[Congressional Record Volume 143, Number 62 (Tuesday, May 13, 1997)]
[Senate]
[Pages S4391-S4392]
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 34

  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 since the last 
Presidential report of November 14, 1996, concerning the national 
emergency with respect to Iran that was declared in Executive Order 
12170 of November 14, 1979. This report is submitted pursuant to 
section 204(c) of the International Emergency Economic Powers Act, 50 
U.S.C. 1703(c) (IEEPA). This report covers events through March 31, 
1997. My last report, dated November 14, 1996, covered events through 
September 16, 1996.
  1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR), 
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. Finally, the amendment notes the availability of 
higher criminal fines for violations of IEEPA pursuant to the formulas 
set forth in 18 U.S.C. 3571. A copy of the amendment is attached.
  2. The Iran-United States Claims Tribunal (the ``Tribunal''), 
established at The Hague pursuant to the Algiers Accords, continues to 
make progress in arbitrating the claims before it. Since the period 
covered in my last report, the Tribunal has rendered eight awards. This 
brings the total number of awards rendered to 579, the majority of 
which have been in favor of U.S. claimants. As of March 24, 1997, the 
value of awards to successful U.S. claimants from the Security Account 
held by the NV Settlement Bank was $2,424,959,689.37.
  Since my last report, Iran has failed to replenish the Security 
Account established by the Algiers Accords to ensure payment of awards 
to successful U.S. claimants. Thus, since November 5, 1992, the 
Security Account has continuously remained below the $500 million 
balance required by the Algiers Accords. As of March 24, 1997, the 
total amount in the Security Account was $183,818,133.20, and the total 
amount in the Interest Account was $12,053,880.39. Therefore, the 
United States continues to pursue Case A/28, filed in September 1993, 
to require Iran to meet its obligation under the Algiers Accords to 
replenish the Security Account. Iran filed its Rejoinder on April 8, 
1997.
  The United States also continues to pursue Case A/29 to require Iran 
to meets its obligation of timely payment of its equal share of 
advances for Tribunal expenses when directed to do so by the Tribunal. 
The United States filed its Reply to the Iranian Statement of Defense 
on October 11, 1996.
  Also since my last report, the United States appointed Richard Mosk 
as one of the three U.S. arbitrators on the Tribunal. Judge Mosk, who 
has previously served on the Tribunal and will be joining the Tribunal 
officially in May of this year, will replace Judge Richard Allison, who 
has served on the Tribunal since 1988.
  3. The Department of State continues to pursue other United States 
Government claims against Iran and to respond to claims brought against 
the United States by Iran, in coordination with concerned government 
agencies.
  On December 3, 1996, the Tribunal issued its award in Case B/36, the 
U.S. claim for amounts due from Iran under two World War II military 
surplus property sales agreements. While the Tribunal dismissed the 
U.S. claim as to one of the agreements on jurisdictional grounds, it 
found Iran liable for breach of the second (and larger) agreement and 
ordered Iran to pay the United States principal and interest in the 
amount of $43,843,826.89. Following payment of the award, Iran 
requested the Tribunal to reconsider both the merits of the case and 
the calculation of interest; Iran's request was denied by the Tribunal 
on March 17, 1997.
  Under the February 22, 1996, agreement that settled the Iran Air case 
before the International Court of Justice and Iran's bank-related 
claims against the United States before the Tribunal (reported in my 
report of May 17, 1996), the United States agreed to make ex gratia 
payments to the families of Iranian victims of the 1988 Iran Air 655 
shootdown and a fund was established to pay Iranian bank debt owed to 
U.S. nationals. As of March 17, 1997, payments were authorized to be 
made to surviving family members of 125 Iranian victims of the aerial 
incident, totaling $29,100,000.00. In addition, payment of 28 claims by 
U.S. nationals against Iranian banks, totaling $9,002,738.45 was 
authorized.
  On December 12, 1996, the Department of State filed the U.S. Hearing 
Memorial and Evidence on Liability in Case A/11. In this case, Iran 
alleges that the United States failed to perform its obligations under 
Paragraphs 12-14 of the Algiers Accords, relating to the return to Iran 
of assets of the late Shah and his close relatives. A hearing date has 
yet to be scheduled.
  On October 9, 1996, the Tribunal dismissed Case B/58, Iran's claim 
for damages arising out of the U.S. operation of Iran's southern 
railways during the Second World War. The Tribunal held that it lacked 
jurisdiction over the claim under Article II, paragraph two, of the 
Claims Settlement Declaration.
  4. Since my last report, the Tribunal conducted two hearings and 
issued

[[Page S4392]]

awards in six private claims. On February 24-25, 1997, Chamber One held 
a hearing in a dual national claim, G.E. Davidson v. The Islamic 
Republic of Iran, Claim No. 457. The claimant is requesting 
compensation for real property that he claims was expropriated by the 
Government of Iran. On October 24, 1996, Chamber Two held a hearing in 
Case 274, Monemi v. The Islamic Republic of Iran, also concerning the 
claim of a dual national.

  On December 2, 1996, Chamber Three issued a decision in Johangir & 
Jila Mohtadi v. the Islamic Republic of Iran (AWD 573-271-3), awarding 
the claimants $510,000 plus interest for Iran's interference with the 
claimants' property rights in real property in Velenjak. The claimants 
also were awarded $15,000 in costs. On December 10, 1996, Chamber Three 
issued a decision in Reza Nemazee v. The Islamic Republic of Iran  (AWD 
575-4-3), dismissing the expropriation claim for lack of proof. On 
February 25, 1997, Chamber Three issued a decision in Dadras Int'l v. 
The Islamic Republic of Iran (AWD 578-214-3), dismissing the claim 
against Kan Residential Corp. for failure to prove that it is an 
``agency, instrumentality, or entity controlled by the Government of 
Iran'' and dismissing the claim against Iran for failure to prove 
expropriation or other measures affecting property rights. Dadras had 
previously received a substantial recovery pursuant to a partial award. 
On March 26, 1997, Chamber Two issued a final award in Case 389, 
Westinghouse Electric Corp. v. The Islamic Republic of Iran Air Force 
(AWD 579-389-2), awarding Westinghouse $2,553,930.25 plus interest in 
damages arising from the Iranian Air Force's breach of contract with 
Westinghouse.
  Finally, there were two settlements of claims of dual nationals, 
which resulted in awards on agreed terms. They are Dora Elghanayan, et 
al. v. The Islamic Republic of Iran (AAT 576-800/801/802/803/804-3), in 
which Iran agreed to pay the claimants $3,150,000, and Lilly Mythra 
Fallah Lawrence v. The Islamic Republic of Iran (AAT 577-390/381-1), in 
which Iran agreed to pay the claimant $1,000,000.
  5. The situation reviewed above continues to implicate important 
diplomatic, financial, and legal interests of the United States and its 
nationals and presents an unusual challenge to the national security 
and foreign policy of the United States. The Iranian Assets Control 
Regulations issued pursuant to Executive Order 12170 continue to play 
an important role in structuring our relationship with Iran and in 
enabling the United States to implement properly the Algiers Accords. I 
shall continue to exercise the powers at my disposal to deal with these 
problems and will continue to report periodically to the Congress on 
significant developments.

                                             William J. Clinton.  
  The White House, May 13, 1997.

                          ____________________