[Weekly Compilation of Presidential Documents Volume 31, Number 6 (Monday, February 13, 1995)]
[Pages 211-214]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Message to the Congress on Iraq

February 8, 1995

To the Congress of the United States:

    I hereby report to the Congress on the developments since my last 
report of August 2, 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,

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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 No. 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 
Iraqi'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 August 2, 1994, 
through February 1, 1995.
    1. There has been one action affecting the Iraqi Sanctions 
Regulations, 31 C.F.R. Part 575 (the ``Regulations''), administered by 
the Office of Foreign Assets Control (FAC) of the Department of the 
Treasury, since my last report on August 2, 1994. On February 1, 1995 
(60 Fed. Reg. 6376), FAC amended the Regulations by adding to the list 
of Specially Designated Nationals (SDNs) of Iraq set forth in Appendices 
A (``entities and individuals'') and B (``merchant vessels''), the names 
of 24 cabinet ministers and 6 other senior officials of the Iraqi 
government, as well as 4 Iraqi state-owned banks, not previously 
identified as SDNs. Also added to the Appendices were the names of 15 
entities, 11 individuals, and 1 vessel that were newly identified as 
Iraqi SDNs in the comprehensive list of SDNs for all sanctions programs 
administered by FAC that was published in the Federal Register (59 Fed. 
Reg. 59460) on November 17, 1994. In the same document, FAC also 
provided additional addresses and aliases for 6 previously identified 
Iraqi SDNs. This Federal Register publication brings the total number of 
listed Iraqi SDNs to 66 entities, 82 individuals, and 161 vessels.
    Pursuant to section 575.306 of the Regulations, FAC has determined 
that these entities and individuals designated as SDNs are owned or 
controlled by, or are acting or purporting to act directly or indirectly 
on behalf of, the Government of Iraq, or are agencies, instrumentalities 
or entities of that government. By virtue of this determination, all 
property and interests in property of these entities or persons that are 
in the United States or in the possession or control of United States 
persons are blocked. Further, United States persons are prohibited from 
engaging in transactions with these individuals or entities unless the 
transactions are licensed by FAC. The designations were made in 
consultation with the Department of State. A copy of the amendment is 
attached to this report.
    2. Investigations of possible violations of the Iraqi sanctions 
continue to be pursued and appropriate enforcement actions taken. The 
FAC continues its involvement in lawsuits, seeking to prevent the 
unauthorized transfer of blocked Iraqi assets. There are currently 38 
enforcement actions pending, including nine cases referred by FAC to the 
U.S. Customs Service for joint investigation. Additional FAC civil 
penalty notices were prepared during the reporting period for violations 
of the International Emergency Economic Powers Act and the Regulations 
with respect to transactions involving Iraq. Four penalties totaling 
$26,043 were collected from two banks, one company, and one individual 
for violations of the prohibitions against transactions involving Iraq.
    3. Investigation also continues into the roles played by various 
individuals and firms outside Iraq in the Iraqi government pro- 

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curement network. These investigations may lead to additions to FAC's 
listing of individuals and organizations determined to be SDNs of the 
Government of Iraq.
    4. Pursuant to Executive Order No. 12817 implementing United Nations 
Security Council Resolution No. 778, on October 26, 1992, FAC 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 
October 5, 1994, following payments by the Governments of Canada 
($677,756.99), the United Kingdom ($1,740,152.44), and the European 
Community ($697,055.93), 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 $3,114,965.36 from 
the blocked account it holds to the United Nations-controlled account. 
Similarly, on December 16, 1994, following the payment of $721,217.97 by 
the Government of the Netherlands, $3,000,891.06 by the European 
Community, $4,936,808.84 by the Government of the United Kingdom, 
$190,476.19 by the Government of France, and $5,565,913.29 by the 
Government of Sweden, the Federal Reserve Bank of New York was directed 
to transfer a corresponding amount of $14,415,307.35 to the United 
Nations-controlled account. Again, on December 28, 1994, following the 
payment of $853,372.95 by the Government of Denmark, $1,049,719.82 by 
the European Community, $70,716.52 by the Government of France, 
$625,390.86 by the Government of Germany, $1,151,742.01 by the 
Government of the Netherlands, and $1,062,500.00 by the Government of 
the United Kingdom, the Federal Reserve Bank of New York was directed to 
transfer a corresponding amount of $4,813,442.16 to the United Nations 
controlled account. Finally, on January 13, 1995, following the payment 
of $796,167.00 by the Government of the Netherlands, $810,949.24 by the 
Government of Denmark, $613,030.61 by the Government of Finland, and 
$2,049,600.12 by the European Community, the Federal Reserve Bank of New 
York was directed to transfer a corresponding amount of $4,269,746.97 to 
the United Nations-controlled account. Cumulative transfers from the 
blocked Federal Reserve Bank of New York account since issuance of 
Executive Order No. 12817 have amounted to $157,542,187.88 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 533 
specific licenses regarding transactions pertaining to Iraq or Iraqi 
assets since August 1990. Since my last report, 37 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 August 2, 1994, through February 1, 1995, that are directly 
attributable to the exercise of powers and authorities conferred by the 
declaration of a national emergency with respect to Iraq are reported to 
be about $2.25 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 Under 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 Affairs, the Bureau of Organization Affairs, 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,

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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. More 
than 4 years after the invasion, a pattern of defiance persists: a 
refusal to account for missing Kuwaiti detainees; failure to return 
Kuwaiti property worth millions of dollars, including weapons used by 
Iraq in its movement of troops to the Kuwaiti border in October 1994; 
sponsorship of assassinations in Lebanon and in northern Iraq; 
incomplete declarations to weapons inspectors; and ongoing widespread 
human rights violations. 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 continues 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 blockade of food, 
medicine, and other humanitarian supplies against northern Iraq. The 
Iraqi military routinely harasses residents of the north, and has 
attempted to ``Arabize'' the 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. More than 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,
February 8, 1995.