    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book II)]
    [November 14, 1996]
    [Pages 2117-2119]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Reporting on the National Emergency With
    Respect to Iran
    November 14, 1996

    Dear Mr. Speaker:  (Dear Mr. President:)
        I hereby report to the Congress on developments since the last
    Presidential report of May 16, 1996, concerning the national emergency
    with respect to Iran that was declared in Executive Order 12170 of
    November 14, 1979. This report is submitted pursuant to section 204(c)
    of the International Emergency Economic Powers Act, 50 U.S.C. 1703(c).
    This report covers events through September 16, 1996. My last report,
    dated May 16, 1996, covered events through March 1, 1996.
        1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR),
    were amended on August 22, 1996, to add the Antiterrorism and Effective
    Death Penalty Act of 1996 (Public Law 104-132; 110 Stat. 1214-1319 (the
    ``Antiterrorism Act'') as an authority for the Regulations (61 Fed. Reg.
    43460, August 23, 1996). On April 24, 1996, I signed into law the
    Antiterrorism Act. Section 321 of the Antiterrorism Act (18 U.S.C.
    2332d) makes it a criminal offense for United States persons, except as
    provided in regulations issued by the Secretary of the Treasury in
    consultation with the Secretary of State, to engage in a financial
    transaction with the governments of countries designated under section
    6(j) of the Export Administration Act (50 U.S.C. App. 2405) as
    supporting international terrorism. United States persons who engage in
    such transactions shall be fined under title 18, United States Code, or
    imprisoned for up to 10 years, or both. Because the IACR already
    prohibited such transactions with minor exceptions found to be in the
    public interest, no substantive change to the prohibitions of the IACR
    was necessary. A copy of the amendment is attached.
        2. The Iran-United States Claims Tribunal (the ``Tribunal''),
    established at The Hague pursuant to the Algiers Accords, continues to
    make progress in arbitrating the claims before it. Since the period
    covered in my last report, the Tribunal has rendered additional awards,
    in which the claims of dual nationals were dismissed for lack of
    jurisdiction. This brings the total number of awards rendered to 571,
    the majority of which have been in favor of U.S. claimants. As of
    September 16, 1996, the value of awards to successful U.S. claimants
    from  the  Security  Account  held by the NV Settlement Bank was
    $2,376,010,041.91.

    [[Page 2118]]

        On July 24, 1996, Iran directed the transfer of $37,700,000 to the
    Security Account, established by the Algiers Accords to ensure payment
    of awards to successful U.S. claimants, from the Interest Account.
    However, the Security Account has remained continuously below the $500
    million balance required by the Algiers Accords since November 12, 1992.
    As of September 23, 1996, the total amount in the Security Account was
    $233,070,127.71, and the total amount in the Interest Account was
    $5,494,387.30.
        Therefore, the United States continues to pursue Case A/28, filed in
    September 1993, to require Iran to meet its obligations under the
    Algiers Accords to replenish the Security Account. Iran filed its
    Statement of Defense in that case on August 30, 1995, and the United
    States filed a Reply on December 4, 1995. Iran is scheduled to file its
    Rejoinder on December 4, 1996.
        The United States also continues to pursue Case A/29, filed in July
    1994, to require Iran to meet its obligations under the Algiers Accords
    to pay its equal share of advances for Tribunal expenses when directed
    to do so by the Tribunal. Iran filed its Statement of Defense on July 5,
    1996. The United States filed its Reply on October 11, 1996.
        3. The Department of State continues to present other United States
    Government claims against Iran and to respond to claims brought against
    the United States by Iran, in coordination with concerned government
    agencies.
        In May 1996, the United States filed comments in response to a
    Tribunal inquiry whether experts meetings could facilitate the
    resolution of the United States Request to Dismiss Certain Claims from
    Case B/61, filed in August 1995 as part of the United States
    consolidated submission on the merits of that case. The United States
    stated that experts meetings were inadvisable. Case B/61 involves a
    claim by Iran for compensation with respect to primarily military
    equipment that Iran had sought to purchase or have repaired under
    commercial contracts with more than 50 private American companies, but
    that Iran alleges it did not receive. Iran alleges that it suffered
    direct losses and consequential damages in excess of $2 billion because
    of the United States Government refusal to allow the export of the
    equipment after January 19, 1981, in alleged contravention of the
    Algiers Accords. Iran's rebuttal of the United States consolidated
    submission in Case B/61 is due December 9, 1996.
        On May 6, 1996, in connection with Cases A/4, A/7, and A/15 (I: F
    and III), Iran requested that the Tribunal order the United States to
    terminate its leases of two former diplomatic properties of Iran to its
    current tenants. The United States responded by submitting comments to
    the Tribunal on May 31, 1996. The Tribunal has not yet issued a decision
    on Iran's request. A hearing of these cases has remained postponed by
    the parties' mutual agreement and under Tribunal order since October 11,
    1994.
        On May 10, 1996, Iran made a request for interim measures in Cases
    A/15(IV) and A/24, brought against the United States for its alleged
    failure to terminate litigation in U.S. courts in violation of the
    Algiers Accords. Iran requested that the Tribunal order the United
    States to stay the McKesson-OPIC litigation against Iran in U.S.
    district court. On June 20, 1996, after briefing by both parties, the
    Tribunal denied Iran's request for interim measures. The parties await
    the Tribunal's award on the merits of the cases, which were heard more
    than a year ago before the Full Tribunal.
        On June 27, 1996, in connection with Case B/1, the United States
    renewed a request for a Tribunal order directing Iran to produce seized
    United States Government documents and suspending the proceedings until
    Iran complies with the order. In this renewal of the pending request,
    the United States identified nine exhibits recently submitted to the
    Tribunal by Iran that appeared to have been seized from U.S. facilities
    in Iran.
        The United States pointed out to the Tribunal that Iran had
    previously informed the Tribunal on several occasions that the Iranian
    government does not possess any of the documents that were once stored
    in the U.S. facilities in Iran. Iran submitted a response to the
    Tribunal on September 5, 1995, asserting that the documents were handed
    over to Iranian representatives in the normal course of the Foreign
    Military sales program operations.
        In August 1996, Iran filed a Statement of Claim in a new case,
    number A/30, alleging that the United States has violated paragraphs 1
    and 10 of the General Declaration of the Algiers Accords. Iran bases its
    claim, inter alia, on press statements about an alleged covert action
    program aimed at Iran and U.S. economic sanctions, including the Iran-
    Libya Sanctions Act of 1996. The United States is currently prepar-

    [[Page 2119]]

    ing its Statement of Defense in response to Iran's claim.
        In Case A/11, Iran alleges that the United States violated the
    Algiers Accords by failing to assist Iran in obtaining the return of the
    Shah's assets. The Department of State is currently in the process of
    preparing the United States Hearing Memorial, which is due to be filed
    on December 13, 1996.
        Under the procedures established by the settlement reached February
    22, 1996, on which I reported previously, the United States has begun to
    pay ex gratia amounts to the survivors of Iranian victims of the July 3,
    1988, shootdown of Iran Air 655. As of the closing day for this report,
    34 beneficiaries representing 12 of the deceased passengers had received
    payments totaling $2,850,000.00. Under the terms of the settlement, no
    money will be paid to the Government of Iran.
        4. Since my last report, the Tribunal conducted hearings in two
    cases involving U.S. nationals, considered dual U.S.-Iranian nationals
    by the Tribunal. On May 16, 1996, Chamber Three held a one-day hearing
    in Claim No. 266, Aryeh v. The Islamic Republic of Iran, which involves
    the alleged expropriation by Iran of claimant's property in Iran. On
    June 12-14, 1996, Chamber Two held a hearing in Claim No. 953, Hakim v.
    The Islamic Republic of Iran, another claim for the expropriation of
    property in Iran.
        In August 1996, the United States submitted a brief on behalf of
    private dual national claimants in a proceeding before Chamber One of
    the Tribunal. The United States argued that the Tribunal erred in a
    previous decision when it denied a dual national's claim on the ground
    that the claimant had acquired his property in his capacity as an
    Iranian national. The brief takes issue with the rationale of the
    Tribunal's decision and urges the Tribunal not to extend this approach
    to the other pending dual national cases.
        5. The situation reviewed above continues to implicate important
    diplomatic, financial, and legal interests of the United States and its
    nationals and presents an unusual challenge to the national security and
    foreign policy of the United States. The Iranian Assets Control
    Regulations issued pursuant to Executive Order 12170 continue to play an
    important role in structuring our relationship with Iran and in enabling
    the United States to implement properly the Algiers Accords. I shall
    continue to exercise the powers at my disposal to deal with these
    problems and will continue to report periodically to the Congress on
    significant developments.
            Sincerely,

                                                          William J. Clinton

    Note: Identical letters were sent to Newt Gingrich, Speaker of the House
    of Representatives, and Albert Gore, Jr., President of the Senate. This
    letter was released by the Office of the Press Secretary on November 15.