[Congressional Record Volume 142, Number 32 (Monday, March 11, 1996)]
[Senate]
[Pages S1679-S1680]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




REPORT CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO IRAN--MESSAGE 
                       FROM THE PRESIDENT--PM 130

  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 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 the measures 
in that order and in 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 that 
Executive order and 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 U.S. 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 on 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 or reexport, investment, and 
certain trade 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) allowed 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 specific 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 related to other international obligations and 
United States Government functions, and transactions related to 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 revoked 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 Speaker 
of the House of Representatives and President of the Senate by letters 
dated May 6, 1995.
  2. There were no amendments to the Iranian Transactions Regulations, 
31 CFR Part 560 (the ``ITR'') during the reporting period.
  3. During the current 6-month period, the Department of the 
Treasury's Office of Foreign Assets Control (FAC) made numerous 
decisions with respect

[[Page S1680]]

to applications for licenses to engage in transactions under the ITR, 
issuing 54 licensing determinations--both approvals and denials. The 
majority of denials were in response to requests to extend contract 
performance beyond the time specified by Executive Order No. 12959 and 
by FAC general license. Licenses were issued authorizing the continued 
operation of Iranian diplomatic accounts, powers of attorney, 
extensions of standby letters of credit, payments for trade 
transactions pursuant to contracts prior to May 6, 1995, and 
exportation of certain agricultural products contracted for prior to 
May 6, 1995. The FAC continues to review under section 560.528 requests 
for authorization to export and reexport goods, services, and 
technology to ensure the safety of civil aviation and safe operation of 
U.S.-origin commercial passenger aircraft in Iran. In light of 
statutory restrictions applicable to goods and technology involved in 
these cases, Treasury continues to consult and coordinate with the 
Departments of State and Commerce on these matters, consistent with 
section 4 of Executive Order No. 12959.
  During the reporting period, FAC administered provisions on services 
related to maintaining Iranian bank accounts and identified and 
rejected Iran-related payments not authorized under the ITR. United 
States banks were notified that they could not process transactions on 
behalf of accounts held in the name of the Government of Iran or 
persons in Iran, with the exception of certain transactions related to 
interest accruals, customary service charges, the exportation of 
information or informational material, travel-related remittances, 
donations of articles to relieve human suffering, or lump sum closures 
of accounts by payment to their owners. United States banks continue to 
handle certain dollar payment transactions involving Iran between 
third-country banks that do not involve a direct credit or debit to 
Iranian accounts. Noncommercial family remittances involving Iran must 
be routed to or from non-U.S., non-Iranian offshore banks.
  The FAC continues to coordinate closely with the Federal Reserve 
Board, the Federal Reserve Bank of New York, and the California banking 
authorities concerning the treatment of three Iranian bank agencies--
Banks Sepah, Saderat, and Melli. Licenses have been issued to the 
Iranian bank agencies authorizing them to pay overhead expenses under 
the supervision of the California and New York banking departments 
while meeting obligations incurred prior to May 6, 1995. Authorization 
expired at the end of December, which had enabled them to make payments 
to U.S. exporters under letters of credit advised prior to June 6, 
1995, where the underlying exports were completed in accordance with 
the Regulations or a specific license issued by FAC. The FAC also had 
permitted the agencies to offer discounted advance payments on deferred 
payment letters of credit under the same conditions.
  4. The U.S. Customs Service has continued to effect numerous seizures 
of Iranian-origin merchandise, primarily carpets, for violation of the 
import prohibitions of the ITR. Various enforcement actions carried 
over from previous reporting periods are continuing and new reports of 
violations are being aggressively pursued.
  5. The expenses incurred by the Federal Government in the 6-month 
period from September 15, 1995, through March 14, 1996, that are 
directly attributable to the exercise powers and authorities conferred 
by the declaration of a national emergency with respect to Iran are 
approximately $965,000, 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 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 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, March 11, 1996.

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