    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [March 14, 1997]
    [Pages 314-316]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to Iran
    March 14, 1997

    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), section 401(c) of the
    National Emergencies Act, 50 U.S.C. 1641(c), and section 505(c) of the
    International Security and Development Corporation 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 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 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 dealings 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 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 a 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

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    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 letter dated May 6,
    1995.
        2. On March 5, 1997, I renewed for another year the national
    emergency with respect to Iran pursuant to IEEPA. This renewal extended
    the authority for 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. The Iranian Transactions Regulations (the ``Regulations'' or
    ITR), 31 CFR Part 560, 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. The amendment notes the availability of higher
    criminal fines pursuant to the formulas set forth in 18 U.S.C. 3571. A
    copy of the amendment is attached.
        Section 560.603 of the ITR was amended on November 15, 1996 (61 Fed.
    Reg. 58480), to clarify rules relating to reporting requirements imposed
    on United States persons with foreign affiliations. Initial reporting
    under the amended Regulation has been deferred until May 30, 1997, by a
    January 14, 1997, Federal Register notice (62 Fed. Reg. 1832). Copies of
    the amendment and the notice are attached.
        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 13 licenses. The majority of
    denials were in response to requests to authorize commercial exports to
    Iran--particularly of machinery and equipment for the petroleum and
    manufacturing industries--and the importation of Iranian-origin goods.
    The licenses issued authorized 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; certain financial and legal transactions; the importation of
    Iranian-origin artwork for public exhibition; and certain diplomatic
    transactions. Pursuant to sections 3 and 4 of Executive Order 12959 and
    in order to comply with the Iran-Iraq Arms Non-Proliferation Act of 1992
    and other statutory restrictions applicable to certain goods and
    technology, including those involved in the air-safety cases, the
    Department of the Treasury continues to consult with the Departments of
    State and Commerce on these matters.
        The U.S. financial community continues to interdict transactions
    associated with Iran and to consult with OFAC about their appropriate
    handling. Many of these inquiries have resulted in investigations into
    the activities of U.S. parties and, where appropriate, the initiation of
    enforcement action.
        5. The U.S. Customs Service has continued to effect numerous
    seizures of Iranian-origin merchandise, primarily carpets, for
    violations 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 my last
    report, OFAC has collected a civil monetary penalty in the amount of
    $5,000. The violation underlying this collection involves the unlicensed
    import of Iranian-origin goods for transshipment to a third country
    aboard a U.S.-flag vessel. Civil penalty action or review is

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    pending against 21 companies, financial institutions, and individuals
    for possible violations of the Regulations.
        6. The expenses incurred by the Federal Government in the 6-month
    period from September 15, 1996, through March 14, 1997, 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 $800,000, most of which represent 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 Intelligence
    and Research, and the Office of the Legal Adviser), and the Department
    of Commerce (the Bureau of Export Administration and the General
    Counsel's 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 efforts 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,

    March 14, 1997.