Weekly Compilation of Presidential Documents Volume 30 Issue 31 (Monday, August 8, 1994)

[Weekly Compilation of Presidential Documents Volume 30, Number 31 (Monday, August 8, 1994)]
[Pages 1608-1611]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Message to the Congress on Iraq

August 2, 1994

To the Congress of the United States:

I hereby report to the Congress on the developments since my last
report of March 3, 1994, 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 United States 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. United States 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 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 778 of 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, to 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. Member States also may make voluntary contributions
to the account. 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 transfers or 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
``Executive orders''). The report covers events from February 2, 1994,
through August 1, 1994.

[[Page 1609]]

1. During the reporting period, there were no amendments to the
Iraqi Sanctions Regulations.
2. Investigations of possible violations of the Iraqi sanctions
continue to be pursued and appropriate enforcement actions taken. There
are currently 30 enforcement actions pending. 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 $38,450 were collected from three banks for violation of the
prohibitions against 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 (``SDNs'') of the
Government of Iraq. One Jordanian-Iraqi joint venture company
prominently involved in shipments to Iraq was identified as an SDN of
Iraq on May 4, 1994. A copy of the notice is attached.
4. Pursuant to Executive Order No. 12817 implementing United Nations
Security Council Resolution 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 March 1, 1994, following payments by the
Governments of the United Kingdom ($447,761.19), the Netherlands
($1,566,994.55), Australia ($476,110.00), and the European Community
($3,758,310.31), respectively, to the special United Nations-controlled
account, entitled United Nations Security Council Resolution 778 Escrow
Account, the Federal Reserve Bank of New York was directed to transfer a
corresponding amount of $6,240,176.05 from the blocked account it holds
to the United Nations-controlled account. Similarly, on March 22, 1994,
following the payment of $525,182.50 by the Government of the
Netherlands, $2,478,089.89 by the European Community, $2,352,800.00 by
the Government of the United Kingdom, $444,444.44 by the Government of
Denmark, $1,204,899.30 by the Government of Sweden, and $3,100,000.00 by
the Government of Japan, the Federal Reserve Bank of New York was
directed to transfer a corresponding amount of $10,105,416.13 to the
United Nations-controlled account. Again on June 30, 1994, the Federal
Reserve Bank of New York was directed to transfer $6,969,862.89 to the
United Nations-controlled account, an amount corresponding to the
aggregate total of recent payments by the governments of other Member
States: European Community ($1,042,774.31), United Kingdom
($1,570,804.48), the Netherlands ($1,062,219.51), Kuwait
($2,000,000.00), and Sweden ($1,294,064.59). Cumulative transfers from
the blocked Federal Reserve Bank of New York account since issuance of
Executive Order No. 12817 have amounted to $130,928,726.04 of the up to
$200 million that the United States is obligated to match from blocked
Iraqi oil payments, pursuant to United Nations Security Council
Resolution 778.
5. The Office of Foreign Assets Control has issued a total of 496
specific licenses regarding transactions pertaining to Iraq or Iraqi
assets since August 1990. Since my last report, 52 specific licenses
have been issued. Licenses were issued for transactions such as the
filing of legal actions against Iraqi governmental entities, legal
representation of Iraq, and the exportation to Iraq of donated medicine,
medical supplies, 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
preexistent intellectual property rights in Iraq.
6. The expenses incurred by the Federal Government in the 6-month
period from February 2, 1994, through August 1, 1994, that are directly
attributable to the exercise of powers and authorities conferred by the
declaration of a national emergency with re-

[[Page 1610]]

spect to Iraq are reported to be about $2.3 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).
7. The United States imposed economic sanctions on Iraq in response
to Iraq's illegal invasion and 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 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. Four
years after the invasion, a pattern of defiance persists: a refusal to
recognize the international boundary with Kuwait or to account for
missing Kuwaiti detainees, sponsorship of assassinations in Lebanon and
in northern Iraq; incomplete declarations to weapons inspectors, and
ongoing widespread human rights violations, among other things. As a
result, 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 of
its own citizens through systematic repression of minorities and denial
of humanitarian assistance. The Government of Iraq has repeatedly said
it will not be bound by United Nations Security Council Resolution 688.
For more than 3 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, Turcomen, and Assyrian areas in the north. Iraq has not
relented in its artillery attacks against civilian population centers in
the south, or in its burning and draining operations in the southern
marshes, which have forced thousands to flee to neighboring States.
In 1991, the United Nations Security Council adopted Resolutions 706
and 712, which would permit Iraq to sell up to $1.6 billion of oil under
U.N. auspices to fund the provision of food, medicine, and other
humanitarian supplies to the people of Iraq. The resolutions also
provide for the payment of compensation to victims of Iraqi aggression
and other U.N. activities with respect to Iraq. The equitable
distribution within Iraq of this humanitarian 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. Nearly a year ago,
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. The U.N. resolutions require that the Security Council be
assured of Iraq's peaceful intentions in judging its compliance with
sanctions. Because of Iraq's failure to comply fully with these
resolutions, the United States will continue to apply economic sanctions
to deter it from threatening peace and stability in the region.
William J. Clinton
The White House,
August 2, 1994.

[[Page 1611]]