    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [May 13, 1997]
    [Pages 596-598]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to Iran
    May 13, 1997

    To the Congress of the United States:
        I hereby report to the Congress on developments since the last
    Presidential report of November 14, 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) (IEEPA). This report covers events through March 31, 1997. My
    last report, dated November 14, 1996, covered events through September
    16, 1996.
        1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR),
    were amended on October 21, 1996 (61 Fed. Reg. 54936, October 23, 1996),
    to implement section 4 of the Federal Civil Penalties Inflation
    Adjustment Act of 1990, as amended by the Debt Collection Improvement
    Act of 1996, by adjusting for inflation the amount of the civil monetary
    penalties that may be assessed under the Regulations. The amendment
    increases the maximum civil monetary penalty provided in the Regulations
    from $10,000 to $11,000 per violation.
        The amended Regulations also reflect an amendment to 18 U.S.C. 1001
    contained in section 330016(1)(L) of Public Law 103-322, September 13,
    1994, 108 Stat. 2147. Finally, the amendment notes the availability of
    higher criminal fines for violations of IEEPA pursuant to the formulas
    set forth in 18 U.S.C. 3571. 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 eight awards. This
    brings the total number of awards rendered to 579, the majority of which
    have been in favor of U.S. claimants. As of March 24, 1997, the value of
    awards to successful U.S. claimants from the Security Account held by
    the NV Settlement Bank was $2,424,959,689.37.
        Since my last report, Iran has failed to replenish the Security
    Account established by the Algiers Accords to ensure payment of awards
    to successful U.S. claimants. Thus, since November 5, 1992, the Security
    Account has continuously remained below the $500 million balance
    required by the Algiers Accords. As of March 24, 1997, the total amount
    in the Security Account was $183,818,133.20, and the total amount in the
    Interest Account was $12,053,880.39. Therefore, the United States
    continues to pursue Case A/28, filed in September 1993, to require Iran
    to meet its obligation under the Algiers Accords to replenish the
    Security Account. Iran filed its Rejoinder on April 8, 1997.

    [[Page 597]]

        The United States also continues to pursue Case A/29 to require Iran
    to meets its obligation of timely payment of its equal share of advances
    for Tribunal expenses when directed to do so by the Tribunal. The United
    States filed its Reply to the Iranian Statement of Defense on October
    11, 1996.
        Also since my last report, the United States appointed Richard Mosk
    as one of the three U.S. arbitrators on the Tribunal. Judge Mosk, who
    has previously served on the Tribunal and will be joining the Tribunal
    officially in May of this year, will replace Judge Richard Allison, who
    has served on the Tribunal since 1988.
        3. The Department of State continues to pursue 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.
        On December 3, 1996, the Tribunal issued its award in Case B/36, the
    U.S. claim for amounts due from Iran under two World War II military
    surplus property sales agreements. While the Tribunal dismissed the U.S.
    claim as to one of the agreements on jurisdictional grounds, it found
    Iran liable for breach of the second (and larger) agreement and ordered
    Iran to pay the United States principal and interest in the amount of
    $43,843,826.89. Following payment of the award, Iran requested the
    Tribunal to reconsider both the merits of the case and the calculation
    of interest; Iran's request was denied by the Tribunal on March 17,
    1997.
        Under the February 22, 1996, agreement that settled the Iran Air
    case before the International Court of Justice and Iran's bank-related
    claims against the United States before the Tribunal (reported in my
    report of May 17, 1996), the United States agreed to make ex gratia
    payments to the families of Iranian victims of the 1988 Iran Air 655
    shootdown and a fund was established to pay Iranian bank debt owed to
    U.S. nationals. As of March 17, 1997, payments were authorized to be
    made to surviving family members of 125 Iranian victims of the aerial
    incident, totaling $29,100,000.00. In addition, payment of 28 claims by
    U.S. nationals against Iranian banks, totaling $9,002,738.45 was
    authorized.
        On December 12, 1996, the Department of State filed the U.S. Hearing
    Memorial and Evidence on Liability in Case A/11. In this case, Iran
    alleges that the United States failed to perform its obligations under
    Paragraphs 12-14 of the Algiers Accords, relating to the return to Iran
    of assets of the late Shah and his close relatives. A hearing date has
    yet to be scheduled.
        On October 9, 1996, the Tribunal dismissed Case B/58, Iran's claim
    for damages arising out of the U.S. operation of Iran's southern
    railways during the Second World War. The Tribunal held that it lacked
    jurisdiction over the claim under Article II, paragraph two, of the
    Claims Settlement Declaration.
        4. Since my last report, the Tribunal conducted two hearings and
    issued awards in six private claims. On February 24-25, 1997, Chamber
    One held a hearing in a dual national claim, G.E. Davidson v. The
    Islamic Republic of Iran, Claim No. 457. The claimant is requesting
    compensation for real property that he claims was expropriated by the
    Government of Iran. On October 24, 1996, Chamber Two held a hearing in
    Case 274, Monemi v. The Islamic Republic of Iran, also concerning the
    claim of a dual national.
        On December 2, 1996, Chamber Three issued a decision in Johangir &
    Jila Mohtadi v. The Islamic Republic of Iran (AWD 573-271-3), awarding
    the claimants $510,000 plus interest for Iran's interference with the
    claimants' property rights in real property in Velenjak. The claimants
    also were awarded $15,000 in costs. On December 10, 1996, Chamber Three
    issued a decision in Reza Nemazee v. The Islamic Republic of Iran (AWD
    575-4-3), dismissing the expropriation claim for lack of proof. On
    February 25, 1997, Chamber Three issued a decision in Dadras Int'l v.
    The Islamic Republic of Iran (AWD 578-214-3), dismissing the claim
    against Kan Residential Corp. for failure to prove that it is an
    ``agency, instrumentality, or entity controlled by the Government of
    Iran'' and dismissing the claim against Iran for failure to prove
    expropriation or other measures affecting property rights. Dadras had
    previously received a substantial recovery pursuant to a partial award.
    On March 26, 1997, Chamber Two issued a final award in Case 389,
    Westinghouse Electric Corp. v. The Islamic Republic of Iran Air Force
    (AWD 579-389-2), awarding Westinghouse $2,553,930.25 plus interest in
    damages arising from the Iranian Air Force's breach of contract with
    Westinghouse.
        Finally, there were two settlements of claims of dual nationals,
    which resulted in awards on agreed terms. They are Dora Elghanayan, et

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    al. v. The Islamic Republic of Iran (AAT 576-800/801/802/803/804-3), in
    which Iran agreed to pay the claimants $3,150,000, and Lilly Mythra
    Fallah Lawrence v. The Islamic Republic of Iran (AAT 577-390/391-1), in
    which Iran agreed to pay the claimant $1,000,000.
        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.

                                                          William J. Clinton

    The White House,

    May 13, 1997.

    Note: This message was released by the Office of the Press Secretary on
    May 14.