[Congressional Record (Bound Edition), Volume 146 (2000), Part 13]
[Senate]
[Pages 19208-19210]
[From the U.S. Government Publishing Office, www.gpo.gov]



REPORT ON 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:
  As required by section 401(c) of the National Emergencies Act, 50 
U.S.C. 1641(c), section 204(c) of the International Emergency Economic 
Powers Act (IEEPA), 50 U.S.C. 1703(c), and section 505(c) of the 
International Security and Development Cooperation Act of 1985, 22 
U.S.C. 2349aa-9(c), I transmit herewith a 6-month periodic report 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.
                                                  William J. Clinton.  

                                   The White House, September 25, 2000.

 President's Periodic Report on the National Emergency With Respect to 
                                  Iran

  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

[[Page 19209]]

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 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 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 by message 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 U.S. 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 U.S. 
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 Zerbaijan, 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 Speaker of the 
House and the President of the Senate by letter dated May 6, 1995.
  2. On August 19, 1997, I issued Executive Order 13059 (the ``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 U.S. 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 materials; (2) 
the exportation, reexportation, sale, or supply from the United States 
or by a U.S. 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 predominately to Iran or the Government to 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 U.S. person; (4) the purchase, sale, 
transport, swap, brokerage, approval, financing, facilitation, 
guarantee, or other transactions or dealings by U.S. 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 U.S. 
persons in Iran or in property or entities owned or controlled by the 
Government of Iran; (6) approval, financing, facilitation, or guarantee 
by a U.S. person of any transaction by a foreign person that a U.S. 
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 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 13, 2000, 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.
  4. On April 28, 1999, I announced that existing unilateral economic 
sanctions programs would be amended to modify licensing policies to 
permit case-by-case review of specific proposals for the commercial 
sale of agricultural commodities and products, as well as medicine and 
medical equipment, where the United States Government has the 
discretion to do so. I further announced that the Administration was 
developing country-specific licensing criteria to guide the case-by-
case review process so that governments subject to sanctions do not 
gain unwarranted benefits from such sales.
  On July 27, 1999, the Iranian Transactions Regulations, 31 CFR Part 
560 (the ``ITR'' or the ``Regulations'') were amended to add statements 
of licensing policy with respect to commercial sales of agricultural 
commodities and products, medicine and medical equipment (64 Fed. Reg. 
41784, August 2, 1999). These provisions were amended on October 27, 
1999 (64 Fed. Reg. 58789, November 1, 1999) to improve language that 
had prohibited the issuance of specific licenses authorizing financing 
by entities of the governments of Sudan, Libya, and Iran. In addition, 
technical revisions were made to the Regulations pertaining to 
informational materials and visas.
  On March 17, 2000, Secretary of State Madeleine Albright announced 
that economic sanctions against Iran would be eased to allow Americans 
to purchase and import carpets and food

[[Page 19210]]

products such as dried fruits, nuts, and caviar from Iran. To implement 
this policy, the Department of the Treasury's Office of Foreign Assets 
Control (``OFAC'') amended the Regulations to authorize by general 
license the importation into the United States of, and dealings in, 
certain Iranian-origin foodstuffs and carpets and related transactions 
(65 Fed. Reg. 25642, May 3, 2000).
  5. During the current six-month period, OFAC made numerous decisions 
with respect to applications for licenses to engage in transactions 
under the ITR, and issued 62 licenses. The majority of license 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. Twenty-one licenses were issued 
authorizing commercial sales and exportation to Iran of bulk 
agricultural commodities; in addition, licenses were issued that 
authorized 20 sales of medicines or medical equipment. Other licenses 
that were issued authorized certain air and marine safety, diplomatic, 
legal, financial, and travel transactions, filmmaking, humanitarian, 
journalistic, and research activities, and the importation of arts 
objects for public exhibition. Pursuant to Sections 3 and 4 of 
Executive Order 12959, Executive Order 13059, and consistent with 
statutory restrictions concerning certain goods and technology, 
including those involved in air safety cases. Treasury continues to 
consult with the Departments of State and Commerce prior to issuing 
licenses.
  For the period March 15 through September 14, 2000, on OFAC's 
instructions, U.S. banks refused to process more than 1,100 commercial 
transactions, the majority involving foreign financial institutions, 
that would have been contrary to U.S. sanctions against Iran. The 
transactions rejected amounted to nearly $170 million worth of business 
denied Iran by virtue of U.S. economic sanctions.
  Since my last report, OFAC has collected nearly $342,000 in civil 
monetary penalties for violations of IEEPA and the Regulations. The 
violators included one insurer, seven companies, six U.S. financial 
institutions, and six individuals. An additional 102 cases are 
undergoing penalty action for violations of IEEPA and the Regulations.
  6. On January 14, 2000, the vice president of a Wisconsin corporation 
was sentenced in the Eastern District of Wisconsin to 41 months in 
prison for his October 1999 jury conviction on charges he violated 
IEEPA and the Arms Export Control Act by illegally exporting U.S.-
origin military aircraft component parts to Iran. On February 3, 2000, 
the corporation president was sentenced to six months in prison and 
ordered to pay a $5,000 fine for his guilty plea to one count of making 
false statements to the Government, and the corporation was ordered to 
pay a fine of $15,000. The defendants were charged with violating 
sanctions against Iran in an August 1998 indictment.
  A California resident is scheduled to be tried in October 2000 in the 
District of Maryland for IEEPA and other charges filed in a superseding 
indictment on March 20, 1997. The indictment charges the defendant with 
the attempted exportation to Iran of gas chromatographs from the United 
States.
  On May 10, 2000, a Georgia corporation pleaded guilty in U.S. 
District Court in Atlanta to one count of violating IEEPA by exporting 
automobile parts from the United States to Iran through third 
countries. Two company officials entered guilty pleas for making false 
statements to the United States Government in connection with the 
shipments. Sentencing is pending. The guilty pleas were the result of a 
24-count indictment returned in December 1998.
  Various enforcement actions carried over from previous reporting 
periods are continuing and new reports of violations are being 
aggressively pursued.
  7. The expenses incurred by the Federal Government in the six-month 
period from March 15 through September 14, 2000 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 $1.5 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 
Chief 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.

                          ____________________