    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book II)]
    [November 25, 1997]
    [Pages 1663-1665]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Reporting on the National Emergency With
    Respect to Iran
    November 25, 1997

    Dear Mr. Speaker:  (Dear Mr. President:)
        I hereby report to the Congress on developments since the last
    Presidential report of May 13, 1997, 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 September 30, 1997. My last
    report, dated May 13, 1997, covered events through March 31, 1997.
        1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR),
    were amended on August 25, 1997. General reporting, record keeping,
    licensing, and other procedural regulations were moved from the IACR to
    a separate part (31 CFR Part 501) dealing solely with such procedural
    matters (62 Fed. Reg. 45098, August 25, 1997). No substantive changes to
    the IACR were made. 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 five awards. This
    brings the total number of awards rendered by the Tribunal to 584, the
    majority of which have been in favor of U.S. claimants. As of September
    30, 1997, the value of awards to successful U.S. claimants from the
    Security Account held by the NV Settlement Bank was $2,480,897,381.53.
        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 September 30, 1997, the total
    amount in the Security Account was $127,880,441.04, and the total amount
    in the Interest Account was $17,771,382.12. 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 in Case A/28 on April 7,
    1997. The United States has requested that the Tribunal schedule a
    hearing in the case.
        The United States also continues to pursue Case A/29 to require Iran
    to meet its obligation of timely payment of its equal share of advances
    for Tribunal expenses when directed to do so by the Tribunal. Iran has
    not yet filed its Rejoinder in the case.
        3. The Department of State continues to respond to claims brought
    against the United States by Iran, in coordination with concerned
    government agencies. On August 8, 1997, the United States filed its
    Statement of Defense in Case A/30, in which Iran alleges that the United
    States has violated paragraphs 1 and 10 of the General Declaration of
    the Algiers Accords. Iran bases its claim, inter alia, on press
    statements about an alleged covert action program aimed at Iran and on
    U.S. economic sanctions.
        Under the February 22, 1996, settlement agreement related to 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 Department of State has been
    processing payments. As of September 30, 1997,

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    the Department has authorized payment to U.S. nationals of 35 claims
    against Iranian banks totaling $12,021,532.54. The Department has also
    authorized payments to surviving family members of the aerial incident,
    totaling $41,550,000.00.
        The Tribunal has scheduled a hearing date of February 17-19, 1998,
    in Case No. 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.
        4. U.S. nationals continue to pursue claims against Iran at the
    Tribunal. Since my last report, the Tribunal has issued awards in five
    private claims, all of which were filed prior to the January 19, 1982,
    filing deadline by individuals who are dual U.S.-Iranian nationals.
        On April 23, 1997, Chamber Three issued an award in Vivian, Jamshid
    and Keyvan Tavakoli v. Iran, AWD No. 580-832-3. The Tribunal dismissed
    the claims of Jamshid and Keyvan Tavakoli for lack of jurisdiction,
    finding that they had not proven their dominant and effective U.S.
    nationality. The Tribunal determined that Vivian Tavakoli's claim fell
    within the Tribunal's jurisdiction and awarded her $375,952 plus
    interest plus $10,000 in arbitration costs for Iran's expropriation of
    170 shares in the Western Industrial Group recorded in her name. The
    Tribunal rejected her claim for other additional shares in that company
    for lack of proof.
        On May 22, 1997, Chamber One issued an award in Vera-Jo, Laura and
    J.M. Aryeh v. Iran, AWD No. 581-842/843/866-1, finding that all three
    claimants were dominant and effective U.S. nationals for purposes of
    Tribunal jurisdiction, and awarding the claimants a total of
    $19,658,063.84 plus interest and $200,000 in arbitration costs for
    Iran's expropriation of the claimants' shares in various Iranian
    companies.
        On June 20, 1997, Chamber Two issued an award in Betty Monemi v.
    Iran, AWD No. 582-274-2, dismissing the claim for lack of proof. The
    Tribunal held that the claimant had not established that Iran had taken
    actions resulting in the loss of rent from and real estate value of the
    home to which her claim related or that she had made the requisite
    demand for the funds in her bank account to allow recovery.
        On September 25, 1997, Chamber Three issued an award in Moussa Aryeh
    v. Iran, AWD No. 583-266-3, directing Iran to pay the claimant $519,571
    plus interest and $15,000 in arbitration costs for Iran's expropriation
    of the claimant's real property. In so doing, the Tribunal found that
    Iranian law did not expressly prohibit ownership of real property by
    dual nationals so as to bar recovery in this case. It held that while
    Iranian law placed certain restrictions on the ownership of real
    property by an Iranian national who acquires a second nationality, those
    restrictions as applied in the Aryeh case simply required sale of the
    property under certain conditions, with the proceeds to be paid to the
    dual national owner. Also on September 25, 1997, Chamber Three issued an
    award in Ouziel and Eliyahou Aryeh v. Iran, AWD No. 584-839/840-3,
    dismissing the claims on the grounds that the claimants did not prove
    that they inherited under their father's will the property which they
    alleged was expropriated by Iran or that they held a beneficial interest
    in other properties purchased by their brother.
        In Tribunal-related litigation in United States courts, on June 23,
    1997, the District Court of the District of Columbia issued its decision
    in McKesson Corp. v. The Islamic Republic of Iran, granting McKesson's
    motion for summary judgment. The court found that Iran's interference
    with McKesson's shareholder rights ripened into an expropriation by
    April of 1982. In its decision, the court gave preclusive effect to the
    Tribunal's findings in the Foremost Tehran, Inc. v. Iran award, issued
    on April 10, 1986.
        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.
            Sincerely,

                                                          William J. Clinton

    Note: Identical letters were sent to Newt Gingrich, Speaker of the House
    of Representatives,

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    and Albert Gore, Jr., President of the Senate. This letter was released
    by the Office of the Press Secretary on November 26.