[Weekly Compilation of Presidential Documents Volume 32, Number 46 (Monday, November 18, 1996)]
[Pages 2391-2393]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders on Iran

November 14, 1996

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

    I hereby report to the Congress on developments since the last 
Presidential report of May 16, 1996, concerning the national emergency 
with respect to Iran that was declared in Executive Order 12170 of 
November 14, 1979. This report is submitted pursuant to section 204(c) 
of the International Emergency Economic Powers Act, 50 U.S.C. 1703(c). 
This report covers events through September 16, 1996. My last report, 
dated May 16, 1996, covered events through March 1, 1996.
    1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR), 
were amended on August 22, 1996, to add the Anti-terrorism and Effective 
Death Penalty Act of 1996 (Public Law 104-132; 110 Stat. 1214-1319 (the 
``Antiterrorism Act'') as an authority for the Regulations (61 Fed. Reg. 
43460, August 23, 1996). On April 24, 1996, I signed into law the 
Antiterrorism Act. Section 321 of the Antiterrorism Act (18 U.S.C. 
2332d) makes it a criminal offense for United States persons, except as 
provided in regulations issued by the Secretary of the Treasury in 
consultation with the Secretary of State, to engage in a financial 
transaction with the governments of countries designated under section 
6(j) of the Export Administration Act (50 U.S.C. App. 2405) as 
supporting international terrorism. United States persons who engage in 
such transactions shall be fined under title 18, United States Code, or 
imprisoned for up to 10 years, or both. Because the IACR already 
prohibited such transactions with minor exceptions found to be in the 
public interest, no substantive change to the prohibitions of the IACR 
was necessary. A copy of the amendment is attached.
    2. 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 the period 
covered in my last report, the Tribunal has rendered additional awards, 
in which the claims of dual nationals were dismissed for lack of 
jurisdiction. This brings the total number of awards rendered to 571, 
the majority of which have been in favor of U.S. claimants. As of 
September 16, 1996, the value of awards to successful U.S. claimants  
from  the  Security  Account  held by the NV Settlement Bank was 
$2,376,010,041.91.
    On July 24, 1996, Iran directed the transfer of $37,700,000 to the 
Security Account, established by the Algiers Accords to ensure payment 
of awards to successful U.S. claimants, from the Interest Account. 
However, the Security Account has remained continuously below the $500 
million balance required by the Algiers Accords since November 12, 1992. 
As of September 23, 1996, the total amount in the Security Account was 
$233,070,127.71, and the total amount in the Interest Account was 
$5,494,387.30.
    Therefore, 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 filed its 
Statement of Defense in that case on August 30, 1995, and the United 
States filed a Reply on December 4, 1995. Iran is scheduled to file its 
Rejoinder on December 4, 1996.
    The United States also continues to pursue Case A/29, filed in July 
1994, to require Iran to meet its obligations under the Algiers Accords 
to pay its equal share of advances for Tribunal expenses when directed 
to do so by the Tribunal. Iran filed its Statement of De- 

[[Page 2392]]

fense on July 5, 1996. The United States filed its Reply on October 11, 
1996.
    3. The Department of State continues to present other United States 
Government claims against Iran and to respond to claims brought against 
the United States by Iran, in coordination with concerned government 
agencies.
    In May 1996, the United States filed comments in response to a 
Tribunal inquiry whether experts meetings could facilitate the 
resolution of the United States Request to Dismiss Certain Claims from 
Case B/61, filed in August 1995 as part of the United States 
consolidated submission on the merits of that case. The United States 
stated that experts meetings were inadvisable. Case B/61 involves a 
claim by Iran for compensation with respect to primarily military 
equipment that Iran had sought to purchase or have repaired under 
commercial contracts with more than 50 private American companies, but 
that Iran alleges it did not receive. Iran alleges that it suffered 
direct losses and consequential damages in excess of $2 billion because 
of the United States Government refusal to allow the export of the 
equipment after January 19, 1981, in alleged contravention of the 
Algiers Accords. Iran's rebuttal of the United States consolidated 
submission in Case B/61 is due December 9, 1996.
    On May 6, 1996, in connection with Cases A/4, A/7, and A/15 (I: F 
and III), Iran requested that the Tribunal order the United States to 
terminate its leases of two former diplomatic properties of Iran to its 
current tenants. The United States responded by submitting comments to 
the Tribunal on May 31, 1996. The Tribunal has not yet issued a decision 
on Iran's request. A hearing of these cases has remained postponed by 
the parties' mutual agreement and under Tribunal order since October 11, 
1994.
    On May 10, 1996, Iran made a request for interim measures in Cases 
A/15(IV) and A/24, brought against the United States for its alleged 
failure to terminate litigation in U.S. courts in violation of the 
Algiers Accords. Iran requested that the Tribunal order the United 
States to stay the McKesson-OPIC litigation against Iran in U.S. 
district court. On June 20, 1996, after briefing by both parties, the 
Tribunal denied Iran's request for interim measures. The parties await 
the Tribunal's award on the merits of the cases, which were heard more 
than a year ago before the Full Tribunal.
    On June 27, 1996, in connection with Case B/1, the United States 
renewed a request for a Tribunal order directing Iran to produce seized 
United States Government documents and suspending the proceedings until 
Iran complies with the order. In this renewal of the pending request, 
the United States identified nine exhibits recently submitted to the 
Tribunal by Iran that appeared to have been seized from U.S. facilities 
in Iran.
    The United States pointed out to the Tribunal that Iran had 
previously informed the Tribunal on several occasions that the Iranian 
government does not possess any of the documents that were once stored 
in the U.S. facilities in Iran. Iran submitted a response to the 
Tribunal on September 5, 1995, asserting that the documents were handed 
over to Iranian representatives in the normal course of the Foreign 
Military sales program operations.
    In August 1996, Iran filed a Statement of Claim in a new case, 
number A/30, alleging that the United States has violated paragraphs 1 
and 10 of the General Declaration of the Algiers Accords. Iran bases its 
claim, inter alia, on press statements about an alleged covert action 
program aimed at Iran and U.S. economic sanctions, including the Iran-
Libya Sanctions Act of 1996. The United States is currently preparing 
its Statement of Defense in response to Iran's claim.
    In Case A/11, Iran alleges that the United States violated the 
Algiers Accords by failing to assist Iran in obtaining the return of the 
Shah's assets. The Department of State is currently in the process of 
preparing the United States Hearing Memorial, which is due to be filed 
on December 13, 1996.
    Under the procedures established by the settlement reached February 
22, 1996, on which I reported previously, the United States has begun to 
pay ex gratia amounts to the survivors of Iranian victims of the July 3, 
1988, shootdown of Iran Air 655. As of the closing day for this report, 
34 beneficiaries representing 12 of the deceased passengers had received 
payments totaling $2,850,000.00. Under the terms of the settle- 

[[Page 2393]]

ment, no money will be paid to the Government of Iran.
    4. Since my last report, the Tribunal conducted hearings in two 
cases involving U.S. nationals, considered dual U.S.-Iranian nationals 
by the Tribunal. On May 16, 1996, Chamber Three held a one-day hearing 
in Claim No. 266, Aryeh v. The Islamic Republic of Iran, which involves 
the alleged expropriation by Iran of claimant's property in Iran. On 
June 12-14, 1996, Chamber Two held a hearing in Claim No. 953, Hakim v. 
The Islamic Republic of Iran, another claim for the expropriation of 
property in Iran.
    In August 1996, the United States submitted a brief on behalf of 
private dual national claimants in a proceeding before Chamber One of 
the Tribunal. The United States argued that the Tribunal erred in a 
previous decision when it denied a dual national's claim on the ground 
that the claimant had acquired his property in his capacity as an 
Iranian national. The brief takes issue with the rationale of the 
Tribunal's decision and urges the Tribunal not to extend this approach 
to the other pending dual national cases.
    5. 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 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. 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 Newt Gingrich, Speaker of the House 
of Representatives, and Albert Gore, Jr., President of the Senate. This 
item was released by the Office of the Press Secretary on November 15.