[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.

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    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- 

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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.

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