    [Public Papers of the Presidents of the United States: William J. Clinton (1994, Book II)]
    [August 2, 1994]
    [Pages 1411-1413]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency
    With Respect to Iraq
    August 2, 1994

    To the Congress of the United States:
        I hereby report to the Congress on the developments since my last
    report of March 3, 1994, concerning the national emergency with respect
    to Iraq that was declared in Executive Order No. 12722 of August 2,
    1990. This report is submitted pursuant to section 401(c) of the
    National Emergencies Act, 50 U.S.C. 1641(c), and section 204(c) of the
    International Emergency Economic Powers Act, 50 U.S.C. 1703(c).
        Executive Order No. 12722 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 United States person.
    That order also prohibited the importation into the United States of
    goods and services of Iraqi origin, as well as the exportation of goods,
    services, and technology from the United States to Iraq. The order
    prohibited travel-related transactions to or from Iraq and the
    performance of any contract in support of any industrial, commercial, or
    governmental project in Iraq. United States persons were also prohibited
    from granting or extending credit or loans to the Government of Iraq.
        The foregoing prohibitions (as well as the blocking of Government of
    Iraq property) were continued and augmented on August 9, 1990, by
    Executive Order No. 12724, which was issued in order to align the
    sanctions imposed by the United States with United Nations Security
    Council Resolution 661 of August 6, 1990.
        Executive Order No. 12817 was issued on October 21, 1992, to
    implement in the United States measures adopted in United Nations
    Security Council Resolution 778 of October 2, 1992. Resolution 778
    requires U.N. Member States temporarily to transfer to a U.N. escrow
    account up to $200 million apiece in Iraqi oil sale proceeds paid by
    purchasers after the imposition of U.N. sanctions on Iraq, to finance
    Iraq's obligations for U.N. activities with respect to Iraq, such as
    expenses to verify Iraqi weapons destruction, and to provide
    humanitarian assistance in Iraq on a nonpartisan basis. A portion of the
    escrowed funds will also fund the activi-

    [[Page 1412]]

    ties of the U.N. Compensation Commission in Geneva, which will handle
    claims from victims of the Iraqi invasion of Kuwait. Member States also
    may make voluntary contributions to the account. The funds placed in the
    escrow account are to be returned, with interest, to the Member States
    that transferred them to the United Nations, as funds are received from
    future sales of Iraqi oil authorized by the U.N. Security Council. No
    Member State is required to fund more than half of the total transfers
    or contributions to the escrow account.
        This report discusses only matters concerning the national emergency
    with respect to Iraq that was declared in Executive Order No. 12722 and
    matters relating to Executive Orders Nos. 12724 and 12817 (the
    ``Executive orders''). The report covers events from February 2, 1994,
    through August 1, 1994.
        1. During the reporting period, there were no amendments to the
    Iraqi Sanctions Regulations.
        2. Investigations of possible violations of the Iraqi sanctions
    continue to be pursued and appropriate enforcement actions taken. There
    are currently 30 enforcement actions pending. These are intended to
    deter future activities in violation of the sanctions. Additional civil
    penalty notices were prepared during the reporting period for violations
    of the International Emergency Economic Powers Act and Iraqi Sanctions
    Regulations with respect to transactions involving Iraq. Three penalties
    totaling $38,450 were collected from three banks for violation of the
    prohibitions against Iraq, and noncompliance with reporting requirements
    and an Office of Foreign Assets Control directive license.
        3. Investigation also continues into the roles played by various
    individuals and firms outside Iraq in the Iraqi government procurement
    network. These investigations may lead to additions to the Office of
    Foreign Assets Control's listing of individuals and organizations
    determined to be Specially Designated Nationals (``SDNs'') of the
    Government of Iraq. One Jordanian-Iraqi joint venture company
    prominently involved in shipments to Iraq was identified as an SDN of
    Iraq on May 4, 1994. A copy of the notice is attached.
        4. Pursuant to Executive Order No. 12817 implementing United Nations
    Security Council Resolution 778, on October 26, 1992, the Office of
    Foreign Assets Control directed the Federal Reserve Bank of New York to
    establish a blocked account for receipt of certain post-August 6, 1990,
    Iraqi oil sales proceeds, and to hold, invest, and transfer these funds
    as required by the order. On March 1, 1994, following payments by the
    Governments of the United Kingdom ($447,761.19), the Netherlands
    ($1,566,994.55), Australia ($476,110.00), and the European Community
    ($3,758,310.31), respectively, to the special United Nations-controlled
    account, entitled United Nations Security Council Resolution 778 Escrow
    Account, the Federal Reserve Bank of New York was directed to transfer a
    corresponding amount of $6,240,176.05 from the blocked account it holds
    to the United Nations-controlled account. Similarly, on March 22, 1994,
    following the payment of $525,182.50 by the Government of the
    Netherlands, $2,478,089.89 by the European Community, $2,352,800.00 by
    the Government of the United Kingdom, $444,444.44 by the Government of
    Denmark, $1,204,899.30 by the Government of Sweden, and $3,100,000.00 by
    the Government of Japan, the Federal Reserve Bank of New York was
    directed to transfer a corresponding amount of $10,105,416.13 to the
    United Nations-controlled account. Again on June 30, 1994, the Federal
    Reserve Bank of New York was directed to transfer $6,969,862.89 to the
    United Nations-controlled account, an amount corresponding to the
    aggregate total of recent payments by the governments of other Member
    States: European Community ($1,042,774.31), United Kingdom
    ($1,570,804.48), the Netherlands ($1,062,219.51), Kuwait
    ($2,000,000.00), and Sweden ($1,294,064.59). Cumulative transfers from
    the blocked Federal Reserve Bank of New York account since issuance of
    Executive Order No. 12817 have amounted to $130,928,726.04 of the up to
    $200 million that the United States is obligated to match from blocked
    Iraqi oil payments, pursuant to United Nations Security Council
    Resolution 778.
        5. The Office of Foreign Assets Control has issued a total of 496
    specific licenses regarding transactions pertaining to Iraq or Iraqi
    assets since August 1990. Since my last report, 52 specific licenses
    have been issued. Licenses were issued for transactions such as the
    filing of legal actions against Iraqi governmental entities, legal
    representation of Iraq, and the exportation to Iraq of donated medicine,
    medical supplies, food intended for humanitarian relief purposes, the
    execution of powers of attorney relating to the

    [[Page 1413]]

    administration of personal assets and decedents' estates in Iraq, and
    the protection of preexistent intellectual property rights in Iraq.
        6. The expenses incurred by the Federal Government in the 6-month
    period from February 2, 1994, through August 1, 1994, that are directly
    attributable to the exercise of powers and authorities conferred by the
    declaration of a national emergency with respect to Iraq are reported to
    be about $2.3 million, most of which represents 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 Assistant 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 East and South Asian Affairs, the Bureau of International
    Organizations, and the Office of the Legal Adviser), and the Department
    of Transportation (particularly the U.S. Coast Guard).
        7. The United States imposed economic sanctions on Iraq in response
    to Iraq's illegal invasion and occupation of Kuwait, a clear act of
    brutal aggression. The United States, together with the international
    community, is maintaining economic sanctions against Iraq because the
    Iraqi regime has failed to comply fully with United Nations Security
    Council resolutions. Security Council resolutions on Iraq call for the
    elimination of Iraqi weapons of mass destruction, the inviolability of
    the Iraq-Kuwait boundary, the release of Kuwaiti and other third-country
    nationals, compensation for victims of Iraqi aggression, long-term
    monitoring of weapons of mass destruction capabilities, the return of
    Kuwaiti assets stolen during Iraq's illegal occupation of Kuwait,
    renunciation of terrorism, an end to internal Iraqi repression of its
    own civilian population, and the facilitation of access of international
    relief organizations to all those in need in all parts of Iraq. Four
    years after the invasion, a pattern of defiance persists: a refusal to
    recognize the international boundary with Kuwait or to account for
    missing Kuwaiti detainees, sponsorship of assassinations in Lebanon and
    in northern Iraq; incomplete declarations to weapons inspectors, and
    ongoing widespread human rights violations, among other things. As a
    result, the U.N. sanctions remain in place; the United States will
    continue to enforce those sanctions under domestic authority.
        The Baghdad government continued to violate basic human rights of
    its own citizens through systematic repression of minorities and denial
    of humanitarian assistance. The Government of Iraq has repeatedly said
    it will not be bound by United Nations Security Council Resolution 688.
    For more than 3 years, Baghdad has maintained a complete blockade of
    food, fuel, and medicine on northern Iraq. The Iraqi military routinely
    harasses residents of the north, and has attempted to ``Arabize''
    Kurdish, Turcomen, and Assyrian areas in the north. Iraq has not
    relented in its artillery attacks against civilian population centers in
    the south, or in its burning and draining operations in the southern
    marshes, which have forced thousands to flee to neighboring States.
        In 1991, the United Nations Security Council adopted Resolutions 706
    and 712, which would permit Iraq to sell up to $1.6 billion of oil under
    U.N. auspices to fund the provision of food, medicine, and other
    humanitarian supplies to the people of Iraq. The resolutions also
    provide for the payment of compensation to victims of Iraqi aggression
    and other U.N. activities with respect to Iraq. The equitable
    distribution within Iraq of this humanitarian assistance would be
    supervised and monitored by the United Nations. The Iraqi regime so far
    has refused to accept these resolutions and has thereby chosen to
    perpetuate the suffering of its civilian population. Nearly a year ago,
    the Iraqi government informed the United Nations that it would not
    implement Resolutions 706 and 712.
        The policies and actions of the Saddam Hussein regime continue to
    pose an unusual and extraordinary threat to the national security and
    foreign policy of the United States, as well as to regional peace and
    security. The U.N. resolutions require that the Security Council be
    assured of Iraq's peaceful intentions in judging its compliance with
    sanctions. Because of Iraq's failure to comply fully with these
    resolutions, the United States will continue to apply economic sanctions
    to deter it from threatening peace and stability in the region.

                                                          William J. Clinton

    The White House,
    August 2, 1994.