    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book II)]
    [December 6, 1996]
    [Pages 2174-2176]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Reporting on the National Emergency With
    Respect to the Federal Republic of Yugoslavia (Serbia and Montenegro)
    December 6, 1996

    Dear Mr. Speaker:  (Dear Mr. President:)
        On May 30, 1992, by Executive Order 12808, President Bush declared a
    national emergency to deal with the unusual and extraordinary threat to
    the national security, foreign policy, and economy of the United States
    constituted by the actions and policies of the Governments of Serbia and
    Montenegro, blocking all property and interests in property of those
    Governments. President Bush took additional measures to prohibit trade
    and other transactions with the Federal Republic of Yugoslavia (Serbia
    and Montenegro) by Executive Orders 12810 and 12831, issued on June 5,
    1992, and January 15, 1993, respectively.
        On April 25, 1993, I issued Executive Order 12846, blocking the
    property and interests in property of all commercial, industrial, or
    public utility undertakings or entities organized or located in the
    Federal Republic of Yugoslavia (Serbia and Montenegro) (the ``FRY
    (S&M)''), and prohibiting trade-related transactions by United States
    persons involving those areas of the Republic of Bosnia and Herzegovina
    controlled by the Bosnian Serb forces and the United Nations Protected
    Areas in the Republic of Croatia. On October 25, 1994, because of the
    actions and policies of the Bosnian Serbs, I expanded the scope of the
    national emergency by issuance of Executive Order 12934 to block the
    property of the Bosnian Serb forces and the authorities in the territory
    that they control within the Republic of Bosnia and Herzegovina, as well
    as the property of any entity organized or located in, or controlled by
    any person in, or resident in, those areas.
        On December 27, 1995, I issued Presidential Determination No. 96-7,
    directing the Secretary of the Treasury, inter alia, to suspend the
    application of sanctions imposed on the FRY (S&M) pursuant to the above-
    referenced Executive orders and to continue to block property previously
    blocked until provision is made to address claims or encumbrances,
    including the claims of the other successor states of the former
    Yugoslavia. This sanctions relief, in conformity with United Nations
    Security Council Resolution (``UNSCR'') 1022 of November 22, 1995, was
    an essential factor motivating Serbia and Montenegro's acceptance of the
    General Framework Agreement for Peace in Bosnia and Herzegovina
    initialed by the parties in Dayton, Ohio, on November 21, 1995 (the
    ``Peace Agreement'') and signed in Paris on December 14, 1995. The
    sanctions imposed on the FRY (S&M) and on the United Nations Protected
    Areas in

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    the Republic of Croatia were accordingly suspended prospectively,
    effective January 16, 1996. Sanctions imposed on the Bosnia Serb forces
    and authorities and on the territory that they control within the
    Republic of Bosnia and Herzegovina were subsequently suspended
    prospectively, effective May 13, 1996, in conformity with UNSCR 1022. On
    October 1, 1996, the United Nations passed UNSCR 1022. On October 1,
    1996, the United Nations passed the UNSCR 1074, terminating U.N.
    sanctions against the FRY (S&M) and the Bosnian Serbs in light of the
    elections that took place in Bosnia and Herzegovina on September 14,
    1996. UNSCR 1074, however, reaffirms the provisions of UNSCR 1022 with
    respect to the release of blocked assets, as set forth above.
        The present report is submitted pursuant to 50 U.S.C. 1641(c) and
    1703(c) and covers the period from May 30 to November 29, 1996. It
    discusses Administration actions and expenses directly related to the
    exercise of powers and authorities conferred by the declaration of a
    national emergency in Executive Order 12808 of May 30, 1992 (57 FR
    23299) and Executive Order 12934 (59 FR 54117) and to expanded sanctions
    against the FRY (S&M) and the Bosnian Serbs contained in Executive Order
    12810 of June 5, 1992 (57 FR 24347, June 9, 1992), Executive Order 12831
    of January 15, 1993 (58 FR 5253, January 21, 1993), Executive Order
    12846 of April 25, 1993 (58 FR 25771, April 27, 1993), and Executive
    Order 12934 of October 25, 1994 (59 FR 54117, October 27, 1994).
        1. The declaration of the national emergency on May 30, 1992, was
    made pursuant to the authority vested in the President by the
    Constitution and laws of the United States, including the International
    Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National
    Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3 of
    the United States Code. The emergency declaration was reported to the
    Congress on May 30, 1992, pursuant to section 204(b) of the
    International Emergency Economic Powers Act (50 U.S.C. 1703(b)) and the
    expansion of that national emergency under the same authorities was
    reported to the Congress on October 25, 1994. The additional sanctions
    set forth in related Executive orders were imposed pursuant to the
    authority vested in the President by the Constitution and laws of the
    United States, including the statutes cited above, section 1114 of the
    Federal Aviation Act (49 U.S.C. App. 1514), and section 5 of the United
    Nations Participation Act (22 U.S.C. 287c).
        2. Since the declaration of the national emergency with respect to
    the FRY (S&M) on May 30, 1992, the Office of Foreign Assets Control
    (OFAC) acting under authority delegated by the Secretary of the Treasury
    has implemented the sanctions imposed under the foregoing statutes.
    Effective January 16, 1996, OFAC amended the Federal Republic of
    Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled Areas of
    the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 CFR
    Part 585 (the ``Regulations''), to implement in the United States
    provisions of the Peace Agreement and UNSCR 1022 (61 FR 1282, January
    19, 1996). The amended Regulations authorize prospectively all
    transactions with respect to the FRY (S&M) otherwise prohibited.
    Property and interests in property of the FRY (S&M) previously blocked
    within the jurisdiction of the United States remain blocked, in
    conformity with the Peace Agreement and UNSCR 1022, until provision is
    made to address claims or encumbrances, including the claims of the
    other successor states of the former Yugoslavia. On May 10, 1996, OFAC
    amended the Regulations to authorize prospectively those transactions
    previously prohibited with respect to the Bosnian Serb forces and
    authorities; entities organized or located in those areas of the
    Republic of Bosnia and Herzegovina under their control; entities owned
    or controlled directly or indirectly by any person in, or resident in,
    those areas; and any person acting for or on behalf of any of the
    foregoing. United States persons are also authorized to engage in
    transactions involving the areas of the Republic of Bosnia and
    Herzegovina under the control of the Bosnian Serb forces, and services
    may be exported either from the United States or by United States
    persons to those areas. Property and interests in property previously
    blocked because of an interest of any of the above persons remain
    blocked. (61 FR 24696, May 16, 1996.)
        3. Over the past 6 months, the Departments of State and the Treasury
    have worked closely with European Union member states and other U.N.
    member nations to implement the provisions of UNSCR 1022. In the United
    States, retention of blocking authority pursuant to the extension of a
    national emergency provides a framework for administration of an orderly

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    claims settlement. This accords with past policy and practice with
    respect to the suspension of sanctions regimes.
        4. Subsequent to the prospective authorization of transactions with
    the FRY (S&M), effective January 16, 1996, OFAC has issued 28 specific
    licenses regarding transactions pertaining to the FRY (S&M) or assets it
    owns or controls. As of October 28, 1996, specific licenses have been
    issued (1) to authorize the unblocking of certain funds and other
    financial assets previously blocked; (2) for the payment of crews'
    wages, vessel maintenance, and emergency supplies for FRY (S&M)-
    controlled ships blocked in the United States; and (3) to authorize
    performance of certain transactions under pre-sanctions contracts.
        During the past 6 months, OFAC has continued to oversee the
    maintenance of blocked accounts and records with respect to: (1)
    liquidated tangible assets and personalty of the 15 blocked U.S.
    subsidiaries of entities organized in the FRY (S&M); (2) the blocked
    personalty, files, and records of the 2 Serbian banking institutions in
    New York previously placed in secure storage; (3) remaining tangible
    property, including real estate; and (4) the 5 Yugoslav-owned vessels
    still blocked in the United States.
        5. Despite the prospective authorization of transactions with the
    FRY (S&M), OFAC has continued to work closely with the U.S. Customs
    Service and other cooperating agencies to investigate alleged violations
    that occurred while sanctions were in force.
        Since the last report, OFAC has collected five civil monetary
    penalties totaling more than $28,300 for violations of the sanctions.
    These violations included prohibited exports and payments to persons in
    the FRY (S&M) or to blocked entities owned or controlled by the FRY
    (S&M).
        6. The expenses incurred by the Federal Government in the 6-month
    period from May 30, 1996, through November 29, 1996, that are directly
    attributable to the declaration of a national emergency with respect to
    the FRY (S&M) and the Bosnian Serb forces and authorities are estimated
    at about $1.252 million, most of which represent wage and salary costs
    for Federal personnel. Personnel costs were largely centered in the
    Department of the Treasury (particularly in OFAC and its Chief Counsel's
    Office, and the U.S. Customs Service), the Department of State, the
    National Security Council, the U.S. Coast Guard, and the Department of
    Commerce.
        7. In the last year, substantial progress has been achieved to bring
    about a settlement of the conflict in the former Yugoslavia acceptable
    to the parties. UNSCR 1074 terminates sanctions in view of the first
    free and fair elections to occur in the Republic of Bosnia and
    Herzegovina, as provided for in the Peace Agreement. In reaffirming
    Resolution 1022, however, UNSCR 1074 contemplates the continued blocking
    of assets potentially subject to conflicting claims and encumbrances
    until provision is made to address them, including claims of the other
    successor states of the former Yugoslavia.
        The resolution of the crisis and conflict in the former Yugoslavia
    that has resulted from the actions and policies of the Government of the
    Federal Republic of Yugoslavia (Serbia and Montenegro), and of the
    Bosnian Serb forces and the authorities in the territory that they
    control, will not be complete until such time as the Peace Agreement is
    implemented fully and the terms of UNSCR 1022 have been met. Therefore,
    I have continued for another year the national emergency declared on May
    30, 1992, as expanded in scope on October 25, 1994, and will continue to
    enforce the measures adopted pursuant thereto.
        I shall continue to exercise the powers at my disposal with respect
    to the measures against the Government of the Federal Republic of
    Yugoslavia (Serbia and Montenegro), and the Bosnian Serb forces, civil
    authorities, and entities, as long as these measures are appropriate,
    and will continue to report periodically to the Congress on significant
    developments pursuant to 50 U.S.C. 1703(c).
            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.