[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

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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.