[Congressional Record Volume 144, Number 28 (Monday, March 16, 1998)]
[Senate]
[Pages S1988-S1989]
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-111

  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, and in 
Executive Order 13059 of August 19, 1997. 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 (60 Fed. 
Reg. 24757, May 9, 1995) to further respond to the Iranian threat to 
the national security, foreign policy, and economy of the United 
States. The terms of that order and an earlier order imposing an import 
ban on Iranian-origin goods and services (Executive Order 12613 of 
October 29, 1987) were consolidated and clarified in Executive Order 
13059 of August 19, 1997.
  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 U.S. 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,

[[Page S1989]]

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 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 Congressional 
leadership by letter dated May 6, 1995.
  2. On August 19, 1997, I issued Executive Order 13059 in order to 
clarify the steps taken in Executive Order 12957 and Executive Order 
12959, to confirm that the embargo on Iran prohibits all trade and 
investment activities by United States persons, wherever located, and 
to consolidate in one order the various prohibitions previously imposed 
to deal with the national emergency declared on March 15, 1995. A copy 
of the Order was transmitted to the Speaker of the House and the 
President of the Senate by letter dated August 19, 1997.

  The Order prohibits (1) the importation into the United States of any 
goods or services of Iranian origin or owned or controlled by the 
Government of Iran except information or informational material; (2) 
the exportation, reexportation, sale, or supply from the United States 
or by a United States person, wherever located, of goods, technology, 
or services to Iran or the Government of Iran, including knowing 
transfers to a third country for direct or indirect supply, 
transshipment, or reexportation to Iran or the Government of Iran, or 
specifically for use in the production, commingling with, or 
incorporation into goods, technology, or services to be supplied, 
transshipped, or reexported exclusively or predominantly to Iran or the 
Government of Iran; (3) knowing reexportation from a third country to 
Iran or the Government of Iran of certain controlled U.S.-origin goods, 
technology, or services by a person other than a United States person; 
(4) the purchase, sale, transport, swap, brokerage, approval, 
financing, facilitation, guarantee, or other transactions or dealings 
by United States persons, wherever located, related to goods, 
technology, or services for exportation, reexportation, sale or supply, 
directly or indirectly, to Iran or the Government of Iran, or to goods 
or services of Iranian origin or owned or controlled by the Government 
of Iran; (5) new investment by United States persons in Iran or in 
property or entities owned or controlled by the Government of Iran; (6) 
approval, financing, facilitation, or guarantee by a United States 
person of any transaction by a foreign person that a United States 
person would be prohibited from performing under the terms of the 
Order; and (7) any transaction that evades, avoids, or attempts to 
violate a prohibition under the Order.
  Executive Order 13059 became effective at 12:01 a.m., eastern 
daylight time on August 20, 1997. Because the Order consolidated and 
clarified the provisions of prior orders, Executive Order 12613 and 
paragraphs (a), (b), (c), (d), and (f) of section 1 of Executive Order 
12959 were revoked by Executive Order 13059. The revocation of 
corresponding provisions in the prior Executive orders did not affect 
the applicability of those provisions, or of regulations, licenses or 
other administrative actions taken pursuant to those provisions, with 
respect to any transaction or violation occurring before the effective 
date of Executive Order 13059. Specific licenses issued pursuant to 
prior Executive orders continue in effect, unless revoked or amended by 
the Secretary of the Treasury. General licenses, regulations, orders, 
and directives issued pursuant to prior orders continue in effect, 
except to the extent inconsistent with Executive Order 13059 or 
otherwise revoked or modified by the Secretary of the Treasury.
  The declaration of national emergency made by Executive Order 12957, 
and renewed each year since, remains in effect and is not affected by 
the Order.
  3. On March 4, 1998, 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 trade in information and 
informational materials and certain other limited exceptions.
  4. There have been no amendments to the Iranian Transactions 
Regulations, 31 C.F.R. Part 560 (the ``ITR''), since my report of 
September 17, 1997.
  5. 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 seven licenses. The majority of 
denials were in response to requests to authorize commercial exports to 
Iran--particularly of machinery and equipment for various industries--
and the importation of Iranian-origin goods. The licenses issued 
authorized certain financial transactions, transactions relating to air 
safety policy, and to disposal of U.S.-owned goods located in Iran. 
Pursuant to sections 3 and 4 of Executive Order 12959 and consistent 
with the Iran-Iraq Arms Non-Proliferation Act of 1992 and other 
statutory restrictions concerning certain goods and technology, 
including those involved in 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 scrutinize 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.
  6. 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 six civil monetary penalties totaling nearly $84,000 for 
violations of IEEPA and the ITR.
  7. The expenses incurred by the Federal Government in the 6-month 
period from September 15, 1997, through March 14, 1998, that are 
directly attributable to the exercise of powers and authorities 
conferred by the declaration of a national emergency with respect to 
Iran are reported to be approximately $1.3 million, 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).

  8. The situation reviewed above continues to present 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'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 12957, 12959, and 13059 
continue to advance important objectives in promoting the 
nonproliferation and anti-terrorism 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 16, 1998.




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