[Weekly Compilation of Presidential Documents Volume 31, Number 20 (Monday, May 22, 1995)]
[Pages 852-853]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Message to the Congress on Iran

May 18, 1995

To the Congress of the United States:

    I hereby report to the Congress on developments since the last 
Presidential report on November 18, 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 April 18, 1995. It discusses only matters 
concerning the national emergency with respect to Iran that was declared 
in Executive Order No. 12170 and matters relating to Executive Order No. 
12613. Matters relating to the March 15, 1995, Executive Order regarding 
a ban on investment in the petroleum sector, and the May 6, 1995, 
Executive Order regarding new trade sanctions, will be covered in 
separate reports. My last report, dated November 18, 1994, covered 
events through October 18, 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 (``OFAC'') 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. OFAC 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. However, since my 
last report, the Tribunal has not rendered any awards although payments 
were received by claimants in late November for awards rendered during 
the prior reporting period. Thus, the total number of awards remains at 
557. Of this total, 373 have been awards in favor of American claimants. 
Two hundred twenty-five (225) 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, three approved the withdrawal of cases and 56 were in favor of 
Iranian claimants. As of April 18, 1995, 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 
$2,365,160,410.39.
    Iran has not replenished the Security Account since October 8, 1992, 
and the Account has remained continuously below the balance of $500 
million required by the Algiers Accords since November 5, 1992. As of 
April 10, 1995, the total amount in the Security Account was 
$191,219,759.23, and

[[Page 853]]

the total amount in the Interest Account was $24,959,218.79.
    The United States continues to pursue Case A/28, filed in September 
1993, to require Iran to meet its obligations under the Algiers Accords 
to replenish the Security Account. Iran has yet to file its Statement of 
Defense in that case.
    4. 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.
    On April 18, 1995, the United States filed the first of two parts of 
its consolidated submission on the merits in Case B/61. Case B/61 
involves a claim by Iran for compensation with respect to primarily 
military equipment that Iran alleges it did not receive. The equipment 
was purchased pursuant to commercial contracts with more than 50 private 
American companies. Iran alleges that it suffered direct losses and 
consequential damages in excess of $2 billion in total because of the 
U.S. Government's refusal to allow the export of the equipment after 
January 19, 1981, in alleged contravention of the Algiers Accords. As 
directed by the Tribunal, the United States' submission addresses Iran's 
claims regarding both liability and compensation and damages.
    5. The Foreign Claims Settlement Commission (``FSCS'') on February 
24, 1995, successfully completed its case-by-case review of the more 
than 3,000 so-called ``small claims'' against Iran arising out of the 
1979 Islamic revolution. These ``small claims'' (of $250,000 or less 
each) were originally filed before the Iran-United States Claims 
Tribunal, but were transferred to the FCSC pursuant to the May 13, 1990 
Settlement Agreement between Iran and the United States.
    The FCSC issued decisions on 3,066 claims for total awards of 
$86,555,795. Of that amount, $41,570,936 represented awards of principal 
and $44,984,859 represented awards of interest. Although originally only 
$50 million were available to pay these awards, the funds earned 
approximately $9 million in interest over time, for a total settlement 
fund of more than $59 million. Thus, all awardees will receive full 
payment on the principal amounts of their awards, with interest awards 
paid on a pro rata basis.
    The FCSC's awards to individuals and corporations covered claims for 
both real and personal property seized by Iran. In addition, many claims 
arose out of commercial transactions, including contracts for the sale 
of goods and contracts for the supply of services such as teaching, 
medical treatment, data processing, and shipping. The FCSC is now 
working with the Department of the Treasury to facilitate final payment 
on all FCSC awards.
    6. 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 
combating 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.
                                            William J. Clinton
The White House,
May 18, 1995.