[Weekly Compilation of Presidential Documents Volume 33, Number 48 (Monday, December 1, 1997)]
[Pages 1922-1924]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders on Iran

November 25, 1997

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

    I hereby report to the Congress on developments since the last 
Presidential report of May 13, 1997, 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) 
(IEEPA). This report covers events through September 30, 1997. My last 
report, dated May 13, 1997, covered events through March 31, 1997.
    1. The Iranian Assets Control Regulations, 31 CFR Part 535 (IACR), 
were amended on August 25, 1997. General reporting, record keeping, 
licensing, and other procedural regulations were moved from the IACR to 
a separate part (31 CFR Part 501) dealing solely with such procedural 
matters (62 Fed. Reg. 45098, August 25, 1997). No substantive changes to 
the IACR were made. 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 five awards. This 
brings the total number of awards rendered by the Tribunal to 584, the 
majority of which have been in favor of U.S. claimants. As of September 
30, 1997, the value of awards to successful U.S. claimants from the 
Security Account held by the NV Settlement Bank was $2,480,897,381.53.
    Since my last report, Iran has failed to replenish the Security 
Account established by the Algiers Accords to ensure payment of awards 
to successful U.S. claimants. Thus, since November 5, 1992, the Security 
Account has continuously remained below the $500 million balance 
required by the Algiers

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Accords. As of September 30, 1997, the total amount in the Security 
Account was $127,880,441.04, and the total amount in the Interest 
Account was $17,771,382.12. Therefore, the United States continues to 
pursue Case A/28, filed in September 1993, to require Iran to meet its 
obligation under the Algiers Accords to replenish the Security Account. 
Iran filed its Rejoinder in Case A/28 on April 7, 1997. The United 
States has requested that the Tribunal schedule a hearing in the case.
    The United States also continues to pursue Case A/29 to require Iran 
to meet its obligation of timely payment of its equal share of advances 
for Tribunal expenses when directed to do so by the Tribunal. Iran has 
not yet filed its Rejoinder in the case.
    3. The Department of State continues to respond to claims brought 
against the United States by Iran, in coordination with concerned 
government agencies. On August 8, 1997, the United States filed its 
Statement of Defense in Case A/30, in which Iran alleges 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 on 
U.S. economic sanctions.
    Under the February 22, 1996, settlement agreement related to the 
Iran Air case before the International Court of Justice and Iran's bank-
related claims against the United States before the Tribunal (reported 
in my report of May 17, 1996), the Department of State has been 
processing payments. As of September 30, 1997, the Department has 
authorized payment to U.S. nationals of 35 claims against Iranian banks 
totaling $12,021,532.54. The Department has also authorized payments to 
surviving family members of the aerial incident, totaling 
$41,550,000.00.
    The Tribunal has scheduled a hearing date of February 17-19, 1998, 
in Case No. A/11. In this case, Iran alleges that the United States 
failed to perform its obligations under Paragraphs 12-14 of the Algiers 
Accords, relating to the return to Iran of assets of the late Shah and 
his close relatives.
    4. U.S. nationals continue to pursue claims against Iran at the 
Tribunal. Since my last report, the Tribunal has issued awards in five 
private claims, all of which were filed prior to the January 19, 1982, 
filing deadline by individuals who are dual U.S.-Iranian nationals.
    On April 23, 1997, Chamber Three issued an award in Vivian, Jamshid 
and Keyvan Tavakoli v. Iran, AWD No. 580-832-3. The Tribunal dismissed 
the claims of Jamshid and Keyvan Tavakoli for lack of jurisdiction, 
finding that they had not proven their dominant and effective U.S. 
nationality. The Tribunal determined that Vivian Tavakoli's claim fell 
within the Tribunal's jurisdiction and awarded her $375,952 plus 
interest plus $10,000 in arbitration costs for Iran's expropriation of 
170 shares in the Western Industrial Group recorded in her name. The 
Tribunal rejected her claim for other additional shares in that company 
for lack of proof.
    On May 22, 1997, Chamber One issued an award in Vera-Jo, Laura and 
J.M. Aryeh v. Iran, AWD No. 581-842/843/866-1, finding that all three 
claimants were dominant and effective U.S. nationals for purposes of 
Tribunal jurisdiction, and awarding the claimants a total of 
$19,658,063.84 plus interest and $200,000 in arbitration costs for 
Iran's expropriation of the claimants' shares in various Iranian 
companies.
    On June 20, 1997, Chamber Two issued an award in Betty Monemi v. 
Iran, AWD No. 582-274-2, dismissing the claim for lack of proof. The 
Tribunal held that the claimant had not established that Iran had taken 
actions resulting in the loss of rent from and real estate value of the 
home to which her claim related or that she had made the requisite 
demand for the funds in her bank account to allow recovery.
    On September 25, 1997, Chamber Three issued an award in Moussa Aryeh 
v. Iran, AWD No. 583-266-3, directing Iran to pay the claimant $519,571 
plus interest and $15,000 in arbitration costs for Iran's expropriation 
of the claimant's real property. In so doing, the Tribunal found that 
Iranian law did not expressly prohibit ownership of real property by 
dual nationals so as to bar recovery in this case. It held that while 
Iranian law placed certain restrictions on the ownership of real 
property by an Iranian national

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who acquires a second nationality, those restrictions as applied in the 
Aryeh case simply required sale of the property under certain 
conditions, with the proceeds to be paid to the dual national owner. 
Also on September 25, 1997, Chamber Three issued an award in Ouziel and 
Eliyahou Aryeh v. Iran, AWD No. 584-839/840-3, dismissing the claims on 
the grounds that the claimants did not prove that they inherited under 
their father's will the property which they alleged was expropriated by 
Iran or that they held a beneficial interest in other properties 
purchased by their brother.
    In Tribunal-related litigation in United States courts, on June 23, 
1997, the District Court of the District of Columbia issued its decision 
in McKesson Corp. v. The Islamic Republic of Iran, granting McKesson's 
motion for summary judgment. The court found that Iran's interference 
with McKesson's shareholder rights ripened into an expropriation by 
April of 1982. In its decision, the court gave preclusive effect to the 
Tribunal's findings in the Foremost Tehran, Inc. v. Iran award, issued 
on April 10, 1986.
    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 
letter was released by the Office of the Press Secretary on November 26.