[Weekly Compilation of Presidential Documents Volume 30, Number 46 (Monday, November 21, 1994)]
[Pages 2412-2414]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders on Iran

November 18, 1994

Dear Mr. Speaker:  (Dear Mr. President:)

    I hereby report to the Congress on developments since the last 
Presidential report on May 14, 1994, concerning the national emergency 
with respect to Iran that was declared in Executive Order No. 12170 of 
November 14, 1979, and matters relating to Executive Order No. 12613 of 
October 29, 1987. This report is submitted pursuant to section 204(c) of 
the International Emergency Economic Powers Act, 50 U.S.C. 1703(c), and 
section 505(c) of the International Security and Development Cooperation 
Act of 1985, 22 U.S.C. 2349aa-9(c). This report covers events through 
October 18, 1994. My last report, dated May 14, 1994, covered events 
through March 31, 1994.
    1. There have been no amendments to the Iranian Transactions 
Regulations, 31 CFR Part 560, or to the Iranian Assets Control 
Regulations, 31 CFR Part 535, since the last report.
    2. The Office of Foreign Assets Control (FAC) of the Department of 
the Treasury continues to process applications for import licenses under 
the Iranian Transactions Regulations. However, a substantial majority of 
such applications are determined to be ineligible for licensing and, 
consequently, are denied.
    During the reporting period, the U.S. Customs Service has continued 
to effect numerous seizures of Iranian-origin merchandise, primarily 
carpets, for violation of the import prohibitions of the Iranian 
Transactions Regulations. The FAC and Customs Service investigations of 
these violations have resulted in forfeiture actions and the imposition 
of civil monetary penalties. Additional forfeiture and civil penalty 
actions are under review.
    3. The Iran-United States Claims Tribunal (the ``Tribunal''), 
established at The Hague pursuant to the Algiers Accords, continues to 
make progress in arbitrating the claims before it. Since my last report, 
the Tribunal has rendered 6 awards, bringing the total number to 557. Of 
this total, 373 have been awards in favor of American claimants. Two 
hundred twenty-five of these were awards on agreed terms, authorizing 
and approving payment of settlements negotiated by the parties, and 150 
were decisions adjudicated on the merits. The Tribunal has issued 38 
decisions dismissing claims on the merits and 85 decisions dismissing 
claims for jurisdictional reasons. Of the 59 remaining awards, 3 
approved the withdrawal of cases and 56 were in favor of Iranian 
claimants. As of October 18, 1994, the Federal Reserve Bank of New York 
reported that the value of awards to successful American claimants from 
the Security Account held by the NV Settlement Bank stood at 
$2,353,030,872.61.
    The Security Account has fallen below the required balance of $500 
million almost 50 times. Until October 1992, Iran periodically 
replenished the account, as required by the Algiers Accords. This was 
accomplished first by transfers from the separate account held

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by the NV Settlement Bank in which interest on the Security Account is 
deposited. The aggregate amount transferred from the Interest Account to 
the Security Account was $874,472,986.47. Iran then replenished the 
account with the proceeds from the sale of Iranian-origin oil imported 
into the United States, pursuant to transactions licensed on a case-by-
case basis by FAC. Iran has not, however, replenished the account since 
the last oil sale deposit on October 8, 1992, although the balance fell 
below $500 million on November 5, 1992. As of October 18, 1994, the 
total amount in the Security Account was $203,349,297.01 and the total 
amount in the Interest Account was $20,160,414.78.
    The United States continues to pursue Case A/28, filed last year, to 
require Iran to meet its financial obligations under the Algiers Accords 
to replenish the Security Account.
    4. Since my last report, the Tribunal has issued two significant 
awards in favor of U.S. citizens who are dual nationals, for their 
respective shares of corporations expropriated by Iran. The Tribunal 
awarded members of the Khosrowshahi family $2,484,746.31 plus interest. 
The Tribunal awarded members of the Ebrahimi family $5,265,697.00 plus 
interest.
    5. The Department of State continues to present United States 
Government claims against Iran, in coordination with concerned 
government agencies, and to respond to claims brought against the United 
States by Iran. In July 1994, the United States filed a new case, Number 
A/29, seeking to compel Iran to make its payments for Tribunal expenses 
in a timely manner. Over the past 2 years, Iran has failed repeatedly to 
make its payments for extended periods of time, until pressed by the 
United States in Cases A/28 and A/29.
    The United States also recently filed its Rejoinders in, 
respectively, Case A/15 (I:D and I:H), a claim brought by Iran for the 
return of certain amounts held in U.S. banks, and Case A/27, a claim 
brought by Iran for the alleged failure of the United States to enforce 
a Tribunal award in its favor against a U.S. national.
    In August, the United States filed a Production Request in Case B/1, 
a case in which Iran alleges the United States is liable for termination 
costs and the nondelivery of goods and services under contracts through 
the Foreign Military Sales (FMS) program. The United States is seeking 
the return of FMS documents that remained in U.S. military offices in 
Iran after the Revolution.
    6. United States arbitrator Howard Holtzmann, one of the original 
members of the Tribunal, resigned July 31, 1994, after 13 years of 
service. To replace him, the United States appointed Charles T. Duncan, 
who assumed his duties on August 1, 1994. Until his appointment, Mr. 
Duncan was Senior Counsel to the law firm of Reid & Priest.
    7. As anticipated by the May 13, 1990, agreement settling the claims 
of U.S. nationals against Iran for less than $250,000, the Foreign 
Claims Settlement Commission (FCSC) has continued its review of 3,112 
claims. As of October 18, 1994, the FCSC has issued decisions in 3,066 
claims, for total awards of more than $68 million. The FCSC expects to 
complete its adjudication of the remaining claims this year.
    8. The situation reviewed above continues to implicate important 
diplomatic, financial, and legal interests of the United States and its 
nationals and presents an unusual challenge to the national security and 
foreign policy of the United States. The Iranian Assets Control 
Regulations issued pursuant to Executive Order No. 12170 continue to 
play an important role in structuring our relationship with Iran and in 
enabling the United States to implement properly the Algiers Accords. 
Similarly, the Iranian Transactions Regulations issued pursuant to 
Executive Order No. 12613 continue to advance important objectives in 
combatting international terrorism. I shall continue to exercise the 
powers at my disposal to deal with these problems and will continue to 
report periodically to the Congress on significant developments.

    Sincerely,

                                            William J. Clinton

Note: Identical letters were sent to Thomas S. Foley, Speaker of the 
House of Representatives, and Albert Gore, Jr., President of the Senate.

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