[Weekly Compilation of Presidential Documents Volume 30, Number 9 (Monday, March 7, 1994)]
[Pages 423-426]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Message to the Congress on Iraq

March 3, 1994

To the Congress of the United States:

    I hereby report to the Congress on the developments since my last 
report of August 2, 1993, concerning the national emergency with respect 
to Iraq that was declared in Executive Order No. 12722 of August 2, 
1990. This report is submitted pursuant to section 401(c) of the 
National Emergencies Act, 50 U.S.C. 1641(c), and section 204(c) of the 
International Emergency Economic Powers Act, 50 U.S.C. 1703(c).
    Executive Order No. 12722 ordered the immediate blocking of all 
property and interests in property of the Government of Iraq (including 
the Central Bank of Iraq), then or thereafter located in the United 
States or within the possession or control of a U.S. person. That order 
also prohibited the importation into the United States of goods and 
services of Iraqi origin, as well as the exportation of goods, services, 
and technology from the United States to Iraq. The order prohibited 
travel-related transactions to or from Iraq and the performance of any 
contract in support of any industrial, commercial, or governmental 
project in Iraq. U.S. persons were also prohibited from granting or 
extending credit or loans to the Government of Iraq.
    The foregoing prohibitions (as well as the blocking of Government of 
Iraq property) were continued and augmented on August 9, 1990, by 
Executive Order No. 12724, which was issued in order to align the 
sanctions imposed by the United States with United Nations Security 
Council Resolution No. 661 of August 6, 1990.
    Executive Order No. 12817 was issued on October 21, 1992, to 
implement in the United States measures adopted in United Nations 
Security Council Resolution No. 778 of

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October 2, 1992. Resolution 778 requires U.N. member states temporarily 
to transfer to a U.N. escrow account up to $200 million apiece in Iraqi 
oil sale proceeds paid by purchasers after the imposition of U.N. 
sanctions on Iraq. These funds finance Iraq's obligations for U.N. 
activities with respect to Iraq, such as expenses to verify Iraqi 
weapons destruction and to provide humanitarian assistance in Iraq on a 
nonpartisan basis. A portion of the escrowed funds will also fund the 
activities of the U.N. Compensation Commission in Geneva, which will 
handle claims from victims of the Iraqi invasion of Kuwait. The funds 
placed in the escrow account are to be returned, with interest, to the 
member states that transferred them to the United Nations, as funds are 
received from future sales of Iraqi oil authorized by the U.N. Security 
Council. No member state is required to fund more than half of the total 
contributions to the escrow account.
    This report discusses only matters concerning the national emergency 
with respect to Iraq that was declared in Executive Order No. 12722 and 
matters relating to Executive Orders Nos. 12724 and 12817. The report 
covers events from August 2, 1993, through February 1, 1994.
    1. During the reporting period, there were technical amendments to 
the Iraqi Sanctions Regulations relating to notification of transfers 
into blocked accounts and registration of persons holding blocked 
property, 58 Fed. Reg. 47643 (September 10, 1993). A copy of the 
amendments is attached for reference.
    2. Investigations of possible violations of the Iraqi sanctions 
continue to be pursued and appropriate enforcement actions taken. These 
are intended to deter future activities in violation of the sanctions. 
Additional civil penalty notices were prepared during the reporting 
period for violations of the International Emergency Economic Powers Act 
and Iraqi Sanctions Regulations with respect to transactions involving 
Iraq. Three penalties totaling nearly $54,000 were collected from three 
banks for violation of the prohibitions against funds transfers to Iraq, 
and noncompliance with reporting requirements and an Office of Foreign 
Assets Control directive license.
    3. Investigation also continues into the roles played by various 
individuals and firms outside Iraq in the Iraqi government procurement 
network. These investigations may lead to additions to the Office of 
Foreign Assets Control's listing of individuals and organizations 
determined to be Specially Designated Nationals of the Government of 
Iraq.
    4. Pursuant to Executive Order No. 12817 implementing United Nations 
Security Council Resolution No. 778, on October 26, 1992, the Office of 
Foreign Assets Control directed the Federal Reserve Bank of New York to 
establish a blocked account for receipt of certain post-August 6, 1990, 
Iraqi oil sales proceeds, and to hold, invest, and transfer these funds 
as required by the order. On July 20, 1993, following payments by the 
Governments of Saudi Arabia and Denmark of, respectively $40,589,419.00 
and $674,360.00, to the special United Nations-controlled account, 
entitled United Nations Security Council Resolution No. 778 Escrow 
Account, the Federal Reserve Bank of New York was directed to transfer a 
corresponding amount of $41,263,779.00 from the blocked account it holds 
to the United Nations-controlled account. Similarly, on August 2, 1993, 
following the payment of $1,765,138.33 by the Government of the United 
Kingdom, the Federal Reserve Bank of New York was directed to transfer a 
corresponding amount of $1,765,138.33 to the United Nations-controlled 
account; on September 11, 1993, following payments of $1,547,054.35 by 
the Government of Canada, $276,000.00 by the Government of Greece, 
$3,196,897.72 from the Commission of the European Community, and 
$1,006,614.89 from the Government of Denmark, the Federal Reserve Bank 
of New York was directed to transfer a corresponding amount of 
$6,026,566.96 to the United Nations-controlled account; and on December 
15, 1993, following payments of $5,223,880.60 by the Government of the 
United Kingdom, $621,426.80 by the Government of Germany, and 
$1,219,941.98 from the Government of the Netherlands, the Federal 
Reserve Bank of New York was directed to transfer a corresponding amount 
of $7,065,249.38 to the United Nations-controlled account. Total 
transfers from the blocked Federal Reserve Bank of New York

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account since issuance of Executive Order No. 12817 have amounted to 
$107,613,270.99 of the $200 million for which the United States is 
potentially obligated, on a matching basis, pursuant to United Nations 
Security Council Resolution No. 778.
    5. Since the last report, there have been developments in one case. 
In Campia et al. v. Newcomb et al., a settlement was entered into by the 
parties addressing payment of back rent to the landlord and return to 
the landlord of premises leased by the Matrix Churchill Corporation. To 
implement the settlement, certain blocked property owned by Matrix 
Churchill was sold, with the proceeds placed in a blocked account. 
Matrix Churchill's remaining property and records were placed in secure 
storage.
    6. The Office of Foreign Assets Control has issued a total of 444 
specific licenses regarding transactions pertaining to Iraq or Iraqi 
assets since August 1990. Since my last report, 53 specific licenses 
have been issued. Licenses were issued for transactions such as the 
filing of legal actions against Iraqi governmental entities, for legal 
representation of Iraq, and the exportation to Iraq of donated medicine, 
medical supplies, and food intended for humanitarian relief purposes, 
the execution of powers of attorney relating to the administration of 
personal assets and decedents' estates in Iraq, and the protection of 
pre-existent intellectual property rights in Iraq.
    7. The expenses incurred by the Federal Government in the 6 month 
period from August 2, 1993, through February 1, 1994, that are directly 
attributable to the exercise of powers and authorities conferred by the 
declaration of a national emergency with respect to Iraq are reported at 
about $3.1 million, most of which represents 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 Assistant 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 East and South Asian Affairs, the Bureau of International 
Organizations, and the Office of the Legal Adviser), and the Department 
of Transportation (particularly the U.S. Coast Guard).
    8. The United States imposed economic sanctions on Iraq in response 
to Iraq's invasion and illegal occupation of Kuwait, a clear act of 
brutal aggression. The United States, together with the international 
community, is maintaining economic sanctions against Iraq because the 
Iraqi regime, despite international will, has failed to comply fully 
with United Nations Security Council resolutions. Security Council 
resolutions on Iraq call for the elimination of Iraqi weapons of mass 
destruction, the inviolability of the Iraq-Kuwait boundary, the release 
of Kuwaiti and other third-country nationals, compensation for victims 
of Iraqi aggression, long-term monitoring of weapons of mass destruction 
capabilities, the return of Kuwaiti assets stolen during Iraq's illegal 
occupation of Kuwait, renunciation of terrorism, an end to internal 
Iraqi repression of its own civilian population, and the facilitation of 
access of international relief organizations to all those in need in all 
parts of Iraq. Nonetheless, we see a pattern of defiance: repeated 
public claims to Kuwait, sponsorship of terrorism, incomplete 
declarations to weapons inspectors, and ongoing widespread human rights 
violations, among other things. The U.N. sanctions remain in place; the 
United States will continue to enforce those sanctions under domestic 
authority.
    The Baghdad government continued to violate basic human rights by 
repressing the Iraqi civilian population and depriving it of 
humanitarian assistance. For more than 2 years, Baghdad has maintained a 
complete blockade of food, fuel, and medicine on northern Iraq. The 
Iraqi military routinely harasses residents of the north, and has 
attempted to ``Arabize'' Kurdish, Turcoman, and Assyrian areas in the 
north. Iraq continues to launch artillery attacks against civilian 
population centers in the south, and its efforts to drain the southern 
marshes have forced thousands to flee to neighboring States.
    In 1991, the United Nations Security Council adopted Resolutions 706 
and 712 that permit Iraq to sell up to $1.6 billion of

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oil under U.N. auspices to fund the provision of food, medicine, and 
other humanitarian supplies to the people of Iraq. Under the U.N. 
resolutions, the equitable distribution within Iraq of this assistance 
would be supervised and monitored by the United Nations. The Iraqi 
regime so far has refused to accept these resolutions and has thereby 
chosen to perpetuate the suffering of its civilian population. In 
October 1993, the Iraqi government informed the United Nations that it 
would not implement Resolutions 706 and 712.
    The policies and actions of the Saddam Hussein regime continue to 
pose an unusual and extraordinary threat to the national security and 
foreign policy of the United States, as well as to regional peace and 
security. because of Iraq's failure to comply fully with United Nations 
Security Council resolutions, the United States will continue to apply 
economic sanctions to deter Iraq from threatening peace and stability in 
the region, and I 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,
March 3, 1994.