    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [January 10, 1997]
    [Pages 27-29]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Reporting on Economic Sanctions Against
    Libya
    January 10, 1997

    Dear Mr. Speaker:  (Dear Mr. President:)
        I hereby report to the Congress on the developments since my last
    report of July 22, 1996, concerning the national emergency with respect
    to Libya that was declared in Executive Order 12543 of January 7, 1986.
    This report is submitted pursuant to section 401(c) of the National
    Emergencies Act, 50 U.S.C. 1641(c); section 204(c) of the International
    Emergency Economic Powers Act (IEEPA), 50 U.S.C. 1703(c); and section
    505(c) of the International Security and Development Cooperation Act of
    1985, 22 U.S.C. 2349aa-9(c).
        1. On January 2, 1997, I renewed for another year the national
    emergency with respect to Libya pursuant to IEEPA. This renewal extended
    the current comprehensive financial and trade embargo against Libya in
    effect since 1986. Under these sanctions, all trade with Libya is
    prohibited, and all assets owned or controlled by the Libyan government
    in the United States or in the possession or control of U.S. persons are
    blocked.
        2. There have been two amendments to the Libyan Sanctions
    Regulations, 31 C.F.R. Part 550 (the ``Regulations''), administered by
    the Office of Foreign Assets Control (OFAC) of the Department of the
    Treasury, since my last report on July 22, 1996. The Libyan Sanctions
    Regulations 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
    financial transactions 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 are subject to criminal fines under title
    18, United States Code, imprisonment for up to 10 years, or both.
    Because the Regulations already prohibited such transactions, with minor
    exceptions for transactions found to be in the public interest, no
    substantive change to the prohibitions of the Regulations was necessary.
    A copy of the amendment is attached.
        The Regulations 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 Regulations, as amended, increase the maximum civil
    monetary penalty provided by law 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; 108 Stat. 2147.
    The amendment strikes the $10,000 maximum on fines imposed for
    fraudulent dealing with Federal agencies. Finally, 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.
        3. During the current 6-month period, OFAC reviewed numerous
    applications for licenses to authorize transactions under the
    Regulations. Consistent with OFAC's ongoing scrutiny of banking
    transactions, the largest category of license approvals (49) concerned
    requests by non-Libyan persons or entities to unblock transfers
    interdicted because of what appeared to be Government of Libya
    interests. Several previously issued licenses were amended to authorize
    the provision of legal services to the Government of Libya in connection
    with actions in U.S. courts in which the Government of Libya was named
    as defendant.
        Minister Louis Farrakhan and the Nation of Islam applied for a
    license to receive a gift of up to $1 billion from the Government of
    Libya as well as for Minister Farrakhan to collect $250,000 in prize
    money that accompanied the Ghadafi Prize for Human Rights awarded to

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    Minister Farrakhan in Tripoli. The application was denied on Foreign
    policy grounds.
        4. During the current 6-month period, OFAC continued to emphasize to
    the international banking community in the United States the importance
    of identifying and blocking payments made by or on behalf of Libya. The
    office worked closely with the banks to assure the effectiveness of
    interdiction software systems used to identify such payments. During the
    reporting period, more than 100 transactions potentially involving Libya
    were interdicted.
        5. Since my last report, OFAC collected 14 civil monetary penalties
    totaling more than $165,000 for violations of the U.S. sanctions against
    Libya. Twelve of the violations involved the failure of banks to block
    funds transfers to Libyan-owned or -controlled financial institutions.
    Two U.S. corporations paid OFAC penalties totaling $105,000 for export
    violations as part of global plea agreements with the Department of
    Justice. Sixty-one other cases are in active penalty processing.
        On August 7, 1996, a major U.S. exporter entered a guilty plea and
    was sentenced in the U.S. District Court for the Western District of
    Kentucky for Libyan sanctions violations. The company and four co-
    conspirators were charged with aiding and abetting the exportation and
    attempted exportation of oil well drilling equipment to Libya through
    Italy in 1995 and 1996. The company paid $3 million in criminal fines
    and aggregate criminal penalties paid by individuals totaled $211,000.
    In addition, a major U.S. manufacturer in Milwaukee, Wisconsin agreed to
    pay $2 million in criminal fines, in addition to the civil penalty noted
    above, for violation of the Libyan sanctions involving a commercial
    project in Libya. Numerous investigations carried over from prior
    reporting periods are continuing and new reports of violations are being
    pursued.
        6. The expenses incurred by the Federal Government in the 6-month
    period from July 6, 1996, through January 5, 1997, that are directly
    attributable to the exercise of powers and authorities conferred by the
    declaration of the Libyan national emergency are estimated at
    approximately $670,000. Personnel costs were largely centered in the
    Department of the Treasury (particularly in the Office of Foreign Assets
    Control, the Office of the General Counsel, and the U.S. Customs
    Service), the Department of State, and the Department of Commerce.
        7. The policies and actions of the Government of Libya continue to
    pose an unusual and extraordinary threat to the national security and
    foreign policy of the United States. In adopting UNSCR 883 in November
    1993, the Security Council determined that the continued failure of the
    Government of Libya to demonstrate by concrete actions its renunciation
    of terrorism, and in particular its continued failure to respond fully
    and effectively to the requests and decisions of the Security Council in
    Resolutions 731 and 748, concerning the bombing of the Pan Am 103 and
    UTA 772 flights, constituted a threat to international peace and
    security. The United States will continue to coordinate its
    comprehensive sanctions enforcement efforts with those of other U.N.
    member states. We remain determined to ensure that the perpetrators of
    the terrorist acts against Pan Am 103 and UTA 772 are brought to
    justice. The families of the victims in the murderous Lockerbie bombing
    and others acts of Libyan terrorism deserve nothing less. I shall
    continue to exercise the powers at my disposal to apply economic
    sanctions against Libya fully and effectively, so long as those measures
    are appropriate, and will continue to report periodically to the
    Congress on significant developments as required by law.
        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.

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