[Congressional Record Volume 143, Number 73 (Monday, June 2, 1997)]
[Senate]
[Pages S5174-S5176]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   REPORT CONCERNING THE FEDERAL REPUBLIC OF YUGOSLAVIA (SERBIA AND 
      MONTENEGRO)--MESSAGE FROM THE PRESIDENT RECEIVED DURING THE 
                           ADJOURNMENT--PM 41

  Under the authority of the order of the Senate of January 7, 1997, 
the Secretary of the Senate, on May 30, 1997, during the adjournment of 
the Senate,

[[Page S5175]]

received 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:

  On May 30, 1992, by Executive Order 12808, President Bush declared a 
national emergency to deal with the unusual and extraordinary threat to 
the national security, foreign policy, and economy of the United States 
constituted by the actions and policies of the Governments of Serbia 
and Montenegro, blocking all property and interests in property of 
those Governments. President Bush took additional measures to prohibit 
trade and other transactions with the Republic of Yugoslavia (Serbia 
and Montenegro) by Executive Orders 12810 and 12831, issued on June 5, 
1992, and January 15, 1993, respectively.
  On April 25, 1993, I issued Executive Order 12846, blocking the 
property and interests in property of all commercial, industrial, or 
public utility undertakings or entities organized or located in the 
Federal Republic of Yugoslavia (Serbia and Montenegro) (the ``FRY 
(S&M)''), and prohibiting trade-related transactions by United States 
persons involving those areas of the Republic of Bosnia and Herzegovina 
controlled by the Bosnian Serb forces and the United Nations Protected 
Areas in the Republic of Croatia. On October 24, 1994, because of the 
actions and policies of the Bosnian Serbs, I expanded the scope of the 
national emergency by issuance of Executive Order 12934 to block the 
property of the Bosnian Serb forces and the authorities in the 
territory that they control within the Republic of Bosnia and 
Herzegovina, as well as the property of any entity organized or located 
in, or controlled by any person in, or resident in, those areas.
  On November 22, 1995, the United Nations Security Council passed 
(``Resolution 1022''), immediately and indefinitely suspending economic 
sanctions against the FRY (S&M). Sanctions were subsequently lifted by 
the United Nations Security Council pursuant to Resolution 1074 on 
October 1, 1996. Resolution 1022, however, continues to provide for the 
release of funds and assets previously blocked pursuant to sanctions 
against the FRY (S&M), provided that such funds and assets that are 
subject to claims and encumbrances, or that are the property of persons 
deemed insolvent, remain blocked until ``released in accordance with 
applicable law.'' This provision was implemented in the United States 
on December 27, 1995, by Presidential Determination No. 96-7. The 
Determination, in conformity with Resolution 1022, directed the 
Secretary of the Treasury, inter alia, to suspend the application of 
sanctions imposed on the FRY (S&M) pursuant to the above-referenced 
Executive orders and to continue to block property previously blocked 
until provision is made to address claims or encumbrances, including 
the claims of the other successor states of the former Yugoslavia. This 
sanctions relief was an essential factor motivating Serbia and 
Montenegro's acceptance of the General Framework Agreement for Peace in 
Bosnia and Herzegovina initialed by the parties in Dayton on November 
21, 1995 (the ``Peace Agreement'') and signed in Paris on December 14, 
1995. The sanctions imposed on the FRY (S&M) and on the United Nations 
Protected Areas in the Republic of Croatia were accordingly suspended 
prospectively, effective January 16, 1996. Sanctions imposed on the 
Bosnian Serb forces and authorities and on the territory that they 
control within the Republic of Bosnia and Herzegovina were subsequently 
suspended prospectively, effective May 10, 1996, in conformity with 
UNSCR 1022. On October 1, 1996, the United Nations passed UNSCR 1074, 
terminating U.N. sanctions against the FRY (S&M) and the Bosnian Serbs 
in light of the elections that took place in Bosnia and Herzegovina on 
September 14, 1996. UNSCR 1074, however, reaffirms the provisions of 
UNSCR 1022 with respect to the release of blocked assets, as set forth 
above.
  The present report is submitted pursuant to 50 U.S.C. 1641(c) and 
1703(c) and covers the period from November 30, 1996, through May 29, 
1997. It discusses Administration actions and expenses directly related 
to the exercise of powers and authorities conferred by the declaration 
of a national emergency in Executive Order 12808 as expanded with 
respect to the Bosnian Serbs in Executive Order 12934, and against the 
FRY (S&M) contained in Executive Orders 12810, 12831, and 12846.

  1. The declaration of the national emergency on May 30, 1992, was 
made pursuant to the authority vested in the President by the 
Constitution and laws of the United States, including the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National 
Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3 of 
the United States Code. The emergency declaration was reported to the 
Congress on May 30, 1992, pursuant to section 204(b) of the 
International Emergency Economic Powers Act (50 U.S.C. 1703(b)) and the 
expansion of that national emergency under the same authorities was 
reported to the Congress on October 25, 1994. The additional sanctions 
set forth in related Executive orders were imposed pursuant to the 
authority vested in the President by the Constitution and laws of the 
United States, including the statutes cited above, section 1114 of the 
Federal Aviation Act (49 U.S.C. App. 1514), and section 5 of the United 
Nations Participation Act (22 U.S.C. 287c).
  2. The Office of Foreign Assets Control (OFAC), acting under 
authority delegated by the Secretary of the Treasury, implemented the 
sanctions imposed under the foregoing statutes in the Federal Republic 
of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled Areas 
of the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 
C.F.R. Part 585 (the ``Regulations''). To implement Presidential 
Determination No. 967, the Regulations were amended to authorize 
prospectively all transactions with respect to the FRY (S&M) otherwise 
prohibited (61 FR 1282, January 19, 1996). Property and interests in 
property of the FRY (S&M) previously blocked within the jurisdiction of 
the United States remain blocked, in conformity with the Peace 
Agreement and UNSCR 1022, until provision is made to address claims or 
encumbrances, including the claims of the other successor states of the 
former Yugoslavia.
  On May 10, 1996, OFAC amended the Regulations to authorize 
prospectively all transactions with respect to the Bosnian Serbs 
otherwise prohibited, except with respect to property previously 
blocked (61 FR 24696, May 16, 1996). On December 4, 1996, OFAC amended 
Appendices A and B to 31 C.F.R. chapter V, containing the names of 
entities and individuals in alphabetical order and by location that are 
subject to the various economic sanctions programs administered by 
OFAC, to remove the entries for individuals and entities that were 
determined to be acting for or on behalf of the Government of the 
Federal Republic of Yugoslavia (Serbia and Montenegro). These assets 
were blocked on the basis of these persons' activities in support of 
the FRY (S&M)--activities no longer prohibited--not because the 
Government of the FRY (S&M) or entities located in or controlled from 
the FRY (S&M) had any interest in those assets (61 FR 64289, December 
4, 1996). A copy of the amendment is attached to this report.
  On April 18, 1997, the Regulations were amended by adding a new 
section 585.528, authorizing all transactions after 30 days with 
respect to the following vessels that remained blocked pursuant to the 
Regulations, effective at 10:00 a.m. local time in the location of the 
vessel on May 19, 1997: the M/V MOSLAVINA, M/V ZETA, M/V LOVCEN, M/V 
DURMITOR and M/V BAR (a/k/a M/V INVIKEN) (62 FR 19672, April 23, 1997). 
During the 30-day period, United States persons were authorized to 
negotiate settlements of their outstanding claims with respect to the 
vessels with the vessels' owners or agents and were generally licensed 
to seek and obtain judicial warrants of maritime arrest. If claims 
remained unresolved 10 days prior to the vessels' unblocking (May 8, 
1997), service of the warrants could be effected at that time through 
the United States Marshal's Office in the district where the vessel was 
located to ensure that United States creditors of a vessel had the 
opportunity to assert their claims. Appendix C to 31 CFR, chapter V, 
containing the names of vessels blocked pursuant to the various 
economic sanctions programs administered by OFAC (61 FR

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32936, June 26, 1996), was also amended to remove these vessels from 
the list effective May 19, 1997. A copy of the amendment is attached to 
this report.

  3. Over the past year, the Departments of State and the Treasury have 
worked closely with European Union member states and other U.N. member 
nations to implement the provisions of UNSCR 1022. In the United 
States, retention of blocking authority pursuant to the extension of a 
national emergency provides a framework for administration of an 
orderly claims settlement. This accords with past policy and practice 
with respect to the suspension of sanctions regimes.
  4. During this reporting period, OFAC issued seven specific licenses 
regarding transactions pertaining to the FRY (S&M) or assets it owns or 
controls. Specific licenses have been issued (1) to authorize the 
unblocking of certain funds and other financial assets previously 
blocked; (2) for the payment of crews' wages, vessel maintenance, and 
emergency supplies for FRY (S&M)--controlled ships blocked in the 
United States; and (3) to authorize performance of certain transactions 
under pre-sanctions contracts.
  During the past 6 months, OFAC has continued to oversee the 
maintenance of blocked accounts and records with respect to: (1) 
liquidated tangible assets and personality of the 15 blocked United 
States subsidiaries of entities organized in the (S&M); (2) the blocked 
personality, files, and records of the two Serbian banking institutions 
in New York previously placed in secure storage; (3) remaining tangible 
property, including real estate; and (4) the 5 Yugoslav-owned vessels 
recently unblocked in the United States.
  5. Despite the prospective authorization of transactions with the FRY 
(S&M), OFAC has continued to work closely with the United States 
Customs Service and other cooperating agencies to investigate alleged 
violations that occurred while sanctions were in force.
  Since my last report, OFAC has collected six civil monetary penalties 
totaling nearly $39,000 for violations of the sanctions. These 
violations included prohibited imports, exports, contract dealings, and 
payments to the Government of the FRY (S&M), persons in the FRY (S&M), 
or to blocked entities owned or controlled by the FRY (S&M).
  6. The expenses incurred by the Federal Government in the 6-month 
period from November 30, 1996, through May 29, 1997, that are directly 
attributable to the declaration of a national emergency with respect to 
the FRY (S&M) and the Bosnian Serb forces and authorities are estimated 
at approximately $400,000, most of which represents wage and salary 
costs for Federal personnel. Personnel costs were largely centered in 
the Department of the Treasury (particularly in OFAC and its Chief 
Counsel's Office, and the United States Customs Service), the 
Department of State, the National Security Council, and the Department 
of Commerce.
  7. In the last year and a half, substantial progress has been 
achieved to bring about a settlement of the conflict in the former 
Yugoslavia acceptable to the parties. UNSCR 1074 terminates sanctions 
in view of the first free and fair elections to occur in the Republic 
of Bosnia and Herzegovina, as provided for in the Peace Agreement. In 
reaffirming Resolution 1022, however, UNSCR 1074 contemplates the 
continued blocking of assets potentially subject to conflicting claims 
and encumbrances until provision is made to address them under 
applicable law, including claims of the other successor states of the 
former Yugoslavia.
  The resolution of the crisis and conflict in the former Yugoslavia 
that has resulted from the actions and policies of the Government of 
the Federal Republic of Yugoslavia (Serbia and Montenegro), and of the 
Bosnian Serb forces and the authorities in the territory that they 
control, will not be complete until such time as the Peace Agreement is 
implemented and the terms of UNSCR 1022 have been met. Therefore, I 
have continued for another year the national emergency declared on May 
30, 1992, as expanded in scope on October 25, 1994, and will continue 
to enforce the measures adopted pursuant thereto.
  I shall continue to exercise the powers at my disposal with respect 
to the measures against the Government of the Federal Republic of 
Yugoslavia (Serbia and Montenegro), and the Bosnian Serb forces, civil 
authorities, and entities, 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, May 30, 1997.

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