. 
The U.N. resolutions require that the Security Council be assured of 
Iraq's peaceful intentions in judging its compliance with sanctions. 
Because of Iraq's failure to comply fully with these resolutions, the 
United States will continue to apply economic sanctions to deter it 
from threatening peace and stability in the region.
                                                  William J. Clinton.  
  The White House, August 1, 1995.
  

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