    [Weekly Compilation of Presidential Documents Volume 30, Number 25 (Monday, June 27, 1994)]
    [Pages 1317-1320]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Message to the Congress on the Federal Republic of Yugoslavia (Serbia
    and Montenegro)

    June 21, 1994

    To the Congress of the United States:

        On May 30, 1992, in Executive Order No. 12808, the President
    declared a national emergency to deal with the threat to the national
    security, foreign policy, and economy of the United States arising from
    actions and policies of the Governments of Serbia and Montenegro, acting
    under the name of the Socialist Federal Republic of Yugoslavia or the
    Federal Republic of Yugoslavia, in their involvement in and support for
    groups attempting to seize territory in Croatia and Bosnia-Herzegovina
    by force and violence utilizing, in part, the forces of the so-called
    Yugoslav National Army (57 FR 23299, June 2, 1992). The present report
    is submitted pursuant to 50 U.S.C. 1641(c) and 1703(c). 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 No. 12808 and to expanded sanctions against
    the Federal Republic of Yugoslavia (Serbia and Montenegro) (the ``FRY
    (S/M)'') contained in Executive Order No. 12810 of June 5, 1992 (57 FR
    24347, June 9, 1992), Executive Order No. 12831 of January 15, 1993 (58
    FR 5253, January 21, 1993), and Executive Order No. 12846 of April 26,
    1993 (58 FR 25771, April 27, 1993).
        1. Executive Order No. 12808 blocked all property and interests in
    property of the Governments of Serbia and Montenegro, or held in the
    name of the former Government of the Socialist Federal Republic of
    Yugoslavia or the Government of the Federal Republic of Yugoslavia, then
    or thereafter located in the United States or within the possession or
    control of United States persons, including their overseas branches.
        Subsequently, Executive Order No. 12810 expanded U.S. actions to
    implement in the United States the United Nations sanctions against the
    FRY (S/M) adopted in United Nations Security Council Resolution 757 of
    May 30, 1992. In addition to reaffirming the blocking of FRY (S/M)
    Government property, this order prohibits transactions with respect to
    the FRY (S/M) involving imports, exports, dealing in FRY-origin
    property, air and sea transportation, contract performance, funds
    transfers, activity promoting importation or exportation or dealings in
    property, and official sports, scientific, technical, or other cultural
    representation of, or sponsorship by, the FRY (S/M) in the United
    States.
        Executive Order No. 12810 exempted from trade restrictions (1)
    transshipments through the FRY (S/M), and (2) activities related to the
    United Nations Protection Force (``UNPROFOR''), the Conference on
    Yugoslavia, or the European Community Monitor Mission.
        On January 15, 1993, the President issued Executive Order No. 12831
    to implement new sanctions contained in United Nations Security Council
    Resolution 787 of November 16, 1992. The order revoked the exemption for
    transshipments through the FRY (S/M) contained in Executive Order No.
    12810, prohibited transactions within the United States or by a United
    States person relating to FRY (S/M) vessels and vessels in which a
    majority or controlling interest is held by a person or entity in, or
    operating from, the FRY (S/M), and stated that all such vessels shall be
    considered as vessels of the FRY (S/M), regardless of the flag under
    which they sail.
        On April 26, 1993, I issued Executive Order No. 12846 to implement
    in the United States the sanctions adopted in United Nations Security
    Council Resolution 820 of April 17, 1993. That resolution called on the
    Bosnian Serbs to accept the Vance-Owen peace plan for Bosnia-Herzegovina
    and, if they failed to do so by April 26, called on member states to
    take additional measures to tighten the embargo against the FRY (S/M)
    and Serbian-controlled areas of

    [[Page 1318]]

    Bosnia-Herzegovina and the United Nations Protected Areas in Croatia.
    Effective April 26, 1993, the order blocked all property and interests
    in property of commercial, industrial, or public utility undertakings or
    entities organized or located in the FRY (S/M), including property and
    interests in property of entities (wherever organized or located) owned
    or controlled by such undertakings or entities, that are or thereafter
    come within the possession or control of United States persons.
        2. 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)). The
    additional sanctions set forth in Executive Orders Nos. 12810, 12831,
    and 12846 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).
        3. There have been no amendments to the Federal Republic of
    Yugoslavia (Serbia and Montenegro) Sanctions Regulations (the
    ``Regulations''), 31 C.F.R. Part 585, since the last report. Of the two
    court cases in which the blocking authority was challenged as applied to
    FRY (S/M) subsidiaries and vessels in the United States, the
    government's position in the case involving the blocked vessels was
    upheld by the Fifth Circuit Court of Appeals. The Supreme Court declined
    to review the decision. Milena Ship Management Co. v. Newcomb, 804 F.
    Supp. 859 (E.D. La. 1992), aff'd, 995 F.2nd 620 (5th Cir. 1993), cert.
    denied ______ U.S. ______, 114 S.Ct. 877 (1994). The case involving a
    blocked subsidiary is pending a decision by the court on the
    government's motion for summary judgment.
        4. Over the past 6 months, the Departments of State and Treasury
    have worked closely with European Community (the ``EC'') member states
    and other U.N. member nations to coordinate implementation of the
    sanctions against the FRY (S/M). This has included visits by assessment
    teams formed under the auspices of the United States, the EC, and the
    Conference for Security and Cooperation in Europe (the ``CSCE'') to
    states bordering on Serbia and Montenegro; deployment of CSCE sanctions
    assistance missions (``SAMs'') to Albania, Bulgaria, Croatia, the Former
    Yugoslav Republic of Macedonia, Hungary, Romania, and Ukraine to assist
    in monitoring land and Danube River traffic; bilateral contacts between
    the United States and other countries for the purpose of tightening
    financial and trade restrictions on the FRY (S/M); and establishment of
    a mechanism to coordinate enforcement efforts and to exchange technical
    information.
        5. In accordance with licensing policy and the Regulations, FAC has
    exercised its authority to license certain specific transactions with
    respect to the FRY (S/M) that are consistent with the Security Council
    sanctions. During the reporting period, FAC has issued 114 specific
    licenses regarding transactions pertaining to the FRY (S/M) or assets it
    owns or controls, bringing the total as of April 15, 1994, to 677.
    Specific licenses have been issued (1) for payment to U.S. or third-
    country secured creditors, under certain narrowly defined circumstances,
    for pre-embargo import and export transactions; (2) for legal
    representation or advice to the Government of the FRY (S/M) or FRY (S/
    M)-controlled clients; (3) for the liquidation or protection of tangible
    assets of subsidiaries of FRY (S/M)-controlled firms located in the
    United States; (4) for limited FRY (S/M) diplomatic representation in
    Washington and New York; (5) for patent, trademark and copyright
    protection and maintenance transactions in the FRY (S/M) not involving
    payment to the FRY (S/M) Government; (6) for certain communications,
    news media, and travel-related transactions; (7) for the payment of
    crews' wages, vessel maintenance, and emergency supplies for FRY (S/M)-
    controlled ships blocked in the United States; (8) for the re-

    [[Page 1319]]

    moval from the FRY (S/M) of certain property owned and controlled by
    U.S. entities; and (9) to assist the United Nations in its relief
    operations and the activities of the U.N. Protection Forces. Pursuant to
    regulations implementing United Nations Security Council Resolution 757,
    specific licenses have also been issued to authorize exportation of
    food, medicine, and supplies intended for humanitarian purposes in the
    FRY (S/M).
        During the past 6 months, FAC has continued to oversee the
    liquidation of tangible assets of the 15 U.S. subsidiaries of entities
    organized in the FRY (S/M). Subsequent to the issuance of Executive
    Order No. 12846, all operating licenses issued for these U.S.-located
    Serbian or Montenegrin subsidiaries or joint ventures were revoked, and
    the net proceeds of the liquidation of their assets placed in blocked
    accounts.
        The Board of Governors of the Federal Reserve Board and the New York
    State Banking Department again worked closely with FAC with regard to
    two Serbian banking institutions in New York that were not permitted to
    conduct normal business after June 1, 1992. The banks had been issued
    licenses to maintain a limited staff for audit purposes while full-time
    bank examiners were posted in their offices to ensure that banking
    records are appropriately safeguarded. Subsequent to the issuance of
    Executive Order No. 12846, all licenses previously issued were revoked.
    FAC is currently working with the Federal Reserve Board and the New York
    State Banking Department of resolve outstanding issues regarding the
    banks.
        During the past 6 months, U.S. financial institutions have continued
    to block funds transfers in which there is an interest of the Government
    of the FRY (S/M) or an entity or undertaking located in or controlled
    from the FRY (S/M). Such transfers have accounted for $58.6 million in
    Yugoslav assets blocked since the issuance of Executive Order No. 12808,
    with some $22 million in funds transfers frozen during the past 6
    months.
        To ensure compliance with the terms of the licenses that have been
    issued under the program, stringent reporting requirements are imposed.
    More than 380 submissions were reviewed since the last report and more
    than 194 compliance cases are currently open. In addition, licensed bank
    accounts are regularly audited by FAC compliance personnel and by
    cooperating auditors from bank regulatory agencies.
        6. Since the issuance of Executive Order No. 12810, FAC has worked
    closely with the U.S. Customs Service to ensure both that prohibited
    imports and exports (including those in which the Government of the FRY
    (S/M) has an interest) are identified and interdicted, and that
    permitted imports and exports move to their intended destination without
    undue delay. Violations and suspected violations of the embargo are
    being investigated and appropriate enforcement actions are being taken.
    There are currently 50 cases under active investigation. Since the last
    report, FAC has collected 20 civil penalties totaling nearly $75,000
    from 17 financial institutions for violations involving transfers of
    funds in which the Government of the FRY (S/M) has an interest. Two U.S.
    companies and one law firm have also paid penalties related to exports
    and unlicensed payments to the Government of the FRY (S/M) for trademark
    registration.
        7. The expenses incurred by the Federal Government in the 6-month
    period from November 30, 1993, through May 29, 1994, that are directly
    attributable to the authorities conferred by the declaration of a
    national emergency with respect to the FRY (S/M) are estimated at about
    $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 FAC and its Chief Counsel's Office, and
    the U.S. Customs Service), the Department of State, the National
    Security Council, the U.S. Coast Guard, and the Department of Commerce.
        8. The actions and policies of the Government of the FRY (S/M), in
    its involvement in and support for groups attempting to seize and hold
    territory in Croatia and Bosnia-Herzegovina by force and violence,
    continue to pose an unusual and extraordinary threat to the national
    security, foreign policy, and economy of the United States. The United
    States remains committed to a multilateral resolution of this crisis
    through its actions im-

    [[Page 1320]]

    plementing the binding resolutions of the United Nations Security
    Council with respect to the FRY (S/M).
        I shall continue to exercise the powers at my disposal to apply
    economic sanctions against the FRY (S/M) 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,
    June 21, 1994.