[Weekly Compilation of Presidential Documents Volume 33, Number 2 (Monday, January 13, 1997)]
[Pages 30-32]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders on Libya

January 10, 1997

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

    I hereby report to the Congress on the developments since my last 
report of July 22, 1996, concerning the national emergency with respect 
to Libya that was declared in Executive Order 12543 of January 7, 1986. 
This report is submitted pursuant to section 401(c) of the National 
Emergencies Act, 50 U.S.C. 1641(c); section 204(c) of the International 
Emergency Economic Powers Act (IEEPA), 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).
    1. On January 2, 1997, I renewed for another year the national 
emergency with respect to Libya pursuant to IEEPA. This renewal extended 
the current comprehensive financial and trade embargo against Libya in 
effect since 1986. Under these sanctions, all trade with Libya is 
prohibited, and all assets owned or controlled by the Libyan government 
in the United States or in the possession or control of U.S. persons are 
blocked.
    2. There have been two amendments to the Libyan Sanctions 
Regulations, 31 C.F.R. Part 550 (the ``Regulations''), administered

[[Page 31]]

by the Office of Foreign Assets Control (OFAC) of the Department of the 
Treasury, since my last report on July 22, 1996. The Libyan Sanctions 
Regulations were amended on August 22, 1996, to add the Antiterrorism 
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 
financial transactions 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 are subject to criminal fines under title 
18, United States Code, imprisonment for up to 10 years, or both. 
Because the Regulations already prohibited such transactions, with minor 
exceptions for transactions found to be in the public interest, no 
substantive change to the prohibitions of the Regulations was necessary. 
A copy of the amendment is attached.
    The Regulations were amended on October 21, 1996 (61 Fed. Reg. 
54936, October 23, 1996), to implement section 4 of the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Debt 
Collection Improvement Act of 1996, by adjusting for inflation the 
amount of the civil monetary penalties that may be assessed under the 
Regulations. The Regulations, as amended, increase the maximum civil 
monetary penalty provided by law from $10,000 to $11,000 per violation.
    The amended Regulations also reflect an amendment to 18 U.S.C. 1001 
contained in section 330016(1)(L) of Public Law 103-322; 108 Stat. 2147. 
The amendment strikes the $10,000 maximum on fines imposed for 
fraudulent dealing with Federal agencies. Finally, the amendment notes 
the availability of higher criminal fines pursuant to the formulas set 
forth in 18 U.S.C. 3571. A copy of the amendment is attached.
    3. During the current 6-month period, OFAC reviewed numerous 
applications for licenses to authorize transactions under the 
Regulations. Consistent with OFAC's ongoing scrutiny of banking 
transactions, the largest category of license approvals (49) concerned 
requests by non-Libyan persons or entities to unblock transfers 
interdicted because of what appeared to be Government of Libya 
interests. Several previously issued licenses were amended to authorize 
the provision of legal services to the Government of Libya in connection 
with actions in U.S. courts in which the Government of Libya was named 
as defendant.
    Minister Louis Farrakhan and the Nation of Islam applied for a 
license to receive a gift of up to $1 billion from the Government of 
Libya as well as for Minister Farrakhan to collect $250,000 in prize 
money that accompanied the Ghadafi Prize for Human Rights awarded to 
Minister Farrakhan in Tripoli. The application was denied on Foreign 
policy grounds.
    4. During the current 6-month period, OFAC continued to emphasize to 
the international banking community in the United States the importance 
of identifying and blocking payments made by or on behalf of Libya. The 
office worked closely with the banks to assure the effectiveness of 
interdiction software systems used to identify such payments. During the 
reporting period, more than 100 transactions potentially involving Libya 
were interdicted.
    5. Since my last report, OFAC collected 14 civil monetary penalties 
totaling more than $165,000 for violations of the U.S. sanctions against 
Libya. Twelve of the violations involved the failure of banks to block 
funds transfers to Libyan-owned or -controlled financial institutions. 
Two U.S. corporations paid OFAC penalties totaling $105,000 for export 
violations as part of global plea agreements with the Department of 
Justice. Sixty-one other cases are in active penalty processing.
    On August 7, 1996, a major U.S. exporter entered a guilty plea and 
was sentenced in the U.S. District Court for the Western District of 
Kentucky for Libyan sanctions violations. The company and four co-
conspirators were charged with aiding and abetting the

[[Page 32]]

exportation and attempted exportation of oil well drilling equipment to 
Libya through Italy in 1995 and 1996. The company paid $3 million in 
criminal fines and aggregate criminal penalties paid by individuals 
totaled $211,000. In addition, a major U.S. manufacturer in Milwaukee, 
Wisconsin agreed to pay $2 million in criminal fines, in addition to the 
civil penalty noted above, for violation of the Libyan sanctions 
involving a commercial project in Libya. Numerous investigations carried 
over from prior reporting periods are continuing and new reports of 
violations are being pursued.
    6. The expenses incurred by the Federal Government in the 6-month 
period from July 6, 1996, through January 5, 1997, that are directly 
attributable to the exercise of powers and authorities conferred by the 
declaration of the Libyan national emergency are estimated at 
approximately $670,000. Personnel costs were largely centered in the 
Department of the Treasury (particularly in the Office of Foreign Assets 
Control, the Office of the General Counsel, and the U.S. Customs 
Service), the Department of State, and the Department of Commerce.
    7. The policies and actions of the Government of Libya continue to 
pose an unusual and extraordinary threat to the national security and 
foreign policy of the United States. In adopting UNSCR 883 in November 
1993, the Security Council determined that the continued failure of the 
Government of Libya to demonstrate by concrete actions its renunciation 
of terrorism, and in particular its continued failure to respond fully 
and effectively to the requests and decisions of the Security Council in 
Resolutions 731 and 748, concerning the bombing of the Pan Am 103 and 
UTA 772 flights, constituted a threat to international peace and 
security. The United States will continue to coordinate its 
comprehensive sanctions enforcement efforts with those of other U.N. 
member states. We remain determined to ensure that the perpetrators of 
the terrorist acts against Pan Am 103 and UTA 772 are brought to 
justice. The families of the victims in the murderous Lockerbie bombing 
and others acts of Libyan terrorism deserve nothing less. I shall 
continue to exercise the powers at my disposal to apply economic 
sanctions against Libya fully and effectively, so long as those measures 
are appropriate, and will continue to report periodically to the 
Congress on significant developments as required by law.
    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.