    [Public Papers of the Presidents of the United States: George H. W. Bush (1991, Book I)]
    [February 11, 1991]
    [Pages 131-133]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Reporting on the National Emergency With
    Respect to Iraq
    February 11, 1991

    Dear Mr. Speaker:  (Dear Mr. President:)
        1. On August 2, 1990, in Executive Order No. 12722, I declared a
    national emergency to deal with the threat to the national security and
    foreign policy of the United States caused by Iraq's invasion of Kuwait.
    (55 FR 31803.) In that order, I ordered the immediate blocking of all
    property and interests in property of the Government of Iraq (including
    the Central Bank of Iraq) then or thereafter located in the United
    States or within the possession or control of a U.S. person. I also
    prohibited the importation of goods or services of Iraqi origin into the
    United States and the exportation of goods, technology, and services to
    Iraq from the United States. In addition, I prohibited travel-related
    transactions and transportation transactions from or to Iraq and the
    performance of any contract in support of any industrial, commercial, or
    governmental project in Iraq. U.S. persons were also prohibited from
    granting or extending credit or loans to the Government of Iraq.
        At the same time, at the request of the Government of Kuwait, I
    issued Executive Order No. 12723 (55 FR 31805), blocking all property of
    the Government of Kuwait then or thereafter in the United States or in
    the possession or control of a U.S. person.
        Subsequently, on August 9, 1990, I issued Executive Orders Nos.
    12724 and 12725 (55 FR 33089), to ensure that the sanctions imposed by
    the United States were consistent with United Nations Security Council
    Resolution 661 of August 6, 1990. Under these orders, additional steps
    were taken with regard to Iraq, and sanctions were applied to Kuwait as
    well to insure that no benefit to Iraq resulted from the military
    occupation of Kuwait.
        2. The declaration of the national emergency on August 2, 1990, was
    made pursuant to the authority vested in me as 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. I reported the declaration to the Congress on
    August 3, 1990, pursuant to section 204(b) of the International
    Emergency Economic Powers Act (50 U.S.C. 1703(b)). The additional
    sanctions of August 9, 1990, were imposed pursuant to the authority
    vested in me by the Constitution and laws of the United States,
    including the statutes cited above and the United Nations Participation
    Act (22 U.S.C. 287c). The present report is submitted pursuant to 50
    U.S.C. 1641(c) and 1703(c). This report discusses only Administration
    actions and expenses directly related to the national emergency with
    respect to Iraq declared in Executive Order No. 12722, as implemented
    pursuant to that order and Executive Orders Nos. 12723, 12724, and
    12725.
        3. The Office of Foreign Assets Control of the Department of the
    Treasury (``FAC''), after consultation with other Federal agencies,
    issued the Kuwaiti Assets Control Regulations, 31 C.F.R. Part 570 (55 FR
    49857, November 30, 1990), and the Iraqi Sanc-

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    tions Regulations, 31 C.F.R. Part 575 (56 FR 2112, January 18, 1991), to
    implement the prohibitions contained in Executive Orders Nos. 12722-
    12725.
        Prior to the issuance of the final regulations, FAC issued a number
    of general licenses to address emergency situations affecting U.S.
    persons and the legitimate Government of Kuwait. Those general licenses
    have been incorporated, as appropriate, into the Kuwaiti Assets Control
    Regulations and the Iraqi Sanctions Regulations as general licenses,
    which permit transactions that would otherwise be prohibited by the
    Executive orders and regulations. U.S. persons, including U.S. financial
    institutions, are authorized to complete certain securities, foreign
    exchange, and similar transactions on behalf of the Government of Kuwait
    that were entered into prior to August 2, 1990. Similarly, certain
    import and export transactions commenced prior to August 2, 1990, were
    allowed to be completed, provided that any payments owed to Iraq or
    Kuwait were paid into a blocked account in a U.S. financial institution.
    The regulations also allow for the investment and reinvestment of
    blocked Kuwaiti and Iraqi assets. Consistent with United Nations
    Security Council Resolutions 661 and 666, the regulations also outline
    licensing procedures permitting the donation to Iraq or Kuwait of food
    in humanitarian circumstances, and of medical supplies, where it is
    demonstrated to FAC that the proposed export transaction meets the
    requirements for exemption under United Nations Security Council
    Resolution 661.
        With this report I am enclosing a copy of the Department of the
    Treasury's Kuwaiti Assets Control Regulations and Iraqi Sanctions
    Regulations.
        4. Worldwide outrage over the invasion of Kuwait by Saddam Hussein
    has resulted in the imposition of sanctions by nearly every country of
    the world. To an extent unprecedented in the history of peacetime
    economic sanctions, the community of nations has worked together to make
    the sanctions effective in isolating Saddam Hussein and in cutting him
    off from the support he needs in order to continue his illegal
    occupation of Kuwait. This cooperation has occurred through the United
    Nations Sanctions Committee, established by United Nations Security
    Council Resolution 661, diplomatic channels, and day-to-day working
    contact among the national authorities responsible for implementing and
    administering the sanctions.
        5. As of January 24, 1991, FAC had issued 158 specific licenses to
    Kuwaiti governmental entities operating assets or direct investments in
    the United States, enabling continued operation and the preservation of
    Kuwaiti government assets in the United States, as well as addressing
    certain expenditures by or on behalf of the Government of Kuwait in
    exile. In addition, 68 specific licenses were issued regulating
    transactions involving the Government of Iraq or its assets.
    Authorizations were granted enabling the Iraqi Embassy to conduct
    diplomatic representation in the United States. Specific licenses were
    also issued to non-Iraqi entities determining or authorizing the
    disposition of pre-embargo imports and exports on the high seas,
    authorizing the payment under confirmed letters of credit for pre-
    embargo exports, and permitting the conduct of procedural transactions
    such as the filing of lawsuits and payment for legal representation. In
    all cases involving Iraqi property, steps were taken to ensure that no
    financial benefit accrued to Iraq as a result of a licensing decision.
    In order to ensure compliance with the terms and conditions of licenses,
    reporting requirements have been imposed that are closely monitored.
    Licensed accounts are regularly audited by FAC compliance personnel and
    by deputized auditors from other regulatory agencies. Compliance
    analyses are prepared monthly for major licensed Kuwaiti governmental
    entities.
        6. Upon issuance of Executive Orders Nos. 12722 and 12723 on August
    2, 1990, FAC initiated an intensive effort to identify and enforce the
    blocked status of all property within the United States in which the
    Government of Iraq has an interest. On Sunday,
    August 5, 1990, in a nationwide law enforcement effort coordinated by
    FAC, notices of blocking were served on agents of
    Iraqi Airways, Inc., at four locations--two in New York, one in
    Southfield, Michigan, and one in Los Angeles, California--and all

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    operations of Iraqi Airways in the United States were shut down.
        On August 27, 1990, a notice of blocking was served on a company in
    Newbury, Ohio, which had in its possession a scintillation detector
    belonging to the Iraqi Atomic Energy Commission. The detector had been
    sold to the Iraqi government by the firm in February 1990 and returned
    to the United States for repair in July 1990.
        On September 17, 1990, in a law enforcement effort coordinated by
    FAC with assistance from the Federal Bureau of Investigation and the
    Customs Service, a notice of blocking was served and actions were taken
    pursuant thereto at the office of a machine tool distributing company in
    Solon, Ohio. This corporation is a wholly owned subsidiary of an English
    company and was blocked based on information that the English company
    was ultimately owned and controlled by an Iraqi government-controlled
    trading company in Baghdad, Iraq. Enforcement of the blocked status of
    the Ohio company's property, including its bank assets, forced the
    shutdown of the firm.
        FAC is continuing to coordinate enforcement actions and investigate
    reports of violations of the sanctions against Iraq and occupied Kuwait.
    These efforts will continue to ensure that no activities in violation of
    the sanctions are allowed to confer any benefit on Iraq.
        The enforcement efforts of the United States Government complement
    the efforts worldwide to enforce sanctions against Iraq. The United
    States has utilized a wide variety of diplomatic, administrative, and
    enforcement tools to deter circumvention of the global trade and
    financial embargoes established under United Nations Security Council
    resolutions. The enforcement efforts of the United States have been
    augmented through ongoing contacts with the United Nations, the
    Organization of Economic Cooperation and Development, the European
    Community and member states' central banks through the Bank for
    International Settlements, as well as with representatives of individual
    governments.
        7. The expenses incurred by the Federal Government in the 6-month
    period from August 2, 1990, through February 1, 1991, that are directly
    attributable to the exercise of the authorities conferred by the
    declaration of a national emergency with respect to Iraq (including
    sanctions against Iraq and occupied Kuwait) are estimated at
    $1,226,338.80, most of which represents wage and salary costs for
    Federal personnel. Personnel costs were largely centered in the
    Department of the Treasury (particularly in FAC, the U.S. Customs
    Service, Office of the Assistant Secretary for Enforcement, the Office
    of the Assistant Secretary for International Affairs, and the Office of
    the General Counsel), the Department of State, the Federal Reserve
    Board, the National Security Council, the Department of Agriculture, and
    the Department of Transportation.
        8. The invasion of Kuwait and the continuing illegal occupation of
    that country by Saddam Hussein continue to pose an unusual and
    extraordinary threat to the national security and foreign policy of the
    United States. The United States remains committed to a multilateral
    resolution of this crisis through its actions implementing the binding
    decisions of the United Nations Security Council with respect to Iraq
    and Kuwait. I shall continue to exercise the powers at my disposal to
    apply economic sanctions against Iraq and occupied Kuwait 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).
        Sincerely,

                                                                 George Bush

                        Note: Identical letters were sent to Thomas S.
                            Foley, Speaker of the House of Representatives,
                            and Dan Quayle, President of the Senate.