    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [May 30, 1997]
    [Pages 683-686]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to the Federal Republic of Yugoslavia (Serbia and Montenegro) and the
    Bosnian Serbs
    May 30, 1997

    To the Congress of the United States:
        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 24, 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 November 22, 1995, the United Nations Security Council passed
    (``Resolution 1022''), immediately and indefinitely suspending economic
    sanctions against the FRY (S&M). Sanctions were subsequently lifted by
    the United Nations Security Council pursuant to Resolution 1074 on
    October 1, 1996. Resolution 1022, however, continues to provide for the
    release of funds and assets previously blocked pursuant to sanctions
    against the FRY (S&M), provided that such funds and assets that are
    subject to claims and encumbrances, or that are the property of persons
    deemed insolvent, remain blocked until ``released in accordance with
    applicable law.'' This provision was implemented in the United States on
    December 27, 1995, by Presidential Determination No. 96-7. The
    Determination, in conformity with Resolution 1022, directed 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 was an essential factor motivating Serbia and

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    Montenegro's acceptance of the General Framework Agreement for Peace in
    Bosnia and Herzegovina initialed by the parties in Dayton 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 the Republic of Croatia were accordingly suspended
    prospectively, effective January 16, 1996. Sanctions imposed on the
    Bosnian Serb forces and authorities and on the territory that they
    control within the Republic of Bosnia and Herzegovina were subsequently
    suspended prospectively, effective May 10, 1996, in conformity with
    UNSCR 1022. On October 1, 1996, the United Nations passed 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 November 30, 1996, through May 29,
    1997. 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 as expanded with
    respect to the Bosnian Serbs in Executive Order 12934, and against the
    FRY (S&M) contained in Executive Orders 12810, 12831, and 12846.
        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. The Office of Foreign Assets Control (OFAC), acting under
    authority delegated by the Secretary of the Treasury, implemented the
    sanctions imposed under the foregoing statutes in the Federal Republic
    of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled Areas
    of the Republic of Bosnia and Herzegovina Sanctions Regulations, 31
    C.F.R. Part 585 (the ``Regulations''). To implement Presidential
    Determination No. 967, the Regulations were amended to authorize
    prospectively all transactions with respect to the FRY (S&M) otherwise
    prohibited (61 FR 1282, January 19, 1996). 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 all transactions with respect to the Bosnian Serbs
    otherwise prohibited, except with respect to property previously blocked
    (61 FR 24696, May 16, 1996). On December 4, 1996, OFAC amended
    Appendices A and B to 31 C.F.R. chapter V, containing the names of
    entities and individuals in alphabetical order and by location that are
    subject to the various economic sanctions programs administered by OFAC,
    to remove the entries for individuals and entities that were determined
    to be acting for or on behalf of the Government of the Federal Republic
    of Yugoslavia (Serbia and Montenegro). These assets were blocked on the
    basis of these persons' activities in support of the FRY (S&M)--
    activities no longer prohibited--not because the Government of the FRY
    (S&M) or entities located in or controlled from the FRY (S&M) had any
    interest in those assets (61 FR 64289, December 4, 1996). A copy of the
    amendment is attached to this report.
        On April 18, 1997, the Regulations were amended by adding a new
    section 585.528, authorizing all transactions after 30 days with respect
    to the following vessels that remained blocked pursuant to the
    Regulations, effective at 10:00 a.m. local time in the location of the
    vessel on May 19, 1997: the M/V Moslavina, M/V Zeta, M/V Lovcen, M/V
    Durmitor and M/V Bar (a/k/a M/V Inviken) (62 FR 19672, April

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    23, 1997). During the 30-day period, United States persons were
    authorized to negotiate settlements of their outstanding claims with
    respect to the vessels with the vessels' owners or agents and were
    generally licensed to seek and obtain judicial warrants of maritime
    arrest. If claims remained unresolved 10 days prior to the vessels'
    unblocking (May 8, 1997), service of the warrants could be effected at
    that time through the United States Marshal's Office in the district
    where the vessel was located to ensure that United States creditors of a
    vessel had the opportunity to assert their claims. Appendix C to 31 CFR,
    chapter V, containing the names of vessels blocked pursuant to the
    various economic sanctions programs administered by OFAC (61 FR 32936,
    June 26, 1996), was also amended to remove these vessels from the list
    effective May 19, 1997. A copy of the amendment is attached to this
    report.
        3. Over the past year, 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
    claims settlement. This accords with past policy and practice with
    respect to the suspension of sanctions regimes.
        4. During this reporting period, OFAC issued seven specific licenses
    regarding transactions pertaining to the FRY (S&M) or assets it owns or
    controls. 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 United
    States subsidiaries of entities organized in the FRY (S&M); (2) the
    blocked personalty, files, and records of the two 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 recently unblocked in the United States.
        5. Despite the prospective authorization of transactions with the
    FRY (S&M), OFAC has continued to work closely with the United States
    Customs Service and other cooperating agencies to investigate alleged
    violations that occurred while sanctions were in force.
        Since my last report, OFAC has collected six civil monetary
    penalties totaling nearly $39,000 for violations of the sanctions. These
    violations included prohibited imports, exports, contract dealings, and
    payments to the Government of the FRY (S&M), 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 November 30, 1996, through May 29, 1997, 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 approximately $400,000, most of which represents wage and salary
    costs for Federal personnel. Personnel costs were largely centered in
    the Department of the Treasury (particularly in OFAC and its Chief
    Counsel's Office, and the United States Customs Service), the Department
    of State, the National Security Council, and the Department of Commerce.
        7. In the last year and a half, 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 under
    applicable law, 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 and the terms of UNSCR 1022 have been met. Therefore, I have
    continued for another year the national emergency declared on May 30,

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    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).

                                                          William J. Clinton

    The White House,

    May 30, 1997.