[Public Papers of the Presidents of the United States: George H. W. Bush (1992, Book I)]
[May 14, 1992]
[Pages 769-770]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 769]]

Message to the Congress Reporting on the National Emergency With Respect 
to Iran

May 14, 1992
To the Congress of the United States:
    I hereby report to the Congress on developments since the last 
Presidential report on November 13, 1991, concerning the national 
emergency with respect to Iran that was declared in Executive Order No. 
12170 of November 14, 1979, and matters relating to Executive Order No. 
12613 of October 29, 1987. This report is submitted pursuant to section 
204(c) of the International Emergency Economic Powers Act, 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). This report 
covers events through March 31, 1992. My last report dated November 13, 
1991, covered events through September 30, 1991.
    1. The Iranian Transactions Regulations (``ITRs''), 31 CFR Part 560, 
were amended on December 3, 1991, to further interpret the documentary 
requirements for obtaining a license to import Iranian-origin carpets 
from third countries, and to permit the importation of certain household 
and personal effects by persons arriving in the United States. A copy of 
these amendments is attached to this report. Except for minor clerical 
changes, the Iranian Assets Control Regulations (``IACRs''), 31 CFR Part 
535, have not been amended since my last report.
    2. The Office of Foreign Assets Control (``FAC'') of the Department 
of the Treasury continues to process applications for import licenses 
under the ITRs. However, the December 3, 1991, amendments to the ITRs 
have resulted in a substantial reduction in the number of license 
applications received relating to the importation of nonfungible 
Iranian-origin goods, principally carpets, claimed to have been located 
outside of Iran prior to the imposition of the embargo. Those amendments 
have also made specific licenses unnecessary for most Iranian-origin 
goods permitted entry as duty-free household goods and personal effects 
by persons returning to the United States.
    During the reporting period, the Customs Service has continued to 
effect numerous seizures of Iranian-origin merchandise, mostly carpets, 
for violation of the import prohibitions of the ITRs. FAC and Customs 
Service investigations of these violations have resulted in forfeiture 
actions and the imposition of civil monetary penalties. Numerous 
additional forfeiture and civil penalty actions are under review.
    FAC worked closely with the Customs Service during the reporting 
period to further develop procedures to expeditiously dispose of cases 
involving the seizure of noncommercial importations of nonfungible 
Iranian goods by certain first-time importers. The opportunity for 
immediate re-exportation of such goods, under Customs supervision and 
upon payment of a mitigated forfeiture amount, has been made available 
in a greater number of cases to reduce the total cost of the violation 
to those importers.
    3. 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 my last report, 
the Tribunal has rendered 7 awards, for a total of 528 awards. Of that 
total, 357 have been awards in favor of American claimants: 217 of these 
were awards on agreed terms, authorizing and approving payment of 
settlements negotiated by the parties, and 140 were decisions 
adjudicated on the merits. The Tribunal has issued 34 decisions 
dismissing claims on the merits and 80 decisions dismissing claims for 
jurisdictional reasons. Of the 57 remaining awards, 3 approved the 
withdrawal of cases and 54 were in favor of Iranian claimants. As of 
March 31, 1992, payments on awards to successful American claimants from 
the Security Account held by the NV Settlement Bank stood at 
$2,045,284,993.99.
    As of March 31, 1992, the Security Account has fallen below the 
required balance of $500 million 34 times. Iran has periodically 
replenished the account, as required

[[Page 770]]

by the Algiers Accords, by transferring funds from the separate account 
held by the NV Settlement Bank in which interest on the Security Account 
is deposited. The last transfer of interest occurred on November 27, 
1991, and resulted in a transfer of $26.6 million from the interest 
account to the Security Account. The aggregate amount that has been 
transferred from the interest account to the Security Account is 
$859,472,986.47. As noted in my last report, Iran has also replenished 
the Security Account with the proceeds from the sale of Iranian-origin 
oil imported into the United States, pursuant to transactions licensed 
on a case-by-case basis by FAC.
    The Security Account was also increased on December 3, 1991, by an 
$18 million payment from the United States that was a part of the 
settlement of case B/1 (Claim 4). This payment brought the balance of 
the Security Account up to the required $500 million for the first time 
since June 1990. As of March 31, 1992, the total amount in the Security 
Account was $500,334,516.76, and the total amount in the interest 
account was $8,332,610.75.
    4. The Tribunal continues to make progress in the arbitration of 
claims of U.S. nationals for $250,000.00 or more. Since the last report, 
six large claims have been decided, including two claims that were 
settled by the parties. Approximately 85 percent of the nonbank claims 
have now been disposed of through adjudication, settlement, or voluntary 
withdrawal, leaving 89 such claims on the docket. The largest of the 
large claims, the progress of which has been slowed by their complexity, 
are finally being resolved, sometimes with sizable damage awards to the 
U.S. claimant. Since September 30, 1991, U.S. claimants have been 
awarded over $4 million by the Tribunal.
    5. As anticipated by the May 13, 1990, agreement settling the claims 
of U.S. nationals against Iran for less than $250,000.00 the Foreign 
Claims Settlement Commission (``FCSC'') has begun its review of 3,112 
claims. The FCSC has issued decisions in 460 claims, for total awards of 
over $8 million. The FCSC expects to complete its adjudication of the 
remaining claims by September 1993.
    6. In coordination with concerned Government agencies, the 
Department of State continues to present United States Government claims 
against Iran, as well as responses by the United States Government to 
claims brought against it by Iran. Since the last report, the United 
States Government has settled one case with Iran, resulting in a payment 
to Iran of $278,000,000. As noted above, $18 million of this payment was 
deposited into the Security Account for replenishment purposes. The 
Department of State also represented the United States before the 
Tribunal in a case filed by an Iranian national.
    7. As anticipated in my last report, after a final determination 
that there were no longer any bank syndicates pursuing claims against 
Dollar Account No. 1 at the Federal Reserve Bank of New York, 
appropriate steps were taken to close the account. On February 19, 1992, 
the remaining balance in the dollar account, $134,128.56, was 
transferred to Bank Markazi. On March 12, 1992, the United States and 
Iran filed a joint submission to the Tribunal requesting termination of 
Case No. A/15 (I:G), the case brought by Iran involving the syndicate 
claims.
    8. 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 IACRs issued pursuant to 
Executive Order No. 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. Similarly, the ITRs issued 
pursuant to Executive Order No. 12613 continue to advance important 
objectives in combatting international 
terrorism. 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.

                                                             George Bush

The White House,
May 14, 1992.