    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [February 8, 1995]
    [Pages 176-179]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to Iraq
    February 8, 1995

    To the Congress of the United States:
        I hereby report to the Congress on the developments since my last
    report of August 2, 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 No. 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
    Iraqi'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 activities 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 August 2, 1994,
    through February 1, 1995.
        1. There has been one action affecting the Iraqi Sanctions
    Regulations, 31 C.F.R. Part 575 (the ``Regulations''), administered by
    the Office of Foreign Assets Control (FAC) of the Department of the
    Treasury, since my last report on August 2, 1994. On February 1, 1995
    (60 Fed. Reg. 6376), FAC amended the Regulations by adding to the list
    of Specially Designated Nationals (SDNs) of Iraq set forth in Appendices
    A (``entities and individuals'') and B (``merchant vessels''), the names
    of 24 cabinet ministers and 6 other senior officials of the Iraqi
    government, as well as 4 Iraqi state-owned banks, not previously
    identified as SDNs. Also added to the Appendices were the names of 15
    entities, 11 individuals, and 1 vessel that were newly identified as
    Iraqi SDNs in the comprehensive list of SDNs for all sanctions programs
    administered by FAC that was published in the Federal Register (59 Fed.
    Reg. 59460) on November 17, 1994. In the same document, FAC also
    provided additional addresses and aliases for 6 previously identified
    Iraqi SDNs. This Federal Register publication brings the total number of
    listed Iraqi SDNs to 66 entities, 82 individuals, and 161 vessels.
        Pursuant to section 575.306 of the Regulations, FAC has determined
    that these entities and individuals designated as SDNs are owned

    [[Page 177]]

    or controlled by, or are acting or purporting to act directly or
    indirectly on behalf of, the Government of Iraq, or are agencies,
    instrumentalities or entities of that government. By virtue of this
    determination, all property and interests in property of these entities
    or persons that are in the United States or in the possession or control
    of United States persons are blocked. Further, United States persons are
    prohibited from engaging in transactions with these individuals or
    entities unless the transactions are licensed by FAC. The designations
    were made in consultation with the Department of State. A copy of the
    amendment is attached to this report.
        2. Investigations of possible violations of the Iraqi sanctions
    continue to be pursued and appropriate enforcement actions taken. The
    FAC continues its involvement in lawsuits, seeking to prevent the
    unauthorized transfer of blocked Iraqi assets. There are currently 38
    enforcement actions pending, including nine cases referred by FAC to the
    U.S. Customs Service for joint investigation. Additional FAC civil
    penalty notices were prepared during the reporting period for violations
    of the International Emergency Economic Powers Act and the Regulations
    with respect to transactions involving Iraq. Four penalties totaling
    $26,043 were collected from two banks, one company, and one individual
    for violations of the prohibitions against transactions involving Iraq.
        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 FAC's listing of
    individuals and organizations determined to be SDNs of the Government of
    Iraq.
        4. Pursuant to Executive Order No. 12817 implementing United Nations
    Security Council Resolution No. 778, on October 26, 1992, FAC 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
    October 5, 1994, following payments by the Governments of Canada
    ($677,756.99), the United Kingdom ($1,740,152.44), and the European
    Community ($697,055.93), 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 $3,114,965.36 from
    the blocked account it holds to the United Nations-controlled account.
    Similarly, on December 16, 1994, following the payment of $721,217.97 by
    the Government of the Netherlands, $3,000,891.06 by the European
    Community, $4,936,808.84 by the Government of the United Kingdom,
    $190,476.19 by the Government of France, and $5,565,913.29 by the
    Government of Sweden, the Federal Reserve Bank of New York was directed
    to transfer a corresponding amount of $14,415,307.35 to the United
    Nations-controlled account. Again, on December 28, 1994, following the
    payment of $853,372.95 by the Government of Denmark, $1,049,719.82 by
    the European Community, $70,716.52 by the Government of France,
    $625,390.86 by the Government of Germany, $1,151,742.01 by the
    Government of the Netherlands, and $1,062,500.00 by the Government of
    the United Kingdom, the Federal Reserve Bank of New York was directed to
    transfer a corresponding amount of $4,813,442.16 to the United Nations
    controlled account. Finally, on January 13, 1995, following the payment
    of $796,167.00 by the Government of the Netherlands, $810,949.24 by the
    Government of Denmark, $613,030.61 by the Government of Finland, and
    $2,049,600.12 by the European Community, the Federal Reserve Bank of New
    York was directed to transfer a corresponding amount of $4,269,746.97 to
    the United Nations-controlled account. Cumulative transfers from the
    blocked Federal Reserve Bank of New York account since issuance of
    Executive Order No. 12817 have amounted to $157,542,187.88 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 533
    specific licenses regarding transactions pertaining to Iraq or Iraqi
    assets since August 1990. Since my last report, 37 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 administration of
    personal assets and decedents' estates in Iraq, and the protection of
    preexistent intellectual property rights in Iraq.

    [[Page 178]]

        6. The expenses incurred by the Federal Government in the 6-month
    period from August 2, 1994, through February 1, 1995, 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 $2.25 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 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 East Affairs, the Bureau of Organization Affairs, 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. More
    than 4 years after the invasion, a pattern of defiance persists: a
    refusal to account for missing Kuwaiti detainees; failure to return
    Kuwaiti property worth millions of dollars, including weapons used by
    Iraq in its movement of troops to the Kuwaiti border in October 1994;
    sponsorship of assassinations in Lebanon and in northern Iraq;
    incomplete declarations to weapons inspectors; and ongoing widespread
    human rights violations. 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 continues 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 blockade of food,
    medicine, and other humanitarian supplies against northern Iraq. The
    Iraqi military routinely harasses residents of the north, and has
    attempted to ``Arabize'' the 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. More than 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,

    February 8, 1995.

    [[Page 179]]