[Congressional Record Volume 143, Number 34 (Monday, March 17, 1997)]
[Senate]
[Pages S2354-S2355]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




REPORT RELATIVE TO THE EMERGENCY WITH RESPECT TO IRAN--MESSAGE FROM THE 
                            PRESIDENT--PM 22

  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 12957 of March 15, 1995, and matters relating to the measures in 
that order and in Executive Order 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), section 401(c) of the 
National Emergencies Act, 50 U.S.C. 1641(c), 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 12957 and does not deal with those relating to the emergency 
declared on November 14, 1979, in connection with the hostage crisis.
  1. On March 15, 1995, I issued Executive Order 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 Speaker of the House and 
the President of the Senate by letter 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 12959 to further 
respond to the

[[Page S2355]]

Iranian threat to the national security, foreign policy, and economy of 
the United States.
  Executive Order 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 dealings 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 certain 
reexport, investment, and 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 a 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 transaction 
pursuant to contracts predating the Executive order.
  At the time of signing Executive Order 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, Kazakstan, and 
Turkmenistan.

  Executive Order 12959 revoked sections 1 and 2 of Executive Order 
12613 of October 29, 1987, and sections 1 and 2 of Executive Order 
12957 of march 15, 1995, to the extent they are inconsistent with it. A 
copy of Executive Order 12959 was transmitted to the Speaker of the 
House of Representatives and the President of the Senate by letter 
dated May 6, 1995.
  2. On March 5, 1997, I renewed for another year the national 
emergency with respect to Iran pursuant to IEEPA. This renewal extended 
the authority for the current comprehensive trade embargo against Iran 
in effect since May 1995. Under these sanctions, virtually all trade 
with Iran is prohibited except for information and informational 
materials and certain other limited exceptions.
  3. The Iranian Transactions Regulations (the ``Regulations'' or ITR), 
31 CFR Part 560, were amended on October 21, 1996 (61 Fed. Reg. 54936, 
October 23, 1996), to implement section 4 of the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Debt 
Collection Improvement Act of 1996, by adjusting for inflation the 
amount of the civil monetary penalties that may be assessed under the 
Regulations. The amendment increases the maximum civil monetary penalty 
provided in the Regulations from $10,000 to $11,000 per violation.
  The amended Regulations also reflect an amendment to 18 U.S.C. 1001 
contained in section 330016(1)(L) of Public Law 103-322, September 13, 
1994; 108 Stat. 2147. The amendment notes the availability of higher 
criminal fines pursuant to the formulas set forth in 18 U.S.C. 3571. A 
copy of the amendment is attached.
  Section 560.603 of the ITR was amended on November 15, 1996 (61 Fed. 
Reg. 58480), to clarify rules relating to reporting requirements 
imposed on United States persons with foreign affiliations. Initial 
reporting under the amended Regulation has been deferred until May 30, 
1997, by a January 14, 1997 Federal Register notice (62 Fed. Reg. 
1832). Copies of the amendment and the notice are attached.
  4. During the current 6-month period, the Department of the 
Treasury's Office of Foreign Assets Control (OFAC) made numerous 
decisions with respect to applications for licenses to engage in 
transactions under the ITR, and issued 13 licenses. The majority of 
denials were in response to requests to authorize commercial exports to 
Iran--particularly of machinery and equipment for the petroleum and 
manufacturing industries--and the importation of Iranian-origin goods. 
The licenses issued authorized the export and reexport of goods, 
services, and technology essential to ensure the safety of civil 
aviation and safe operation of certain commercial passenger aircraft in 
Iran; certain financial and legal transactions; the importation of 
Iranian-origin artwork for public exhibition; and certain diplomatic 
transactions. Pursuant to sections 3 and 4 of Executive Order 12959 and 
in order to comply with the Iran-Iraq Arms Non-Proliferation Act of 
1992 and other statutory restrictions applicable to certain goods and 
technology, including those involved in the air-safety cases, the 
Department of the Treasury continues to consult with the Departments of 
State and Commerce on these matters.
  The U.S. financial community continues to interdict transactions 
associated with Iran and to consult with OFAC about their appropriate 
handling. Many of these inquiries have resulted in investigations into 
the activities of U.S. parties and, where appropriate, the initiation 
of enforcement action.
  5. 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. Since my last report, OFAC 
has collected a civil monetary penalty in the amount of $5,000. The 
violation underlying this collection involves the unlicensed import of 
Iranian-origin goods for transshipment to a third country aboard a 
U.S.-flag vessel. Civil penalty action or review is pending against 21 
companies, financial institutions, and individuals for possible 
violations of the Regulations.

  6. The expenses incurred by the Federal Government in the 6-month 
period from September 15, 1996, through March 14, 1997, 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 $800,000, 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 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 
Intelligence and Research, and the Office of the Legal Adviser), and 
the Department of Commerce (the Bureau of Export Administration and the 
General Counsel's Office).
  7. 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 12957 and the comprehensive economic 
sanctions imposed by Executive Order 12959 underscore the United States 
Government 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 12957 and 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 14, 1997.
  
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