[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.