[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
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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-
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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-
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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.