[Congressional Record Volume 142, Number 18 (Friday, February 9, 1996)]
[Senate]
[Pages S1176-S1178]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO IRAQ--MESSAGE FROM THE 
                           PRESIDENT--PM 118

  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 on August 1, 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. 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 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 No. 12724 and 12817 (the 
``Executive orders''). The report covers events from August 2, 1995, 
through February 1, 1996.
  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, No. 94-5390 (D.C. Cir. Dec. 
15, 1995), the U.S. Court of Appeals for the D.C. Circuit issued its 
second opinion in this case, finding in FAC's favor on all issues 
presented to the court. The court ordered the district court judge to 
direct Consarc Corporation to restore the status quo by returning $6.4 
million plus interest to the blocked Iraqi government account from 
which it was withdrawn after the district court erroneously held that 
these funds were not blocked Iraqi government property. The court also 
found that the unsold furnace manufactured for the Iraqi government and 
sales proceeds of a second furnace were blocked property. Finally, the 
court reversed the district court's ruling that Consarc held a specific 
claim against a blocked Iraqi government account for $6.4 million, 
holding that any claim Consarc had against the Government of Iraq was 
as a general creditor only.
  Investigations of possible violations of the Iraqi sanctions continue 
to be pursued and appropriate enforcement actions taken. Several cases 
from prior 

[[Page S1177]]
reporting periods are continuing and recent additional allegations have 
been referred by FAC to the U.S. Customs Service for investigation. 
Additional FAC 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. On de minimis penalty has been collected from an 
organization for unlicensed exports in violation of the prohibitions 
against transactions involving Iraq. Several other penalty proceedings 
are pending completion.
  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, Iraqi oil sales proceeds, and 
to hold, invest, and transfer these funds as required by the order. On 
September 5, 1995, following payments by the Governments of Australia 
($216,350.00), Denmark ($168,985.00), Japan ($4,075,000.00), The 
Netherlands ($4,168,745.47), New Zealand ($67,050.00), Switzerland 
($265,108.20), and by the European Union ($647,463.31), 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 $9,606,711.98 from the blocked account it holds to the United 
Nations-controlled account. Similarly, on October 30, 1995, following 
the payment of $1,504,000.00 by the European Community, and payments by 
the Governments of Germany ($355,871.89), The Netherlands 
($2,698,348.13), Norway ($199,983.00), and the United Kingdom 
($2,188,992.67), the Federal Reserve Bank of New York was directed to 
transfer a corresponding amount of $6,947,195.69 to the United Nations-
controlled account. Finally, on December 21, 1995, following the 
payment of $3,062,197.28 by the European Union, and payments by the 
Governments of the Netherlands ($1,922,719.00), Sweden ($4,223,178.20), 
and the United Kingdom ($208,600.44), the Federal Reserve Bank of New 
York was directed to transfer the amount of $8,313,066.13 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 now have amounted to $200 million, fully satisfying the 
U.S. commitment to match the payments of other Member States from 
blocked Iraqi oil payments, and its obligations pursuant to United 
Nations Security Council Resolution 778.

  5. The Office of Foreign Assets Control has issued a total of 618 
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 and 
the protection of preexistent intellectual property rights in Iraq. 
Since my last report, 28 specific licenses have been issued.
  6. The expenses incurred by the Federal Government in the 6-month 
period from August 2, 1995, through February 1, 1996, 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 
to be about $1.6 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 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 the 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 Iraq's illegal occupation of Kuwait, renunciation of 
terrorism, an end to internal Iraqi repression of its own Iraqi 
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.
  The 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 repeatedly 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 the north, and has 
attempted to ``Arabize'' the Kurdish, Turcomen, and Assyrian areas in 
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 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. The U.N. resolutions affirm 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, February 9, 1996.
  
[[Page S1178]]


REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO THE MIDDLE EAST PEACE 
              PROCESS--MESSAGE FROM THE PRESIDENT--PM 119

  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 concerning the 
national emergency with respect to organizations that threaten to 
disrupt the Middle East peace process that was declared in Executive 
Order No. 12947 of January 23, 1995. 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 
(IEEPA), 50 U.S.C. 1703(c).
  1. On January 23, 1995, I signed Executive Order 12947, ``Prohibiting 
Transactions with Terrorists Who Threaten to Disrupt the Middle East 
Peace Process'' (the ``order'') (60 Fed. Reg. 5079, January 25, 1995). 
The order blocks all property subject to U.S. jurisdiction in which 
there is any interest of 12 terrorist organizations that threaten the 
Middle East peace process as identified in an Annex to the order. The 
order also blocks the property and interests in property subject to 
U.S. jurisdiction of persons designated by the Secretary of State, in 
coordination with the Secretary of the Treasury and the Attorney 
General, who are found (1) to have committed, or to pose a significant 
risk of committing, acts of violence that have the purpose or effect of 
disrupting the Middle East peace process, or (2) to assist in, sponsor 
or provide financial, material, or technological support for, or 
services in support of, such acts of violence. In addition, the order 
blocks all property and interests in property subject to U.S. 
jurisdiction in which there is any interest of persons determined by 
the Secretary of the Treasury, in coordination with the Secretary of 
State and the Attorney General, to be owned or controlled by, or to act 
for or on behalf of, any other person designated pursuant to the order 
(collectively ``Specially Designated Terrorists'' or ``SDTs'').
  The order further prohibits any transaction or dealing by a United 
States person or within the United States in property or interests in 
property of SDTs, including the making or receiving of any contribution 
of funds, goods, or services to or for the benefit of such persons. 
This prohibition includes donations that are intended to relieve human 
suffering.
  Designations of persons blocked pursuant to the order are effective 
upon the date of determination by the Secretary of State or his 
delegate, or the Director of the Office of Foreign Assets Control (FAC) 
acting under authority delegated by the Secretary of the Treasury. 
Public notice of blocking is effective upon the date of filing with the 
Federal Register, or upon prior actual notice.
  2. On January 25, 1995, the Department of the Treasury issued a 
notice listing persons blocked pursuant to Executive Order No. 12947 
who have been designated by the President as terrorist organizations 
threatening the Middle East peace process or who have been found to be 
owned or controlled by, or to be acting for or on behalf of, these 
terrorist organizations (60 Fed. Reg. 5084, January 25, 1995). The 
notice identified 31 entities that act for or on behalf of the 12 
Middle East terrorist organizations listed in the Annex to Executive 
Order No. 12947, as well as 18 individuals who are leaders or 
representatives of these groups. In addition the notice provides 9 name 
variations or pseudonyms used by the 18 individuals identified. The 
list identifies blocked persons who have been found to have committed, 
or to pose a risk of committing, acts of violence that have the purpose 
of disrupting the Middle East peace process or to have assisted in, 
sponsored, or provided financial, material or technological support 
for, or service in support of, such acts of violence, or are owned or 
controlled by, or to act for or on behalf of other blocked persons. The 
Department of the Treasury issued three additional notices adding the 
names of three individuals, as well as their pseudonyms, to the List of 
SDTs (60 Fed. Reg. 41152-53, August 11, 1995; 60 Fed. Reg. 44932-33, 
August 29, 1995; and 60 Fed. Reg. 58435-36, November 27, 1995). Copies 
of the notices are attached to this report. The FAC, in coordination 
with the Secretary of State and the Attorney General, is continuing to 
expand the list of Specially Designated Terrorists, including both 
organizations and individuals, as additional information is developed.

  3. The expenses incurred by the Federal Government in the 6-month 
period from July 23, 1995, through January 22, 1996, that are directly 
attributable to the exercise of powers and authorities conferred by the 
declaration of the national emergency with respect to organizations 
that disrupt the Middle East peace process are estimated at 
approximately $2.6 million. (The expenses for the previous period, 
incorrectly stated in the report of July 27, 1995, to be approximately 
$55,000, were about $2.5 million.) Personnel costs were largely 
centered 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 the Department of 
Justice.
  4. Executive Order No. 12947 provides this Administration with a new 
tool for combating fundraising in this country on behalf of 
organizations that use terror to undermine the Middle East peace 
process. The order makes it harder for such groups to finance these 
criminal activities by cutting off their access to sources of support 
in the United States and to U.S. financial facilities. It is also 
intended to reach charitable contributions to designated organizations 
and individuals to preclude diversion of such donations to terrorist 
activities.
  In addition, the Congress has pending before it comprehensive 
counterterrorism legislation proposed by the Administration that would 
strengthen our ability to prevent terrorist acts, identify those who 
carry them out, and bring them to justice. The combination of Executive 
Order No. 12947 and the proposed legislation demonstrate the U.S. 
determination to confront and combat those who would seek to destroy 
the Middle East peace process, and our commitment to the global fight 
against terrorism.
  I shall continue to exercise the powers at my disposal to apply 
economic sanctions against extremists seeking to destroy the hopes of 
peaceful coexistence between Arabs and Israelis 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, February 9, 1996.

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