[Congressional Record Volume 141, Number 145 (Monday, September 18, 1995)]
[Senate]
[Pages S13726-S13727]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     REPORT ON THE NATIONAL EMERGENCY WITH IRAN--MESSAGE FROM THE 
                            PRESIDENT--PM 81

  The PRESIDENT 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 developments concerning the 
national emergency with respect to Iran that was declared in Executive 
Order No. 12957 of March 15, 1995, and matters relating to Executive 
Order No. 12959 of May 6, 1995. This report is submitted pursuant to 
section 204(c) of the International Emergency Economic Powers Act, 50 
U.S.C. 1703(c) (IEEPA), and section 505(c) of the International 
Security and Development Cooperation Act of 1985, 22 U.S.C. 2349aa-
9(c). This report discusses only matters concerning the national 
emergency with respect to Iran that was declared in Executive Order No. 
12957 and matters relating to Executive Order No. 12959.
  1. On March 15, 1995, I issued Executive Order No. 12957 (60 Fed. 
Reg. 14615, March 17, 1995) to declare a national emergency with 
respect to Iran pursuant to IEEPA, and to prohibit the financing, 
management, or supervision by United States persons of the development 
of Iranian petroleum resources. This action was in response to actions 
and policies of the Government of Iran, including support for 
international terrorism, efforts to undermine the Middle East peace 
process, and the acquisition of weapons of mass destruction and the 
means to deliver them. A copy of the order was provided to the Congress 
by message dated March 15, 1995.
  Following the imposition of these restrictions with regard to the 
development of Iranian petroleum resources, Iran continued to engage in 
activities that represent a threat to the peace and security of all 
nations, including Iran's continuing support for international 
terrorism, its support for acts that undermine the Middle East peace 
process, and its intensified efforts to acquire weapons of mass 
destruction. On May 6, 1995, I issued Executive Order No. 12959 to 
further respond to the Iranian threat to the national security, foreign 
policy, and economy of the United States.
  Executive Order No. 12959 (60 Fed. Reg. 24757, May 9, 1995) (1) 
prohibits exportation from the United States to Iran or to the 
Government of Iran of goods, technology, or services; (2) prohibits the 
reexportation of certain U.S. goods and technology to Iran from third 
countries; (3) prohibits transactions such as brokering and other 
dealing by United States persons in goods and services of Iranian 
origin or owned or controlled by the Government of Iran; (4) prohibits 
new investments by United States persons in Iran or in property owned 
or controlled by the Government of Iran; (5) prohibits U.S. companies 
and other United States persons from approving, facilitating, or 
financing performance by a foreign subsidiary or other entity owned or 
controlled by a United States person of transactions that a United 
States person is prohibited from performing; (6) continues the 1987 
prohibition on the importation into the United States of goods and 
services of Iranian origin; (7) prohibits any transaction by any United 
States person or within the United States that evades or avoids or 
attempts to violate any prohibition of the order; and (8) allow U.S. 
companies a 30-day period in which to perform trade transactions 
pursuant to contracts predating the Executive order.
  In Executive Order No. 12959, I directed the Secretary of the 
Treasury to authorize through licensing certain transactions, including 
transactions by United States persons related to the Iran-United States 
Claims Tribunal in The Hague, established pursuant to the Algiers 
Accords, and other international obligations and United States 
Government functions. Such transactions also include the export of 
agricultural commodities pursuant to preexisting contracts consistent 
with section 5712(c) of title 7, United States Code. I also directed 
the Secretary of the Treasury, in consultation with the Secretary of 
State, to consider authorizing United States persons through specific 
licensing to participate in market-based swaps of crude oil from the 
Caspian Sea area for Iranian crude oil in support of energy projects in 
Azerbaijan, Kazakhstan, and Turkmenistan.
  Executive Order No. 12959 revokes sections 1 and 2 of Executive Order 
No. 12613 of October 29, 1987, and sections 1 and 2 of Executive Order 
No. 12957 of March 15, 1995, to the extent they are inconsistent with 
it. A copy of Executive Order No. 12959 was transmitted to the 
President of the Senate and Speaker of the House by letter dated May 6, 
1995.
  2. In its implementation of the sanctions imposed against Iran 
pursuant to Executive Order No. 12959, the Office of Foreign Assets 
Control (FAC) of the Department of the Treasury has issued 12 general 
licenses and 2 general notices authorizing various transactions 
otherwise prohibited by the Executive order or providing statements of 
licensing policy. In order to ensure the widest dissemination of the 
general licenses and general notices in advance of promulgation of 
amended regulations, FAC published them in the Federal Register on 
August 10, 1995 (60 Fed. Reg. 40881). In addition, FAC disseminated 
this information by its traditional methods such as electronic bulletin 
boards, FAX, and mail. Copies of these general licenses and general 
notices are attached to this report.
  General License No. 1 described those transactions which were 
authorized in connection with the June 6, 1995 delayed effective date 
contained in Executive Order No. 12959 for trade transactions related 
to pre-May 7 trade contracts. General License No. 2 authorized payments 
to or from Iran under certain circumstances and certain dollar clearing 
transactions involving Iran by U.S. financial institutions. General 
License No. 3 authorized the exportation of certain services by U.S. 
financial institutions with respect to accounts held for persons in 
Iran, the Government of Iran, or entities owned or controlled by the 
Government of Iran. General License No. 3 also contained an annex 
identifying 13 Iranian banks and 62 of their branches, agencies, 
representative offices, regional offices, and subsidiaries as owned or 
controlled by the Government of Iran. General License No. 4 authorized 
(1) domestic transactions involving Iranian-origin goods already within 
the United States except for transactions involving the Government of 
Iran or an entity owned or controlled by the Government of Iran, and 
(2) transactions by United States persons necessary to effect the 
disposition of Iranian-origin goods or services located or to be 
performed outside the United States, provided that they were acquired 
by that United States person in transactions not prohibited by the 
order or by 31 C.F.R. Part 560, that such disposition does not result 
in the importation of these goods or services into the United States, 
and that such transactions are completed prior to August 6, 1995. 
General License No. 5 authorized the importation into the United States 
of information and informational materials, confirmed the exemption of 
such information from the ban on exportation from the United States, 
and set forth a licensing policy for the exportation of equipment 
necessary to establish news wire feeds or other transmissions of 
information. General License No. 6 authorized the importation into the 
United States and the exportation to Iran of diplomatic pouches and 
their contents. General License No. 7 provided a statement of licensing 
policy for consideration, on a case-by-case basis, to authorize the 
establishment and operation of news organization offices in Iran by 
U.S. organizations whose primary purpose is the gathering and 
dissemination of news to 

[[Page S 13727]]
the general public. General License No. 8 authorized transactions in 
connection with the exportation of agricultural commodities pursuant to 
pre-May 7 trade contracts provided that the terms of such contract 
require delivery of the commodity prior to February 2, 1996. General 
License No. 9 authorized import, export, and service transactions 
necessary to the conduct of official business by the missions of the 
Government of Iran to international organizations and the Iranian 
Interests Section of the Embassy of Pakistan in the United States. 
General License No. 10 provided a statement of licensing policy with 
respect to transactions incident to the resolution of disputes between 
the United States or U.S. nationals and the Government of Iran in 
international tribunals and domestic courts in the United States and 
abroad. General License No. 11 authorized the exportation of household 
goods and personal effects for persons departing from the United States 
to relocate in Iran. General License No. 12 authorized the provision of 
certain legal services to the Government of Iran or to a person in Iran 
and the receipt of payment therefor under certain circumstances.

  General Notice No. 1 described information required in connection 
with an application for a specific license to complete the performance 
of pre-May 7 trade contracts prior to August 6, 1995 (except with 
respect to agricultural commodities as provided by General License No. 
8). General Notice No. 2 indicated that the Department of the Treasury 
had authorized the U.S. agencies of Iranian banks to complete, through 
December 29, 1995, transactions for U.S. exporters involving letters of 
credit, which they issued, confirmed, or advised prior to June 6, 1995, 
provided that the underlying export was completed in accordance with 
the terms of General License No. 1 or a specific license issued to the 
exporter by FAC. General Notice No. 2 also noted that the U.S. agencies 
of the Iranian banks were authorized to offer discounted advance 
payments on deferred payment letters of credit, which they issued, 
confirmed, or advised, provided that the same criteria are met.
  3. The Iranian Transactions Regulations, 31 CFR Part 560 (the 
``ITR''), have been comprehensively amended to implement the provisions 
of Executive Orders No. 12957 and No. 12959. The amended ITR were 
issued by FAC on September 11, 1995 (60 Fed. Reg. 47061-74) and 
incorporate, with some modifications, the General Licenses cited above. 
A copy of the amended regulations is attached to this report.

  4. In consultation with the Department of State, FAC reviewed 
applications for specific licenses to permit continued performance of 
trade contracts entered into prior to May 7, 1995. It issued more than 
100 such licenses allowing performance to continue up to August 6, 
1995.
  5. The expenses incurred by the Federal Government in the 6-month 
period from March 15 through September 14, 1995, that are directly 
attributable to the exercise of powers and authorities conferred by the 
declaration of a national emergency with respect to Iran are 
approximately $875,000, 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 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 Politico-Military 
Affairs, and the Office of the Legal Adviser), and the Department of 
Commerce (the Bureau of Export Administration and the General Counsel's 
Office).
  6. The situation reviewed above continues to involve important 
diplomatic, financial, and legal interests of the United States and its 
nationals and presents an extraordinary and unusual threat to the 
national security, foreign policy, and economy of the United States. 
The declaration of the national emergency with respect to Iran 
contained in Executive Order No. 12957 and the comprehensive economic 
sanctions imposed by Executive Order No. 12959 underscore the United 
States Government's opposition to the actions and policies of the 
Government of Iran, particularly its support of international terrorism 
and its efforts to acquire weapons of mass destruction and the means to 
deliver them. The Iranian Transactions Regulations issued pursuant to 
Executive Orders No. 12957 and No. 12959 continue to advance important 
objectives in promoting the nonproliferation and antiterrorism policies 
of the United States. I shall exercise the powers at my disposal to 
deal with these problems and will report periodically to the Congress 
on significant developments.
                                                  William J. Clinton.  
  The White House, September 18, 1995.

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