    [Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
    [March 16, 1998]
    [Pages 384-386]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to Iran
    March 16, 1998

    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, and in Executive
    Order 13059 of August 19, 1997. 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 Cooperation 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 (60 Fed.
    Reg. 24757, May 9, 1995) to further respond to the Iranian threat to the
    national security, foreign policy, and economy of the United States. The
    terms of that order and an earlier order imposing an import ban on
    Iranian-origin goods and services (Executive Order 12613 of October 29,
    1987) were consolidated and clarified in Executive Order 13059 of August
    19, 1997.

    [[Page 385]]

        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 the Algiers Accords, and related to other
    international obligations and U.S. 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, Kazakhstan, 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 Congressional leadership
    by letter dated May 6, 1995.
        2. On August 19, 1997, I issued Executive Order 13059 in order to
    clarify the steps taken in Executive Order 12957 and Executive Order
    12959, to confirm that the embargo on Iran prohibits all trade and
    investment activities by United States persons, wherever located, and to
    consolidate in one order the various prohibitions previously imposed to
    deal with the national emergency declared on March 15, 1995. A copy of
    the Order was transmitted to the Speaker of the House and the President
    of the Senate by letter dated August 19, 1997.
        The Order prohibits (1) the importation into the United States of
    any goods or services of Iranian origin or owned or controlled by the
    Government of Iran except information or informational material; (2) the
    exportation, reexportation, sale, or supply from the United States or by
    a United States person, wherever located, of goods, technology, or
    services to Iran or the Government of Iran, including knowing transfers
    to a third country for direct or indirect supply, transshipment, or
    reexportation to Iran or the Government of Iran, or specifically for use
    in the production, commingling with, or incorporation into goods,
    technology, or services to be supplied, transshipped, or reexported
    exclusively or predominantly to Iran or the Government of Iran; (3)
    knowing reexportation from a third country to Iran or the Government of
    Iran of certain controlled U.S.-origin goods, technology, or services by
    a person other than a United States person; (4) the purchase, sale,
    transport, swap, brokerage, approval, financing, facilitation,
    guarantee, or other transactions or dealings by United States persons,
    wherever located, related to goods, technology, or services for
    exportation, reexportation, sale or supply, directly or indirectly, to
    Iran or the Government of Iran, or to goods or services of Iranian
    origin or owned or controlled by the Government of Iran; (5) new
    investment by United States persons in Iran or in property or entities
    owned or controlled by the Government of Iran; (6) approval, financing,
    facilitation, or guarantee by a United States person of any transaction
    by a foreign person that a United States person would be prohibited from
    performing under the terms of the Order; and (7) any transaction that
    evades, avoids, or attempts to violate a prohibition under the Order.
        Executive Order 13059 became effective at 12:01 a.m., eastern
    daylight time on August 20, 1997. Because the Order consolidated and
    clarified the provisions of prior orders, Executive Order 12613 and
    paragraphs (a), (b), (c), (d), and (f) of section 1 of Executive Order
    12959 were revoked by Executive Order 13059. The revocation of
    corresponding provisions in the prior Executive orders did not affect
    the applicability of those provisions, or of regulations, licenses or
    other administrative actions taken pursuant to those provisions, with
    respect to any transaction or violation occurring before the effective
    date of Executive Order 13059. Specific licenses issued pursuant to
    prior Executive orders continue in effect, unless revoked or amended by
    the Secretary of the Treasury. General licenses, regulations, orders,
    and directives issued pursuant to prior orders continue in effect,
    except to the extent inconsistent with Executive Order 13059 or
    otherwise revoked or modified by the Secretary of the Treasury.
        The declaration of national emergency made by Executive Order 12957,
    and renewed each year since, remains in effect and is not affected by
    the Order.
        3. On March 4, 1998, 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.

    [[Page 386]]

    Under these sanctions, virtually all trade with Iran is prohibited
    except for trade in information and informational materials and certain
    other limited exceptions.
        4. There have been no amendments to the Iranian Transactions
    Regulations, 31 C.F.R. Part 560 (the ``ITR''), since my report of
    September 17, 1997.
        5. 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 seven licenses. The majority of
    denials were in response to requests to authorize commercial exports to
    Iran--particularly of machinery and equipment for various industries--
    and the importation of Iranian-origin goods. The licenses issued
    authorized certain financial transactions, transactions relating to air
    safety policy, and to disposal of U.S.-owned goods located in Iran.
    Pursuant to sections 3 and 4 of Executive Order 12959 and consistent
    with the Iran-Iraq Arms Non-Proliferation Act of 1992 and other
    statutory restrictions concerning certain goods and technology,
    including those involved in 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 scrutinize 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.
        6. The U.S. Customs Service has continued to effect numerous
    seizures of Iranian-origin merchandise, primarily carpets, for violation
    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 six civil monetary penalties totaling nearly
    $84,000 for violations of IEEPA and the ITR.
        7. The expenses incurred by the Federal Government in the 6-month
    period from September 15, 1997, through March 14, 1998, that are
    directly attributable to the exercise of powers and authorities
    conferred by the declaration of a national emergency with respect to
    Iran are reported to be approximately $1.3 million, 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).
        8. The situation reviewed above continues to present 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's 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, 12959, and 13059
    continue to advance important objectives in promoting the
    nonproliferation and anti-terrorism 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 16, 1998.