    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book I)]
    [March 11, 1996]
    [Pages 423-425]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 423]]

    Message to the Congress Reporting on the National Emergency With Respect
    to Iran
    March 11, 1996

    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 the measures
    in that order and in 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 that Executive
    order and 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 U.S. 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 on 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 reexport, investment, and certain trade
    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 specific 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 related to other international obligations and
    United States Government functions, and transactions related to 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 revoked sections 1 and 2 of Executive
    Order No. 12613 of October 29, 1987, and sections 1 and 2 of Executive

    [[Page 424]]

    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
    Speaker of the House of Representatives and President of the Senate by
    letters dated May 6, 1995.
        2. There were no amendments to the Iranian Transactions Regulations,
    31 CFR Part 560 (the ``ITR'') during the reporting period.
        3. During the current 6-month period, the Department of the
    Treasury's Office of Foreign Assets Control (FAC) made numerous
    decisions with respect to applications for licenses to engage in
    transactions under the ITR, issuing 54 licensing determinations--both
    approvals and denials. The majority of denials were in response to
    requests to extend contract performance beyond the time specified by
    Executive Order No. 12959 and by FAC general license. Licenses were
    issued authorizing the continued operation of Iranian diplomatic
    accounts, powers of attorney, extensions of standby letters of credit,
    payments for trade transactions pursuant to contracts prior to May 6,
    1995, and exportation of certain agricultural products contracted for
    prior to May 6, 1995. The FAC continues to review under section 560.528
    requests for authorization to export and reexport goods, services, and
    technology to ensure the safety of civil aviation and safe operation of
    U.S.-origin commercial passenger aircraft in Iran. In light of statutory
    restrictions applicable to goods and technology involved in these cases,
    Treasury continues to consult and coordinate with the Departments of
    State and Commerce on these matters, consistent with section 4 of
    Executive Order No. 12959.
        During the reporting period, FAC administered provisions on services
    related to maintaining Iranian bank accounts and identified and rejected
    Iran-related payments not authorized under the ITR. United States banks
    were notified that they could not process transactions on behalf of
    accounts held in the name of the Government of Iran or persons in Iran,
    with the exception of certain transactions related to interest accruals,
    customary service charges, the exportation of information or
    informational material, travel-related remittances, donations of
    articles to relieve human suffering, or lump sum closures of accounts by
    payment to their owners. United States banks continue to handle certain
    dollar payment transactions involving Iran between third-country banks
    that do not involve a direct credit or debit to Iranian accounts.
    Noncommercial family remittances involving Iran must be routed to or
    from non-U.S., non-Iranian offshore banks.
        The FAC continues to coordinate closely with the Federal Reserve
    Board, the Federal Reserve Bank of New York, and the California banking
    authorities concerning the treatment of three Iranian bank agencies--
    Banks Sepah, Saderat, and Melli. Licenses have been issued to the
    Iranian bank agencies authorizing them to pay overhead expenses under
    the supervision of the California and New York banking departments while
    meeting obligations incurred prior to May 6, 1995. Authorization expired
    at the end of December, which had enabled them to make payments to U.S.
    exporters under letters of credit advised prior to June 6, 1995, where
    the underlying exports were completed in accordance with the Regulations
    or a specific license issued by FAC. The FAC also had permitted the
    agencies to offer discounted advance payments on deferred payment
    letters of credit under the same conditions.
        4. The U.S. Customs Service has continued to effect numerous
    seizures of Iranian-origin merchandise, primarily carpets, for violation
    of the import prohibitions of the ITR. Various enforcement actions
    carried over from previous reporting periods are continuing and new
    reports of violations are being aggressively pursued.
        5. The expenses incurred by the Federal Government in the 6-month
    period from September 15, 1995, through March 14, 1996, 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 $965,000, 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 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 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

    [[Page 425]]

    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,

    March 11, 1996.