[Public Papers of the Presidents of the United States: William J. Clinton (1994, Book I)]
[June 21, 1994]
[Pages 1109-1111]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 1109]]


Message to the Congress Reporting on Sanctions Against the 
Federal Republic of Yugoslavia (Serbia and Montenegro)
June 21, 1994

To the Congress of the United States:
    On May 30, 1992, in Executive Order No. 12808, the President 
declared a national emergency to deal with the threat to the national 
security, foreign policy, and economy of the United States arising from 
actions and policies of the Governments of Serbia and Montenegro, acting 
under the name of the Socialist Federal Republic of Yugoslavia or the 
Federal Republic of Yugoslavia, in their involvement in and support for 
groups attempting to seize territory in Croatia and Bosnia-Herzegovina 
by force and violence utilizing, in part, the forces of the so-called 
Yugoslav National Army (57 FR 23299, June 2, 1992). The present report 
is submitted pursuant to 50 U.S.C. 1641(c) and 1703(c). 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 No. 12808 and to expanded sanctions against 
the Federal Republic of Yugoslavia (Serbia and Montenegro) (the ``FRY 
(S/M)'') contained in Executive Order No. 12810 of June 5, 1992 (57 FR 
24347, June 9, 1992), Executive Order No. 12831 of January 15, 1993 (58 
FR 5253, January 21, 1993), and Executive Order No. 12846 of April 26, 
1993 (58 FR 25771, April 27, 1993).
    1. Executive Order No. 12808 blocked all property and interests in 
property of the Governments of Serbia and Montenegro, or held in the 
name of the former Government of the Socialist Federal Republic of 
Yugoslavia or the Government of the Federal Republic of Yugoslavia, then 
or thereafter located in the United States or within the possession or 
control of United States persons, including their overseas branches.
    Subsequently, Executive Order No. 12810 expanded U.S. actions to 
implement in the United States the United Nations sanctions against the 
FRY (S/M) adopted in United Nations Security Council Resolution 757 of 
May 30, 1992. In addition to reaffirming the blocking of FRY (S/M) 
Government property, this order prohibits transactions with respect to 
the FRY (S/M) involving imports, exports, dealing in FRY-origin 
property, air and sea transportation, contract performance, funds 
transfers, activity promoting importation or exportation or dealings in 
property, and official sports, scientific, technical, or other cultural 
representation of, or sponsorship by, the FRY (S/M) in the United 
States.
    Executive Order No. 12810 exempted from trade restrictions (1) 
transshipments through the FRY (S/M), and (2) activities related to the 
United Nations Protection Force (``UNPROFOR''), the Conference on 
Yugoslavia, or the European Community Monitor Mission.
    On January 15, 1993, the President issued Executive Order No. 12831 
to implement new sanctions contained in United Nations Security Council 
Resolution 787 of November 16, 1992. The order revoked the exemption for 
transshipments through the FRY (S/M) contained in Executive Order No. 
12810, prohibited transactions within the United States or by a United 
States person relating to FRY (S/M) vessels and vessels in which a 
majority or controlling interest is held by a person or entity in, or 
operating from, the FRY (S/M), and stated that all such vessels shall be 
considered as vessels of the FRY (S/M), regardless of the flag under 
which they sail.
    On April 26, 1993, I issued Executive Order No. 12846 to implement 
in the United States the sanctions adopted in United Nations Security 
Council Resolution 820 of April 17, 1993. That resolution called on the 
Bosnian Serbs to accept the Vance-Owen peace plan for Bosnia-Herzegovina 
and, if they failed to do so by April 26, called on member states to 
take additional measures to tighten the embargo against the FRY (S/M) 
and Serbian-controlled areas of Bosnia-Herzegovina and the United 
Nations Protected Areas in Croatia. Effective April 26, 1993, the order 
blocked all property and interests in property of commercial, 
industrial, or public utility undertakings or entities organized or 
located in the FRY (S/M), including property and interests in property 
of entities (wherever organized or located) owned or controlled by such 
undertakings or entities, that are or thereafter come within the 
possession or control of United States persons.

[[Page 1110]]

    2. 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)). The 
additional sanctions set forth in Executive Orders Nos. 12810, 12831, 
and 12846 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).
    3. There have been no amendments to the Federal Republic of 
Yugoslavia (Serbia and Montenegro) Sanctions Regulations (the 
``Regulations''), 31 C.F.R. Part 585, since the last report. Of the two 
court cases in which the blocking authority was challenged as applied to 
FRY (S/M) subsidiaries and vessels in the United States, the 
government's position in the case involving the blocked vessels was 
upheld by the Fifth Circuit Court of Appeals. The Supreme Court declined 
to review the decision. Milena Ship Management Co. v. Newcomb, 804 F. 
Supp. 859 (E.D. La. 1992), aff'd, 995 F.2nd 620 (5th Cir. 1993), cert. 
denied ______ U.S. ______ , 114 S.Ct. 877 (1994). The case involving a 
blocked subsidiary is pending a decision by the court on the 
government's motion for summary judgment.
    4. Over the past 6 months, the Departments of State and Treasury 
have worked closely with European Community (the ``EC'') member states 
and other U.N. member nations to coordinate implementation of the 
sanctions against the FRY (S/M). This has included visits by assessment 
teams formed under the auspices of the United States, the EC, and the 
Conference for Security and Cooperation in Europe (the ``CSCE'') to 
states bordering on Serbia and Montenegro; deployment of CSCE sanctions 
assistance missions (``SAMs'') to Albania, Bulgaria, Croatia, the Former 
Yugoslav Republic of Macedonia, Hungary, Romania, and Ukraine to assist 
in monitoring land and Danube River traffic; bilateral contacts between 
the United States and other countries for the purpose of tightening 
financial and trade restrictions on the FRY (S/M); and establishment of 
a mechanism to coordinate enforcement efforts and to exchange technical 
information.
    5. In accordance with licensing policy and the Regulations, FAC has 
exercised its authority to license certain specific transactions with 
respect to the FRY (S/M) that are consistent with the Security Council 
sanctions. During the reporting period, FAC has issued 114 specific 
licenses regarding transactions pertaining to the FRY (S/M) or assets it 
owns or controls, bringing the total as of April 15, 1994, to 677. 
Specific licenses have been issued (1) for payment to U.S. or third-
country secured creditors, under certain narrowly defined circumstances, 
for pre-embargo import and export transactions; (2) for legal 
representation or advice to the Government of the FRY (S/M) or FRY (S/
M)-controlled clients; (3) for the liquidation or protection of tangible 
assets of subsidiaries of FRY (S/M)-controlled firms located in the 
United States; (4) for limited FRY (S/M) diplomatic representation in 
Washington and New York; (5) for patent, trademark and copyright 
protection and maintenance transactions in the FRY (S/M) not involving 
payment to the FRY (S/M) Government; (6) for certain communications, 
news media, and travel-related transactions; (7) for the payment of 
crews' wages, vessel maintenance, and emergency supplies for FRY (S/M)-
controlled ships blocked in the United States; (8) for the removal from 
the FRY (S/M) of certain property owned and controlled by U.S. entities; 
and (9) to assist the United Nations in its relief operations and the 
activities of the U.N. Protection Forces. Pursuant to regulations 
implementing United Nations Security Council Resolution 757, specific 
licenses have also been issued to authorize exportation of food, 
medicine, and supplies intended for humanitarian purposes in the FRY (S/
M).
    During the past 6 months, FAC has continued to oversee the 
liquidation of tangible assets of the 15 U.S. subsidiaries of entities 
organized in the FRY (S/M). Subsequent to the issuance of Executive 
Order No. 12846, all operating licenses issued for these U.S.-located 
Serbian or Montenegrin subsidiaries or joint ventures were revoked, and 
the net proceeds of the liquidation of their assets placed in blocked 
accounts.
    The Board of Governors of the Federal Reserve Board and the New York 
State Banking

[[Page 1111]]

Department again worked closely with FAC with regard to two Serbian 
banking institutions in New York that were not permitted to conduct 
normal business after June 1, 1992. The banks had been issued licenses 
to maintain a limited staff for audit purposes while full-time bank 
examiners were posted in their offices to ensure that banking records 
are appropriately safeguarded. Subsequent to the issuance of Executive 
Order No. 12846, all licenses previously issued were revoked. FAC is 
currently working with the Federal Reserve Board and the New York State 
Banking Department of resolve outstanding issues regarding the banks.
    During the past 6 months, U.S. financial institutions have continued 
to block funds transfers in which there is an interest of the Government 
of the FRY (S/M) or an entity or undertaking located in or controlled 
from the FRY (S/M). Such transfers have accounted for $58.6 million in 
Yugoslav assets blocked since the issuance of Executive Order No. 12808, 
with some $22 million in funds transfers frozen during the past 6 
months.
    To ensure compliance with the terms of the licenses that have been 
issued under the program, stringent reporting requirements are imposed. 
More than 380 submissions were reviewed since the last report and more 
than 194 compliance cases are currently open. In addition, licensed bank 
accounts are regularly audited by FAC compliance personnel and by 
cooperating auditors from bank regulatory agencies.
    6. Since the issuance of Executive Order No. 12810, FAC has worked 
closely with the U.S. Customs Service to ensure both that prohibited 
imports and exports (including those in which the Government of the FRY 
(S/M) has an interest) are identified and interdicted, and that 
permitted imports and exports move to their intended destination without 
undue delay. Violations and suspected violations of the embargo are 
being investigated and appropriate enforcement actions are being taken. 
There are currently 50 cases under active investigation. Since the last 
report, FAC has collected 20 civil penalties totaling nearly $75,000 
from 17 financial institutions for violations involving transfers of 
funds in which the Government of the FRY (S/M) has an interest. Two U.S. 
companies and one law firm have also paid penalties related to exports 
and unlicensed payments to the Government of the FRY (S/M) for trademark 
registration.
    7. The expenses incurred by the Federal Government in the 6-month 
period from November 30, 1993, through May 29, 1994, that are directly 
attributable to the authorities conferred by the declaration of a 
national emergency with respect to the FRY (S/M) are estimated at about 
$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 FAC and its Chief Counsel's Office, and 
the U.S. Customs Service), the Department of State, the National 
Security Council, the U.S. Coast Guard, and the Department of Commerce.
    8. The actions and policies of the Government of the FRY (S/M), in 
its involvement in and support for groups attempting to seize and hold 
territory in Croatia and Bosnia-Herzegovina by force and violence, 
continue to pose an unusual and extraordinary threat to the national 
security, foreign policy, and economy of the United States. The United 
States remains committed to a multilateral resolution of this crisis 
through its actions implementing the binding resolutions of the United 
Nations Security Council with respect to the FRY (S/M).
    I shall continue to exercise the powers at my disposal to apply 
economic sanctions against the FRY (S/M) 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,

June 21, 1994.