[Weekly Compilation of Presidential Documents Volume 32, Number 49 (Monday, December 9, 1996)]
[Pages 2467-2470]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders on the Federal Republic of Yugoslavia 
(Serbia and Montenegro)

December 6, 1996

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

    On May 30, 1992, by Executive Order 12808, President Bush declared a 
national emergency to deal with the unusual and extraordinary threat to 
the national security, foreign policy, and economy of the United States 
constituted by the actions and policies of the Governments of Serbia and 
Montenegro, blocking all property and interests in property of those 
Governments. President Bush took additional measures to prohibit trade 
and other transactions with the Federal Republic of Yugoslavia (Serbia 
and

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Montenegro) by Executive Orders 12810 and 12831, issued on June 5, 1992, 
and January 15, 1993, respectively.
    On April 25, 1993, I issued Executive Order 12846, blocking the 
property and interests in property of all commercial, industrial, or 
public utility undertakings or entities organized or located in the 
Federal Republic of Yugoslavia (Serbia and Montenegro) (the ``FRY 
(S&M)''), and prohibiting trade-related transactions by United States 
persons involving those areas of the Republic of Bosnia and Herzegovina 
controlled by the Bosnian Serb forces and the United Nations Protected 
Areas in the Republic of Croatia. On October 25, 1994, because of the 
actions and policies of the Bosnian Serbs, I expanded the scope of the 
national emergency by issuance of Executive Order 12934 to block the 
property of the Bosnian Serb forces and the authorities in the territory 
that they control within the Republic of Bosnia and Herzegovina, as well 
as the property of any entity organized or located in, or controlled by 
any person in, or resident in, those areas.
    On December 27, 1995, I issued Presidential Determination No. 96-7, 
directing the Secretary of the Treasury, inter alia, to suspend the 
application of sanctions imposed on the FRY (S&M) pursuant to the above-
referenced Executive orders and to continue to block property previously 
blocked until provision is made to address claims or encumbrances, 
including the claims of the other successor states of the former 
Yugoslavia. This sanctions relief, in conformity with United Nations 
Security Council Resolution (``UNSCR'') 1022 of November 22, 1995, was 
an essential factor motivating Serbia and Montenegro's acceptance of the 
General Framework Agreement for Peace in Bosnia and Herzegovina 
initialed by the parties in Dayton, Ohio, on November 21, 1995 (the 
``Peace Agreement'') and signed in Paris on December 14, 1995. The 
sanctions imposed on the FRY (S&M) and on the United Nations Protected 
Areas in the Republic of Croatia were accordingly suspended 
prospectively, effective January 16, 1996. Sanctions imposed on the 
Bosnia Serb forces and authorities and on the territory that they 
control within the Republic of Bosnia and Herzegovina were subsequently 
suspended prospectively, effective May 13, 1996, in conformity with 
UNSCR 1022. On October 1, 1996, the United Nations passed UNSCR 1022. On 
October 1, 1996, the United Nations passed the UNSCR 1074, terminating 
U.N. sanctions against the FRY (S&M) and the Bosnian Serbs in light of 
the elections that took place in Bosnia and Herzegovina on September 14, 
1996. UNSCR 1074, however, reaffirms the provisions of UNSCR 1022 with 
respect to the release of blocked assets, as set forth above.
    The present report is submitted pursuant to 50 U.S.C. 1641(c) and 
1703(c) and covers the period from May 30 to November 29, 1996. It 
discusses Administration actions and expenses directly related to the 
exercise of powers and authorities conferred by the declaration of a 
national emergency in Executive Order 12808 of May 30, 1992 (57 FR 
23299) and Executive Order 12934 (59 FR 54117) and to expanded sanctions 
against the FRY (S&M) and the Bosnian Serbs contained in Executive Order 
12810 of June 5, 1992 (57 FR 24347, June 9, 1992), Executive Order 12831 
of January 15, 1993 (58 FR 5253, January 21, 1993), Executive Order 
12846 of April 25, 1993 (58 FR 25771, April 27, 1993), and Executive 
Order 12934 of October 25, 1994 (59 FR 54117, October 27, 1994).
    1. The declaration of the national emergency on May 30, 1992, was 
made pursuant to the authority vested in the President by the 
Constitution and laws of the United States, including the International 
Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National 
Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3 of 
the United States Code. The emergency declaration was reported to the 
Congress on May 30, 1992, pursuant to section 204(b) of the 
International Emergency Economic Powers Act (50 U.S.C. 1703(b)) and the 
expansion of that national emergency under the same authorities was 
reported to the Congress on October 25, 1994. The additional sanctions 
set forth in related Executive orders were imposed pursuant to the 
authority vested in the President by the Constitution and laws of the 
United States, including the statutes cited above, section 1114 of the 
Federal Aviation Act (49 U.S.C. App. 1514), and

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section 5 of the United Nations Participation Act (22 U.S.C. 287c).
    2. Since the declaration of the national emergency with respect to 
the FRY (S&M) on May 30, 1992, the Office of Foreign Assets Control 
(OFAC) acting under authority delegated by the Secretary of the Treasury 
has implemented the sanctions imposed under the foregoing statutes. 
Effective January 16, 1996, OFAC amended the Federal Republic of 
Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled Areas of 
the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 CFR 
Part 585 (the ``Regulations''), to implement in the United States 
provisions of the Peace Agreement and UNSCR 1022 (61 FR 1282, January 
19, 1996). The amended Regulations authorize prospectively all 
transactions with respect to the FRY (S&M) otherwise prohibited. 
Property and interests in property of the FRY (S&M) previously blocked 
within the jurisdiction of the United States remain blocked, in 
conformity with the Peace Agreement and UNSCR 1022, until provision is 
made to address claims or encumbrances, including the claims of the 
other successor states of the former Yugoslavia. On May 10, 1996, OFAC 
amended the Regulations to authorize prospectively those transactions 
previously prohibited with respect to the Bosnian Serb forces and 
authorities; entities organized or located in those areas of the 
Republic of Bosnia and Herzegovina under their control; entities owned 
or controlled directly or indirectly by any person in, or resident in, 
those areas; and any person acting for or on behalf of any of the 
foregoing. United States persons are also authorized to engage in 
transactions involving the areas of the Republic of Bosnia and 
Herzegovina under the control of the Bosnian Serb forces, and services 
may be exported either from the United States or by United States 
persons to those areas. Property and interests in property previously 
blocked because of an interest of any of the above persons remain 
blocked. (61 FR 24696, May 16, 1996.)
    3. Over the past 6 months, the Departments of State and the Treasury 
have worked closely with European Union member states and other U.N. 
member nations to implement the provisions of UNSCR 1022. In the United 
States, retention of blocking authority pursuant to the extension of a 
national emergency provides a framework for administration of an orderly 
claims settlement. This accords with past policy and practice with 
respect to the suspension of sanctions regimes.
    4. Subsequent to the prospective authorization of transactions with 
the FRY (S&M), effective January 16, 1996, OFAC has issued 28 specific 
licenses regarding transactions pertaining to the FRY (S&M) or assets it 
owns or controls. As of October 28, 1996, specific licenses have been 
issued (1) to authorize the unblocking of certain funds and other 
financial assets previously blocked; (2) for the payment of crews' 
wages, vessel maintenance, and emergency supplies for FRY (S&M)-
controlled ships blocked in the United States; and (3) to authorize 
performance of certain transactions under pre-sanctions contracts.
    During the past 6 months, OFAC has continued to oversee the 
maintenance of blocked accounts and records with respect to: (1) 
liquidated tangible assets and personalty of the 15 blocked U.S. 
subsidiaries of entities organized in the FRY (S&M); (2) the blocked 
personalty, files, and records of the 2 Serbian banking institutions in 
New York previously placed in secure storage; (3) remaining tangible 
property, including real estate; and (4) the 5 Yugoslav-owned vessels 
still blocked in the United States.
    5. Despite the prospective authorization of transactions with the 
FRY (S&M), OFAC has continued to work closely with the U.S. Customs 
Service and other cooperating agencies to investigate alleged violations 
that occurred while sanctions were in force.
    Since the last report, OFAC has collected five civil monetary 
penalties totaling more than $28,300 for violations of the sanctions. 
These violations included prohibited exports and payments to persons in 
the FRY (S&M) or to blocked entities owned or controlled by the FRY 
(S&M).
    6. The expenses incurred by the Federal Government in the 6-month 
period from May 30, 1996, through November 29, 1996, that are directly 
attributable to the declaration of a national emergency with respect to 
the FRY (S&M) and the Bosnian Serb forces and authorities are estimated 
at about $1.252

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million, most of which represent wage and salary costs for Federal 
personnel. Personnel costs were largely centered in the Department of 
the Treasury (particularly in OFAC and its Chief Counsel's Office, and 
the U.S. Customs Service), the Department of State, the National 
Security Council, the U.S. Coast Guard, and the Department of Commerce.
    7. In the last year, substantial progress has been achieved to bring 
about a settlement of the conflict in the former Yugoslavia acceptable 
to the parties. UNSCR 1074 terminates sanctions in view of the first 
free and fair elections to occur in the Republic of Bosnia and 
Herzegovina, as provided for in the Peace Agreement. In reaffirming 
Resolution 1022, however, UNSCR 1074 contemplates the continued blocking 
of assets potentially subject to conflicting claims and encumbrances 
until provision is made to address them, including claims of the other 
successor states of the former Yugoslavia.

    The resolution of the crisis and conflict in the former Yugoslavia 
that has resulted from the actions and policies of the Government of the 
Federal Republic of Yugoslavia (Serbia and Montenegro), and of the 
Bosnian Serb forces and the authorities in the territory that they 
control, will not be complete until such time as the Peace Agreement is 
implemented fully and the terms of UNSCR 1022 have been met. Therefore, 
I have continued for another year the national emergency declared on May 
30, 1992, as expanded in scope on October 25, 1994, and will continue to 
enforce the measures adopted pursuant thereto.

    I shall continue to exercise the powers at my disposal with respect 
to the measures against the Government of the Federal Republic of 
Yugoslavia (Serbia and Montenegro), and the Bosnian Serb forces, civil 
authorities, and entities, as long as these measures are appropriate, 
and will continue to report periodically to the Congress on significant 
developments pursuant to 50 U.S.C. 1703(c).
    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.