    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book II)]
    [September 13, 1996]
    [Pages 1563-1565]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to Iran
    September 13, 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 12957 of March 15, 1995, and matters relating to the measures in
    that order and in Executive Order 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 12957 and does not deal with those relating to the emergency
    declared on November 14, 1979, in connection with the hostage crisis.
        1. On March 15, 1995, I issued Executive Order 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 Speaker of the House of
    Representatives and the President of the Senate by letter 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 12959 to further
    respond to the Iranian

    [[Page 1564]]

    threat to the national security, foreign policy, and economy of the
    United States.
        Executive Order 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 certain reexport, investment, and certain
    trade transactions that a United States person is prohibited from
    performing; (6) continue 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.
        At the time of signing Executive Order 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, Kazakstan, and Turkmenistan.
        Executive Order 12959 revoked sections 1 and 2 of Executive Order
    12613 of October 29, 1987, and sections 1 and 2 of Executive Order 12957
    of March 15, 1995, to the extent they are inconsistent with it. A copy
    of Executive Order 12959 was transmitted to the Speaker of the House of
    Representatives and the President of the Senate by letters dated May 6,
    1995.
        2. On March 8, 1996, I renewed for another year the national
    emergency with respect to Iran pursuant to IEEPA. This renewal extended
    the current comprehensive trade embargo against Iran in effect since May
    1995. Under these sanctions, virtually all trade with Iran is prohibited
    except for information and informational materials and certain other
    limited exceptions.
        3. There were no amendments to the Iranian Transactions Regulations,
    31 CFR Part 560 (the ``ITR'') during the reporting period.
        4. During the current 6-month period, the Department of the
    Treasury's Office of Foreign Assets Control (OFAC) made numerous
    decisions with respect to applications for licenses to engage in
    transactions under the ITR, and issued 24 licenses. The majority of
    denials were in response to requests to authorize commercial exports to
    Iran and the importation of Iranian-origin goods. The majority of the
    licenses issued authorized the completion of commodity ``string
    transactions'' entered into by U.S. parties with respect to foreign
    commodities and having no knowledge or control over the Iranian interest
    in the contracts; the export and reexport of goods, services, and
    technology essential to ensure the safety of civil aviation and safe
    operation of certain commercial passenger aircraft in Iran; licenses
    relating to Iranian participation in the 1996 Atlanta Olympic and
    Paralympic Games; the importation of Iranian-origin artwork for public
    exhibition; and certain humanitarian imports and exports. In light of
    statutory restrictions applicable to goods and technology involved in
    the air safety cases, the Department of the Treasury continues to
    consult and coordinate with the Departments of State and Commerce on
    these matters, consistent with section 4 of Executive Order 12959.
        In consultation with the Board of Governors of the Federal Reserve
    System and bank regulators in New York and California, OFAC revoked the
    licenses of all Iranian banking agencies in the United States. State
    regulators then required them to convert to Representative Office
    status. There are now no Iranian banks authorized to conduct banking
    business in the United States. Activities have been restricted to
    ``limited representation,'' allowing only research

    [[Page 1565]]

    and coordination with U.S. holders of affiliate correspondent accounts.
        Bank Saderat, Iran's New York Representative Office, was nominated
    by the Central Bank of Iran to act as its agent for procedures outlined
    in the ``Airbus'' settlement at The Hague. Accordingly, Bank Saderat was
    separately licensed by OFAC for the limited purpose of collecting
    information for the Central Bank of Iran about U.S. commercial claims
    against Iranian banks. The information will be forwarded to and cleared
    by Iranian and State Department officials and used in making independent
    determinations as to which claims can be paid from a special escrow
    account established at the Federal Reserve Bank of New York.
        The U.S. financial community continues to interdict transactions
    associated with Iran and to consult with OFAC about their appropriate
    handling. During this reporting period, OFAC took decisive action to
    prevent the U.S. clearing of third country dollar travelers checks sold
    by Iranian banks.
        5. 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. Since March 11,
    1996, OFAC has collected two civil penalties totaling $6,000. The
    violations underlying these collections involve unlicensed exports to
    Iran. Civil penalty action is pending against 12 U.S. companies and
    financial institutions for violations of the Regulations.
        6. The expenses incurred by the Federal Government in the 6-month
    period from March 15 through September 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 $850,000, 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 Political-Military
    Affairs, and the Office of the Legal Adviser), and the Department of
    Commerce (the Bureau of Export Administration and the General Counsels
    Office).
        7. 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 12957 and the comprehensive economic sanctions imposed
    by Executive Order 12959 underscore the United States Government
    opposition to the actions and policies of the Government of Iran,
    particularly its support of international terrorism and its effort to
    acquire weapons of mass destruction and the means to deliver them. The
    Iranian Transactions Regulations issued pursuant to Executive Orders
    12957 and 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 13, 1996.