Weekly Compilation of Presidential Documents Volume 31 Issue 31 (Monday, August 7, 1995)

[Weekly Compilation of Presidential Documents Volume 31, Number 31 (Monday, August 7, 1995)]
[Pages 1357-1360]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Message to the Congress on Iraq

August 1, 1995

To the Congress of the United States:

I hereby report to the Congress on the developments since my last
report of February 8, 1995, 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 U.S. 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 to transfer to a U.N. escrow account any
funds (up to $200 million apiece) representing 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 also funds the activities of the U.N. Compensation
Commission in Geneva, which handles claims from victims of the Iraqi
invasion and occupation 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 No. 12724 and 12817 (the
``Executive orders''). The report covers events from February 2, 1995,
through August 1, 1995.

[[Page 1358]]

1. During the reporting period, there were no amendments to the
Iraqi Sanctions Regulations.
2. The Department of the Treasury's office of Foreign Assets Control
(``FAC'') continues its involvement in lawsuits seeking to prevent the
unauthorized transfer of blocked Iraqi assets. In Consarc Corporation v.
Iraqi-ministry of Industry and Minerals, a briefing schedule has been
set for disposition of FAC's December 16, 1994, appeal of the district
court's order of October 17, 1994, transferring blocked property.
Investigations of possible violations of the Iraqi sanctions
continue to be pursued and appropriate enforcement actions taken. There
are currently 43 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 Iraqi sanction Regulations with respect to transactions involving
Iraq. Three penalties totaling $8,905 were collected from two banks for
funds transfers in violation 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 procurement
network. These investigations may lead to additions to FAC's listing of
individuals and organizations determined to be Specially Designated
Nationals (``SDNs'') of the Government of Iraq.
4. Pursuant to Executive Order No. 12817 implementing United Nations
Security Council Resolution 778, on October 26, 1992, FAC directed the
Federal Reserve Bank of New York to establish a blocked account for
receipt for certain post-August 6, 1990, Iraqi-oil sales proceeds, and
to hold, invest, and transfer these funds as required by the Order. On
March 21, 1995, following payments by the Governments of Canada
($1,780,749.14), the European Community ($399,695.21), Kuwait
($2,500,000.00), Norway ($261,758.10), and Switzerland ($40,000.00),
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 $4,982,202.45 from the blocked account it holds
to the United Nations-controlled account. Similarly, on April 5, 1995,
following the payment of $5,846,238.99 by the European Community, the
Federal Reserve Bank of New York was directed to transfer a
corresponding amount of $5,846,238.99 to the United Nations-controlled
account. Again, on May 23, 1995, following the payment of $3,337,941.75
by the European Community, $571,428.00 by the Government of the
Netherlands and $1,200,519.05 by the Government of the United Kingdom,
the Federal Reserve Bank of New York was directed to transfer a
corresponding amount of $5,109,888.80 to the United Nations-controlled
account. Finally, on June 19, 1995, following the payment of $915,584.96
by the European Community and $736,923.12 by the Government of the
United Kingdom, the Federal Reserve Bank of New York was directed to
transfer a corresponding amount of $1,652,508.08 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 $175,133,026.20 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 590
specific licenses regarding transactions pertaining to Iraq or Iraqi
assets since August 1990. Licenses have been 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, the
protection of preexistent intellectual property rights in Iraq and
travel to Iraq for the purposes of visiting Americans detained there.
Since my last report, 57 specific licenses have been issued.
6. The expenses incurred by the Federal Government in the 6 month
period from

[[Page 1359]]

February 2, 1995, through August 1, 1995, which 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 $4.9 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 Eastern Affairs, the Bureau of International Organization
Affairs, the Bureau of Political-Military Affairs, the U.S. Mission to
the United Nations, 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, Iraqi recognition of
Kuwait and 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 5 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
military equipment that was 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 4 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 April 1995, the U.N. Security Council adopted
resolution 986 authorizing Iraq to export limited quantities of oil (up
to $1 billion per quarter) under U.N. supervision in order to finance
the purchase of food, medicine, and other humanitarian supplies. The
resolution includes arrangements to ensure equitable distribution of
such assistance to all the people of Iraq. The resolution also provides
for the payment of compensation to victims of Iraqi aggression and for
the funding of other U.N. activities with respect to Iraq. Resolution
986 was carefully crafted to address the issues raised by Iraq to
justify its refusal to implement similar humanitarian resolutions
adopted in 1991 (Resolutions 706 and 712), such as oil export routes and
questions of national sovereignty. Nevertheless, Iraq refused to
implement this humanitarian measure. This only reinforces our view that
Saddam Hussein is unconcerned about the hardships suffered by the Iraqi
people.
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
sanc-

[[Page 1360]]

tions. 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 1, 1995.