    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
    [September 18, 1995]
    [Pages 1374-1376]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency with Respect
    to Iran
    September 18, 1995

    To the Congress of the United States:
        I hereby report to the Congress on developments concerning the
    national emergency with respect to Iran that was declared in Executive
    Order No. 12957 of March 15, 1995, and matters relating to Executive
    Order No. 12959 of May 6, 1995. This report is submitted pursuant to
    section 204(c) of the International Emergency Economic Powers Act, 50
    U.S.C. 1703(c) (IEEPA), and section 505(c) of the International Security
    and Development Cooperation Act of 1985, 22 U.S.C. 2349aa-9(c). This
    report discusses only matters concerning the national emergency with
    respect to Iran that was declared in Executive Order No. 12957 and
    matters relating to Executive Order No. 12959.
        1. On March 15, 1995, I issued Executive Order No. 12957 (60 Fed.
    Reg. 14615, March 17, 1995) to declare a national emergency with respect
    to Iran pursuant to IEEPA, and to prohibit the financing, management, or
    supervision by United States persons of the development of Iranian
    petroleum resources. This action was in response to actions and policies
    of the Government of Iran, including support for international
    terrorism, efforts to undermine the Middle East peace process, and the
    acquisition of weapons of mass destruction and the means to deliver
    them. A copy of the order was provided to the Congress by message dated
    March 15, 1995.
        Following the imposition of these restrictions with regard to the
    development of Iranian petroleum resources, Iran continued to engage in
    activities that represent a threat to the peace and security of all
    nations, including Iran's continuing support for international
    terrorism, its support for acts that undermine the Middle East peace
    process, and its intensified efforts to acquire weapons of mass
    destruction. On May 6, 1995, I issued Executive Order No. 12959 to
    further respond to the Iranian threat to the national security, foreign
    policy, and economy of the United States.
        Executive Order No. 12959 (60 Fed. Reg. 24757, May 9, 1995) (1)
    prohibits exportation from the United States to Iran or to the
    Government of Iran of goods, technology, or services; (2) prohibits the
    reexportation of certain U.S. goods and technology to Iran from third
    countries; (3) prohibits transactions such as brokering and other
    dealing by United States persons in goods and services of Iranian origin
    or owned or controlled by the Government of Iran; (4) prohibits new
    investments by United States persons in Iran or in property owned or
    controlled by the Government of Iran; (5) prohibits U.S. companies and
    other United States persons from approving, facilitating, or financing
    performance by a foreign subsidiary or other entity owned or controlled
    by a United States person of transactions that a United States person is
    prohibited from performing; (6) continues the 1987 prohibition on the
    importation into the United States of goods and services of Iranian
    origin; (7) prohibits any transaction by any United States person or
    within the United States that evades or avoids or attempts to violate
    any prohibition of the order; and (8) allowed U.S. companies a 30-day
    period in which to perform trade transactions pursuant to contracts
    predating the Executive order.
        In Executive Order No. 12959, I directed the Secretary of the
    Treasury to authorize through

    [[Page 1375]]

    licensing certain transactions, including transactions by United States
    persons related to the Iran-United States Claims Tribunal in The Hague,
    established pursuant to the Algiers Accords, and other international
    obligations and United States Government functions. Such transactions
    also include the export of agricultural commodities pursuant to
    preexisting contracts consistent with section 5712(c) of title 7, United
    States Code. I also directed the Secretary of the Treasury, in
    consultation with the Secretary of State, to consider authorizing United
    States persons through specific licensing to participate in market-based
    swaps of crude oil from the Caspian Sea area for Iranian crude oil in
    support of energy projects in Azerbaijan, Kazakhstan, and Turkmenistan.
        Executive Order No. 12959 revokes sections 1 and 2 of Executive
    Order No. 12613 of October 29, 1987, and sections 1 and 2 of Executive
    Order No. 12957 of March 15, 1995, to the extent they are inconsistent
    with it. A copy of Executive Order No. 12959 was transmitted to the
    President of the Senate and Speaker of the House by letter dated May 6,
    1995.
        2. In its implementation of the sanctions imposed against Iran
    pursuant to Executive Order No. 12959, the Office of Foreign Assets
    Control (FAC) of the Department of the Treasury has issued 12 general
    licenses and 2 general notices authorizing various transactions
    otherwise prohibited by the Executive order or providing statements of
    licensing policy. In order to ensure the widest dissemination of the
    general licenses and general notices in advance of promulgation of
    amended regulations, FAC published them in the Federal Register on
    August 10, 1995 (60 Fed. Reg. 40881). In addition, FAC disseminated this
    information by its traditional methods such as electronic bulletin
    boards, FAX, and mail. Copies of these general licenses and general
    notices are attached to this report.
        General License No. 1 described those transactions which were
    authorized in connection with the June 6, 1995 delayed effective date
    contained in Executive Order No. 12959 for trade transactions related to
    pre-May 7 trade contracts. General License No. 2 authorized payments to
    or from Iran under certain circumstances and certain dollar clearing
    transactions involving Iran by U.S. financial institutions. General
    Licenses No. 3 authorized the exportation of certain services by U.S.
    financial institutions with respect to accounts held for persons in
    Iran, the Government of Iran, or entities owned or controlled by the
    Government of Iran. General License No. 3 also contained an annex
    identifying 13 Iranian banks and 62 of their branches, agencies,
    representative offices, regional offices, and subsidiaries as owned or
    controlled by the Government of Iran. General License No. 4 authorized
    (1) domestic transactions involving Iranian-origin goods already within
    the United States except for transactions involving the Government of
    Iran or an entity owned or controlled by the Government of Iran, and (2)
    transactions by United States persons necessary to effect the
    disposition of Iranian-origin goods or services located or to be
    performed outside the United States, provided that they were acquired by
    that United States person in transactions not prohibited by the order or
    by 31 C.F.R. Part 560, that such disposition does not result in the
    importation of these goods or services into the United States, and that
    such transactions are completed prior to August 6, 1995. General License
    No. 5 authorized the importation into the United States of information
    and informational materials, confirmed the exemption of such information
    from the ban on exportation from the United States, and set forth a
    licensing policy for the exportation of equipment necessary to establish
    news wire feeds or other transmissions of information. General License
    No. 6 authorized the importation into the United States and the
    exportation to Iran of diplomatic pouches and their contents. General
    License No. 7 provided a statement of licensing policy for
    consideration, on a case-by-case basis, to authorize the establishment
    and operation of news organization offices in Iran by U.S. organizations
    whose primary purpose is the gathering and dissemination of news to the
    general public. General License No. 8 authorized transactions in
    connection with the exportation of agricultural commodities pursuant to
    pre-May 7 trade contracts provided that the terms of such contract
    require delivery of the commodity prior to February 2, 1996. General
    License No. 9 authorized import, export, and service transactions
    necessary to the conduct of official business by the missions of the
    Government of Iran to international organizations and the Iranian
    Interests Section of the Embassy of Pakistan in the United States.
    General License No. 10 provided a statement of licensing policy with
    respect to transactions incident to the resolution of disputes between
    the United

    [[Page 1376]]

    States or U.S. nationals and the Government of Iran in international
    tribunals and domestic courts in the United States and abroad. General
    License No. 11 authorized the exportation of household goods and
    personal effects for persons departing from the United States to
    relocate in Iran. General License No. 12 authorized the provision of
    certain legal services to the Government of Iran or to a person in Iran
    and the receipt of payment therefor under certain circumstances.
        General Notice No. 1 described information required in connection
    with an application for a specific license to complete the performance
    of pre-May 7 trade contracts prior to August 6, 1995 (except with
    respect to agricultural commodities as provided by General License No.
    8). General Notice No. 2 indicated that the Department of the Treasury
    had authorized the U.S. agencies of Iranian banks to complete, through
    December 29, 1995, transactions for U.S. exporters involving letters of
    credit, which they issued, confirmed, or advised prior to June 6, 1995,
    provided that the underlying export was completed in accordance with the
    terms of General License No. 1 or a specific license issued to the
    exporter by FAC. General Notice No. 2 also noted that the U.S. agencies
    of the Iranian banks were authorized to offer discounted advance
    payments on deferred payment letters of credit, which they issued,
    confirmed, or advised, provided that the same criteria are met.
        3. The Iranian Transactions Regulations, 31 CFR Part 560 (the
    ``ITR''), have been comprehensively amended to implement the provisions
    of Executive Orders No. 12957 and No. 12959. The amended ITR were issued
    by FAC on September 11, 1995 (60 Fed Reg. 47061-74) and incorporate,
    with some modifications, the General Licenses cited above. A copy of the
    amended regulations is attached to this report.
        4. In consultation with the Department of State, FAC reviewed
    applications for specific licenses to permit continued performance of
    trade contracts entered into prior to May 7, 1995. It issued more than
    100 such licenses allowing performance to continue up to August 6, 1995.
        5. The expenses incurred by the Federal Government in the 6-month
    period from March 15 through September 14, 1995, that are directly
    attributable to the exercise of powers and authorities conferred by the
    declaration of a national emergency with respect to Iran are
    approximately $875,000, 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 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 Eastern Affairs, the Bureau of Politico-Military Affairs,
    and the Office of the Legal Adviser), and the Department of Commerce
    (the Bureau of Export Administration and the General Counsel's Office).
        6. The situation reviewed above continues to involve important
    diplomatic, financial, and legal interests of the United States and its
    nationals and presents an extraordinary and unusual threat to the
    national security, foreign policy, and economy of the United States. The
    declaration of the national emergency with respect to Iran contained in
    Executive Order No. 12957 and the comprehensive economic sanctions
    imposed by Executive Order No. 12959 underscore the United States
    Government's opposition to the actions and policies of the Government of
    Iran, particularly its support of international terrorism and its
    efforts to acquire weapons of mass destruction and the means to deliver
    them. The Iranian Transactions Regulations issued pursuant to Executive
    Orders No. 12957 and No. 12959 continue to advance important objectives
    in promoting the nonproliferation and antiterrorism policies of the
    United States. I shall exercise the powers at my disposal to deal with
    these problems and will report periodically to the Congress on
    significant developments.

                                                          William J. Clinton

    The White House,

    September 18, 1995.